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Under Pressure! Steel Margins On Course To Contract By 2022

Recovering from the new covid-19 pandemic and pent-up demand has led to a surge in steel prices at a faster rate than raw materials, thus bringing huge profits to steelmakers.


In 2021, the gap between Fastmarkets' steel hot-rolled coil index, fob mill US and steel scrap No.1 busheling, index, delivered Midwest mill has widened significantly. As of mid-June, the average profit so far in the year was US $936.18 per ton; In 2020, the average gap was USD 354.32 per ton, and the profit margin in 2015 was only USD 257.39 per ton.


U.S. steel producers have been struggling to keep up with demand because section 232 tariffs and quotas implemented in 2018 make maritime suppliers uncompetitive. At the same time, the green agenda has become the focus of attention. It has created the demand for low carbon steel, which in turn has created the demand for ore metals and more and more waste. The combination of these factors enables local steel mills to determine prices, especially for flat steel used in manufacturing applications.


Short Comments: A surge in steel prices at a faster rate than raw materials, thus bringing huge profits to steelmakers while resulting in a steep price rise on steel products such as its packaging, steel drum closures.

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