According to IREPAS, the global association of producers and exporters of long steel products, booming demand for commodities, raw material and steel is likely to continue during the spring season, largely due to the ongoing increase of production in most regions in the world, stimulus activities, and, in particular, amid the vaccinations being implemented. Meanwhile, tight supply along with the gradual re-opening of the world’s economies has caused inflationary pressure on commodities as well as on freight markets.
Due to the strict safeguard measures in the EU, import volumes in the region have dropped to historically low levels, with prices reaching record levels as in 2008. Though China is unlikely to resume its exports on the back of steel output reductions and possible tax rebate cuts for exports, EUROFER has continued to perceive China as dangerous and insists on the extension of import restrictions.
The importers in the US market have continued to remain under pressure, having faced shipping difficulties especially as regards obtaining containers and serious local port congestions, along with supply shortages.
China’s positive return from the Chinese New Year celebrations has been one of the main drivers for demand to resume and prices to pick up. With China’s plans to reduce the pollution by 40 percent by the end of 2021, the capacity utilization of BOF plants is expected to be reduced significantly. As a consequence, the prices of scrap are likely to move up further.
According to IREPAS, the outlook for the next quarter is much better compared to the last year, with an exception for the US where the situation has remained unstable.