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Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Steel Market and Pricing Outlook
Supply Chain Disruptions, Rising Energy Costs and Russian Invasion of Ukraine Impacting Upward Trends in Pricing
March 30, 2022
Situation Analysis
The positive trend in steel consumption, as well as steel demand seen over Q2 and Q3 2021, is projected to continue in 2022. Ongoing global issues have cast uncertainty on the economic and industrial outlook, and most likely will continue to do so until the first half of 2022. In general, recovery in the EU appears to be increasingly uneven and exposed to downside risks, mainly from the severe disruptions in the global supply chain (i.e., shortage of components and raw materials, skyrocketing energy prices, rising shipping costs, etc.), as well as potential new COVID-19 variants.
Recovery in steel-using industries and in steel demand is therefore expected to continue, but at a moderate rate and subject to considerable uncertainty at least until the second quarter of 2022. This is conditional based on no additional external shocks materializing, and significant ease of the current pressures on global supply chains.
An Upward Trend in Steel Pricing
Steel Rebar futures climbed to above CNY 5,050 per tonne in late March 2022, the highest in three weeks and closing in on its highest level since October 2021 as investors refocused again on the bullish outlook for the commodity. The Russian invasion of Ukraine and the subsequent wave of the West’s sanctions against Russia has suspended the supply-demand balance for steel markets given the importance of Russian and Ukrainian supply to international buyers.
The invasion has disrupted exports from Russia and Ukraine, which account for approximately 10% of the global trade. On top of that, soaring energy costs on the heels of the invasion have forced steelmakers to increase prices for large steel sections. Moreover, new lockdown measures in parts of China further threaten supply, after steel production in January-February decreased 10% from a year earlier to 157.96 million mt, data from the National Bureau of Statistics showed. On the demand side, Chinese steel consumption is set to rebound strongly as the country is expected to unleash more fiscal spending and tax cuts to spur investment and consumption.
Steel Trends
Source: Trading Economics
Overall Metal Trends
Source: Trading Economics (Market data as of March 29, 2022
Key Takeaways
- Based on the uptrend of the steel prices, we recommend working closely with the supply base to secure materials with steel suppliers.
- Address upfront, the potential cost increases with customers prior presenting the rise in pricing. It’s important to show the market trend report based on the market index where raw materials are supplied.
- Major OEMs are securing materials upfront, therefore raw material shortages will continue to impact Metal Stampers.
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