The European steel market has wobbled since the beginning of the conflict between Russia and Ukraine. More than a month has passed, European steel prices continue to rise sharply due to delivery disruptions, sanctions from the US and Western countries, and soaring energy prices.

Russia is the world’s fifth largest steel producer, while Ukraine is in 14th place, the two combined account for a combined one-fifth of total steel imports into the European Union.

The price of hot rolled coil (HRC) in the European market has increased by nearly 40% in the past 3 weeks. Following the same trend, steel prices in North America and China also increased, but at a slower rate, around 7-8%.

Steel prices in Europe increased sharply, outstripping the US and European markets.

“It seems certain that prices will continue to rise in the short-term. We expect this trend to last through March and into April,” said Kaye Ayub, an analyst at consulting firm MEPS International. “Supply has been disrupted mass in Europe, and it will take quite a while to resolve that,” he said.

Russia and Ukraine are the world’s leading steel exporters, with outstanding market shares, especially in European markets.

UBS analyst Andrew Jones said: “In Europe, Russia and Ukraine have pricing power over steel mills … and the loss of about 20% of finished steel imports from Russia/Ukraine has caused supply is tight in the market”.

Although the sanctions by Western countries do not specifically target Russian steel companies, logistical problems and the associated impact of the sanctions have disrupted business. as well as transporting steel.

Steel production in the world, Europe and China.

New measures banning Russian finished steel products from entering the European Union are expected to take effect soon, and traders have been forced to raise prices on the view that supply will continue to shrink.

On March 12, the EU announced it would ban iron and steel imports from Russia and ban the export of luxury goods to Moscow. On March 16, the EU announced it would increase tariffs on stainless steel products from India and Indonesia, after determining they benefited from unfair subsidies, including some from China. . These moves will further tighten the European steel market.

Reference: Reuters

Vu Ngoc Diep

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