The impact of Covid-19 is undeniably huge. It continues to make its presence felt across all commodity markets, including the ferrous supply chain, from raw materials down to finished steel products.
One significant impact that can be tracked closely through spot pricing is the increasing disarray in price correlations between various segments of the ferrous supply chain after the Covid-19 pandemic kicked in.
A supply chain typically moves together in the same price cycle, allowing for time lags between raw materials input and finished product output amid fluid market conditions. The recycling of steel products back into the supply chain is another factor to consider in a price cycle.
This is especially so in the seaborne commodity markets, which is exposed to differing levels of demand and supply in various regions, compared to domestic markets that are more stable in terms of trade flows.
Fastmarkets takes a look at the following key benchmark prices in Asia to decipher Covid-19's impact on the regional steel market.
Premium hard coking coal, fob DBCT Iron ore 62% Fe fines, cfr Qingdao, $/tonne...