Global steel prices on the up since early August
Buoyed by post COVID19 sharp recovery in steel demand, especially in China, resulting in super high seaborne iron ore prices, steel prices have been increasing globally since early August 2020.
While steel mills are generally citing increased input costs, the price surge seems to be driven by restocking led shortage of steel cargoes in most countries, which started due to Chinese COVID19 stimuli led creation of unprecedented steel demand in China, prompting Chinese buyers to import huge volumes of steel from every available source, phenomena seen last in late 2003 when China was in top gear to create nationwide infrastructure and many steel projects were yet to be commissioned.
While steel making cost impact for BF-BOF steel mills outside China is about USD 90, the same is about USD 185 for scrap based steel mills, when compared with pre pandemic input material price levels.
Steel mills in most countries have been announcing regular prices hikes as their order books remain full. World’s No 1 steel maker Chinese BaoSteel recently hiked February HR prices by CNY 350 or USD 54, world’s No 2 steel maker ArcelorMittal pushed HR coil offers up again last week to EUR 730 or USD 889 across Europe.
World’s No 3 steel maker Japanese Nippon Steel is reported to have raised spot prices of by JPY 15,000 or USD 145 for February shipments. Formosa Ha Tinh Steel has hiked domestic HRC prices by USD 65-70 for March shipment to USD 710-725 in Vietnams, which has become a benchmark market in SEA.
Hot rolled band is reported to have climbed to USD 995 per short ton (USD 1097 per tonne) in East of the Mississippi in US, even higher that 2008 record. Unconfirmed reports say that Russian suppliers have increased HRC offers to USD 780-790 FOB Black Sea, up from USD 755-760 a week earlier.
