The hibernation of the automotive industry throughout the prevailing period of semiconductor shortages should come to an end next summer, which will then see a massive surge in demand and prices.
“As soon as auto is back we will see the level again as we saw in the summertime this year,” Fernando Espada of Eurometal said at the Kallanish Flat Steel 2021 conference held online on Tuesday. He was referring to the all-time peak of prices seen in mid-year, which has eased somewhat over the months since.
His view was supported by Alessandro Sciamarelli of Eurofer who believes that the disruption to the semiconductor supply chain will wane after the first quarter next year, and that demand will surge in the second half-year.
Francois-David Martino of service centre Becker SSC in Germany worded the scenario more drastically. “We will face huge demand from the OEMs as of June,” he predicted. Volkswagen, for example, “has a huge backlog of several 100,000 cars that cannot be produced now”.
Martino does not see imports on the horizon that could help in feeding that demand. In fact, he points to another factor of external trade that could play a role until then. As the EU and the USA are coming to terms to ease Section 232 measures, the EU’s transatlantic exports should rebound, and thus take away volumes from the domestic European market.
Christian Koehl Germany