There is huge uncertainty in the global long steel products market as there are a lot of unknowns against the backdrop of protectionist measures and price corrections, the short-range outlook report issued by IREPAS, the global association of producers and exporters of long steel products, said.
Commenting on the trade disputes, the IREPAS report pointed to the 90-day ceasefire between the US and China and said it could be a positive break, while recalling that the Section 232 tariffs remain in place despite the new North America trade agreement. The report also said that the possibility of country-specific quotas in the EU “is making the market unpredictable”.
According to IREPAS, competition in the global market is getting stronger in general, while it has slackened only in certain regions due to the plentiful number of trade barriers, and also in some other regions because few can compete without incurring losses.
As the year-end approaches, almost all stockists in the US are trying to lower their inventories, and this increases pressure on prices, the IREPAS report noted. Year-end Inventory adjustment is also valid for the European market.
Turkish mills may suspend production in coming months
Turkish exports to the US are down by about 55 percent and the US market remains closed for Turkish exports, while the prices in the Far Eastern market are now below the cost of production for Turkish producers. The IREPAS report stated that, apart from these issues, domestic consumption in Turkey has almost stopped and the hit coming from vanishing domestic consumption is very hard on mills. As a result, Turkish mills are not left with much option but to suspend production in the coming months, IREPAS said.
The IREPAS report also indicated that Iranian exports to Turkey are also adding to the pressure on Turkish producers, and this development could cause trade measures to be implemented in Turkey also, adding that the Turkish economy is now expected to contract for the coming year.
Less-than-satisfactory outlook
According to IREPAS, the market can be defined as unstable with a less-than-satisfactory outlook due to uncertainty and extreme volatility.