Q2 2021 Steel Report Overview
Global Steel Prices continued their astonishing rise in Q1 2021, with global HRC prices soaring 18-21% to multi-year highs across all regions. Over the last twelve months, the US has proven to be a significant outlier with its domestic HRC prices up 162% relative to the 79% rise in China and 68% rise in Europe over the same period. This growing chasm in regional market prices could aid in bringing a market recovery to the US, however key issues like persistent supply constraints and rising scrap prices are extending the timeline.
Rising scrap prices are a particularly important trend for buyers to monitor in both the short and long term, with prices reaching record levels in all regions and additional upward drivers on the horizon. Scrap prices are up 51% in the US, 28% in EU and 22% in China Q-o-Q. The recent removal of China’s import ban is already increasing demand for both US & EU scrap, with expectations of further increases as China continues its ongoing efforts to transition to more high-scrap-consuming EAF production. Additional scrap demand can also be expected from US mills’ plans to increase capacity of EAF production by ~13.5mMT over the next 3-4 years.
- US HRC prices recorded multi-year highs at $1,469/MT in April 2021, up another 21% Q-o-Q on constrained supply & sustained by expensive inputs.
- EU HRC prices rose another 18% Q-o-Q in the first quarter of 2021 on further increases in manufacturing activity and constrained supply.
- CN HRC prices increased 20% to $831/MT in April, on domestic demand and anticipation of Government mandated production cuts expected late 2021.
- Raw Material prices continue to etch upwards, driven mainly by higher-than-normal demand from China and additional upward drivers on the horizon.