The global long steel market has entered the holiday season, with significant business activity expected to resume only after 13 January.
Chinese export pressure on global markets, Europe’s steel sector challenges due to high energy costs and weak demand, which has already led to shutdowns, and potential policy shifts in the US are further adding to uncertainty, Kallanish notes from the International Rebar Exporters and Producers Association (Irepas) December outlook.
“Under these circumstances, the situation in the global longs market, where competition remains very tough and more local than global, may be described as unstable and complicated with a difficult, unpredictable outlook,” Irepas forecasts.
Irepas suggests Chinese steel exporters may not have full export order books for the first quarter of 2025 as overseas demand and prices continue to decline. Therefore, “steel prices in the international markets, except in the US, will suffer going forward,” it adds.
Chinese stimulus measures are expected to have a limited impact on limiting steel export volumes in the short term. Domestic prices in China remain low, while production cuts are unlikely, as “Chinese Premier Xi Jinping has pledged that China will meet its ambitious GDP growth target of 5% this year and remain the engine of global economic expansion, and so no production cuts would be anticipated,” Irepas explains.
EU producers are squeezed between weak demand and high costs, limiting their ability to reduce prices while competing with imports. Energy prices in Europe have surged to 2022 levels, prompting mills to temporarily halt liquid steel output or reduce production hours to control supply. “Usually, this would push prices up, but in the current low season, we have to wait and see what happens,” Irepas notes, adding: “It is a good sign that prices have not slid down any further [in the EU].”
In the US, a “not-so-pleasant winter” is expected. “US domestic mills have been keeping prices low and are still offering discounts on already low prices,” Irepas says. “On the other hand, US domestic scrap pricing for December is expected to be down, for the first time in two decades.”
Although interest rates have slightly eased, they remain high for investments. The steel trade may soon become more difficult due to looming additional duties proposed by the new US administration. These duties could trigger retaliatory measures from other countries, further complicating global long steel trade.
Elina Virchenko UAE
