According to the latest report published by IREPAS, the global association of long steel producers and exporters, the global long steel products market continues to be characterized by generally weak demand, but rising energy costs and growing difficulties on the supply and logistics fronts are beginning to exert upward pressure on prices. According to IREPAS, the market will remain particularly volatile and sensitive to geopolitical developments, especially in the Black Sea region and the Middle East.
The balance between supply and demand in the international long steel market has deteriorated slightly for international business compared to June, although supply has started to react. Global crude steel production, in fact, shifted from a 1.7 percent year-on-year increase in June to a 0.3 percent decline in July. Over the same period, Chinese production shifted from a 0.4 percent increase to a 3.6 percent contraction.
However, in the first seven months of the year, global production declined by only 0.6 percent year on year, a figure which, according to the association, does not yet indicate any meaningful rebalancing of the market.
Energy costs and logistics support prices
Further complicating the picture is the sharp increase in energy costs. Natural gas prices in Europe and elsewhere remain at high levels, while electricity and coal prices have also increased. The international environment has therefore become increasingly inflationary, with the unusual combination of relatively weak demand, rising costs and supply-side pressures.
In Europe, moreover, exceptionally low water levels on major rivers have increased transport costs for both producers and importers. According to IREPAS, even in a weak demand environment, steel mills cannot continue to absorb these additional costs indefinitely.
Consequently, the current upward movement in EU prices is mainly cost-driven rather than the result of any significant improvement in consumption, which remains weak partly due to the summer slowdown and continued lack of activity in the construction sector. The association does not expect a sharp acceleration of demand, particularly as the market enters the fourth quarter, which is traditionally characterized by slowing activity.
China's steel bar exports rise, its real estate sector weakens further
The Chinese market continues to represent one of the main sources of imbalance for the international market. Real estate investment in China deteriorated from an 18 percent decline in the first half to a 19.2 percent contraction in the first seven months of the year. Over the same period, fixed-asset and infrastructure investment declined by 6.7 percent and 3.6 percent, respectively.
At the same time, Chinese steel exports remained above 10 million metric tons in July, while steel bar exports increased by 20.9 percent during the month and by 12.3 percent in the first seven months.
According to IREPAS, the introduction of tighter import quotas in the EU and UK from July 1 is helping to improve the balance within protected markets, but is putting greater pressure on markets that remain open. “The imbalance is being redistributed rather than resolved,” the association observes.
US market moves in the opposite direction to other markets
The US, on the other hand, is one of the markets with the clearest growth prospects. Domestic steel shipments increased by 5.3 percent in the first half of 2026, while US steel demand is forecast to grow by 1.7 percent over the full year, supported by infrastructure and technology-related investment.
IREPAS also notes a gradual recovery in demand, substantial infrastructure investment and continued investment related to artificial intelligence. By contrast, steel imports have declined by 22 percent since the beginning of the year.
In the US long steel market, supply remains moderately tight, although it began moving toward greater balance in August. High interest rates, however, continue to represent a significant obstacle for residential and commercial construction.
According to IREPAS, rising domestic production capacity and a gradual recovery in imports should progressively ease supply pressures. The situation therefore remains more favorable for US steel mills than for international suppliers. Meanwhile, around 20 US steel producers have announced production outages for September, October and November.
Prices to rise in next quarter but without genuine demand recovery
On the pricing front, IREPAS identifies several supportive factors: the prospect of reduced pressure from Chinese supply, trade disruptions in the Black Sea and Strait of Hormuz, higher energy and production costs, and tighter trade measures in the US, EU and UK. The slight contraction in global production recorded in July also indicates that steel mills are beginning to respond to market conditions. The association therefore expects steel prices to remain under upward pressure during the next quarter. However, the movement should be driven mainly by supply-side factors and costs rather than by a strong recovery in underlying demand.
On the demand side, the picture remains less encouraging. According to IREPAS, the best opportunities for long steel products are currently in India, Southeast Asia, Africa and selected segments of the US construction sector. Market analysts also expect global steel demand to improve in 2027, which could support trade volumes and market confidence. However, the association stresses that these are positive signals limited to certain markets and margins and do not yet represent the beginning of a broad-based recovery in global demand.
In conclusion, IREPAS describes the current market situation as “very unstable” and expects geopolitical developments, particularly in the Black Sea and the Middle East, to continue having a significant impact on price trends and international trade.
