What is the current trend in steel prices?

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What is the current trend in steel prices?

COVID-19 pandemic, construction boom, war in Ukraine - the last four years have undoubtedly been turbulent. This is also reflected in commodity prices, which have been subject to strong fluctuations. That is why we have already taken an in-depth look at current steel, aluminium, and transportation prices in 2021 and 2022. Click here to read the 2021 article and here to go to our 2022 update. But what does the current situation look like?

The war in Ukraine caused record highs in steel prices

To understand the current situation in the commodity market, we need to take a brief look back at steel prices over the past few years. Because a lot has happened here. While the price of a tonne of steel rebar was around 425 USD in mid-2020, it rose to a high of 950 USD per tonne in March 2022. Considering the start of the Ukraine conflict in late February 2022 and that Ukraine and Russia together account for about one-fifth of steel imports into the EU alone, the reasons for this sharp increase are quite clear. Additionally, the delays in production and delivery times caused by the COVID-19 pandemic and the high demand for steel due to the construction boom also significantly impacted steel prices. In May 2021, prices for a ton of steel rebar had already reached a high of 794 USD, followed by only slight price relaxations. You can learn more about the background with a click on the link.

Steel prices will continue to fluctuate in 2024

In recent months, fluctuations in steel prices have continued. Notably, there was a significant price drop from February to August 2023. This can be partly explained by China, the world's largest steel producer, ramping up its steel production in 2023 after being constrained by lockdowns due to the COVID-19 pandemic. The price, which had surged in 2022 due to the Ukraine conflict, subsequently fell again. Additionally, inflation increased price pressure, leading both consumers and investors to cut back on their spending, which further contributed to the decline in steel prices.

 

Fluctating steel prices from 2022 to 2024 (Source: www.investing.com)


With the Hamas attack on Israel on 7th October 2023, the Middle East conflict reached a new level of escalation, causing global economic turbulence, particularly in financial and oil markets. Consequently, steel prices also rose, reaching a peak of 618 USD per ton of steel rebar in January 2024.

Demand and global conflicts influence the price of steel

Currently, there is an overall downward trend in steel prices, with the price now at 579.50 USD (as of 9th July 2024). This marks a 38.35% decrease since its peak in March 2022. Whether steel prices continue to stabilize or remain subject to significant fluctuations depends on various factors such as:

  • The demand for steel products
  • Market competition
  • Global economic development

The demand for steel in particular offers potential for further price fluctuations. If the demand for steel products across various industries remains stable and is supported by infrastructure and construction projects, steel prices could even rise slightly. However, the construction industry is currently stagnating in Europe, for example, but also in China. As a result, Chinese steel is increasingly being exported abroad, which could lead to a further fall of the price of steel.

Additionally, the current global political situation, especially regarding the Middle East conflict and associated naval blockades, could lead to greater price fluctuations. Check out our upcoming blog for more information on current logistics prices and their backgrounds.

 

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