CELSA at IREPAS: Longs market under pressure amid costly freight, logistic issues

Monday, 18 October 2021 18:06:57 (GMT+3)   |   Istanbul
       

During his presentation at the SteelOrbis 2021 Fall Conference & 85th IREPAS Meeting held virtually on October 18, Alexander Gordienko, export director of Spain’s CELSA Group, stated that the global economy is performing better than expected amid coronavirus-related restrictions. Accordingly, the outlook for growth in advanced countries was revised from April’s 5.1 percent to 5.6 percent in July, resulting from the much stronger than expected recovery in the US. However, the outlook for the emerging economies has been downgraded because of the slower pace of vaccination, while their growth is not likely to be as uniform and fast as compared to advanced economies.

As for the European construction sector, Mr. Gordienko said that most of the losses in this sector resulting from the coronavirus pandemic are likely to be recovered in 2021. The output in the construction sector, which declined by 5.1 percent in 2020, is now expected to increase by more than four percent this year.

In his presentation, as regards the current situation and the outlook for the global steel industry, Gordienko stated that global crude steel output is expected to increase by 2.7 percent this year to 1.91 billion mt, while global demand is expected to rise by 5.8 percent to 1.87 billion mt. He stated that the gap between the increase rates of supply and demand has caused steel prices to increase sharply this year. Meanwhile, in 2022, steel demand is expected to increase by 2.7 percent to 1.92 billion mt. As for China, he said that steel exports to China have helped steel mills in the global market to maintain their prices at reasonable levels.

In terms of long products, Mr. Gordienko stated that consumption is expected to increase by 6.8 percent to almost one million mt in 2021. On product basis, production of wire rod, rebar, merchant bar and sections is expected to rise by 3.9 percent, 6.4 percent, 10 percent and 9.7 percent, respectively. According to Gordienko, during the course of the year the consumption of wire rods increased first and demand was very strong, and “wire rods pulled up the prices and consumption of all long products.” Now, consumption of other long steel products is catching up amid infrastructure spending and building construction.

On the other hand, the Celsa Group official said that global rebar consumption is estimated to reach 443 million mt in 2021, which is the highest number ever. China is expected to take the biggest share with 60.7 percent. As for prices, “2021 has been an unusual year,” according to Gordienko. “Prices have reached historical high levels at the beginning of the year; but later in the year, they have come under pressure due to expensive freight and logistic restrictions,” he said.

 

 


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