Steel Market Updates

It seems we will have to wait at least until next spring for the uncertainty that dominates the steel sector to dissipate.

After a 2021 characterized by the shortage of raw materials and the consequent price increases, 2022 is proving to be an unexpectedly complex year, characterized by a very strong impact of high energy prices on the margins of the industries in the sector, and at the same time by an overbought triggered by the war (a combination of factors that has already shown its effects since the summer, bringing down prices).

In fact, over 5 million tons of steel arrive from Russia and Ukraine, in particular from Donbass, the region at the center of the conflict.

Therefore, if to date there are no critical issues in the availability of materials in service centers and warehouses, on the other hand we are witnessing continuous price rebounds and sudden stop and go orders which make it extremely difficult to make long-term forecasts.

However, we are starting to notice signs of awakening in the market, with livelier demand, which has favored an immediate rebound in coil prices.

There is now a widespread belief that the bottom levels of the market have now been exceeded. The prices offered by steel mills have in fact risen on average to the order of Euro 30-50/ton compared to recent minimum levels.

The approaching closures of the production plants contributed to accelerating the exchange activity for the needs of the first months of 2023 despite the uncertain prospects for the beginning of 2023.