Steel short-term outlook August 2021 Report

Commodity Market Report 31 August 2021

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Report summary

Chinese steel demand recovered slower than expected in August, impacted by heavy rain in the north of the country and a spike in Covid cases in a few provinces. We expect a seasonal uptick in the next two months; however, upside is limited by a soft construction demand outlook. Production cuts are taking effect in China. This winter, the government will be well positioned to enforce its production cut policy as both domestic and export demand slow down. Also in this month’s short-term outlook: • How does the US infrastructure bill impact US construction steel demand? • How have Japan and South Korea fared in the past few months? • Will India maintain its production growth? • Are EU and US steel prices ready for a slowdown?

China
- Steel demand recovers in August but not ideal
- Steel supply to decline for the rest of 2021
- Mill margins recovered, destocking pace will be key to steel prices in September
US
- Bipartisan Infrastructure Framework: an infrastructure bill, not a steel one
- Production: full recovery may not be seen in 2021
- meanwhile, the appetite for imports is soaring!
EU and UK
- European steel production catching up with pre-pandemic level
- Post-lockdown rebound in European car sales is slowing down
- Construction continues to show improvement but business sentiment in Europe is sliding
- Steel prices to retreat but remain elevated
India
- Strong steel production despite subdued domestic demand
- but domestic demand to recover with range-bound steel prices
Japan
- Growth to stutter in the second half
South Korea
- South Korea to bridge the demand gap with Japan
- Iron ore
- Coal
- Scrap
- Green steel initiatives
- Other key industry developments