August 2022
AME’s average HRC price forecast for the US in the September quarter is US$1,100/t, down 15.6% quarter on quarter. Global average steel prices have been falling throughout July with end users still wary of rising inflation.

Turkey’s inflation experienced a 24-year high at 80% in July, due to a weak lira and rising commodity prices. Central banks are now aggressively increasing interest rates leaving concerns that many developed economies will experience a recession within the next 12 months. The US average rebar price for July was US$1,093/t, down 3.2% month on month and 27.1% since April. 

Average steel prices in 2022 and 2023 will continue to progressively normalise from their recent highs in March-April 2022. The decline has been caused by surging inflation which has consequently lowered global GDP forecasts, along with China’s zero covid policy, crimping demand.

China’s average rebar price forecast for 2022 is US$627/t, down 10% and for 2023 is US$570/t, down 9%, year on year. By 2023, many steel producers will have negotiated alternative trading partners to compensate for Russian exports. As deglobalisation escalates and individual counties manoeuvre to become self-reliant, there will be an acceleration of decarbonisation policies.

German steel producer Salzgitter AG’s executive board has approved its own funds of US$769m for the first phase expansion for its green transition SALCOS project. The project will be implemented in three stages and once operational will reduce its CO2 emission by 95%. The first stage of construction will include an electrolysis unit, a DRI plant and an EAF with expected commissioning by the end of 2025.

Global pipe manufacturing Tenaris has entered into a definitive agreement to acquire Benteler Steel & Tube Manufacturing Corporation from its holding company, Benteler North American Corporation (Benteler), with investment of US$460m. Benteler Steel & Tube Manufacturing Corporation is a US producer of seamless steel pipe, for the oil and gas markets with its facility located in Sherveport, Louisiana. The facility is modern and highly digitised with Benteler successfully completing a ramp-up at the plant in 2020.

ArcelorMittal plans to acquire Brazilian steel complex Companhia Siderurgica do Pecem (CSP) in Ceara state. The producer has already reached an agreement with CSP’s shareholders – Vale (50%), Dongkuk (30%), and POSCO (20%). The investment will cost ArcelorMittal US$2.2bn and is expected to be finalised by late 2022. ArcelorMittal believes the site has expansion potential with the option for low-CO2 steelmaking due to third-party investment to form a clean electricity and green hydrogen hub in Pecem.

Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) is likely to stop its investment programme rollout due to severe international sanctions against Russia. This has impacted the company’s steel exports, resulting in a steep decline in revenue and profit. MMK has indicated the company’s typical profitability was between 20-25%, while in May it had dropped to only 4%.

The company suggests the investment programme is stopping as it requires a minimum profitability of 15% to be implemented. MMK initial announced in December 2021 it was going to invest a total of US$5bn, during 2022-2025.