World steel price rises 16 percent in February over the previous year

The upward trend in global steel prices continued in February, with North American and European steel companies driving much of the price increases thanks to improved market principles.

From a MEPS survey, in February, many North American and European steel buyers report that increased international sales have helped to reach the latest prices. Steelworkers were given the opportunity to raise values, in the absence of competitively priced alternatives, especially from suppliers in the Far East.

Steelmakers in China took advantage of the government closure of local induction furnaces and improved demand conditions to significantly increase domestic prices in the second half of 2017. Consequently, less material was sent for overseas markets. Export volumes fell 30.5 percent in 2017 compared to the same period last year.

After a spike in late November /early December and a subsequent downward correction in late December /early January, China's steel sales figures stabilized ahead of the Lunar New Year. In the next period, it is likely that local prices will rise due to restocking.

With strong demand forecasts for 2018, MEPS expects Chinese prices to peak in mid-year in mid-March as a result of the lifting of winter production restrictions. It is reported that the metal produced by electric arc furnaces will be introduced to replace the output of the lost power of induction furnaces. Consequently, Chinese production is expected to rise in the second trimester of 2018. This could jeopardize the sustainability of the current global recovery in steel prices.