The global long products business remains challenging with margins being tight and overall sentiment being cautious despite some considerable cuts on the blast furnace side. Insufficient demand remains the key problem for steel producers as the lack of confidence in the economic recovery results in some limited restocking activity overall. Moreover, the recent rise of import scrap prices is not backed by longs product market activity, according to the short-range outlook issued by IREPAS, the global association of producers and exporters of long steel products.
Increasing regionalization of the business and the high level of competition between sellers in the global steel market remain among some of the key challenges for the longs business. Protectionist measures adopted by many sizeable markets have deepened the imbalance between supply and demand and so mills’ opportunities to firm up their pricing remain limited.
Some positive factors also exist in the market. China, which remains a key steel market influencer, at present plays more of a positive role as it not only stays away from higher exports, but also remains active in steel imports for now. Ongoing semis deals by Chinese importers support the general pricing in the segment. In addition, the US sees some higher transaction prices locally, despite some political issues. Warm winter conditions and low interest rates and liquidity in the global market can be named among the other factors supporting business overall.
As a result, the outlook of IREPAS for the first quarter next year remains generally stable, in line with the market conditions seen at the end of 2019.