Hillfoot bring you an update on the October 2020 surcharges for carbon and alloy steels.
Peter Morris, Purchasing Director , said: “Steel buyers have returned from their summer holidays and questioning where steel prices are heading next. The answer is upwards.
It has been a very challenging time for all participants in the steel supply chain. The coronavirus pandemic resulted in national governments imposing large-scale lockdowns. Steel producers and distributors faced a slump in orders, as end-user activity was, in many cases, brought to a standstill. Steel prices fell, amid the downturn in demand.
But the market is about to turn a corner.
The cost of steelmaking raw materials has increased dramatically since late March/early April. Iron ore prices have soared by 57 percent to reach a six-and-a-half-year peak at close to US$130 per tonne, amid record high Chinese steel production.
Increases were also substantial for the benchmark Turkish scrap import value – up 38 percent since the start of the second quarter. Scrap availability was disrupted by coronavirus-related lockdown measures. Meanwhile, purchasing by mills in Turkey is generally strong.
During the second quarter of this year, production at European vehicle makers was severely negatively aﬀected by the Covid-19 lockdown measures. As a consequence, steelmakers that rely heavily on the auto sector saw a dramatic drop in their order books. This forced EU mills to ﬁnd alternative buyers for their steel products, at reduced selling prices.
An upturn in demand from automotive companies bodes well for an improvement in conditions in the steel sector and the prospects for steel price increases."
Click here to find out how the changes have affected the surcharge for specific steel grades, or contact the Hillfoot team for advice on your material requirements, and price and availability information.