European steel prices have risen by 81% since November 2020 and steelmakers’ margins have also increased by 300% despite massive increases in raw material prices. In addition, EU steelmakers are apparently no longer offering on the spot market.
EU steel prices continue to rise – mills no longer offer steel
After further price increases, European HRC (hot-rolled coil) prices now stand at around 1050 euros (1247 USD) per ton. That’s an 81% increase since November 2020, Deutsche Bank writes in a recent newsletter. At the same time, steelmakers’ margins have increased by 300%. And that’s despite rapidly rising commodity prices, such as iron ore, Deutsche Bank further writes.
Steel prices could rise further in the short term
Eurofer, the trade association of the European iron and steel industry, expects consumption of steel in the European Union to rise by 11.7% in 2021 compared with the previous year. However, this would not yet mean that demand would have reached pre-Corona pandemic levels, so further surges in demand appear possible in the event of a strong economic recovery. EU steel prices and steel producers’ profit margins could increase further in the short term.
EU steel mills stay away from the spot market
One problem in this respect is and remains that European steel producers are not willing or able to meet the actual needs of EU steel consumers. We already reported that market sources repeatedly tell us that steelmakers are not offering any more at all on the spot market. Fastmarkets also reports that “most steelmakers said to be staying away from the spot market” (Source).
This means that the supply situation for steel and stainless steel in the European Union remains poor and is further impacted by market protection measures. No matter how high the EU steel prices will rise.
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