Evolution of the Price of Steel

Evolution and current situation of the price of steel

By Aratubo on September 13, 2021
Categorized as

The price of steel has reached record levels, even managing to eclipse the previous peak recorded in 2008. In the last 12 months, the price of hot rolled coil has increased by more than €700 per tonne. In short, HRC has increased by almost 200%.

Lowest point (Jun./Jul. 2020) Highest point (Jul. 2021) Current prices (Sept. 2021)
Hot rolled coil 396 €/t 1,190 €/t 1,125 €/t
Cold rolled coil 501 €/t 1,320 €/t 1,340 €/t
Hot dipped galvanised coil 513 €/t 1,300 €/t 1,290 €/t
Northern Europe - Evolution of steel prices
Northern Europe – Evolution of steel prices – Source S&P Global

How did we get to this unprecedented situation?

There are many factors that have caused steel prices to rise to all-time highs. The most relevant ones are listed below:

A shortage of supply and high demand caused by COVID-19

During the first half of 2020, as a result of the pandemic, global steel consumption fell dramatically. The impact of COVID-19 not only affected demand, but global production as well. The measures implemented by governments in March 2020 to control the spread of the virus forced the steel industry to significantly reduce its production. There were even some companies that were forced to close temporarily. As a result of this halt in production, not only did the international price of steel plummet, but global production also fell to historic levels.

The lowest point for hot rolled coil was when it was worth €396/t in July 2020.

In the second half of 2020, the demand for steel began to increase gradually, but there was a very low supply. The supply shortage was caused in part by the technical difficulties the mills had to face in getting their equipment back up and running. Furthermore, they were reluctant to quickly restore their capacity for fear of a possible oversupply if the price of steel fell again. At the same time, there was an unexpected peak in demand from the automotive sector, which caused a decrease in supply for the general market.

Towards the end of 2020 the shortage of material became even more pronounced. As a result, the recovery in steel prices accelerated and steel mills focused on customers with long-term contracts, leaving little material for the spot market.

Due to domestic supply shortages, in early 2021, European steel buyers were forced to look for alternatives. However, the options they found were just as problematic. They encountered high steel prices, significant transportation costs, port congestion and protectionist trade policies. These aspects were important obstacles for the acquisition of steel from other countries.

Today there is still a lack of supply both inside and outside of Europe, with high prices and long delivery times. The current situation allows steel producers to regularly raise their selling prices, which translates into little room for negotiation in the acquisition of this material.


Increase in raw material prices

The increase in the price of steel is obviously linked to that of the raw materials it is made up of. Raw materials such as iron ore, coal or metallurgical coke, among others.

Below is a table showing the increases that some materials have experienced to date:

IRON ORE: Current price: $216.50/t. Recent year average: $70-80/t. [Maximum: $230/t]

AUSTRALIAN COAL: Current price: $206.50/t. Recent year average: $110-120/t.

CHINESE COAL: Current price: $307.50/t. Recent year average: $120-130/t.

TURKISH SCRAP: Current price: $484/t. Recent year average: $110-120/t. [Maximum: $504/t]

EUROFORGE BDSV 2/8 SCRAP: Current price: $430.40/t. [+$234.30/t since July 2020]

There are different aspects that have contributed to the drastic increase in the prices of raw materials:

  • The gradual recovery of the markets has triggered demand and, as a result, its price
  • Policies to favour domestic supply and export restrictions in some countries have led to a decreased flow of materials to Europe
  • The tendency among some industrial companies to over stock to avoid stock outs and be able to properly serve customers has contributed to the shortage of materials
  • The availability of scrap has been reduced as a result of the decline in industrial activity during the pandemic


Protectionist measures


The new policy of the Chinese government that eliminates the VAT refund of 13% for steel exports to third countries has been a strategic move that makes imports difficult and significantly increases the price.

In addition, the largest steel producer in the world is absorbing much of its production, and also that of other countries, to supply its domestic market. A very significant piece of data is that steel exports from China last year fell by 67%, while its imports grew by 150%. In other words, China has gone from being an exporting country to being an importing country, as its internal demand has exceeded its production.


The European Union has extended the safeguard measures on imports of certain steel products for another 3 years. This extension took effect on 1st July 2021.

The initial tariff policy was introduced in March 2018 to protect and guarantee the viability of the steel market and European steel producers against trade pressure from countries such as China and the US. It originally proposed that the validity of the initial tariff would end on 30th June.

However, the European Union will continue to charge the 25% tariff on imports of products that exceed its quotas. In addition, in accordance with World Trade Organization regulations, duty-free steel import quotas will also increase by 3% per year.

For some industry leaders, extending the safeguard measures will negatively affect the steel industry and automotive sector, as well as steel consuming and processing companies (due to the current context of high prices and limited availability in the European market).


Increased transportation costs

Along with supply problems, there has been a significant increase in the price of sea freight. According to data from Drewry Shipping, a firm that monitors sea freight prices globally, the cost of shipping a 12-metre container on eight of the main East-West routes reached 9,613 USD; an increase of 360% in just one year.

Behind the spectacular increase in the value of ocean freight is the so-called “container crisis”. In other words, an unusual shortage of available space to transport goods from Asia to the West. In the specific case of steel transportation, sea freight has gone from 40-45 USD/tonne to 100 USD/tonne and containers have reached figures of up to 14,000 USD/tonne for the spot market.


CO2 emissions reduction plan

The global steel industry has defined eight sustainability indicators, which consider the environmental, social and economic performance of the steel industry. The environmental indices to take into account are:

  • CO2 emissions and energy consumed per produced tonne of steel
  • The percentage of raw material converted into products and by-products
  • The percentage of employees and contractors included in an environmental management system

China: Carbon neutrality by 2060

Carbon neutrality is achieved when the same amount of CO2 is emitted into the atmosphere from which it is removed. Thus, the Asian giant has committed to reaching neutrality in its emissions by 2060. In other words, starting in 2060, China will not release any additional CO2 into the atmosphere.

Specifically, Tangshan, one of the world’s largest steel centres and China’s steel capital, has called upon major steel plants to reduce their emissions by 30-50% by the end of 2021.

Europe: Carbon Border Adjustment Mechanisms  

The European Union launched its new package of climate measures known as Fit for 55. The target of this programme is to achieve a 55% reduction in greenhouse gas emissions by 2030, compared with levels in 1990. The goal is to become a climate-neutral continent by 2050.

Within this package of measures, a Carbon Border Adjustment Mechanism  will be implemented that, in principle, will affect imports of iron and steel, among others. This tax will be applied to prevent the risk of carbon leakage and to encourage producers in non-EU countries to make their production processes greener.

Currently, there are some steelmakers that have already joined this initiative. So much so that they are applying increases to their selling price in favour of the so-called green steel.


As we have explained in this article, numerous factors are causing this rising steel price situation and they are of a very diverse nature. As a result, it appears that the current situation will stay around for a long amount of time.

Un comentario para “Evolution and current situation of the price of steel”

  1. Having read this I believed it was rather informative. I appreciate you spending some time and energy to put this information together. I once again find myself personally spending a significant amount of time both reading and leaving comments. how can you make me interested?

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