Jun 10, 2020
GLOBAL LONGS EXPORT MARKETS SHRINK AMID PROTECTIONISM: IREPAS
2020-06-15
Drawing attention to the increase seen in protectionist moves by governments globally, International Rebar Producers & Exporters Association (Irepas) said in its latest short-range outlook that these moves accelerated the shrinkage in the global longs export markets, but some optimism has begun to be seen in recent weeks amid normalization efforts globally.
“The EU opened fire with an antidumping investigation on HRC imports from Turkey, with Turkey firing back with duties on steel products from the EU. Canada started a similar investigation against imports of heavy plates from several countries, while Egypt has been working on a 10 percent duty,” Irepas said, adding that accordingly, the world market is shrinking further and Russian mills are taking the lead and dominating the market. “It will be a real game of survival for a while and the cost of production is the key.”
While prices are heading up, particularly in Asia, consumption in the global long steel products market seems very uncertain, but on the bright side, despite the impact of the Covid-19 pandemic, the World Steel Association (worldsteel) in its recent report still foresees an increase in steel demand in China in the current year, predicting a rise of 1% from 2019 to 916.5 million mt, Irepas noted.
“This helps restrict the fall in global steel demand in 2020 to an anticipated drop of 6.4%, whereas demand in the rest of the world excluding China is foreseen to contract by 14.2% compared to 2019. Meanwhile, market players are hoping that June and July will be months of stabilization before a recovery later in the year,” the association said.
Drawing attention to the low demand conditions and bearish pricing sentiment in the EU region, Irepas said: “The biggest threat for importers is the ongoing discussions in Brussels on the reevaluation of safeguard measures. The EU is once again changing the rules in the middle of the game under pressure from Eurofer.”
Meanwhile, demand in the ferrous scrap market has recovered and raw material inventories that were depleted have had to be rebuilt as the markets have been opening up after the lockdowns, Irepas said.
Turkish imported scrap prices hit a two-month high at $258.25/mt CFR on June 4 with fresh US and EU cargoes. Prices have remained strong since then. S&P Global Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $260.50/mt CFR on June 8, up a further $0.50/mt on day.
Stimulus packages around the world are acting as fuel; there are concerted efforts to avoid a U- or L-shaped economic rebound, with a V-shaped rebound being what the financial markets are seeking, and finally, normalization procedures have been initiated in many countries, as the automotive sector is back in business in various countries, for example in the US, EU and Turkey, Irepas noted.
“The current status of the market is clearly unstable. The markets are still assessing the damages from the COVID-19 pandemic and the future remains very much uncertain. But at least investors and industries are showing optimism,” the association concluded.
— Cenk Can
Source: Eurometal
