LONDON The long steel market could see fundamentals improve in December as output reductions help to correct a supply/demand imbalance, according to the International Rebar Exporters and Producers Association (Irepas).
"Buying activity in the market should be slightly better due to the combination of existing low inventories and the approach of the new year, but questions will probably still surround the overall market situation until after the (holidays)," Irepas said.
In the European market, a strengthening euro will increase long product imports but could weigh on the competitiveness of scrap exports, the association said.
Winter weather and the approaching holiday season are expected to reduce scrap availability in both the United States and continental Europe.
Prompted by poor demand and higher scrap prices, long steel mills continued to cut supply in November, putting pressure on margins, the association said. "Raw material price increases strongly squeezed mills margins in the E.U. market as the supply/demand imbalance got worse."
Competition continued to be high across markets in November, driving mills toward direct orders with end-users and traders to consolidate their activities.
Although Irepas continues to see some hope for demand in the North American markets and the Asian and African markets look promising, the association expects European mills to continue to adjust volumes to curb losses.
A version of this article was first published by AMM sister publication Steel First.