Via AG Metal Miner
After weathering a bumpy ride throughout 2022, one of the world's most traded commodities still isn't out of the woods just yet. Though steel prices rose across the board over the past few weeks, mills around the world remain shuttered, and demand continues to fluctuate. Zero-COVID and limited energy across places like Europe are just some of the factors the steel industry endured over the past year. In the U.S., this was coupled with high-interest rates and a dollar that reached new highs before quickly retreating.
Steel prices seemed to find a bottom at the beginning of December. However, will steel prices keep rising? If so, how quickly and by how much? Of course, reduced steel output remains a stressor for buyers, as large companies like NMLK continue to operate at limited capacity. Meanwhile, other manufacturers like Nucor and ArcelorMittal have raised HRC prices by $50/st. This means steel procurement professionals might face more headaches than they would like going into Q1.
While HRC has pivoted to the upside in the short term, the trend still hasn't reversed from the long term decline we saw in 2022. Currently, price action does not have sufficient strength to the upside for a true reversal. Therefore, further price direction needs to develop before a bias appears within the HRC trend.
The War in Ukraine and sanctions on Russia dramatically impacted the global steel market. As a result, supply chains underwent significant transformations. Unfortunately, those supply chains were already suffering tight bottlenecks. As a result, many who sourced steel from these regions looked elsewhere for steel products. In many ways, the resulting supply chain alteration was even more dramatic than the post-pandemic supply chain dilemma. Other issues (some already mentioned above) which changed the face of the global steel industry include:
However, these disruptions did bring about some positive factors for steel prices. These include:
We here at MetalMiner know all too well how quickly commodity markets can change, and global steel markets are no exception.
By Jennifer Kary
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