Market conditions are clearly extraordinary when we find ourselves adjusting the axis on our pricing charts to display the new record-high prices each month.

After reporting record price highs in Europe and the United States with regards to coated steel products, we find ourselves repeating the same line this month. In Europe, the price rally has only intensified, with leading steelmaker ArcelorMittal announcing - and obtaining - a further three price increases since our previous tracker in mid-March.

Alongside these record prices have come record-high margins in recent weeks - calculated as the pricing difference between coated steel prices and raw materials. This price rally and its dynamics have thus exceeded the excesses during late 2008.

When prices correct - and they will, given such high margins and incentives to ramp up production - there is a growing risk that the pullback will be steep, the same as it was during late 2008 and early 2009. Demand has clearly rebounded year on year when compared to the initial outbreak of the Covid-19 pandemic, although market demand is not overly strong when compared to more ‘normal’ levels.

As we say in our Europe analysis this month, prices for flat-steel products when compared to long-steel products have likely been boosted amid growing trade restrictions in recent years, which bolstered the negotiating power of local suppliers. The less-globalized nature of the long products markets, for instance, has helped keep prices steady for these products. Certainly consumers of flat steel in Europe and the US would benefit from more open markets and there are growing calls from industry associations to repeal or at least soften existing trade barriers.

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