EU steel imports rise 35% in 2021; Turkey, India top exporters in Q4

• Turkey, India and Russian Federation top three exporters to EU in Q4
  
  
• Increase in volumes mirror continued improvement in steel demand
  
  
• Skyrocketing energy prices, materials shortage, high shipping costs disrupting supply chains
  
  
• Recession or stagflation could emerge if challenges persist
  
  

Morning Brief: Steel imports into the European Union (EU) remained volatile throughout 2021 as well as 2020, continuing a trend seen since 2019, as per the latest Eurofer Economic Report.

Over the entire 2021, imports of finished products rose 35% y-o-y after the drop of 15% recorded in 2020. Flat products rose 40% after dropping 15% in 2020 while longs imports were up 21% against the 16% decline in 2020.

Total steel imports into the EU (excluding the intra-EU trade) amounted to a little over 30 mnt against around 22 mnt in 2020.

Q4 imports
Total steel imports (including semis) into the EU rose considerably in the fourth quarter (Q4) of 2021 - 43% y-o-y and 48% in Q3, mirroring improved demand across the EU as well as high import penetration.

Imports of finished steel rose 50% in Q4 and 45% in Q3. Imports of flats were up 63% and 52% respectively in Q4 while longs showed a 15% and 25% growth respectively.

After a short spell of exceptionally weak demand, because of the outbreak of Covid-19, imports surged for some products in 2020 but showed volatility in the second half of the year. The increase became significantly more pronounced in 2021, particularly over the second and third quarters, mirroring the continued improvement in steel demand. The fourth quarter was, however, volatile.

Country-wise imports
The main exporting countries in Q4 to the EU were Turkey (0.43 mnt), India (0.34 mnt), the Russian Federation (0.52 mnt), South Korea (0.21 mnt) and Ukraine (o.17 mnt). These five countries represented 51% of total EU imports in 2021. In fact, Turkey and India were the largest exporters of finished steel with a share of 15.4% and 12.2% respectively, followed by the Russian Federation (9%), Ukraine (7.4%) and South Korea (6%).

Category-wise imports
Customs data shows that both flat and long products imports increased by 63% and 15% respectively in Q4 of 2021. The share of longs in the total finished steel imports was 20%.

In Q3, imports of both flats and longs had increased by 52% and 25% respectively.

In Q4, imports of all flats rose considerably. Hot dipped segment, in particular, doubled, while CR sheets rose 84%, coated sheets, by 79% and HR strips, by 68%.

In longs, all categories increased except for heavy sections, in Q4. Rebar imports were up 39%, and wire rods by a moderate 10%.

The report shows that in Q4, imports of hot rolled wide strips was the highest at 0.77 mnt, followed by hot dipped at 0.60 mnt and CR sheets with 0.37 mnt.

Outlook
Skyrocketing energy prices, components and materials shortage, high shipping costs are resulting in major global supply chain disruptions. Growing uncertainty, primarily due to the Russia-Ukraine war, is casting a shadow on the rest of 2022. Thus, the EU's economic growth in 2022 will be considerably lower than previously forecast. "Should the current crisis factors persist, a new recession could also materialize in the course of the year or even emerge in a stagflation..." said the report.