Expect steel prices to cool off before recovering in Q2CY22: S&P Global Platts

Paul Bartholomew, Senior Managing Editor, S&P Global Platts, expects steel prices to potentially go down before recovering in Q2 of next calendar year. He believes the slowdown in steel production will have an impact on iron ore prices as well, going into Q1. However, he is hopeful that the resolution of the semiconductor shortage issue could positively influence steel prices in the US and Europe.

Bartholomew mentioned, “China has taken off a lot of aluminium, steel production and has got shortages in copper, because of energy shortage. However, a lot of the Asian countries are finding customers in countries they hadn't really exported to before, like Vietnam exporting to the US and India exporting to Turkey etc. Probably, China is still going to export about 68-70 million tonne of steel this year, which is what it was in 2018 but I don't think China is suddenly going to start putting a lot of steel and other metals into Asian markets, which is putting price pressure.”

“However, there is no doubt that slowdown in terms of steel production is going to have an impact on iron ore prices, and so we expect pretty flat iron ore prices going into Q1 of next year. With regard to steel, it is very distinctive now between what you might call the Western markets, Europe and the US and eastern markets, China, India, etc., they have sort of decoupled in some respect; the easing of the semiconductor shortage situation could have a very positive effect on flat steel prices in the US and Europe because a lot of production has come off,” he said.