Covid-19, now at an all-time high, also affects steel

In 2020, the Covid-19 pandemic forced the global extraction and production plants to close, resulting in a shortage of raw materials and semi-finished products.

China and the US have already been experiencing strong economic recoveries for some months, resulting in a high demand for commodities and in turn, causing difficulties for the production of European companies, whose warehouses have quickly emptied.

With regard to steel in particular, iron ore closed 2020 with an increase of over 70% compared to the lows of March 2022 due, precisely, to Chinese infrastructure demand.

The increase in the prices for the raw materials of steel has thus paved the way for significant price increases by laminates producers, so much so, that the price of hot coils in Italy has gone from 370 euros in June 2020 per ton, to the current 1,170 euros for the exact same amount.

Similar trends are present in the stainless steel sector with the common ‘304’ alloy going from 1,900 euros per ton in the second quarter of 2020 to over 3,000 euros per ton in 2021.

This flare-up of increases, and net of inevitable speculative elements, culminates in an exceptional and historic moment that has been rightly referred to as the “perfect storm”, exposing the structural weaknesses of Europe compared to the Chinese and American steel giants.

It is to be hoped that a plateau has now been reached, one that allows the market to recover a “new normal” in the next few months. This will undoubtedly also extend into the steel market, a sometimes fragile, yet completely indispensable giant.