Global steel prices have started correcting downward in most markets, but a clear outlook for the next several months remains difficult. Raw materials levels have dropped somewhat and finished prices have followed, but something could well change after the Chinese holidays are over toward the end of February.

According to Kallanish price series, both billet and slab in the CIS reached their peak at the beginning of January, only to lose some $30-60/tonne since. Some markets are still more resilient than others, but even in Europe and North America the first signs of a softening of the sentiment in the coils market are visible.

FITCH OUTLOOK
Fitch Ratings believes that the recent rise in global steel prices will be short-lived as an increasing number of mills are bringing hot metal capacity back on line.

“The restarting of steel plants was not sufficiently quick to meet growing demand, with restocking across the steel value chain in Europe and the US creating additional demand, and steel prices rallied in all regions in late 2020 as a result,” the agency comments in a note.

However, about 30 million t/year of hot metal capacity has come back on stream since October 2020. Many previously idled mills in the US and EU are already in operation, although there is a time lag for production to fully ramp up.