Commodity Market Report

Global steel short-term outlook April 2020

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30 April 2020

Global steel short-term outlook April 2020

Report summary

Will global steel demand experience a double digit decline this year? In this month’s steel markets short-term outlook we have proposed a slump scenario. An outlook where steel demand broadly mirrors the falls and recovery experienced during the 2009 global financial crisis. Initial data creeping in for March suggest the magnitude of our slump is feasible. This remains scenario analysis and not our base case. But the results are damning. A 200 million tonne reduction in annual finished steel demand is possible. Excluding China – where falls could be limited to the low single digits – we could see one fifth of 2019 finished steel demand lost this year.

Table of contents

  • Downside demand scenario analysis
  • Production and prices
    • Construction sector recovery is on track
    • More stimulus favoring the sector is expected
    • Automotive downturn may last longer
    • Slump scenario: downside risk is beyond the border
    • Crude steel output growth has turned negative
    • Limited visibility for steel during country lockdown.
    • Steel Exports providing a lifeline with domestic demand dried-up.
    • Partial relaxations in lockdown to revive steel demand.
    • A global economic slump could rebase Japanese steel production 9% lower
    • A bleak outlook for demand
    • So far so good for construction
    • Automotive: in free fall, as expected
    • Prices: the only way is down!
    • Brazil will get (much) worse before it gets better
    • Steel Costs
    • Raw material prices
    • Where is cost support for steel prices?
    • China
    • United States

Tables and charts

This report includes 26 images and tables including:

  • Summary of results of the downside steel demand scenario analysis in comparison to the GFC – an extended version of this table can be found later in the Executive Summary.
  • What has to happen on a monthly basis for global finished steel demand to contract by 11% this year?
  • Proportion of global steel making capacity under announced suspentions/curtailments by reason
  • Proportion of global steel making capacity under announced suspentions/curtailments by initial restart date
  • Proportion of global steel making capacity under announced suspentions/curtailments by asset type
  • Proportion of global BOF capacity under announced suspentions/curtailments by closure type
  • Downside scenario global summary table
  • Daily transactions of construction steel between end-users have indicated construction activity resuming normal
  • Crude steel output has some room to grow but there is no way to catch up on the level in last year
  • Post GFC world was difficult for Japanese steel products
  • Japanese steel production rebased 8% lower post GFC and is set to be rebased again 9% lower by 2024
  • EU slump scenario - demand in April could fall by 75% yoy
  • Permission for the execution of construction projects by state (as of 27 April 2020)
  • US indicators 1
  • US indicators 2
  • Quarterly and annual steel prices
  • Quarterly and annual metallics prices
  • Europe HRC
  • Europe Rebar
  • China HRC
  • China Rebar
  • US HRC
  • US Rebar
  • Global crude-steel production
  • Global PMI indicators
  • Summary

What's included

This report contains:

  • Document

    Global steel short-term outlook April 2020

    PDF 1.13 MB