The severe coil shortage in Europe and the United States has led to steel prices rising to the highest level since 2008 and has attracted export interest from Asian steel mills. Moreover, this situation seems unlikely to change until steel output rebounds in the second half of the year, which means that the second quarter will bring good opportunities for steel exports.

Since the beginning of this year, the ex factory prices of hot rolled coils in the Midwest and Northern Europe have soared. The delivery dates in both markets are full, and many customers are unable to obtain steel supply in time.

A shortage of semiconductors has led to a reduction in US car production. As a result, automakers believe that the sharp rise in US steel prices is largely driven by insufficient supply rather than demand. In Europe, downstream demand is relatively strong, and the delivery of large steel producers such as ArcelorMittal has been scheduled to October. Steel prices in Europe and the United States are expected to continue to rise in the second quarter, in addition to the supply shortage factor, which also benefited from the support of the new crown vaccination, which will help further economic recovery.

South Korea is exempt from the 25% import tariff imposed by the US government on steel and has been increasing steel shipments to the US. Japan is affected by tariffs, but has long-term ties with US automakers and other high-end steel consumers.

The recovery of overseas market demand and prices has made China's steel products more competitive. As a result, China's steel exports have increased this year. But in May, China's finished steel exports fell 33.9% month on month to 5.271 million tons. It is estimated that China's steel export volume will increase significantly in 2021.

Since the beginning of this year, China's domestic steel prices have continued to rise, reaching a historical peak in the middle of May. In addition to strong demand, environmental protection has led to the reduction of production in Tangshan area, which has further supported the steel prices. However, due to the "fear of heights" of downstream industries and the impact of increased national supervision, steel prices have fallen.

The profit margin of Chinese steel mills is increasing this year. Driven by profit, domestic steel mills are unwilling to reduce the amount. China's total steel production is not expected to drop significantly this year. As the Chinese government's monetary tightening measures come into effect, especially in the real estate sector, steel demand will start to slow down in the second half of the year.

India continues to play a greater role in international steel trade. India's steel exports from April 2020 to February this year increased 49.5% year-on-year to 15.5 million tons, according to the joint factories Committee. Last year, India exported a lot of steel to China and Vietnam before its economy recovered from the epidemic. This year, India has shifted its export focus to Europe with the widening price gap between India and Europe for hot rolled coils and the shortage of coils in Europe.

India's domestic steel supply is tight due to a large number of exports, which will be exacerbated by the overhaul plans of Kindler southwest steel, Tata Steel and Indian steel authority. The imbalance between supply and demand led to a further rise in Indian domestic hot rolled coil prices from April to May. However, with the arrival of the monsoon season, this situation will begin to ease, as downstream industry activity will slow down.