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Market situation and outlook

The market

According to the World Steel Association (WSA), global crude steel production for the first eight months of 2017 was 1,124 (1,069) million tonnes, up 5.1% compared with the same period in 2016. The Chinese crude steel production increased by nearly 6%. In the EU-28, production rose by just over 4%, whereas production in North America was up by just over 3% during the same period.

In North America, demand was good early on in the third quarter, but weakened as the quarter progressed. The market in the USA is characterized by a wait and see sentiment with regard to the possible impacts from the Section 232 steel investigation (which could result in further import duties on steel on the grounds of USA security) and most of all by the prevailing uncertainty surrounding if and when further duties or quotas on imported steel could be introduced. In North America, inventory levels at distributors are considered to be somewhat low. In Europe, demand during the third quarter continued to be good, albeit with the usual seasonal slowdown. Inventory levels at distributors decreased somewhat during the quarter and are considered to be in balance. In October, notification was received from the EU about import duties on hot-rolled material from Brazil, Iran, Russia and Ukraine.

In North America, the falling price trend seen towards the end of the second quarter continued and market prices for heavy plate decreased during the third quarter. In Europe on the other hand, market prices both for strip and heavy plate rose during the third quarter. Also in China, market prices both for strip and heavy plate rose during the quarter.

Market outlook

In North America, demand for heavy plate is anticipated to be stable during the fourth quarter. In Europe, demand is expected to be good. It is anticipated that the underlying demand for high-strength steel will continue to show positive development. Overall, SSAB’s shipments during the fourth quarter are expected to be in line with those of the third quarter. It is anticipated that overall the prices realized by SSAB during the fourth quarter will be somewhat lower compared with prior quarter. This is attributable to SSAB Americas and to a seasonally weaker mix in SSAB Europe.