The global long steel products market is increasingly unstable, with China moving steel billets at the lowest prices. Chinese finished products dominate most markets in both long and flat segments, with no signs of slowing production or exports. This could severely impact the global steel industry, according to the International Rebar Producers and Exporters Association (Irepas) in its latest short-range outlook report.
Weakness in Asia, particularly in China, continues to undermine steel markets. Low capacity utilization and excess raw material stocks at Chinese ports have enabled BOF-based producers to lower iron ore and coke prices, driving down finished product prices. This weakness is spreading globally.
In contrast, EAF-based mills face a tight scrap market. Changes in the EU quota system have allowed Turkish mills to sell substantial quantities to the region, but limited scrap purchases have driven up scrap prices. EAF-based mills struggle to compete with BOFs, and high scrap costs are expected to persist. Improvement seems unlikely unless the Chinese government enacts significant market-changing measures, Irepas observed.
European demand remains low with no signs of improvement. The freight market is stable with competitive fares, Irepas noted.
Turkish rebar exports are up 15pct YoY (1.5 mln tons) but still down 20pct from the previous year and less than half the usual 6-7 mln tons per annum. The absence of the Israeli market will impact Turkish exporters more sharply in the second half of the year.
In the US, business conditions remain unchanged. Due to the Fourth of July holiday week and July vacations, most buyers have been reluctant to make significant purchases. Commercial and residential construction remains slow due to high interest rates, but infrastructure projects continue at a normal pace. Long product prices are under pressure from domestic competition, while flat product prices have declined more significantly but may stabilize soon. Despite competition, US domestic mills maintain healthy margins, Irepas said.
Market competition remains intense, with Chinese exports leaving little room for others. The market outlook is unstable and uncertain, with upcoming official decisions in China being a key factor, Irepas concluded.
