News Global Market forecast 28 October 2020
In 2020, prices will go down by 7%
World Steel Dynamics, one of the most reputable think tanks in the steel industry, predicts a 2% growth in steel prices in 2021.
This is the forecast presented by Philipp Englin, CEO of World Steel Dynamics, during the Steel Success Strategy 2020 forum organized by World Steel Dynamics and Fastmarkets reporting agency.
According to Philipp Englin, two major factors determine the price dynamics on steel markets: changes in net exports from China and steel consumption dynamics outside of China.
2020 will see prices going down by 7%. This is an incredibly small decrease considering the catastrophic drop in demand outside of China due to the COVID-19 epidemic. The thing is that the prices have been so far backed by a 40% decrease in China’s exports. In the summer, China even became a net importer for some time.
World Steel Dynamics forecasts a slight growth in prices in 2021 — by around 2% only. Steel demand outside of China will increase by 10.4% next year. Still, China is expected to ramp up its exports by 33% which will definitely affect the prices. The second factor restricting the growth in prices will be the fact that demand has already recovered, despite being expected only next year, which has already been reflected in the current prices.
Philipp Englin believes that supply recovery will be one of the factors of downward pressure on prices. This factor will be particularly influential in the second half of the year when the suspended capacities will rejoin the market.