Jose Angel Rey at IREPAS: Price spread between rebar and scrap widens due to higher electrode costs
At the SteelOrbis 2017 Fall Conference & 77th IREPAS Meeting held in Athens on September 24-26, Jose Angel Rey, international commercial director of Spanish steel producer CELSA Group, said that when global GDP growth exceeds three percent steel demand sees a healthy growth and he expects this scenario to be observed in the coming years. Mr. Rey stated that the global construction sector will grow at an average of 2.8 percent year on year in the 2017-21 period.
Mr. Rey indicated that world steel demand is expected to grow by 1.3 percent in 2017 to reach 1.53 billion mt, with finished steel products demand growing in all areas of the world at the same time. In 2018, only Asia will be affected by a slight slowdown of 0.1 percent. Long products consumption in the first half of 2017 amounted to 400 million mt, only up by one percent year on year. He pointed out that wire rod is the only long product that is expected to see a decrease in its consumption figure in 2017. In the first half of 2017, the Asian markets accounted for more than 67 percent of total longs consumption, with China alone accounting for about 55 percent.
The CELSA official said that during the first half of the current year global rebar consumption increased by two percent year on year, with significant strength in Europe and East and Southeast Asia and with signs of recovery in North America. He added that the recent rebound of the Turkish market will be reflected in the third quarter figures, but in the first half of 2017 only one percent growth was reported.
Commenting on the international price situation, Mr. Rey said that long steel export prices are following the trends in raw material prices, though the average price spread between the rebar export price and scrap price which was €189/mt since 2009 has increased as a result of higher costs, namely, higher prices for electrodes, ferroalloys and refractories. In particular, costs of electrodes have increased to €30/mt from just €1-2/mt previously.
*This was published on SteelOrbis website on September 25, 2017.