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Global steel prices are forecast to remain high in 2022

Ukraine / Ferrous metallurgy

The record highs reached in the summer of 2021 took many by surprise

Global steel prices are forecast to remain high in 2022

MEPS International expects steel prices to find support above the historical average due to higher production costs and moves to decarbonize the industry. The economic outlook for 2022 is also relatively strong.

According to forecasts, European prices for flat products will increase in the first months of 2022. Procurement is currently expected to resume. Factories are looking to recoup their rising electricity and gas costs.

North American transaction costs are expected to continue declining in the coming months. Purchasing activity is declining on the background of increasing stocks at distributors and service centers. Domestic steelmakers are likely to offer discounts to boost sales.

MEPS predicts that the average transaction value for flat products in Asia will decrease in the near future. Covid outbreaks in the region are negatively impacting market activity and sentiment. A moderate seasonal price recovery is expected in the spring.

Steel sales costs are projected to decrease in the second half of 2022 in all regions studied. Flat steel consumption growth is expected to slow down due to the increased cost of steel and other materials. Inflationary pressure is likely to reduce consumer spending. In addition, the recovery in demand from the automotive sector is expected to be protracted.

MEPS does not foresee a collapse in prices, despite growing concerns about this from a number of buyers in the market. The cost of global transactions should decline more slowly than it grew last year. In 2022, the total transaction value of MEPS World flat products is forecast to average around $1,220 per tonne, up nearly 60% from 2010/2019.

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