At the SteelOrbis 2021 Fall Conference & 85th IREPAS Meeting held virtually on October 18, Michael Setterdahl, from GFG Alliance - Liberty Steel Mills, member of the producers committee, said that it is a great time to be in the steel business.
He went on to say that the markets have never been better and that the first quarter of 2022 will be excellent, as long as China does not start increasing exports, while pointing out that steel consumption is growing at a higher rate in the rest of the world than in China.
Considering that the extra increases in steel production costs amount to €120/mt, Mr. Setterdahl indicated that, in the medium term, there will be CO2 charges or taxes and that there will be surcharges on all products. He said that right now, steel has surcharges on ferroalloys, but there has been very little reference to natural gas or electricity in the pricing of steel. Commenting on energy costs on the other hand, the Liberty official underlined that the EU and emerging markets will be affected the most because they are importing energy. He also noted that increases in electricity from wind power and solar power are expected, but these will be incremental increases, not immediate as in the case of coal energy
According to Mr. Setterdahl, demand in China is slowing down, with the Chinese demand growth forecast dropping from 6.5 percent to 4.9 percent. “As inventory levels are going up and as Chinese regulators are concerned about the increase in prices for residential buildings amid expensive rebar and cement, I think there is a political push in China to reduce demand,” Setterdahl noted. In response to a question on whether China would resume exports, the committee chairman said that Chinese mills may want to turn to the export markets to maintain their volumes with domestic consumption slowing down, but Beijing will not allow mass exports, he noted, explaining that 20 million mt of steel exports out of China may be tolerated but, if the figure goes up to the maximum amount of 65 million mt registered a few year ago, Beijing will take action.