The crisis in relations between Russia and Ukraine affects the global steel market

After the uproar over the suspension of shipments from the Black Sea due to the confrontation between Russia and Ukraine, most enterprises have recently preferred to declare force majeure. The sensational news caused a spike in market prices and a rapid redistribution. However, market fluidity and shyness in demand continue to put pressure on the steel market.

Demands from factories in India, Russia and China have significantly increased, but this does not translate into a significant increase in transactions. Some signs of a resurgence in US demand from nearby markets remain weak as the Middle East awaits the end of summer and Europe laments the disadvantage of a weak euro. The ubiquitous threat of a Chinese invasion of the steel market is a reality, as Chinese factories are ramping up in the absence of domestic appetites.

Steel product exports from China rose recklessly by 43 percent in July. At the same time, Chinese enterprises have lost some of their import orders to the countries of the Middle East at the expense of Indian and Russian factories. Recent reports point to deals in the UAE at $ 533 per tonne CFR versus $ 550-555 per tonne offers from other factories.

Russian mills have raised their supply levels by $ 40 per tonne, primarily for orders from the US, as they prefer closer destinations. Indian factories would like to take advantage of a shorter delivery time of 1 month from India compared to 3 months from China. The declining prices of iron ore, coke and scrap metal provide additional room for Chinese and Indian factories, competing with each other for markets in Europe and the Middle East. However, the balance is still in favor of the Chinese.