Steel Market Update (SMU) recorded two consecutive weeks of triple-digit price gains in March. SMU also recorded the highest week-over-week gain we’ve ever seen in hot-rolled coil (HRC)—$210/ton.
Russia’s invasion of Ukraine—and subsequent shocks to raw material costs and supply chains—drove prices higher. Prices shot higher not only for steel, ferrous scrap, and pig iron, but also for ferroalloys and energy. It was the same story on both sides of the Atlantic.
The sharp week-over-week gains have since moderated. We saw HRC prices dip in mid-April for the first time since the outset of the war. The decline was modest, but we saw flat or modestly lower prices across several of the products we track. We don’t think that trend is an outlier.
Let’s start with the big picture. Russia’s invasion of Ukraine sent prices in the West soaring. But prices in Asia didn’t go up nearly as much, probably because of a severe COVID-19 outbreak in China and equally severe lockdown measures. (Also, while the West put various sanctions on Russian goods, including steel, China did not.)
Beijing might provide stimulus to offset the impact of those lockdowns, as it has done in the past, but for now there is a huge gap between HRC prices in the West and those in Asia. That’s unusual. In normal times—and we realize these are not normal times—prices in the East would rise or prices in the West would fall. It looks like prices in the West are inflecting downward