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Q3 2020 Steel Report Overview

Global steel commodities saw significant decline in Q2 ‘20 due to COVID, however global HR was most negatively affected due to the Auto production shutdown in March and May. Even as global markets have started to reopen, the only significant market recovery observed thus far has been in China, while the recovery in US prices lost steam in July and European prices have yet to show any signs of recovery at all.

• US HR prices ended in July at multi-year lows ~$520/MT as more states are reversing or slowing reopening plans. Prices are expected to continue trending downwards, but could recover back to current levels by the end of the year.
• EU HR prices fell 14% QoQ in July to 420 EUR/MT, erasing all progress made in Q1, the first significant rally in EU prices in the last two years. Although no recovery has been observed with reopening efforts in EU so far, those reopening efforts remain unhindered as they have been in the US, suggesting some recovery could be imminent.
• China HR prices ticked upwards in Q2 2020 and reached ~$538/MT in July as one of the first markets to begin reopening following COVID lock-downs.
• Scrap prices in the US continued to rise amid the pandemic and production shutdowns, up 6% QoQ, while Chinese and EU prices turned downwards, bottoming out in April/May; Chinese scrap has subsequently risen back to pre-COVID levels while EU scrap remains at it’s floor; Iron Ore prices displayed a strong upward trend in Q2 2020, as the pandemic disrupted Brazil’s ability to make shipments globally and currently trades at ~$100/MT.

As always, we look forward to hearing your questions and comments

The Steel Team at Applied Value