Summer gloom hits the global longs market
Demand is weak in the global market for long products, according to the latest outlook report from IREPAS, and combined with weak commodity prices, mills are being forced to slow down.
Chinese factories are particularly hard hit, with production being suppressed by political and commercial factors, and Turkish factories continue to struggle to deal with cheap products flowing out of Russia.
However, demand is better in the European Union, where the demand for long products as well as the prices are probably higher than anywhere else. However, the safeguard measures prevent the necessary imports of steel, and other regions of the world enjoy a considerable cost advantage, as steel products are much cheaper and also benefit downstream industries and investors. .
In the United States, the demand for long products is relatively stable, and if the rebar market holds up somewhat, it should decline along with the apartment market. As US domestic prices are expected to fall, imports have become less attractive, especially in light of faster deliveries from domestic steel mills that dominate the market.
Despite global demand forecasts for long products, the rebound in global scrap metal prices from low levels sends a positive message to the market. Mills are also hoping that current low inventory levels will boost buying activity for arrivals in the fourth quarter, and a reduction in Russian steel on the market – as the country’s mills have reduced their export volumes in because of their strong local currency – also arouses optimism.
Overall, IREPAS describes the current global longs market as “unstable”, but that could change if buyers return to the market to replenish stocks in late August or early September.