The global sheet steel market has been experiencing an upturn in the past few months, which will last at least until mid-summer.
According to experts, since the beginning of the third quarter of 2020, the cost of Chinese galvanized steel has increased by about 1.5 times, European – almost 2 times, American – more than 2.2 times. Quotes for it reached the highest levels since 2008.
This is due, first of all, to a sharp increase in demand, the main reason for which was the antiquated stimulation of the economy of developed countries. According to IMF estimates, by the end of September 2020, the amount of funds allocated for these purposes by governments and central banks reached $ 19.5 trillion.
By now, this amount has probably approached $ 25 trillion. The United States, for example, spent $ 6.4 trillion to support the economy, Japan – more than $ 2.8 trillion, China – over $ 500 billion, the European Union announced the allocation of 800 billion euros, not counting the measures taken by the EU member states.
Some of these funds leaked into the real sector of the economy, which contributed to the rise in prices for goods and raw materials, in particular, oil and iron ore. At the same time, metallurgical companies cannot increase their capacities sufficiently to meet the increased demand for rolled products.
Currently, manufacturers of coated rolled products in the United States, the European Union, and Turkey are concluding contracts for delivery in the third quarter. Thus, prices for steel products are likely to remain high until at least mid-to-late summer. Further prospects will depend on how quickly developed countries begin to lift quarantine restrictions, whether they begin to curtail support for the economy, what kind of monetary policy they will pursue.