Although a slight recovery in steel prices seemed to be taking shape in the fourth quarter of 2023, it has not yet really materialised. The economic outlook in China remains weak, which also has an indirect effect on steel prices in Europe.

In Europe, the German market remains very weak, with an overall decline of 5% compared with the same period in 2023, due in particular to a fall in the automotive market. This decline could reach 25%.

As demand remains weak, pushing prices down – despite a small increase of 40/tonne in March – there will continue to be a risk of steel mills closing capacity in order to maintain a certain price level. This type of closure is obviously likely to handicap a future recovery in the event of a sharp increase in demand.

Against this backdrop, steel and stainless steel prices have remained stable at very low levels. Alloy surcharge prices followed the same trend, with a slight upturn in March.

While the third quarter saw a downward trend in steel prices, it seems that the low point has been reached.

The fourth quarter saw a slight upturn in prices.  In Europe, this was mainly the result of production cutbacks at major producers such as Arcelor Mittal and Tata Steel, which shut down several blast furnaces for maintenance and inspection.  This reduction in production volumes is also evident at global level, with output down by 5% in China.

This limitation of volumes has had its effect.  In Europe, this was coupled with specific measures in certain countries, such as Germany, to boost the competitiveness of their industry and thus maintain prices.

There has also been an increase of around 8% in motor vehicle production, particularly in Germany and China, which has supported price rises.

In the stainless steel market, the downward trend in alloy surcharges continued.  However, stainless steel prices remained relatively stable over the period because the rise in steel prices offset the fall in alloy surcharges.

For the beginning of 2024, depending on the commodity, the price of a tonne of steel will vary between €740 and €890 per tonne.

The trend in steel prices was fairly uneven in the third quarter of 2023.

Rising interest rates, persistently high energy prices (even though they have fallen since the crisis in the summer of 2022), the automotive industry, which appears to be stagnating, and the construction industry, which is in decline, are leading to a downward trend in demand for raw materials and therefore for steel.

Furthermore, economic forecasts have been revised downwards in Europe and in most European countries, with Germany even threatening recession.  In addition, the fall in activity in China has meant that many Chinese producers have tried to export more at lower prices.  These increased imports have not yet been cleared through customs, as the quotas for the third quarter have been used up, but they will be in the fourth quarter, which could further depress steel prices.

Other Asian countries are experiencing the same situation, which is not improving demand for steel in general.

Prices per tonne of steel are therefore falling, to around €850 – €890 per tonne.  These are obviously base prices, as there are supplements for different qualities, thicknesses, widths and lengths.

Prices for alloy surcharges for the various categories of stainless steel are also trending slightly downwards.  This drop varies according to the quality of the stainless steel.

In view of these factors, it does not seem likely that prices will rise in the fourth quarter.  They may stabilise if the stimulus measures taken by certain countries begin to bear fruit.