Longs: shortages keep prices and margins high, outlook positive

As steel output outside China had not increased during the first two months of the year compared to the same period last year, despite the increases reported in India, South Korea, Turkey and Brazil, there is still a shortage of material, which is keeping prices and margins high, International Rebar Producers & Exporters Association (Irepas) said in its latest short-range outlook April 7.

Lead times are longer than ever in the global long steel market and there is still strong demand, encouraging mills to continue increasing their prices, Irepas noted, adding that there are still shortages for many products in the global market exacerbated by disruptions in logistical and shipping chains.

“Customers are buying less than what they need, but these local shortages keep pushing the markets up. Prices keep on climbing in most areas across the world as demand is strong,” the association said.

“China seems to be happy with its situation and is not interested in increasing exports, but instead keeps importing. Their new five-year plan promises considerable public spending on many projects. China’s buying of billets gives the global market additional strength,” Irepas observed, adding that the expected US infrastructure bill and China’s timid export behavior are the main positives for the second and third quarters.

“It seems the current prices will hold for the next three months and that reductions will be gradual rather than sudden,” it said, adding that tight availability from most exporting countries and companies is affecting the level of competition in most markets.

“Even though there may be some fluctuations, the current status of the market is generally stable and the second quarter should be better than the first quarter. Accordingly, the outlook of the market is very good and satisfactory,” Irepas concluded.

— CenkCan