16-04-2021 STEEL PRICES SURGE IN USA AND EU, SPIKING THE INTEREST OF ASIAN MILLS TO SUPPLY MARKET GAP, Maersk Broker
The price of steel has increased to its highest level since the 2008 financial crisis due to acute coil shortages in Europe and the USA. The situation seems unlikely to change until steel production picks up in the second half of the year. Consequently, increasing export opportunities will prevail in Q2, attracting the interest of Asian mills.
In the US, the price increase is deemed to be due to supply side issues, while in Europe, it stems from a combination of strong downstream demand and supply side shortages. Since the start of the year, prices in the US for hot-rolled coil have risen by 33% and prices in Europe have increased 37%.
The absence of US import tariffs on Korean products is already translating into an increase of steel exports to the US. Meanwhile, Japan forecasts its exports will increase 21% on the year for Q2.
Concerning European steel, India’s involvement is expected to grow, as despite having already exceeded its EU quota, they expect more steel to be allowed in.
China is also looking to supply the world steel market gap; however, their intentions are unlikely to last as they similarly expect domestic prices of steel to increase due to reduced domestic output.
Steel production is slow to recover after the lockdown, and with more moving parts, export opportunities are expected to remain well into Q2.