Steel Market Intelligence

Are you looking for answers on Steel category?

Are you looking for answers on Steel category?

  • What are the key trends in Steel category?
  • Am I paying the right price?
  • Am I working with the right supplier?
  • What are the major challenges and risks in Steel industry?
  • How is Steel industry performing?

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Report Coverage

  • Market Overview- Trade Dynamics
  • Key Global Supplier Profiles
  • End Use Industry Analysis
  • Price Analysis- HRC & CRC

Table of contents

  1. Market Overview
  2. Market Drivers and Constraints (Demand)
  3. Key Suppliers and Market share
  4. Key End-use Industries
  5. Price Analysis - Trends & Forecast
  6. Industry & Regulatory Updates
  7. Appendix

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Global Market Outlook on Steel

Crude steel market is expected to be driven by mainly by construction and automotive components. Anti-dumping tariffs imposed by the US coupled with the current regulations in China could be the main force driving the market, which will reflect in the fluctuations of steel prices in the upcoming quarters

steel market forecast

  • The steel production market is expected to grow at 1-1.3% CAGR during the period 2018-2020. The first quarter of 2018 saw a rise of 4.1%, to reach 426.6 MMT as compared to Q1 2017
  • Asia produced 294.1 Mt of crude steel, an increase of 4.6% over the first quarter of 2017. The EU produced 43.1 Mt of crude steel in the first quarter of 2018, up by 0.9% compared to the same quarter of 2017. North America's crude steel production in the first three months of 2018 was 29.5 Mt, an increase of 1.9% compared to the Q1 2017
  • In 2017, steel consumption increased by 4.8% to 1588 MMT and a further 1.7% growth is estimated in 2018. However, this upward trend is expected to change in the second half of 2018 as the global consumption is likely to decrease by 2% in 2018
  • China consumes about 45% of the global steel output and the country's demand is estimated to be 725 MMT IN 2017, a rise of 6% in from 2016, majorly owing to government incentives and increase in loans for steel end use industries

Market Overview- Trade Dynamics

Gradual rise in domestic demand coupled with increase in capacity utilization has increase trade measures in the last few years, majorly resulting in the recent increase in global steel export volumes. The global crude steel capacity utilization ratio in March 2018 was 74.5% which is s 2.2 percentage points higher than March of last year

  • Global steel export volumes have risen steadily from 29.4% in 2014 to 30.8% in 2015 and 31.1% in 2016
  • Top net exports countries include China (94.5 MMT), Japan (34.5 MMT), Russia (26.9 MMT), Ukraine (17.5 MMT), and Brazil (11.5 MMT)
  • Top net importers are US (21.7 MMT), Vietnam(17.0 MMT), Thailand (16.1 MMT), Indonesia (11.0 MMT), and European Union (10.5 MMT)
  • Many economies registered declines in exports last year: China by 2.5% to 108.1.5 MMT, Japan by 0.7% to 40.5 MMT, the EU by 9.1% to 29.9 MMT, and Korea by 1.5% to 30.6 MMT. This was partially offset by growth in the CIS region, where Russian steel exports climbed by 5.4% to 31.2 MMT and Ukrainian exports increased by 2.9% to 18.2 MMT

Market Drivers and Constraints

Drivers

Downstream Demand

  • Increasing demand from downstream industries such as agriculture, processing industry, consumer products, construction industry is expected to be the primary driver for steel industry

Need for Cost Reduction

  • Increased focus on reducing total ownership cost of steel making process has led to the adoption of newer technologies and the use of more energy efficient fabrication and manufacturing process

Technological Advancements

  • Development of newer technologies is driven by the need to attain lower cycle times in manufacturing process.
  • Suppliers in emerging economies are rapidly adopting technologies to improve the efficiency and increase the  production capacities

Constraints

Current Supply Glut

  • Steel industry has been facing with supply glut since 2014, mainly due to the fall of demand from the largest consumer, China. The weak economic growth of China has impacted the global stainless steel industry and subsequently the prices

Lower Profit Margins

  • For the past 12–18 months, steel suppliers are experiencing lower margins due to the falling prices. Suppliers are also susceptible to commodity price fluctuations, against which they cannot hedge due to relatively smaller periods of contracts

Logistics Cost

  • Steel and its products have high logistics costs. The Baltic Dry Index acts as an indicator of measuring logistic costs of dry bulk category, such as steel. Increased logistics cost impacts the import of raw material and increases the domestic and landing cost of steel, exporting nations

Raw Material Supply

  • Steel industry has been facing shortage of graphite electrode owing to paucity of needle coke in China. This is due to stringent measures adopted by the authorities in order to curtail pollution levels
  • Around 226,000 tonnes of electrodes are consumed every year in the EU. More than 60% of the smaller LF-type rods come from China. Consequently, both primary and secondary steel production could be adversely affected in Europe

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