50th IREPAS meeting held in Dubai relieves members
The 50th IREPAS (International
Rebar Producers Association) meeting was held in Dubai on 1st of March 2004. In total, 110 participants from 25 different countries, of which 20 were producers from 14 different countries attended the meeting. The welcome address was made by the Chairman of IREPAS, Mr Ugur Dalbeler of Colakoglu Metalurji.
During the first session, members reported the macroeconomic conditions in their respective countries. During the second session for the Traders & Producers, the main discussion topics were raw materials and
freight, which have been the two main factors affecting the current prices of long products for at least the last 8-9 months.
It was obvious that, everybody was very much worried about the recent developments in the market, and scared of a possible downturn of prices. Most of the participants were allowed to voice their comments on the market situation. And despite a few pessimistic approaches during the discussions, the general
opinion based on the datas presented turned out to be relieving for the participants.
In general, there was not a real expectation of a downturn of prices in the short run basis the actual demand in the market. One of the most relieving comments was that, there is a general economical recovery worldwide, and different economies are supporting different product groups, making the price increases healthier rather than supported by speculative buying for a certain market.
Some members said that they do not foresee a downturn even until the end of the year. Most serious problem was diagnosed as the liquidity and credit problems faced by the buyers due to constantly increasing prices.
As mentioned above, raw materials, and in particular
scrap, remains as the biggest headache for the producers in addition to
freight costs. Problems faced at the loading facilities at Russian ports due to increasing competition between exporters of
scrap and other goods were reported during the same session.
Another significant comment was that; raw materials and steel products were very much undervalued for the last two or three decades and reached only their actual values today when taking into consideration the inflation and cost of living increases during those years.
As reported by SteelOrbis yesterday (
50th IREPAS meeting held in Dubai under sponsorship of SteelOrbis ) the producers declared their price forecasts for Q2 during the last session of the meeting. The short term expectancy is that the
billet prices to be at $420-440/mt FOB levels while the price for rebars and
wire rods to be at the $480-500/mt FOB range. All the same, it must be noted that
rebar price of $480/mt FOB is already concluded.
To summarize, there was a consensus that the prices would remain firm in the second quarter, supported by the strong demand and the raw material and
freight costs. It is also a wide belief that there might be some market corrections in the third quarter. It must be stated that, even if the prices do decline, they will not be coming back to the low levels which were more or less the case for the past ten years. This is stated as a new reality that is here to stay. “A new level” which will be valid for a reasonable period of time.