Will steel prices fall or keep their strength?Steel equities continue to be volatile, driven by macro woes and commodity pricemovements. Although current spot conditions remain strong, we still forecastcost support to fade and, thus, European prices to fall (current spot conditionswould imply further significant earnings upgrades across the space). Our toppicks are: 1) ArcelorMittal, which looks attractive to us based on strong cash flow(7-12% FCF yield), valuation and additional upside optionality; and 2) Voestalpine,which we believe has more room for upgrades, generates strong underlying CF(9-10% FCF yield) and has a less volatile business model.    HRC: N. European prices down E3.    Last week, N. European prices were down by E3 to E537 (up USD5 to USD632)and S. European prices were down by E3 to E501 (up USD4 to USD590). Priceshave risen E16 in the past three months.    US HRC prices down USD2; Chinese export prices up USD1.    US HRC prices were down USD2 last week. Several US players prepared themarket for a USD40/t price hike. The price gap with Europe fell to USD43/t, whilethe price differential with China decreased to USD129/t. Chinese HRC pricesincreased by USD1 to USD545. The spread between Chinese and S. Europeanprices increased to USD44, less than the two-year average spread of USD58, withChinese prices down E6 (down USD7) in the past three months.    Plate: European prices were stable.    S. European prices were stable at E537 (up in USD terms by USD8 to USD632).    Prices fell E24 in the past month. N. European prices were also stable at E574(up USD9 to USD675). US prices were also stable at USD759 (also stable in euroterms at E648).    Iron ore: Fines 62% Fe prices up USD1/dmt; coking coal: prices up USD4.    The prices of Fines 62% rose by USD1/dmt WoW to USD63/dmt. Chinese steeloutput decreased 1.6% WoW to 1.79mt/day in the last 10 days of October. Pricesof premium coking coal (Australian exports) increased by USD4 to USD192 lastweek. They also increased in euro terms by E3 to E163.

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