Steel prices have endured a secular decline throughout 2022. However, it is important to note that the market as a whole has been very volatile due to so many geopolitical events and supply pinches in his chain.
Steel Prices: Q1 2022
Crude steel started the year on a high note, rising more than 12% from January to February. China’s climate change efforts have pushed iron ore futures prices down, as the country’s steel production sector accounts for almost 15% of China’s total carbon emissions. Meanwhile, Mexico’s steel sector has returned to pre-pandemic production levels.
Scrap steel had a particularly strong first quarter as US steelmakers invested more money in scrap processing. But by February, prices, especially his HRC, started to fall again. Meanwhile, Japan and the US reached an agreement in April that would allow Japan to ship 1.25 million tons of steel duty-free each year.
Prices rose again in March, this time with a massive 4.9% increase. At the time, the surge was primarily due to plate prices. However, HRC has fallen steadily, putting him nearly 47% below its October 2020 level.
Q2 2022: More volatility in steel prices
The steel price index started the second quarter on another note, rising more than 15% in April. By then it was clear that the war in Ukraine would not end anytime soon and that steel prices would react accordingly. I was. This has forced pig iron buyers to look for sources outside of Ukraine and Russia to offset supply shortfalls.
As the European energy crisis worsened, it affected European HRC prices. The steel index then plunged further in May. China’s zero COVID lockdown has pushed iron ore to a four-month low. Meanwhile, Arcelormittal predicts that global demand will fall by 1%.
Zero COVID, the European energy crisis, declining global demand and the war in Ukraine continued to impact steel prices in June. The market saw another 7.87% price decline that month. HRC futures also made new lows at just $976 per short ton. The plate once again proved an outlier for the index and the price stayed near all-time highs. A bipartisan infrastructure law was also passed, which buyers hoped would provide significant support for steel prices.
Steel price: Q3
In July, the HRC price hit a new low. Both HDG and CRC decreased steadily month-on-month. In July, global hot-rolled coil prices fell to pre-war levels amid China’s lockdown and the prospect of a global recession. U.S. steel prices saw their biggest drop following Russia’s invasion of Ukraine after reversing a five-month downtrend in early March.
Raw steel index fell again in August, this time down 8.73%. Despite all the geopolitical factors affecting steel production, plate prices remained strong once again above the odds. August had a record gap between steel plate prices and his HRC.
Steel prices fell again in September, with the HRC officially below $800. The energy crisis had a major impact on European steel as energy cuts reduced production. The big factories in Austria, France and Spain all felt the pain of the energy crisis and his HRC in the US fell below his HRC price in Europe. All of these factors had a significant impact on both futures and demand.
End of 2022: Q4
On October 1st, the range of price cuts narrowed slightly. But the price still he fell 3.04%. Fortunately, the decline in both HRC and CRC prices has slowed significantly and both have entered a flat trend.
Meanwhile, production continued to slow down. US Steel also shut down two furnaces due to continued low demand. The company also discussed the possibility of permanently shutting down its blast furnaces in Monvalley.
Nucor also finally lowered the price of the plate after receiving many complaints about the huge price difference between the plate and HRC prices.
Plate prices managed to stay above water again in November, but the steel index as a whole continued its decline, dropping another 5.08%. Meanwhile, Nucor said he would keep his December plate price at $1,620 per ton without further cuts.
Finally, in December, the index started trading sideways. This was largely due to steel sellers raising prices to avoid bottoming out at record lows. Before the cost hike, steelmakers warned that HRC, CRC and HDG steel prices were nearing their break-even points. With the trend pointing to a downtrend, steel makers are right to worry that prices will hit the threshold of profitability soon.
By AGMetalminer Team