Another month has passed in which demand in the global long steel products market has failed to show the long-awaited recovery, according to the market outlook released by IREPAS, the global association of producers and exporters of long steel products. The volume of business has significantly declined in the overall global marketplace, even though volumes are either unchanged or have increased in some regions.
Prices in the Far Eastern market are somewhat lower due to the increase in Chinese output and supply. The situation in Europe has not improved yet, and the market is still struggling because of very low demand. Political issues continue to hamper any potential improvement in the MENA market, and recent protective measures imposed by countries like Egypt and Morocco only rub salt into the wound. Supply in the US market even improved last month whereas demand has not increased, resulting in a further decrease in prices. Low demand and price competition are making the situation even more complicated and putting pressure on manufacturers, as stated by IREPAS.
On the other hand, there is no problem on the supply side in the global ferrous scrap market. However, demand for scrap is also lower due to reduced steel production, as steel producers continue to adapt production levels to market conditions. Consequently, further production cuts put a lot of pressure on scrap prices, helping steel producers to protect their margins, if they have any.
According to IREPAS, in contrast to the EU market, business in some regions is still relatively good.The Middle Eastern markets are doing fine, mainly the Arabian Gulf markets and more specifically Saudi Arabia and Qatar.
Competition in the market is still very strong, while some market players seem to have already given up. Some steel producers are capitalizing on their advantages in terms of raw material costs. But in general, the focus is mainly on securing new orders rather than on the competition issue under the current very unstable market circumstances.
The association's outlook for May indicates that the market situation in general is very difficult as the market is looking for a new direction and is probably heading towards a new baseline.
Moreover, the market circumstances will continue to be tough, and the outlook still does not look very bright in the short term. Consumers are trying to forecast the second half of 2013 but still see clouds on the horizon. After a long-standing low and flat market trend, some improvements may be seen during the last quarter of the year.
