Market situation and outlook

The market

According to the World Steel Association, global crude steel production in 2020 amounted to 1,829 (1,846) million tonnes, down 0.9% compared to the same period in 2019. Chinese steel production increased by more than 5%. Steel production decreased in North America by 16% and in the EU-28 by 12%.

In North America, demand for heavy plate rose during the fourth quarter. Inventory levels were low in a number of customer segments, including at distributors, and some demand was related to restocking. Inventory levels at distributors were estimated to be at a low level also at the end of the quarter.

In Europe, the market picked up during the fourth quarter. Despite the growing spread of Covid-19, production increased in a number of segments and this had a positive impact on demand. Imports into Europe were at a relatively low level during the quarter, while most European steel mills restarted production that had been idled earlier in the year.

Global demand for high-strength steel picked up during the quarter, especially in the European and North American markets. Demand in some other regions, like China and Latin America, was at a good level for most of the year

In North America, market prices for heavy plate increased during the fourth quarter, especially towards the end of the quarter. In Europe, market prices rose sharply for strip and also heavy plate prices were up. In China, prices for strip and heavy plate rose during the fourth quarter.

Market outlook

Outlook

Demand for steel during the first quarter of 2021 is estimated to be good, driven both by underlying demand and by customer restocking. Nevertheless, there is still uncertainty as to how the development of Covid-19 will affect demand. Global demand for high-strength steel is estimated to be good during the first quarter.

Special Steels’ shipments are expected to increase during the first quarter of 2021, compared to the fourth quarter of 2020, whereas SSAB Europe’s shipments are also expected to increase, but to a somewhat lesser extent. SSAB Americas’ shipments are expected to continue at a good level during the first quarter of 2021, but to be somewhat lower than in the fourth quarter of 2020, mainly due to low opening balance of slab inventories in the first quarter of 2021.

Prices realized by SSAB Americas and SSAB Europe are expected to increase significantly on average compared with the fourth quarter of 2020. For SSAB Special Steels, prices are expected to increase in the first quarter of 2021 compared to the fourth quarter of 2020. At the same time, costs for raw material will be higher in the first quarter of 2021, compared to the fourth quarter of 2020.