Overseas Steel Mills Resume Work amid Strong Global Steel Prices

SHANGHAI, Feb 10 (SMM) - 

HRC Prices Rise over $100 amid Strong Global Steel Prices

In the second half of 2022, affected by sluggish downstream demand and aggressive overseas interest rate hikes, many overseas steel mills either stopped or reduced their production, alleviating the pressure on steel supply to a certain extent. Since late November, major overseas economies released signals of slowing inflation. Coupled with optimised pandemic prevention policy in China, market confidence has gradually improved. The global steel prices ushered in a round of continuous rise amid tight supply. Among them, prices in Europe, America, India, Southeast Asia and China showed sharp increases of $ 90-170 from November 30 to January 31 .

On February 6, earthquakes hit Turkey, which had a great impact on the safety of local personnel and infrastructure. As an important part in the international steel trade, the strong earthquake in Turkey will inevitably affect the local import and export trade. Some local steel mills reported some orders being cancelled due to "force majeure". SMM believes that the incident in Turkey may boost overseas steel prices in the short term and divert its exports to a certain extent .

Import Window Opens Under the Rising Overseas Steel Prices

According to SMM research, the 39 steel makers in China exported a total of 875,000 mt of HRC in February, up 354,000 mt or 67.95 from last month. Many steel mills reported that in light of rising overseas steel prices, the export window is open and domestic steel mills are active in export orders of some steel mills can last until March. According to SMM research, the shipping schedule is mostly concentrated in March-April and thus the export volume of steel mills is expected to increase rapidly in the next two months.

Overseas Steel Mills Actively Resume Work and Pay Attention to Output Rebound

SHANGHAI, Feb 10 (SMM) - Overseas steel mills actively resumed work amid strong global steel prices and improving economic environment. According to the latest research of SMM, the daily pig iron output of steel mills that resumed work since January is expected to reach 50,000 mt .

In terms of European regions , 1. A 2,200 cubic meter blast furnace in Europe resumed the production in early January. 2. Swedish steel producer SSAB stated that it restarted a blast furnace in Finland with an annual capacity of 1.3 million mt in early January. 3. A 3,000 cubic meter blast furnace in Spain resumed the production during the Chinese New Year holiday.

From the perspective of the Asian region , 1. Japan resumed the production of a 5,000 cubic meter blast furnace in mid-January.

In the follow-up stage, it is expected that there will still be a certain increase in pig iron output in Asia . Japan still has plans to resume the production in March, and pig iron output is expected to increase 10,000-15,000 mt. Vietnam will resume the production of 3 blast furnaces, with an average daily pig iron output of 10,000 mt.

With the active resumption of overseas blast furnace, the supply-demand mismatch will gradually smooth out and thus overseas steel prices may return to normal level. The exports will be concentrated in February-April.

SMM believes that the resumption of overseas steel mills will gradually form a certain supply pressure, and global steel prices will stop rising amid supply surplus.