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Market situation and outlook

The market

According to the World Steel Association (WSA), global crude steel production for the two months of 2018 amounted to 277 (266) million tonnes, up 3.9% compared with the same period in 2017. Chinese steel production increased by almost 6% in the first two months of 2018 compared with the first two months prior year. However, as in 2017, the actual increase in steel production is estimated to be clearly lower because some production has moved from illegal capacity (that has been shut down), to steel mills that are included in the official statistics. In the EU-28, production was unchanged, whereas production in North America decreased by 1% during the first two months of the year.

In North America, demand was strong during the first quarter and demand both from end-users and distributors increased compared with the fourth quarter of 2017. During the first quarter, a decision was taken regarding the Section 232 steel investigation and a duty of 25% was imposed on imports from all countries. This was however revised, with exceptions for a number of countries, including a temporary exception for the EU-28. The impact of the decision has so far been limited and it is still difficult to judge the consequences over a longer perspective. In Europe, demand during the first quarter continued to be good. Stock levels at distributors in Europe are considered to be in balance.

In North America, market prices for heavy plate rose throughout the first quarter. In Europe, market prices for strip increased during the first half of the quarter before leveling off, while prices for heavy plate climbed at a moderate pace throughout the quarter. In China, market prices for strip decreased, whereas prices for heavy plate were more or less unchanged during the first quarter.

Market outlook

In North America, the demand for heavy plate is expected to remain strong during the second quarter 2018 and in Europe, demand for strip and heavy plate is estimated to remain good. The underlying demand for high-strength steels is expected to be good in most markets during the second quarter. For SSAB Europe and SSAB Americas, somewhat higher shipments are expected during the second quarter of 2018, compared with the previous quarter. SSAB Special Steels shipments for the second quarter are anticipated to be in line with, or somewhat lower than the high level seen in the first quarter of 2018. In total the prices realized for the three steel divisions are expected to be higher during the second quarter compared with the first quarter, particularly for SSAB Americas.