FOCUS: Will EU flat steel output cuts be enough to minimize a Covid-19-driven market downturn?

European flat steel producers have reduced output, and some of them have stopped operating certain equipment, in their attempts to balance supply and demand after multiple automotive producers suspended their operations because of the Covid-19 pandemic.

All the major steel coil producers in Northern Europe - including ArcelorMittal, Thyssenkrupp, Salzgitter and Tata Steel - have taken steps to cut their output, but market participants have mixed views on how effective these measures will be.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, was unchanged day on day at €473.00 ($518.70) per tonne on Friday March 27.
Friday’s index was calculated based on average offer prices heard at €470-480 per tonne ex-works, as well as “workable” prices estimated by market sources at €460-470 per tonne ex-works.
No trading has been done in the past couple of weeks, according to market sources, but the region’s steelmakers have been trying to keep prices stable.

Some market sources believed that the production cuts would not stop prices falling when the market returned to normal. Decreased demand combined with lower import offers would probably result in a...


Maria Tanatar

Marina Maliushkina

March 27, 2020

20:22 GMT