CELSA at IREPAS: No room left for further decrease in rebar spread

Monday, 08 April 2019 15:57:04 (GMT+3)   |   Istanbul
       

At the SteelOrbis 2019 Spring Conference & 80th IREPAS Meeting held in Barcelona on April 7-9, Daniel Gonzalez, international commercial director of Spanish steel producer CELSA Group, compared the IMF’s 2019 economic growth projections in July 2018 with its projections in January 2019. According to the July 2018 projections, growth forecasts were at 3.9 percent, 2.2 percent and 5.1 percent respectively for the global economy, advanced economies and emerging economies, while they were revised to 3.5 percent, two percent and 4.9 percent respectively in January 2019.

According to the CELSA official, world steel demand is estimated to have grown by 4.3 percent in 2018 to reach 1.66 billion mt, with China being the main engine of the increase. World crude steel production reached 1.80 billion mt in 2018, up 4.6 percent year on year, mainly supported by Asia thanks to China and India. Mr. Gonzalez said that investments in China are expected to grow 10 percent in 2019 and, thanks to the cut in the VAT rate from 16 percent to 13 percent, steel demand in China is expected to increase by 1-2 percent in the current year. Global consumption of all long steel products grew in 2018, except for sections, while all regions except for CIS countries and Turkey saw growth in long steel consumption. Global long steel consumption in 2018 recorded its second-highest level of the last 10 years, recording 831 million mt.

Mr. Gonzalez informed the conference participants that rebar consumption reached 383 million mt last year, the highest volume in the past 10 years, with Asia contributing most to the global growth. He went on to say that production and consumption seem to be balanced, with the main gap coming from the CIS region and Turkey. The CELSA official also remarked that global rebar consumption decreased only in 2008 and in 2015-2016 in the last 26 years. Commenting on the rebar and scrap price spread, Mr. Gonzalez pointed out that the current price spread js $160/mt, one of the lowest in the last 10 years, warning that there is no margin left for a further decrease in rebar prices.

Forecast data for Chinese graphite electrodes in 2020, according to the CELSA official, stand at 640,000 mt for domestic consumption, 720,000 mt for production and 80,000 mt for exports for 2020.


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