Suez Canal blockage may heighten price pressures in steel, metals: sources
London — The Suez Canal blockage by the grounded Ever Given container ship is not expected to immediately impact steel and metals supplies worldwide, market sources said March 25. However, it is fueling expectations of eventual rises in bunker and freight rates and inventory-squeezing that could exacerbate current upwards price pressure, particularly in steel and copper, they said. The waterway is used for shipments of steel and steelmaking raw materials including iron ore, pellets and hot-briquetted iron between the CIS and Asia, including China; aluminum semi-finished products from the Middle East to European nations and for copper shipments from Western nations to China.
Steel sector wary
For steel sources, the crucial factor will be how long the blockage lasts.
"At the moment it's hard to discern any noticeable impact on the European steel industry," said a spokesman for the European Steel Association Eurofer. "This blockage of the Suez Canal is, whilst newsworthy, likely short term and likely to soon be resolved."
If the issue is long-lasting it could have an effect on the European steel sector "as the market is already tight and deliveries slow," a trader said.
The trader nonetheless expressed greater concern over potential supply disruptions currently feared from steelmakers ArcelorMittal Italia, due to a pending court ruling on its operation, and Liberty Steel due to financing issues.
S&P Global Platts assessed North European hot rolled coil prices at an all-time high of Eur830/mt ex-works Ruhr on March 25, up Eur30/mt on-day, while Southern European HRC prices went up by Eur15/mt on the day to Eur825/mt ex-works Italy.