The steel industry stands at a pivotal juncture. Despite a robust first half of 2022, characterized by high prices, utilization, and EBITDA margins, signs of a market slowdown became evident by early 2022. Factors like the Ukraine conflict, recurring COVID-19 lockdowns in China, supply chain issues, and the broader macroeconomic landscape—including inflation and rising global interest rates—have affected the industry’s prospects. Consequently, steel demand predictions have been adjusted downward, and EBITDA margins and the margin over raw materials have significantly declined. In reaction, steel players have taken measures like idling capacities.
To address this volatility, the article proposes four core strategies:
Prepare for the decoupling of steel markets.
Fortify the raw-material supply chain.
Prioritize capital expenditures and maintain a healthy balance sheet.
Enhance technological agility.
Russia's invasion of Ukraine disrupted the steel value chain, causing price spikes in several commodities. However, stabilization has been observed as demand, especially in China, slowed.
For a comprehensive understanding, refer to the 11-page article available for download on MiningInsights.
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