In this memo, we will examine the main reasons for the high price of steel in global markets. Please be with Artan Press.
*** Rising prices in the global steel market
“In 2019, the demand for steel in the world grew by 3.9% and the steel market recorded very favorable conditions in its record, but this year the situation was different. In the current situation, the correct forecast for world economic growth and the exact time Its growth and the exact time for the industrial deficit to emerge from the current crisis are not clear, so it is not possible to speak properly about the timing of the steel industry’s recovery.
However, due to the gradual resumption of economic activity in the countries “in 2020, we expect growth of about two percent in the steel markets, which in addition to guaranteeing the producer’s profit will provide the conditions for stabilizing prices. We have not reached this profit. The trend of world steel prices will be accompanied by excitement.
The price of steel is highly dependent on political events and social issues in the United States. If we see political or economic tensions in the United States or environmental conflicts such as floods and hurricanes, experience has clearly shown that this issue is strongly related to rising prices in the global steel market. Another issue that proves the same argument in the recent discussion of US political tensions with Europeans and Chinese in imposing import tariffs was that it caused an emotional rise in the prices of the world’s major metal exchanges.
*** American steel production and consumption
In order to be able to provide the best analysis and perspective, it is enough to evaluate and evaluate the indicators of steel production and consumption in the United States so that a single version can be prepared for the whole world. Therefore, in this section, we will deal with the reports of American steel production and consumption.
US steel imports fell 25 percent in May from a year earlier, and fell 33 percent in the first five months of 2020, according to a formal report by the American Iron and Steel Institute. This alone can ignite the demand side and maximize the prices of finished steel products.
The decline in imports appears to have targeted the pervasive effects of the Corona virus and a 25 percent tariff on steel imports. Aqaba goes back to the time when the Trump administration set tariffs on steel imports in 2018 under Article 232 of the 1962 Trade Development Act.
*** Reduction of construction projects at the international level
Last year, due to the widespread outbreak of the coronavirus, many construction projects were suspended due to social distancing, which has led to a sharp decline in market demand. Distances have fallen sharply and the situation has shifted towards a reduction in production over the decline in demand. Therefore, this issue has also challenged the stability of world prices.
The global steel price forecast in the last months of this year is in line with the continuing upward trend in prices. Because now the corona epidemic scenario is moving with full force in the world, and many developed countries of the world broadcast catastrophic records of their country’s conditions on a daily basis. This will greatly affect supply and producer power, and in practice, as this trend continues, we will see a 20% increase in base prices.
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