In early October 2024, the global steel market saw a notable increase in the prices of essential raw materials such as iron ore, coking coal, and ferrous scrap. This price hike is attributed to multiple factors, including geopolitical tensions, supply chain disruptions, and a rise in global demand, particularly from construction and automotive sectors.

For instance, iron ore prices, a key component for steel production, jumped by nearly 10% from the previous quarter due to supply shortages in Australia and Brazil. These countries, major exporters of iron ore, have experienced weather-related disruptions and labor strikes, constraining output. At the same time, coking coal prices surged due to export restrictions imposed by key suppliers like Russia, which is redirecting more resources for domestic use amid ongoing geopolitical conflicts.

Adding to the pressure, many steel producers are shifting towards greener technologies, in line with global decarbonization efforts. However, this transition is costly and has led to further increases in production expenses, particularly for environmentally friendly methods like electric arc furnaces, which rely heavily on high-priced scrap metal.

These rising costs are being passed on to steel buyers, with the price of hot-rolled coil (HRC), a common form of flat steel, increasing by nearly 5% in Europe and the U.S. in recent weeks. In China, despite efforts to stabilize the market, demand recovery post-COVID, coupled with reduced exports, has led to further strain.

In summary, the global steel market is facing tight supply conditions and rising costs, with significant implications for industries dependent on steel.