LONDON Global demand for long steel products has not reached the levels anticipated by the International Rebar Exporters and Producers Association (Irepas).
Demand for long products has been particularly poor in Northern Europe as a result of very cold weather conditions, as well as ongoing uncertainty in the market, Irepas said Feb. 8.
However, demand in Asia, the Middle East/North Africa region, and Central and South America "seems to be maintaining its levels," Irepas said.
Demand for ferrous scrap has also been weak, but Irepas maintained its positive outlook. "The situation might change sooner than expected due to adverse weather circumstances, particularly in northern Europe," it said.
Raw material price changes have not been reflected in finished steel prices, Irepas added, although recent significant price increases for flat-rolled steel products "could provide support for price increases in the long steel products market as well," it said.
Irepas also highlighted the difficulties presented to the market by trade restrictions, which it said had "shut down a few significant markets for reinforcing bar exports," resulting in a need to "divert significant quantities of exports to other destinations, creating severe supply pressure on prices, and more importantly, making profit margins practically nonexistent."
Overcapacity is also proving to be an obstacle to the long products industry, Irepas said.
"The number of countries where low demand prevails has increased, and suppliers in such countries are searching for new markets," the association said. "It looks like fierce competition will prevail in the long steel market for quite a long period of time due to excessive installed capacities."
The outlook for February remains unsure, Irepas concluded, with a "difficult" month ahead for mills "as the market remains so unpredictable."
A version of this article was first published by AMM sister publication Steel First.