Market situation and outlook

The market

During the first quarter, the steel markets were impacted by the war in Ukraine. Higher apparent demand, including restocking, led to a sharp increase in spot prices for strip and plate in Europe and kept plate prices in North America on a high level.

In China, market prices for strip and plate showed an upward trend during the first quarter of 2022.

In North America, demand for heavy plate was good in most customer segments during the first quarter. Inventory levels at distributors were still low.

In Europe, demand was characterized by temporarily increased activity in conjunction with Russia’s invasion of Ukraine. Imports into Europe decreased temporarily since volumes from Russia and Ukraine contracted and this affected in particular the heavy plate market. Towards the end of the quarter, import activity from Turkey and Asia, among others, increased.

Global demand for high-strength steel was good in most markets during the quarter.

Market outlook

Outlook

The first quarter of 2022 was characterized by an exceptional upturn in demand, due to constraints in steel supply after Russia invaded Ukraine. Demand for steel during the second quarter of 2022 is expected to normalize and, hence, be on a somewhat lower level than in the first quarter. There remain uncertainties with a shortage of components as well as bottlenecks in logistics chains.

For SSAB Special Steels, both shipments and realized prices are expected to be higher during the second quarter of 2022 compared to the prior quarter. Global demand for high-strength steel is believed to remain on a good level during the second quarter in most markets.

For SSAB Europe, both shipments and prices are expected to be somewhat higher during the second quarter of 2022, compared to the first quarter.

SSAB Americas’ shipments are expected to be higher during the second quarter than in the first quarter and prices are expected to be somewhat higher.

Higher realized prices will be counteracted by higher input costs at all three steel divisions following a sharp rise in market prices of raw materials during the first quarter of 2022. This is due to the normal lag of around one quarter between changes in market prices and the impact on SSAB’s costs. Changes in the market prices for scrap have a lag of around one month for the North American operations.

 


Outlook for steel divisions

Q2 2022 vs. Q1 2022
Shipments Realized prices
SSAB Special Steel Higher Higher
SSAB Europe Somewhat higher
Somewhat higher
SSAB Americas Higher
Somewhat higher

Definitions: Significantly lower (>10 %), Lower (5-10 %), Somewhat lower (0-5 %), Stable (~0 %), Somewhat higher (0-5 %), Higher (5-10 %), Significantly higher (>10 %)