In the first half of February, the global steel sector was in a state of uncertainty. Many believed that prices would come down when shoppers returned to work after the Spring Festival.
This negative was reflected in the international steel market, especially in Asia and Europe. The value of transactions began to stagnate, and buyers reduced their purchases.
Despite pre-holiday skepticism, prices in China have skyrocketed since the Lunar New Year. Environmental constraints on steel production help reduce inventory levels and create the potential for supply disruptions. China's positive sentiment has been reflected in the international steel market. This caught many buyers and analysts around the world by surprise.
The possibility of reducing export rebates has limited the number of offers made by Chinese suppliers to customers in other Asian countries. This helped steel makers throughout the region successfully achieve local price increases in March. Further growth in the value of transactions is predicted in the near future.
Optimism in the European steel sector has grown significantly this month. Customers have returned to the negotiating table, pushing for an increase in order volumes. This helped to restore the uptrend in prices. Sales in Europe are expected to grow significantly over the next few months.
The US market is protected from imports by Section 232 tariffs (National Security Threats). Consequently, pessimism in this country was minimal. Domestic prices rose again in March, reaching new all-time highs for the week. US supply chain participants believe the upward trend in transaction costs will continue in the spring.
UK Engineering Center MEPS predicts that global steel prices will continue to rise in the near future. Many years ago, the cost of transactions in China followed the prices in Western countries. However, now China is the leader in world steel sales and the main reference point for world prices.
Data from the World Steel Association for February this year indicate a 10.9 percent increase in steel production in China. Li Xinchuan, chairman of the China Metallurgical Planning and Research Institute, said at a conference in Beijing that China's steel production will continue to grow and peak at 1.16 billion tonnes in 2025.