Kim Marti at IREPAS: Raw material costs, margin pressures and higher demand will push up long steel prices

The global economy seems to be turning the corner and now heading upwards, with developing economies clearly in the front seat, as stated by Kim Marti Subirana of Celsa Group at the SteelOrbis 2013 Spring Conference & 68th IREPAS Meeting held in Doha on March 3-5. He also noted that the MENA (Middle East and North Africa), Asian, and Central and South American long steel markets are showing strong growth, while the markets in North America are also showing some momentum and the EU is expected to be back showing positive signs at the end of 2013.
 
Mr. Marti said long product consumption continued to grow in 2012 supported by markets in Asia, the MENA region and South America, with the rebar market indicating stronger growth than any other long product market, clearly taking a share from the sections market.
 
The Celsa Group official told attendees at the Doha event that good levels of construction activity in emerging and developing countries powered a remarkable 9.8 percent growth in world rebar consumption in 2012, adding that North America was still suffering from poor business conditions in the construction sector, while the contraction in the EU economy resulted in a 8.4 percent decline in rebar consumption in Europe.  According to Mr. Marti, after a long period of consistent upward movement, the price of rebar appears to have entered a sideways trend since 2010, sustained by strong raw material prices.
 
Margins for long products have been squeezed even further in recent months, Marti continued, underlining that mills should adjust their outputs, maintaining a reasonable supply-demand balance in any market in which they are present, since the recovery of margins is the first priority.
 
As a consequence of the generally improving demand, high raw material costs and margin pressures, long steel price levels will move up in the coming period, although volatility and short-term changes in price directions will continue to be observed in trade, Mr. Marti concluded.