Market situation and outlook

The market

According to the World Steel Association, global crude steel production for the first eight months of the year amounted to 1,188 (1,240) million tonnes, down 4.2% compared with the same period in 2019. Chinese steel production increased by just under 4% and steel production in both North America and the EU-28 decreased by 19% compared with the same period in 2019.

In North America, the heavy plate market remained cautious during the third quarter because of subdued demand from most customer segments, as a result of Covid-19. Inventory levels at distributors are assessed to still be at a low level.

In Europe, the market remained weak for most of the third quarter, but recovered towards the end of the quarter. Some customer segments, primarily Automotive and Heavy Transport, which more or less shuttered production entirely during the second quarter due to Covid-19, have restarted production and this impacted positively on demand.

Global demand for high-strength steel remained weak during most of the third quarter, but recovered towards the end of the quarter. Demand in some regions, especially China, was at a good level.

In North America, market prices for heavy plate fell during the first half of the third quarter but rose during the second half. In Europe, market prices for both strip and heavy plate rose during the third quarter. Prices for the same products rose somewhat in China.

Market outlook

Outlook

Fourth quarter demand for steel is expected to recover somewhat, following two weak quarters. However, there are major uncertainties, mainly related to the spread of Covid-19. Normal seasonal slowdown is expected towards the end of the fourth quarter. Global demand for high-strength steel is expected to improve somewhat compared to the third quarter.

SSAB Americas’ and SSAB Europe’s shipments are expected to increase somewhat during the fourth quarter of 2020 compared with the third quarter. Also SSAB Special Steels’ shipments are expected to increase somewhat.

Prices realized by SSAB Americas are expected to be relatively unchanged on average compared with the third quarter of 2020. For SSAB Europe, prices are expected to be somewhat lower because of a weaker product mix during the fourth quarter. For SSAB Special Steels, prices are expected to be relatively stable during the fourth quarter compared to the third quarter.