For the Quarter Ending June 2022
Steel Plate prices witnessed mixed sentiments in the North American market during the second quarter of 2022. However, since Russia invaded Ukraine, steel prices have significantly rebounded due to supply concerns and an increase in lead times. Steel prices rose sharply as the war threatened supplies from the two major producing countries. Due to supply chain disruptions, the conflict resulted in a reduction in steel input costs. However, after surging around mid-April, the rally in Steel Plate prices has slowed as prices have begun to fall. Prices have dropped by more than 20% since their peak in April. Furthermore, mills are negotiating lower prices for new orders. Steel prices are under pressure in the short term due to these factors and fears of a recession.
Nonetheless, strong demand in critical end-user markets bodes well for the steel industry. Despite the semiconductor crunch, steel producers expect continued healthy demand in the automotive market. Order activity in the non-residential construction market is also vigorous, highlighting the industry's underlying strength.
In the Asian market, steel plate prices experienced mixed market sentiment. On the other hand, Steel Plate prices skyrocketed in April and May due to rising raw material and transportation costs. Japanese steelmakers have been working hard to shift production overseas to their home market. The decision was influenced by the rapidly falling yen, global supply-chain constraints, geopolitical threats, and shifting wage patterns. According to market participants, a shortage of semiconductors has dampened steel demand in the automobile industry. Furthermore, Nippon Steel raised the prices of Steel Plates used in construction materials and pushed for additional price increases, escalating inflationary pressures in a country where the automobile industry is already dealing with rising costs. Prices for steel plates fell in June due to lower demand, a bearish long steel segment, and a lack of firm offers from overseas buyers. Mild Steel (JIS 3101-10 mm) plate prices for Ex Osaka settled at USD 1005/MT as a ripple effect.
In the European market, the Steel Plate prices witnessed a mixed trend during the second quarter of 2022, as the impact of sanctions and rising prices reduced customer purchasing power. Meanwhile, raw material price inflation accelerated due to an unfavorable exchange rate and material shortages. As per market players, the drop comes as Europe's economy slows, rising commodity prices and inflation denting consumption across the continent. After the war sparked concern about a disruption in steel exports from Russia and Ukraine, service centers and factories rebuilt stockpiles, reducing the need for consumers to buy products at historically high prices. Some participants cite that material delivery delays held up the processing of incoming new orders in May and June, mainly to the effect of sanctions, and with the backlog, work decreased only fractionally. Meanwhile, output continued to decline amid a steep further fall in exports and shortages of raw materials.