European Steel Plate Prices Skyrocket Amid Production Cuts and Rising Demand

In the first week of July, the price of Steel Plates in the European market showed an inclining trend as the production cost increased. The demand from the downstream automobile industries was on a higher edge as the sales increased. The feedstock iron ore prices have also increased. Meanwhile, the local mills have planned to go through production cuts and maintenance breaks to promote improving Steel Plate prices in the European market.

The feedstock iron ore prices have been increasing as the supply level has decreased amid the ongoing Russia-Ukraine war that disrupted the supply Chain of Iron ore across Europe. The inventory levels have been low amid the declining extraction rate in Australian mines due to rising concern for deforestation and nature’s preservation. The iron ore supply from the Asian market has been plunged as the Indian KIOCL has shut down its Mangalore unit for refractory repair work, which resulted in a deficient state for feedstock Iron ore inventory in the European market. Furthermore, the Chinese Steel manufacturers have also increased their Steel Plate export prices amid a hike in demand from the downstream automotive industries. The stockpiling of iron ore was observed by local steel manufacturers resulting in lower inventory levels and rising prices of Iron ore stocks. The increase in imported steel prices provoked the local mills to hike their offers for the Steel Plate in the European spot market. Additionally, the rise in energy cost has been observed majorly by the steel-producing industries, and this has also provided strong cost support to produce Steel Plates in the European Steel mills.

The production cut was observed in various mills amid declining demand in previous weeks to lower the supply-demand gap. Salzgitter, a major steel producer in Germany, has announced force majeure on Steel products due to the supply disruption caused by heavy rainfall. The flooding caused by heavy rainfall blocked most roads and railway routes, disrupting the supply chain for Steel Plates. Furthermore, a production cut was observed as some of the finished goods got damaged during that period. This caused an insufficient inventory level in the local market, leading to hiking prices of Steel Plates across Europe.

The demand for the Steel Plate remained high in the European market as the downstream automobile industry showed a profitable margin this week. The Avtovaz Industry, a major European automobile manufacturer, reported a surge in sales of Lada cars at the end of June 2023. The rise in sales and consumption resulted in the mounting demand for Steel Plates in the European market, provoking the local Steel manufacturers to increase their offer prices to benefit from the growing market situation.

According to ChemAnalyst, the price of Steel Plates will rise in the upcoming time as the downstream automobile industry shows an inclining trend that will increase the Steel Plate demand in the European market. The rising energy cost and mounting price of feedstock Iron ore will provide strong cost support in producing Steel Plates in the European Steel market.