The global long steel business continues to face some challenging times as regards trade volumes and the overall supply-demand balance. It appears that the overall reduced steel production seen is 2022 has continued into the current year. As a result, there is a certain aversion to imports, while trade mainly remains regionalized.
In particular, European mills are competing with each other for every order since domestic demand has failed to recover. A demand pick-up was expected from February onwards, but it failed to materialize. Moreover, ongoing political tensions impact potential investment levels in a negative way and higher interest rates are doing the rest. In the US, steel demand levels are unchanged for now, but the outlook is dim, given the banking crises and, once again, the interest rate situation. In the MENA region, the local and regional longs trade is normally affected by the ongoing Ramadan period and may pick up towards summer, but could then be affected by worse weather conditions.
Generally, the global long steel market lacks stability and sustainability, even though cost levels in some regions, particularly in Turkey and the EU, seem to be returning to normal levels. In addition, freight rates have also been coming down. However, consumption levels in most regions are not satisfactory, which results in tighter competition between potential suppliers in the global market. At the same time, in some areas domestic business activities result in relatively good margins for suppliers.
According to IREPAS, the outlook for May and June is unsatisfactory for longs products globally and the market may see a correction, despite some positive factors, such as lower energy costs and declining freight charges. The key reasons are declining imports and exports and the lack of a supply-demand balance, along with reduced consumption levels.