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.

