Page 11 - ITAtube Journal 1-2021
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Market information
  If we look at hot rolled coil prices (Fig.6), we see a major challenge for ERW pipes. Since September 2020 the prices have gone up by about 314%, from 450 US$/ton to a peak of about 1400 US$/ton in August 2021. Since then, prices have fallen again to about 1225 US$/ton in September 2021. Last week of September, prices of about 950 US$/ton were reported.
Such volatile HRC prices are extremely dif- ficult to cope with, since price escalation clauses are uncommon in the carbon steel tube business. Price escalation clauses are mainly associated with stainless steel tube production, due to the frequent volatility of raw material costs. Some tube and pipe pro- ducers even decided to halt production due to the unmanageable raw material costs.
The prices for scrap and iron ore went up as well, but these prices have also begun to fall again in recent weeks (Fig.7).
Driven by the prices for energy, cars and raw materials, inflation is on the rise (Fig.8). In the USA this year the inflation rate reached 5.5% (target 2%). Even if the inflation rate is adjusted for energy and food prices, as some economists like to do, the rate is still a hefty 3.8%. This is the biggest increase since June 1992. The US central bank is now even consid- ering restricting its loose monetary policy.
Even in Europe forecasts anticipate an infla- tion rate over 4% by the end of 2021, driven mainly by the cost of energy.
Energy costs may rise still further due to regional political interventions to prevent climate change. If these measures are not introduced in an internationally balanced way, some European regions may even risk the destruction of their high energy consum- ing industries to lose them to other low- er-cost regions. It is common knowledge that the industry tends to settle in regions with reasonable energy costs.
Availability of qualified labour is another challenge for our industry. During the pandemic, countries adopted different approaches to protect employees from financial hardship. Some European countries kept the employees in employment, but paid
ITAtube Journal 2021 – Special Edition
Figure 6: Hot rolled coil Price Index
 Figure 7: Scrap and iron ore Price Index
  Figure 8: Inflation is coming
compensation for short-time working so that the employers had no cost for the reduced working hours of employees (even 0% working was possible). When the workload of the companies recovered, short-time working regimes were abandoned, and the employees came back to work.
Other countries, like the USA, followed a different model to avoid financial hardship. The companies laid off employees and the
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