Steel is always a hot commodity in the global market, but the demand for steel has increased by record amounts over the past two years, and shortages are causing market issues. Many buyers have expressed their concern about having enough steel for production needs in 2022.
The current shortages are due to supply chain issues that have impacted steel inventory, increasing demand. As a result of the spread of COVID-19 over the past two years, mill outages and transportation blockages have also led to a steel shortage.
The World Steel Association (WSA) reports a projected growth in the demand for steel in 2022, so demand will continue to increase. According to this forecast the growth assumes vaccinations will continue worldwide, which will halt the spread of new COVID variants, so the virus should be less damaging to the global market.
The backlogged demand for steel has also led to strong manufacturing activity, which has helped the steel market. Developed countries worldwide have outperformed the WSA’s expectations due to the high number of vaccinated individuals and government support. However, while the manufacturing side has been doing well, supply chain shortages are still disrupting the global steel market and are preventing a strong recovery in 2022. Due to the backlogged steel orders, the demand will remain high through the next year. Because of the demand for the limited inventory available, steel prices will continue to go up in 2022. The mill shutdowns caused shortages, but they also gave steelmakers time to bring new plants into service and negotiate higher prices for returning customers.
Increased business and consumer spending habits have driven up the demand for steel-bearing products, which are needed for everything from recreational vehicles to food cans and steel drums. Buyers are willing to pay more for these products and will continue to pay increased prices throughout 2022. Check out the full report from the World Steel Association here.