Global Steel Market to Encounter Short-Term Headwinds

SEATTLE (Scrap Monster): The latest market report published by Taiwan-headquartered Yuanta Securities Investment Consulting Co. states that global steel market is seen facing multiple short-term headwinds. It cited unfavourable policy actions by the Chinese administration to limit inflation and to achieve zero-carbon emission goal as the key factors that add to the steel market concerns.

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The report notes that global steel demand continue to remain robust, driven by stimulus packages announced by various countries, following the Covid-19 crisis. The demand for steel from automotive and construction sectors has not slowed down despite pandemic and continues to gain further momentum. Meantime, the ongoing labour shortages and shipping restrictions have led to tight steel supply, it says. Also, Yuanta foresees substantial jump in earnings by global steelmakers.

One of the largest beneficiaries has been China Steel Corp.- the country’s largest steelmaker, who recently reported 848% year-on-year surge in pre-tax profits during the initial five-month period this year. The company has proposed to make further hike in prices for steel products in domestic market, which in turn is expected to benefit domestic downstream companies.