In the summer of 2020, there was a lull in the steel mills – due to the pandemic, demand had collapsed. Since then, industrial production in Europe has been picking up again and the steel demand is growing, but steel manufacturers are still not keeping up with production. So, we are in a situation of clear lack of inventories, at a time when demand began to rise.
Industry experts explain the price jumps, among other things, with the lockdown. In the beginning, industries came to a standstill overnight, such as large parts of the automotive industry. However, production has not been completely shut down, because a premature shutdown of a blast furnace causes millions in damage. Instead, the company has throttled the plants as much as possible and prepared for the ramp-up after the shutdown.
Also, the demand from China has risen sharply. In addition, the order structure was different from usual times – this ensures an extraordinarily high level of complexity in integrated production processes and can lead to delays in the supply chain. On the other hand, China has reduced its steel exports, which is why imports into the EU are declining. The Asian country has raised demand, specifically by 9.1%, in 2020. There has been a very strong stimulus policy, while in the rest of the world there has been a considerable decline (it fell by 9.5%), more logical considering the situation of the pandemic
The EU Monitoring Report includes more details about the steel crisis.
