Posted on 13 Nov 2023
The global long steel supply/demand balance is not improving, with increasing anti-dumping or countervailing duties and supply chain restrictions leading to yet greater trade regionalisation, says the International Rebar Exporters and Producers Association (Irepas).
No improvement will occur as long as China keeps exporting over 6 million tonnes/month of steel, the association observes. The year-end holiday season is also approaching, meaning the usual market slowdown.
The outbreak of war in Israel and involvement of the Yemen-based Houthi movement will have a big impact on Turkish rebar exports, while EU demand offers little hope. Capacity utilisation among Turkish long product producers is around 50%.
EU prices have recovered due to stock shortages. Going forward, EU mills’ offers will be defined by rising scrap and energy costs.
In the US, demand seems to be slowing as most buyers are reluctant to purchase material that will arrive at the end of the year, in order to avoid year-end taxes. The US domestic market has seen some good news with UAW and automotive producers more or less agreeing terms and returning to business, leading to significant hot rolled coil price hikes.
Slow economic development in Europe has slowed the availability of scrap, meaning the recycling business has been struggling to generate sustainable volumes. However, demand from steelmakers is simultaneously low. North American scrap is being exported at up to $50-75/tonne lower than US domestic prices. However, the volumes for many of the export markets are heavily reduced.
“Strong demand for iron ore from China has been pushing up scrap prices, which have thus been maintained at higher-than-expected levels. It is hard for steel mills to decrease prices when raw materials are relatively expensive. China, on the other hand, has started raising its export prices, but whether the prices will hold is questionable,” Irepas says in its November short-range outlook seen by Kallanish.
“The outlook for the next quarter is pessimistic or quiet and sideways at best, but we may look for better times in the second quarter of 2024,” it concludes.
Source:Kallanish
