Executive summary
- The US producer price index for steel mill products rose from 177.6 in August 2020 to a peak of 449.7 in December 2021, an increase of about 153%. It then fell about 30% by December 2022 (BLS via FRED).
- Iron ore led the cycle. In World Bank data, it more than doubled from $95.76/t in January 2020 to $214.43/t in June 2021, then fell to $93.34/t by November 2022.
- In Europe, energy was the bigger shock: the World Bank’s European gas price reached $70.04/mmBtu in August 2022, about 19 times its January 2020 level.
- Lessons that still apply: price clauses that work in both directions, stock policy linked to the cycle, and credit limits that rise with prices.
Key numbers
+153% US steel mill products PPI, Aug 2020 low to Dec 2021 peak Calc.Loharo from BLS/FRED data
−30% Same index, Dec 2021 peak to Dec 2022 Calc.Loharo from BLS/FRED data
$214.43/t Iron ore monthly peak, June 2021 FactWorld Bank Pink Sheet
$70.04 European gas, $/mmBtu, August 2022 peak FactWorld Bank Pink Sheet
381.2 US steel mill products PPI, August 2026 (preliminary), 15% below the 2021 peak Calc.Loharo from BLS/FRED data
Fact = checked against the cited source · Calc. = Loharo calculation from cited figures or stated assumptions · Uncertain = reported but not confirmed. Unlabelled statements in the text are sourced facts; analysis and uncertainty are labelled inline.
Background
The steel price cycle of 2020–22 was one of the most extreme in recent decades. A useful public record of it is the US Bureau of Labor Statistics producer price index for steel mill products (series WPU1017, 1982 = 100). It is a broad index of prices received by US producers, not a spot price for any one product, but it shows the shape of the cycle clearly.
US steel mill products price index, 2019–2026
Producer price index, monthly, 1982 = 100
Phase 1: collapse and rebound (2020–21)
Steelmakers cut output sharply during the early pandemic lockdowns, and the index reached its low of 177.6 in August 2020. When demand came back faster than expected, supply chains could not respond. Restarting idled furnaces takes time, inventories had been run down, and freight was disrupted. The index rose to 449.7 by December 2021, about 153% above its low. Calc.
Reach steel buyers and importers worldwide
Put your brand in front of the people who buy and trade steel.
Advertise with LoharoRaw materials moved first. In the World Bank’s monthly data, iron ore (CFR China) rose from $95.76/t in January 2020 to a peak of $214.43/t in June 2021, an increase of about 124%. Calc.
Phase 2: energy shock and correction (2022)
In 2022, the cycle diverged by region. US steel prices corrected: the index was at 315.6 by December 2022, about 30% below its peak. Iron ore fell back to $93.34/t by November 2022. In Europe, the bigger shock was energy. The World Bank’s European natural gas price rose from $3.63/mmBtu in January 2020 to $70.04/mmBtu in August 2022, about 19 times higher. Calc. That raised costs most for energy-intensive producers, especially EAF mills.
Phase 3: a long tail (2023–26)
The index fell to 261.6 in January 2025, its lowest level since February 2021, and stood at 381.2 in August 2026 (preliminary), still about 15% below the 2021 peak. Calc. The drivers have since shifted towards policy. In Europe, for example, a tariff-quota regime replaced the steel safeguard from 1 July 2026.
Why it matters commercially
Cycles do not repeat exactly, but the same contract and stock decisions come up each time. Lessons from 2020–22 that still apply: Analysis
- Price clauses must work both ways. Fixed prices protected buyers on the way up, but some suppliers then failed to deliver or tried to renegotiate. Index-linked prices with a clear index, a review period and a cap and floor tend to hold up better in both directions.
- Stock policy should depend on the cycle. Building stock in 2021 paid off for some buyers; holding the same stock into the 2022 correction cost others dearly. Set stock targets in weeks of consumption and change them deliberately, not in response to headlines.
- Credit limits need to rise with prices. When prices double, the same tonnage ties up twice the working capital and doubles credit exposure to each customer. Many credit limits were not adjusted in time.
- Energy and surcharge clauses matter in Europe. The 2022 gas shock showed how much costs can change outside the steel market itself. Know which of your contracts allow surcharges and how they are calculated.
- Lead times say more than price. In both 2021 and 2022, delivery times lengthening or shortening was an early signal of where prices were heading.
Who is affected
Buyers on fixed-price annual dealsTwo-sided risk Protected in a rising market, but exposed to supplier default or renegotiation.
Stockholders and service centresInventory risk The biggest gains in the upswing and the biggest write-downs in the correction.
EAF producers in EuropeEnergy risk The 2022 gas shock showed how exposed electricity-intensive steelmaking is.
Credit and treasury teamsWorking capital Price cycles change exposure even when tonnages stay the same.
Stay ahead of the steel market
What to watch next
- Lead times and mill order books, the most reliable early signals of a turn in the cycle.
- Raw material and energy prices, particularly sustained moves rather than weekly noise.
- Trade policy changes, which now drive regional prices more than in 2020–22.
- Your own contracts: review price, surcharge and force-majeure clauses before the next upswing, not during it.
Verification status: Verified
- Index values were taken from the BLS series WPU1017 via FRED (recent months are preliminary), and iron ore and European gas prices from the World Bank Pink Sheet monthly data. Percentage changes are Loharo calculations. The lessons are Loharo analysis.
- Key: Verified = every factual claim checked against a primary source; Partially verified = core facts confirmed, some figures from secondary/market sources; Analysis = interpretation; Developing = story still moving.
Ask the Analyst
“2,000 t HRC from India into Genoa in Q1 2027 at €610/t CFR”: landed cost with duty, quota and CBAM in one answer.Ask the AnalystSources
Primary sources
- Producer Price Index by Commodity: Steel Mill Products (WPU1017) — US Bureau of Labor Statistics via FRED, Federal Reserve Bank of St. Louis, accessed 11 October 2026
- Commodity Markets (Pink Sheet): monthly prices — World Bank, accessed 11 October 2026
- Regulation (EU) 2026/1384 — EUR-Lex, OJ, 24 June 2026
Information as of 11 October 2026. This is an evergreen explainer: figures are dated and linked to their sources, and calculations state their assumptions. Prices quoted from third-party assessments are attributed to the publisher that reported them; Loharo does not publish its own price assessments. This article is market intelligence, not investment, legal or tax advice.
