Moody’s: Global steel supply-demand imbalance to return in 2022 with prices gradually falling

Thursday, 16 September 2021 15:43:20 (GMT+3)   |   Istanbul

International credit rating agency Moody’s has stated that the outlook for the global metals and mining industry is changing to stable from positive with commodity price growth momentum fading out through 2022.

Moody’s expects the industry’s EBITDA to increase by approximately eight percent through mid-2022 based on economic recovery supporting demand for iron ore, steel and coal.

According to Moody’s, iron ore prices will move gradually toward their $70-80/mt average levels of 2016-19 beyond 2022. Tight iron ore supplies will keep prices above their historical norms through 2022, but prices have retreated sharply from their peaks earlier in 2021 as supplies have increased and demand growth decelerates. Coal prices will remain relatively high but will taper as supply problems ease.

Meanwhile, the global steel supply-demand imbalance will return through 2022 with prices gradually declining toward their historical averages from the unusual highs of 2021. Demand will ebb as buyers replenish inventories and stimulus spending wanes. Steel supplies will continue to increase as well, with productivity improving and new capacity coming online in certain parts of the world.

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