According to the latest report issued by IREPAS, the global association for longs exporters and producers, demand in the global longs market is still lower than supply and production volumes are decreasing.
Market players are generally in wait-and-see mode as they are expecting China to slow down its exports. The country, instead, is looking for new target markets. In the meantime, the iron ore price has slid down to $110/mt with the risk of falling further. Therefore, unless China decides to change its attitude towards exports, Turkey will have to decrease its production capacity utilization as it is struggling to find new export markets with demand in the EU still on the low side.
The stagnation in the EU, in fact, has been continuing for almost a year - investments are low and, with the new safeguard measures and the CBAM, imports are reduced further. The construction sector has shown some improvement but overall sentiment is gloomy.
The report indicates a more favorable situation in the US, where there is growing demand coming from infrastructure, renewable energy and commercial construction projects. As for prices, however, there are no advantages in importing as US mills have enough capacity to meet their domestic demand and imports would face AD/CVD and Section 232 duties.
A regionalizing trend seems to permeate the global market, and it is very likely to continue in the short term, causing exporting countries - such as China - to struggle to compensate for their overcapacity.
To conclude, IREPAS states that the overall situation in the global market is volatile, with an exception made for the European Union where it is stable but with scarce activity. The market outlook in the short term is uncertain and insufficient, in line with the current geopolitical scenario.