The supply issues affecting the European flat steel market are expected to continue until the end of the current year, only to ease slightly going into 2022, Kallanish learns during the latest webinar organised by EUROMETAL, the European distributors association.
Chirs Wooffindin, manager for price policies and forecasting at Tata Steel Europe, notes that in Europe domestic capacity is now the biggest issue – more so than imports. He said that according to his calculation 90% of the capacities idled during the peak of the pandemic are now fully back on stream, but they are still facing delays in supply due to the need to fullfill delayed long-term contracts. Other elements limiting supply have been severe weather conditions, as well the need to catch up with some delayed maintainance works.
While the tightness of the supply is expected to ease, Wooffindin believes it will take time and the situation should improve significantly only in 2022.
The issues with supply are set to continue support prices in the market, Kallanish understands. Many believe the market clearly needs to correct from the record price levels reached, but the correction is not expected to be as sharp as the one seen back in 2008 because the tight supply will continue support prices even if the global market sentiment turns negative.
Going forward, Wooffindin believes one element that could be central in the steel market will be the concern for inflationary pressure on all raw material prices in Europe and elsewhere.
“At some point inflation will become a problem,” he explains, adding that authorities will then need to address the point.
Emanuele Norsa Italy