The overall business environment in the global long steel products market remains relatively stable, but regional differences have become more pronounced than ever, according to the latest report issued by IREPAS, the global association for longs exporters and producers. protectionist measures in the US, the implementation of CBAM in Europe, and the upcoming reduction of EU import quotas are significantly reshaping global trade patterns and market dynamics.
Geopolitical tensions continue to drive up costs
IREPAS noted that ongoing conflicts in Ukraine and the Middle East continue to create uncertainty and disrupt trade flows. Higher oil and natural gas prices have driven up transportation and production costs, while marine insurance rates have also increased due to geopolitical risks. The report pointed out that because expectations of a short-lived disruption have disappeared, many distributors and stockists are holding onto inventories over future supply and replacement cost concerns.
EU market braces for new quota system
In the EU and the UK, the market is searching for a new equilibrium ahead of the changes to the import regime starting July 1. IREPAS reported that some last-minute import buying has taken place as buyers attempt to position themselves before the new quota system takes effect. Moving forward, buyers will have to base their strategies on actual market availability rather than the cheapest theoretical import offers.
Scrap prices strong despite weak Turkish demand
IREPAS stated that deep sea scrap prices for Turkey remain well above US$400/mt CFR, providing support for finished product prices despite weak Turkish rebar sales. However, Turkish mills do not expect much long product demand from the EU due to the upcoming quotas. Furthermore, IREPAS observed that Turkey’s production costs may increase as rising summer temperatures end the cheap energy benefits enjoyed from winter rainfall.
US market supported by trade protection and AI investments
In the United States, inflation and the postponement of interest rate cuts into 2027 continue to weigh on housing and construction activity. However, reduced import competition, maintained by 50 percent Section 232 tariffs and high freight costs, continues to support a gradual increase in domestic steel prices. Additionally, low inventories and ongoing investments in infrastructure, energy, and AI data centers are providing key support for domestic steel demand.
China's divergent data and open vs. protected markets
Commenting on Asian dynamics, IREPAS described a highly unusual situation in China, where crude steel production decreased by 4.1% in the January-April period, yet iron ore imports rose by 8% to 418 million mt.
On global competition, IREPAS underlined a clear divergence: competition remains extremely intense in international markets open to imports due to excess capacity, whereas markets benefiting from trade protection measures enjoy more balanced competitive conditions.
Fragmented outlook depends on geography
In conclusion, IREPAS described the current market status as stable but challenging. While market participants have largely adapted to current conditions, the outlook varies significantly by region. Sentiment remains relatively decent in Europe and the US due to infrastructure spending and protective measures, but the outlook for many other parts of the world remains difficult to predict.
