The global long steel market has been fluctuating in terms of price, performance and availability. Demand has been very much disturbed by the political situation in Syria, Egypt and the MENA region. The ongoing political developments in the region have contributed to a slowdown in activity in the market. Raw material prices are not expected to fall further and this provides a certain degree of support for finished product prices despite the depressed market conditions, says the short range outlook report published by IREPAS, the global association of producers and exporters of long steel products.
According to the report, the excess supply situation in certain regions in the global long steel products market in July also continued to be observed in the month of August.
That said, market sentiment has lately been better in the US and Europe, where some price increases have been achieved. The market dynamics have been improving slightly in Asia too. Although the weak yen encourages exports, the Japanese domestic market is showing considerable strength.
In the Gulf region, the level of demand is in rapid increase and is expected to rise further amid excellent economic conditions and political stability. Meanwhile, the political situation elsewhere in the Middle East region is affecting overall demand. Activity started to pick up in Muslim countries in the post-Ramadan period but at a slower rate than expected. Currency weaknesses in certain emerging markets have created hesitation and reduced order placements. The North American market situation is providing significant support, and the lead times in the market seem to be reasonable.
Long steel product prices have moved up in Europe on the back up increasing scrap prices, but buyers are not convinced the upward trend in long steel prices will continue over a long period. The grain flow from Black Sea ports has slowed down, increasing the availability of vessels. Ex-continental Europe scrap is still competitive due to the euro/US dollar exchange rate. However, Turkish demand for ferrous scrap has weakened, particularly due to developments in Syria. Scrap supply seems to exceed the demand in the market.
The situation in the international flat rolled steel market is observed to be slightly better lately, due to improvements in the domestic markets in the US and China, also supported by rising coal and stable iron ore prices. There have been price rises on the flat product side in western Europe too and these increases have boosted market expectations around the world. Slab prices are on a par with billet prices in some markets, which has been rare as of late. Prices of wire rod, rebar and merchant bar quality (MBQ) steel are waiting to follow the upward movement of flat product prices in most markets, but there are still too many negative issues around the world, including Syria, Iraq, Egypt, currency fluctuations, lack of liquidity, dumping cases and raw materials, to list just a few. The market senses potential demand, but many are still waiting to see the actual demand.
Competition levels in the market are still extremely high, with competition evident in every aspect of business not only price, concludes the IREPAS report.