[IREPAS Expects Cost-Led Upward Pressure on Global Long Steel Prices]

Global long steel prices are expected to remain under upward pressure over the next quarter despite subdued consumption, the International Rebar Producers and Exporters Association (IREPAS) said in its September short-range outlook. The association attributed the anticipated price support mainly to higher energy and logistics costs, geopolitical disruptions and increasingly restrictive trade measures rather than any significant recovery in underlying steel demand.

Global crude steel production moved from growth of 1.7% year on year in June to a decline of 0.3% in July, while China’s output shifted from 0.4% growth to a 3.6% contraction. However, global production during January–July was down by only 0.6%, which IREPAS said was insufficient to indicate a meaningful market rebalancing.

Chinese steel bar exports increased by 20.9% year on year in July and by 12.3% during January–July. IREPAS said tighter EU and UK import quotas were improving supply-demand conditions within those protected markets but redirecting surplus material towards markets with fewer trade restrictions.

European long steel prices were being pushed higher primarily by energy and transportation costs, with demand remaining weak. India, Southeast Asia, Africa and selected US construction segments were identified as the stronger opportunities for long steel products. Meanwhile, the global ferrous scrap market remained weak as mills resisted raw-material price increases that could further compress margins.