Ukraine Invasion Boosts Already-High Steel Prices

Russias invasion of Ukraine has roiled several major commodities markets, including those for oil and gas, wheat, fertilizer, steel, coal and vegetable oil. 

Global steel prices had already been climbing in the year before the invasion, thanks to the worlds economic recovery from the COVID-19 lockdowns and restrictions, although prices had softened in the U.S. over the past few months. In the U.S., during the lockdowns consumers bought steel-heavy appliances for their homes, catching shut-down steel mills by surprise and leading some closed mills to reopen. 

Based on revised Census Bureau data, the American Iron & Steel Institute (AISI) reported February 24 that the U.S. imported 31,476,000 net tons of steel in 2021, including 22,770,000 net tons of finished steel. These totals represent increases of 43 percent and 41 percent respectively over 2020. Final Census Bureau data for December 2021 showed total steel imports at 2,885,000 net tons, including 2,255,000 net tons of finished steel (down 0.7 percent and 4.0 net tons, respectively, vs. November revised data). 

According to World Steel, Ukraine had climbed to 9th-place among global steel exporters in 2021. A giant Ukrainian steel mill owned by Arcelor Mittal was forced to close March 3. Argus reported that prices of hot rolled coil steel could rise to between $1,300 and $1,400 a ton in the next few months. The U.S. hot rolled steel market had been softening before the invasion.

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