Supply gap, high steelmaking margins to continue: EUROMETAL

The steel supply shortage in the European domestic market is set to continue at least for the remainder of the current year, EUROMETAL explains in a presentation. The association also calculates that margins for steelmakers are now at record levels.

EUROMETAL says European domestic supply has since 2019 been below real consumption levels. In 2020 real consumption reached 141 million tonnes, 10mt above market supply. This year the shortage of local supply is expected to remain, with real consumption expected to be some 3mt above domestic supply.

Imports have nevertheless also continued declining since 2018 when safeguard measures were introduced. EUROMETAL estimates that in 2020 the share of EU market supply taken by imports fell below 20%, from the 22.5% calculated in 2018, Kallanish notes.

“Since mid-2020, the EU steel market is a perfect sellers’ market where supply gaps, low stock levels and extended mill lead times have triggered soaring steel prices, rising by 125% between July 20 and April 21,” EUROMETAL comments. The association also notes margins for steelmakers are at record levels.

For hot rolled coil, for example, margins over raw materials in Q1, at over €260/tonne, largely surpassed the median levels of the last ten years. In recent weeks, margins have soared further to well above €350/t compared to a median level of some €230/t during the last ten years.

Emanuele Norsa Italy