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Steel prices continue to fluctuate: an overview of the latest trends

The rapid rise in European steel prices stalled at the beginning of February, as the industry took in the latest developments in the Turkish scrap market. The Asian continent was a determining factor as well, as the Chinese New Year’s holiday slowed activities down. This is reported by MEPS International Ltd., the UK-based steel market analysis company. 

In December 2020 and the first half of January 2021, scrap import prices surged in Turkey, reaching US$500 per ton. Such a volatile market, however, could not bear those figures: indeed, prices contracted by around 20% by early February. This shrinkage caused prices of scrap-dependant products, such as reinforcing bars and structural longs, to weaken in Europe. 


As far as China is concerned, many investors see the glass half full—import figures will continue to rise, keeping world steel demand strong. However, signals are mixed. On the one hand, the new regulatory measures enhanced the initial appetite for imported scrap, and new government spending is expected to boost steel demand. On the other hand, buying was halted to prevent prices to skyrocket, and coronavirus-induced lockdowns could further hamper activities. 


In Europe, flat product mills are pushing to increase prices: the market leader has recently announced a new minimum base level for hot-rolled coil—almost €750 per ton. Such endeavors to maintain prices above a certain threshold are more than justified for cold-rolled and coated coil and sheet, which are available in limited quantities and are overall difficult to source. Instead, prices are more likely to drop for products with weaker demand, notably structural longs. 

 

The current European and UK safeguarding measures are only in force until the end of Q2 2021. Any extension could mitigate against further import competition, as a downturn in the Turkish market or cheap offers from China could result in more Turkish producers going back to the European scene.

 

Source: Expometals.Net