Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Fitch has modified its global steel short-term price estimate to an average of $800/mt compared to its prior calculation of $660/mt on strong demand that has outpaced tight supply.


Global recovery in major end-markets including automotive, manufacturing, construction, and infrastructure have boosted steel mill margins and capacity utilization this year to average near 78pc compared to 2020’s average of 68pc.  


Overall steel prices have averaged $883/mt to date in 2021 compared to $582/mt last year, as pricing rose considerably since Q4 2020. The momentum will foreseeably level off by July, though major price drops are unlikely due to continued healthy demand.


However, global steel prices may alleviate when looking at a longer-term view as demand will likely balance after the sharp resurgence in 2021. This trend is apt to drive prices down considerably by 2022.


Fitch estimates that global steel pricing will average $600/mt in 2022 and $535/mt between 2023-2025, according to reports. In fact, the agency projects that slackening Chinese steel consumption mixed with mounting global steel trade hurdles, that led to higher output in concerned countries, will drive market strength downward as well as pull pricing down in the medium term.


The organization also noted that domestic steel demand will decelerate in China by 2022 onwards as market focus will move back to the service sector from heavy industry and pull domestic steel prices down in China as well as globally.

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