Q4 2020 Steel Report Overview
Global steel commodities were on the rebound in Q3 2020 as economic activity continued to pick back up from the pandemic related shutdowns. Crude steel production has been slow to come back online in the US and EU, creating supply constraints and additional upward momentum. In China, crude steel production has already surpassed pre-pandemic levels, contributing to oversupply and a now cooling market.
- US flat prices are back to pre-pandemic levels, with HRC at ~$690/MT in October, supported by the sluggish return of mill utilization. The recent announcements of Cleveland-Cliffs’ acquisitions of AK Steel and now Arcelor US operations (except for AM/NS-Calvert) could create some additional upward momentum in the near term.
- EU HR prices spiked in Q3 amid rising input costs, demand resurgence and import limitations, stabilizing at ~475 EUR/MT in October. With manufacturing activity rising above pre-pandemic levels in October, the upward momentum in Europe should continue through Q4 2020.
- China HR prices continued to soar in Q3, hitting ~$575/MT in October, but have started to cool off as high production levels contribute to oversupply. China has so far seen the fastest and largest recovery from the pandemic shutdown.
- Scrap prices fell by -6% in the US, but rose by +6% in Europe, and +14% China, while Iron Ore prices skyrocketed by +24% to multi-year highs in Q3. Coking Coal prices improved by +4% QoQ but still sit well below the historical average.