We talked to John Manessis, owner of Hellenic Halyvourgia about 2024 reviews and 2025 expectations.
The steel markets, as always, never fail to keep us on our toes.
2024 was a difficult year overall for the steel markets globally.
Local demand in China did not fare well and as a result Chinese mills focused once again on exporting, leading to lower prices not only in Asia but all over the world.
In the US, increased local capacity along with stable demand led to lower prices and lower profitability as well, but still the US is probably the only region in the world where margins still made sense. In addition, the demand outlook seems bright, with infrastructure projects leading the way.
Europe was once again the area that probably suffered the most. Having to compete in the global markets with the huge handicap of being the only region in the world where there is carbon emissions taxation and a badly designed energy market seems like an unsurmountable task, especially combined with the recession domestically. While politicians in Brussels are contemplating the best course of action, steel mills stopped production, while others changed ownership. It is somewhat puzzling that production of steel in Europe is not more than 30 percent less from what it was 15 years ago and still nothing is happening…
For 2025 we want to be optimistic. Hopefully, the Chinese stimulus measures will at some point take effect and will alleviate the pressure currently felt from very competitive exports. The US, with Trump taking the helm, will also face higher demand.
Hopefully, the tariff policies will be realistic and pragmatic, without further damaging world trade, while at the same time strengthening manufacturing in the US.
As far as Europe is concerned, the politicians will probably realize (sooner rather than later) that they need to take some action to level the playing field as regards CO2 emissions costs, energy costs and the procurement of raw materials, while at the same time controlling the cheap imports that are suffocating European industry from countries that do not play by the same rules.
Interest rates in Europe will also need to come down in order to avoid a recession, so demand will probably pick up and the market should be much better than in 2024.
Happy and healthy 2025 to all!