Raw material development for the first quarter 2021
The positive trend in the foundry industry that occurred at the end of 2020 is being slowed down at the beginning of 2021 by several factors such as the gradual recovery of the pandemic globally due to the slow implementation of vaccines and by a bullish raw material market.
The upward dynamic we are experiencing is similar to the one faced during the 2008 crisis. On that occasion it was a bubble that rose and fell rapidly, and on the current one everything indicates that it is related to the evolution of the real economy.
The shutdown of the automotive industry in the spring of 2020 caused a drop in scrap supply. In addition, the increase in steel and metallurgical activity in China and the USA quickly depleted the short supply that existed in the market, leading to the current imbalance of supply and demand.
We are talking about ingot increases of 55% and scrap of 30% in January 2021.
Let us hope that during 2021 the current imbalance in prices will decrease and the economy will gradually return to normal.