Speaking at the SteelOrbis 2014 Spring Conference & 70th IREPAS Meeting in Barcelona, Franc Cardona, the marketing and international affairs director of Spanish steel producer CELSA Group, stated that margins in the long steel product trade are still tight and this necessitates the balancing of supply and demand, as production capacity is growing faster than demand, posing a major challenge for the steel industry.
Mr. Cardona said that the long-term prospects for long steel are solid, with emerging economies expected to continue to drive long steel demand, as these economies seek to support their urbanization and economic development, while the slower growth of the Chinese economy is perceived as a major risk for the growth of global long steel consumption. Cardona also underlined that global long steel consumption (8.1 percent in 2013) is growing faster than overall global steel consumption (3.1 percent), and that global long steel consumption is already at 143 percent of pre-crisis levels (2007-2008).
A cautious recovery in the EU construction sector and strengthening of growth in the US driven by the housing market are positive indicators for long steel consumption, Cardona stated.
The continuation of the downward trend in rebar prices with very tight margins is not in line with global demand growth, while the slowdown to just a slight downtrend in steel billet, rebar and wire rod prices in recent months has been caused by a relatively stronger raw material market, he said.
