Panic Has Given a Way to Uncertainty in the Markets, Stability is not on the Horizon

Based on current data, the disease wave has subsided. Iron and steel production in the country is likely to increase in the near future so demand for raw materials will go up. In Europe, the trends are controversial. Some steelmakers are hiking prices on their products to offset rising costs and a number of steelmakers, on the other hand, halted their operations in March. Stainless steel producers are still raising surcharges (for 3 months in a row now). This trend is also observed among producers of ferroalloys.

Ferroalloy prices in Europe are moving in different directions depending on the segment, but fluctuations are now rather moderate, at least in bulk alloys segment. Most customers have already signed contracts for Q2. Amid this panic has been replaced by mere uncertainty, which has cooled the market. At least the uncertainty has now shifted from tomorrow to the “day after tomorrow”.

Russia is sliding further and further into isolation. Crimes against civilians in Kyiv region will be most probably followed by new sanctions which will once again make it more difficult to do business with the country. In those Ukraine’s areas that are not under occupation, companies that produce raw materials and metallurgists are restoring work. Full work is not yet out of the question, but systematic recovery is taking place. The export of goods that were going through sea ports is impossible because of the blockade, so all trading at the moment is done by rail through Europe.

One of the top products that used to be exported from the Black Sea ports is pig iron. The US and Europe have traditionally bought from Ukraine and Russia for use by companies that predominantly produce flat steel. Now the situation with prices is paradoxical: quotations of pig iron from Black Sea ports have equaled quotations of square billets, and slabs are quoted more expensive than square billets by about $100/mt. A number of companies in North America and Turkey have stated their intention to master pig iron production in order to replace imports from Russia and Ukraine. However, that will take time.

At the same time, steel scrap prices have almost stopped rising. Only high-quality grades are becoming more expensive, with auto component and industrial machinery parts makers being the main sources. This is due to the fact that prices of steel products in Turkey (the main European scrap consumer) have also stopped rising and that in Europe there is complete uncertainty about the raw material demand in the future.

About the Metalshub Price Index.

The Metalshub price indices are 100% based on real transactions, bids and offer from the digital Metalshub marketplace, which is a fundamental shift in price reporting. The information is collected automatically without any journalistic work, e.g. telephone calls to market participants. This methodology minimises the risk of price manipulation and ensures a more robust picture of real market prices.