Steel might be a source of inspiration for many of us in the post-COVID-19 world. It gains its strength from a test of fire, quite literally. Just as the pandemic has tested people and industries across the globe, there is hope that humanity’s resilience has been fortified.
The analogy also works for the steel market, which has been bouncing back after the challenges of 2020. This feature will take a closer look at this vital commodity and how it has stood up to the test of the last year or so.
Balancing price and precision while spinning plates
Steel’s invention can be traced back to the 13th century B.C. with the discovery that iron became stronger when left in charcoal furnaces. Ever since, people have been innovating using steel for everything from weapons and armor to industry and infrastructure.
But not all steel is created equal, and the final product depends on how it is processed. For example, there is hot rolled steel, which requires temperatures above 1,000°C. It is ideal for applications that need to be shaped while retaining high strength, like railroad tracks, agricultural equipment, automotive frames, and construction projects.
Going further, cold rolled steel is essentially hot rolled steel that has undergone additional processing at room temperature. It goes through finishing steps such as grinding and polishing to produce precise dimensions and an improved surface. This extra effort may make the steel more expensive, but it is needed for applications that focus on precision, such as automobile parts, home appliances, and furniture.
Aside from shape, dimensions, and surface, steel can also be processed in terms of color. When people think of steel, silver or gray may come to mind. However, color steel plates have recently gained attention. Steel plates treated with special paint are used for everything from interior and exterior building design to home appliances and office equipment. They combine the durability and functionality of steel with the aesthetics of materials like marble and even wood.
Showing signs of a steely recovery
Despite the global slowdown due to COVID-19, there are signs of improvement in the steel market. The World Steel Association released a “much more optimistic outlook” last October compared with June. This year, steel demand is set to recover to 1,795.1 Mt with an increase of 4.1% over last year.
Much of this recovery is based on a surge in demand in China supported by government aid to develop infrastructure and a strong property market. In particular, China imported large quantities of hot rolled coils last year from India, South Korea, Japan, Taiwan, and Russia. Between last April to September, the price of hot rolled coils in China rose 37%.
There has also been a rebound in demand for cold rolled steel. According to the U.S. Department of Commerce, orders for durable goods like cold rolled steel for factory cooling towers increased 1.9% last September from August, as manufacturing started to recover. In addition, with more people staying at home over the last year, there has been a boost in home appliance sales. This has led to a boom in China’s steel demand, especially for cold rolled coils.
As for color steel plates, the situation is also looking positive. The global market for color-coated steel is expected to reach USD 27.9 billion in 2024, growing at a CAGR of around 4.8%. Demand from end-use industries such as the construction, automotive, and appliance sectors has driven the growth of the color-coated steel market.
Where does Samsung C&T fit in?
Samsung C&T Trading & Investment Group supplies hot and cold rolled steel and color steel plates to automakers, construction material manufacturers, shipyards, and distributors around the world.
Furthermore, we previously featured the work done by Otelinox in Europe, but the company’s offices responsible for trading steel are located in wide-ranging locations, from China to Mexico.
With genuine optimism rising in the industry, it may be hoped that the strength of Samsung C&T’s steel business may continue to shine.