IREPAS: 2021 very likely to be a year of rebound

Wednesday, 10 February 2021 16:32:39 (GMT+3)   |   Istanbul

The global long steel products market is facing more concerns for February and March, despite good margins in December, according to IREPAS, the global association of producers and exporters of long steel products. In the current global market circumstances, a return to the prices of September and October last year is unlikely, with sentiment being better and also China lowering its prices.

The rapid increase and the subsequent sudden heavy drop in scrap prices brought concerns for market players, and it has been the biggest problem in the US market as well. While buyers are on hold to place orders, future orders can only arrive in four to five months. IREPAS noted that it is difficult to sell for such future dates when prices are coming down and the bottom is not clear. This benefits US domestic mills who buy cheaper local scrap and can deliver faster than imports. After jumping to unexpectedly high levels, scrap prices are now declining to levels to which they should not drop, though stabilization in scrap prices is anticipated in February, with renewed buying from multiple market areas.

Hopes of Section 232 being swiftly eliminated by the new US administration are quickly disappearing. However, even if the measures remain in force for a while, the market is still optimistic that the situation will get better in the medium term. On the other hand, regarding import measures in the EU, EUROFER wants an extension beyond June 2021, but the outcome remains to be seen.

According to IREPAS, 2021 looks very likely to be a year of rebound, with demand anticipated to be good. However, increases in output may bring risks. Moreover, as regards the prospects for 2021, China will be a significant factor. The market will have to wait until China returns from its holiday to see in which direction it is headed. “We are hoping for the Chinese to come back from their holiday to lower production. Otherwise, the price increase for raw materials will be maintained and the level of competition in the global market will be higher,” IREPAS said.

Commenting on competition, IREPAS said that it is not so strong but is increasing slowly, adding that competition in the long product market is currently more regional.

Although the current status of the market can be described as generally unstable with some fluctuations, the outlook is quite satisfactory and greater clarity is expected by late February, IREPAS noted.

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