Long products market to face oversupply and margin pressures in short term: IREPAS

Author: Paul Ploumis
11 Sep 2014 Last updated at 02:42:49 GMT
SEATTLE (Scrap Monster): The September outlook published by the International Rebar Producers and Exporters Association (IREPAS) foresees margin pressures and oversupply concerns in global long products market to continue in immediate short term.

According to the Association, the oversupply concerns are unlikely to change in the short term mainly on the back of declining consumption and increasing steel output by China. The competitively priced Chinese supply continues to keep the margins under pressure for global rebar producers. Moreover, geopolitical tensions have badly affected the billet and rebar trade in Black Sera region, Libya and Iraq. The Ukraine-Russia tensions pose a big challenge to any positive change in long products market. The situation in Iraq too will play a prominent role, IREPAS notes.

The disparity in scrap-based and iron ore-based steel making and the volume of Chinese steel exports will continue to cause imbalances in market. The Chinese steel export volumes and prices are likely to have its say on the global steel products pricing.

IREPAS also notes that long products demand in North America has resumed. The demand in Northern European countries also remains reasonable. However, certain South American markets are witnessing slowdown in activity. Also, production cuts have narrowed the supply-demand gap in semi-finished products market.