According to the short-range outlook report issued by IREPAS, the global association of producers and exporters of long steel products, a balance has been maintained between supply and demand in the global long steel products market, but it is still difficult to transact business globally. However, shorter-distance regional business is good. The global market can be described as mostly unstable, with only a few exceptions.
Absence of Chinese still provides support for the rest of the world
China has been largely absent from dictating the global steel market since the end of 2015. Chinese domestic demand is supporting the rest of the world. IREPAS said that local production is increasing almost everywhere, while traditional importers of the past such as the UAE and Qatar have become exporters. According to IREPAS, it is of the utmost importance that the Chinese domestic market should keep internal demand active and continue consuming steel at the same speed in order to prevent a flood of exports arriving into the global market. In particular, the Chinese being largely absent from the export markets allows other countries like Qatar and Turkey to stay in the Asian markets.
US domestic mills reap the rewards of protectionism
In the US, prices declined to an extent, reflecting the movement of scrap prices and imports without special exemptions are not working out amid Section 232 duties. There are not any exemptions for reinforcing bar and wire rod imports.
Demand in Europe not brilliant but stable
The market has been quiet in Europe due to the Easter holidays and the general market situation in the region has not changed. Safeguard measures help maintain the equilibrium between supply and demand, with the latter not brilliant but stable, the IREPAS report noted. Although EU producers are active in the export markets, it is not possible for European exporters to match the prices in the markets which have not been affected by protectionist measures.
Turkey is the country most impacted by protectionist measures
In other places around the world, domestic business is still moderate, though exports are under pressure due to trade remedies. Turkey is the most affected among all countries, with a 15 percent drop in liquid steel output and a drop of almost 50 percent in rebar production, putting pressure on ferrous scrap. IREPAS pointed out that the prevailing protectionist measures do not allow Turkish exporters to reach their main export markets. The latest news is that Malaysia has also decided to pursue an antidumping case.
Regionalization of steel trade is a positive factor for pricing
The regionalization of trade is positive for pricing despite the obvious problems of protectionism for the consumers. It also poses a challenge for Turkish steel producers when the Turkish domestic economy is contracting.
Competition heats up in limited export markets
Competition in the market is getting stronger due to the limited number of export markets and as new cases of antidumping appear. Turkish exporters are competing with everyone in the markets which are still reachable for them.
Outlook worsens and fears of economic slowdown gain ground
Demand is still good but the outlook is worsening in line with general international sentiment and unpredictability regarding new trade wars and measures. The US market is losing steam and so is the scrap market. With a steel asset build-up in multiple areas, the scope for large-scale international trade may be affected in the longer term. IREPAS said that fears of an economic slowdown are gaining acceptance and risks of continued trade barriers restrict the outlook.