Steel Products
The Global Steel Industry: A Reshaping is Underway
Written by David Schollaert
August 23, 2022
The transformation the steel industry has undergone has been accelerated over the past 18-24 months, with even greater dynamics underway, said a panel of steel executives and analysts during the first day of Steel Market Update’s 2022 Steel Summit conference in Atlanta, Ga.
Demand trajectories across regions are diverging, finished steel consumption in China is recovering post-lockdowns, but the rest of the world is seeing a decline,” said Panos Kotseras, CRU’s lead stainless steel market analyst. “Long-term sheet demand will be driven by developed Asia.”
Panos made the remarks during a panel addressing the global steel apparent industry’s meltdown and reconstitution. Other panelists were Michael Setterdahl, senior advisor, GFG Alliance, and Johnny Sjöström, president, CEO, and executive VP, SSAB Special Steels.
While the global Covid pandemic and the war in Ukraine have caused sharp price swings, tariffs, decarbonization, and other geopolitical issues have transformed the global steel order.
“The global steel industry has not seen a meltdown, but it will certainly require a reconstitution,” said Setterdahl.
Though it’s critical to note the dynamics in play over the past 12-18 months, the panel suggested that what’s ahead, and the issues that will impact the North American steel market could be of greater value. From rising energy costs in Europe, cost inflation in the US, and the ongoing implications of the war in Ukraine, to the growing tensions between China and Taiwan – it has the potential to severely impact global trade.
Another headwind affecting the North American market is the cost of steel. “Are prices in Asia going to increase and align more with North America or will North American prices come down due to the low-priced price in Asia?” remarked Sjöström. Adding that the mechanisms in play to impact and drive that would likely be the scrap surplus/deficit relationship between the electric-arc furnace (EAF) steelmaking footprint in the US and Chinese markets.
“Right now, there’s a scrap surplus in the US and a scrap deficit in China,” added Setterdahl. “As China continues to grow its EAF capacity, the need for prime scrap will accelerate at a pace we don’t really understand.”
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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