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Changes in global steel dynamics
Posted by: Spunlite Poles Apr 2021

Implications for customers


  • Understand drivers of global steel prices
  • Be able to articulate potential short to medium term scenarios to help
    customers plan ahead

Key Price drivers Simply put “demand exceeds supply”

  • Global demand for consumer goods,whiteware,automotive (particularly Evs)
  • Major Chinese move to EAF (electric arc furnaces whichuse scrap as the core raw material) from blast furnances (traditional method that combines iron ore,coking coal & limestone) for environmental reasons
  • Significant production cuts in China to reduce emissions
  • Potential removal of 13% Chinese export rebate
  • Mothballed blast furnaces only just starting to reopen
  • Key steel raw material prices at or near historic highs
    Iron ore
    Coking coal
    Scrap steel
  • Port productivity issues and lack of spare shipping capacity extremely high freight rates
  • Govt.stimulus packages ploughing $$ into domestic infrastructure & construction globally

Key raw materials at historically high levels
The Chinese move to EAF production will change the scrap steel supply/demand equation

Globally HRC/Plate prices have risen by >50% in NZD terms since Oct’20 if we take these as the base for most carbon steel products
We have seen a 2 x 10% quarterly increases from NZSteel as a result Since we lag the Asian  market by approx 4 months due to our geography its fair to assume that we still have significant price movements ahead of us

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