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Kallanish Kallanish

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July, 18th 2019

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MAR 11
11:25

Longs market performing well, Turks' struggles continue: Irepas

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The global long products market is characterised by a positive mood, but Turkish longs mills continue to struggle as few markets remain in which they can conclude business. This is on top of continued weak Turkish domestic consumption. So says the International Rebar Exporters and Producers Association (Irepas).

The US and Canada are closed to Turkish steel due to duties, while quotas make it difficult to do business with the EU. The Gulf Cooperation Council and Far Eastern markets are also out of reach because of the price gap. “The remaining target markets are Central and South America, North and South Africa, Israel and Yemen, but the volume that can be generated from all these countries is quite limited,” Irepas says in its March short-range outlook monitored by Kallanish.

Most steel mills globally nevertheless have positive margins, albeit not as good as last year. Moreover, despite the increase in iron ore prices, scrap prices have not moved up at the same rate.

Chinese exports are still being held relatively in check thanks to good demand in the Chinese domestic market. “No downward price trend is expected in the short run in China due to the additional state support for the market,” Irepas says. “Also, the outlook for a deal with the US will help to keep the Chinese economy on an increasing GDP trend.”

Besides China, the EU and US markets are enjoying strong domestic demand, which is driving scrap demand. “After seeing bottom levels in December, the long steel products market has started moving in an upward direction since January and is also supported by raw material prices,” Irepas observes. EU and US domestic mills are thus enjoying good business, with margins “…like never before,” but exporters continue to suffer.