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we are again at the start of another unpredictable year so let’s say my friends “fasten seatbelts and enjoy the ride”!! 

The year 2021 has been quite challenging for many industries and no less for the Indian Steel Users. One of the main concerns were the “exploding" prices on all markets due to increases in all cost related aspects. That the Indian producers followed suit may have hurt their domestic customers especially those who could not that fast translate same in their costing to their end clients mainly because several other industries were not picking up so fast due to continuous covid related issues. On the other hand it is difficult to blame the producers after having faced all the hurdles in 2020 with low prices, no demand, etc. They are after all a heavily indebted industry which in India is actually coming out of a situation with too many NPA.


Quite some people expect 2022 both internationally and locally to follow a different scenario of somewhat moderated prices remaining at a reasonable high level of say +/- USD 800/mt for HRC (as has happened already) due to cost impact and a more stable demand. That can happen but experience throughout the year shows that the market’s behaviour remains unpredictable.


Indeed there are still elements which are or may be disruptive for example the new covid variants as that can have a huge impact for example on the Chinese market demand as for the rulers there keeping control of the pandemic is very important to keep the social unrest under tight control and omikron for example the spreading of same is much more difficult to contain. We already see that happening now in Chinese ports and that may have a huge impact on the world trade hence also the steel industry as for sure very stringent lockdowns may/will follow also because the winter Olympics in Beijing will have a highly disruptive impact on same.


The Indian government has decided not to impose AD on Chinese flat rolled anymore assuming that the BIS-hurdle will be enough to keep most foreign mills out with huge volumes also because for most of them their approval has expired but if domestic demand in China crashes mills may come back to the export markets and India will be an obvious target.


Another element worldwide is the rising inflation especially in US and Europe which can be controlled by increasing the interest rates so quite a bit the opposite of what Erdogan has been doing in Turkey where he is going against all financial principles. With the huge increased debts in US and EU due to covid lending for the governments will become more expensive meaning less governmental spending which may result in a substantial slow down of the economy which is actually in any case overheated.


Considering all above my believe for the Indian and World Steel industry is that we are again at the start of another unpredictable year so let’s say my friends “fasten seatbelts and enjoy the ride”!!