LONDON The global market for steel long products will likely show greater stability in the short term due to a rise in activity since the start of the year, the International Rebar Exporters and Producers Association (Irepas) said, expressing optimism that worldwide demand will rise amid higher raw material prices.
"Increasing raw material prices are stimulating undecided buyers to book tonnages now, on a bigger scale and with even longer lead times," the association said.
Higher raw material costs are expected to last through the first quarter of this year.
Iron ore prices have risen as China plans for significant infrastructure investments, and Chinese producers are thought to be moving away from export activity due to rising domestic demand.
On the European side, not enough capacity has been idled, although demand in most European Union countries has continued to fall, Irepas said.
Ferrous scrap prices are being pushed up by the combined effect of winter in the Northern Hemisphere and higher iron ore prices, the association said.
Demand for raw materials remains healthy in the Northern Hemisphere, although the underlying situation will only become clear after the replenishment of winter inventories has been completed, Irepas said.
In North America, demand for rebar has remained unchanged so far, but prices for long products have risen due to higher raw materials prices, creating some difficulty in the market.
Changes in import rules in some markets in the Middle East and North Africa (Mena) region and in the South American markets have increased competition levels in other countries, Irepas said.
"There is enormous competition in the E.U. market," including third-party competition and competition between mills in the region, the association said, adding that the mid- to long-term outlook remains "unstable and uncertain."
Lakshmi Mittal, chief executive officer of Luxembourg-based ArcelorMittal SA, has said he expects global steel demand to rise between 2 and 3 percent in 2013 (amm.com, Jan. 14).
A version of this article was first published by AMM sister publication Steel First.