As soon as there is even the slightest change on the steel market, even if it is only in the range of 0.35%, an immediate trend reversal is assumed. This is what we see in the currently published figures on global steel production for April 2021 and in the latest price reports from China.

Stainless Espresso: Small changes on the steel market = big effect?
Stainless Espresso: Small changes on the steel market = big effect?

Steel production down worldwide – trend reversal?

Global (and it has to be said) estimated crude steel production fell by 0.6 million tons in April 2021. Which, with a few quick thoughts, can probably be attributed to seasonal factors. With the Christian Easter and the Muslim Ramadan, two world religions had important holidays or celebration weeks. This automatically leads to a decline in production.

Domestic Chinese steel prices down

Everywhere in the industry media you can read that Chinese steel prices have dropped. After these, together with the steel prices in the rest of the world, had torn one record after the next. Then the Chinese government intervened. First it slashed VAT rebates on steel exports to keep key steel products in the country. And when that wasn’t enough, China also intervened on the raw materials market.

Meanwhile, more on this later, further measures are expected from the Chinese government and the China Iron & Steel Association (CISA).

Distortion of economic fundamentals

Even if some media try to serve the hope of a trend reversal in steel prices and availability in mostly Western regions, such as the United States and the European Union, we unfortunately cannot agree.

What no one seems to be considering at the moment is the fact that the Chinese government has clearly called for export taxes on steel products. And market participants in China are already firmly assuming that this export tax will come – in the double-digit percentage range.

New focus on steel in China

This new focus of the Chinese government on the domestic market, the restructuring measures in the domestic steel production, tax relief on the import of raw materials and scrap, and the declared path towards CO2 neutrality, will rather lead to a further shortage on the international steel market. Yes, there is a decline in Chinese steel prices in the domestic market. Because exports have become less attractive and therefore more steel is available for the domestic market. But this more steel in China means less steel outside of China.

And if the “official” figures for global steel production from March 2021 (published in April 2021) were used as the basis for the calculation, we would actually see an increase.

United States and China to blame for global steel price rally?

European steel producers do not see themselves as responsible for the global price rally for steel products. This would be triggered primarily by the United States and China.

In Europe, demand for steel products is still at a very low level, they say. Even though the European steel manufacturers association sees a recovery of 11.7% in consumption for 2021.

At least that according to a recent interview on

Europe: downstream industry suffers steel shortage

This contrasts with consumers in the European downstream industry. These have been suffering for months from a massive shortage of steel products of almost all kinds. High import restrictions, anti-dumping duties, safeguard measures, low availability from European steel producers and skyrocketing prices are making it difficult for European consumers to escape the effects of the Corona pandemic.

United States: The battle for every ton of steel

Steel and stainless steel prices in the United States are at an all-time high. And it’s virtually impossible to get a ton of steel from domestic steelmakers. And a battle has broken out among associations over whether to continue or end the 232 tariffs. In addition, there were massive production losses in the winter months of 2021, when the power supply had just collapsed in the south of the USA.

China: Focus on the domestic market

As already mentioned, China is all about the local steel market. This issue will remain important at least in 2021 and certainly in 2022 and beyond. This continues to put pressure on availability, as described.

We can subscribe to one thesis: Demand will remain high.

CISA outlines seven proposals to secure Chinese steel supply

The China Iron & Steel Association (CISA) on Wednesday called on the Chinese iron and steel industry to adjust its export strategies. In order to thereby secure China’s supply of steel products.

The initiative said China has recently adjusted steel import and export policies, encouraging the export of high-value-added products and restricting the export of low-value products. Iron and steel enterprises should adjust their export strategies accordingly to meet domestic supply, with the aim of complementing and regulating the import and export of iron and steel.

A total of seven proposals were outlined in the initiative. In addition to asking steel companies to do their best to ensure domestic supply of iron and steel, CISA also promised steelmakers to manage production based on actual demand to maintain the balance between supply and demand.


Who benefits from all this?

Overall, in the end, one question always remains. Who benefits from playing with prices, headlines and statistics? At least not the steel consumer.

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