The global longs market remains mainly driven by the signals coming from China as business activity in other countries has been reviving slowly, according to IREPAS, the global association of producers and exporters of long steel products. Moreover, the regionalizatıon of trade continues due to the impact of the Covid-19 pandemic. IREPAS describes the overall market as mainly stable with some fluctuations in certain areas. In the meantime, both demand and prices have improved. Generally, economies have been opening up, with production rates reviving and inventory levels in the supply chains needing to be replenished.
China’s steel imports continue to support suppliers from other countries, taking into account the announced investment activities and stimulus measures in China. IREPAS notes that China became a net importer of steel in June, a position which it has maintained since. As a result, the rest of the world feels much less pressure than might have been the case. The competition in Asian markets remains rather intense as the largest suppliers struggle to get in and stay in that regional market since it is the biggest and most solidly consuming destination for now. Despite Asia's support, global producers need to be careful not to relaunch too much idled capacity as supply pressure might rise.
After a long break, steel demand has returned to Europe as a relatively low number of projects are currently on hold. In addition, supply is becoming tighter, while demand is getting stronger. Prices are expected to increase further.
In North America, demand is also back and prices have moved up due to higher raw material prices. Fears of a second virus wave may restrain a further price increase in the longs market. Service centers in the US, as in the EU, are low on stocks and have been replenishing at higher transaction prices.
The IREPAS outlook for the next quarter is generally satisfactory, but a lot of unknowns still exist due to the pandemic which may affect the steel business in the near future.