The global long steel products market is currently in a positive mood amid good demand worldwide and the global business scenario would be much better if it were not for protectionist actions, according to the short-range outlook report issued by IREPAS, the global association of producers and exporters of long steel products. IREPAS said that competition is limited and moderate in most markets due to protectionism, while there is strong competition in those limited number of markets which are not closed to international market players by protectionism.
Turkish suppliers face shrinking export opportunities
Turkish long product mills are still struggling because of protectionism in the global market and the lack of domestic consumption, IREPAS noted that Turkish exporters are left with fewer export markets because of duties and import quotas, while the GCC and Far Eastern markets are also out of reach because of the price gap. The remaining target markets are Central and South America, North and South Africa, Israel and Yemen, but the volume that can be generated from all these countries is quite limited.
USMCA and US-China trade deal
Politics in both the US and Canada could delay the signing of the USMCA (the new NAFTA) agreement, but the earliest resolution could happen by late summer, IREPAS predicts, while Mexico’s signing of the agreement may be delayed months after the signing by Canada.
On the other hand, the negotiations between China and the US seem to be improving and the markets in China and Asia are all awaiting news on the China vs US feud. The outlook for a deal with the US will help to keep the Chinese economy on an increasing GDP trend. On the other hand, Chinese exports are still being held relatively in check thanks to good demand in the Chinese domestic market, with no downward price trend expected in the short term.
EU quotas boost domestic markets, imports become less attractive
The IREPAS report pointed out that the import quotas in EU are positively affecting the EU producers' capacity utilization and increasing their margins significantly and imports are even getting less and less attractive, with the strengthening of the US dollar, which further improves EU producers' advantage in the market.
Demand for ferrous scrap has recovered since the start of the year
Regarding scrap demand, IREPAS said that the strong domestic demand for steel in the European, US and Chinese markets support scrap demand. After seeing bottom levels in December, the long steel products market has started moving in an upward direction since January and is also supported by raw material prices, the IREPAS report noted. Meanwhile, despite the increase in iron ore prices, scrap prices have not moved up at the same rate.
Still satisfactory outlook despite ongoing instability
Despite all the existing issues and the global long steel market being mostly unstable, the outlook is still satisfactory, even though it remains challenging, the IREPAS report indicated.