The outlook for the global long steel products market in early 2024 is ‘pessimistic or quiet and sideways at best’, according to the International Rebar and Producers and Exporters Association (Irepas) – but it anticipates an improvement in the second quarter.
The organisation’s latest short-term outlook notes that supply and demand in the market is not getting any better, a position that continues to put pressure on producers. ‘The increasing political influence on trade flows and particular markets in the form of antidumping and/or countervailing duties including also supply chain restrictions are leading to a more and more regionalised trade with a fairly unhealthy supply and demand balance,’ it says.
Irepas concludes the outlook by saying: ‘It looks like all the engines are slowing down but inflation is also coming down. 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.’
The outlook considers that while China exports more than six million tonnes of steel products per month, an improvement in the market is ‘highly unlikely’. EU demand is not growing and offers little hope to Turkish mills in the near future.
Capacity utilisation among Turkish long product producers is around 50%. In terms of geopolitics, the war in Gaza is expected to have an impact on Turkish reinforcing bar exports.
EU demand weak
‘In the EU, prices have recovered from the lows of the summer due to the shortage of stocks,’ the report says. ‘Going forward, demand remains weak but mills’ offers are defined by rising scrap and energy costs.’
In the US, it adds, demand for long products appears to be slowing down as most buyers are reluctant to purchase material that will arrive at the end of the year, incurring year-end taxes.
‘The US domestic market has seen some good news with UAW [car workers’ union] and auto producers more or less agreeing terms and returning to business and unprecedented gains on flat products. The end of the UAW strike was one of the reasons of the significant increase in HRC prices seen.’
Slow economic development in Europe has slowed the availability of scrap and the recycling business has been struggling to generate sustainable volumes, the outlook notes. ‘There is low demand from the European steel sector and yet lower scrap generation.’