Increasing supply could bring second-quarter correction: Irepas

The second quarter could see a long products price correction unless consumption of steel increases as new supply sources come online, says the International Rebar Exporters and Producers Association (Irepas). An aversion to imported steel due to lack of certainty is also leading to a decline in the scope of international business.

The market is becoming more and more regional, with European domestic mills fighting for every order. “However, the market is holding back and is in a bearish mood. The anticipated pick-up in the Chinese market after their New Year holiday did not materialise, and global political tensions are not helping to motivate investors, with higher interest rates doing the rest,” Irepas says in its April short-range outlook seen by Kallanish.

In the US, the banking crisis for medium-sized banks is governing the investment outlook, as more steel customers have been doing their business with these banks, which have started to squeeze credit lines. High interest rates, which are continuing to increase, are not helping the situation, leaving imports at the same disadvantage as before, the association observes.

Despite some positives in the global market, such as energy prices and shipping costs coming down, the current status of the market is fluctuating and unstable in general, it concludes.

Adam Smith Poland