With production increasing in many parts of the world, commodities, raw materials and steel will continue to be in high demand during the spring, the International Rebar Producers & Exporters Association (Irepas) said in its latest short-range outlook, drawing attention to good sentiment in global long steel markets.
“Everyone in the market is working to make more steel to take advantage of the current situation. Iron ore-based producers are starting up blast furnaces, which will come on stream over the longer term. Steelmaking raw materials and commodities like oil are trading on strong price trends. There are historic metal margins for flat products, and difficult margins for most long product markets,” Irepas observed.
Very tight supply chains in general and the continued path towards the reopening of economies are driving inflationary pressure on everything from commodities to freight, Irepas noted, adding that as semiconductor shortages slowed down automotive production, scrap availability will be limited as a result.
Exports of ferrous scrap from Europe are slower due to intra-European demand being strong, the association said, adding that output cuts in China could also raise pressure on scrap prices.
“China is starting to reduce steel output to fulfil environmental targets and aims to reduce pollution by 40% by the end of 2021. Accordingly, BOF plants will reduce capacity utilization, while EAF plants will take over this share of production. A likely consequence of this will be to increase pressure on ferrous scrap prices,” it said.
Deepsea imported ferrous scrap prices in Turkey have continued strong in this sentiment, as recyclers have been maintaining elevated offer levels. S&P Global Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) March 8 at $462.50/mt CFR, up a further $2.50/mt on the day.
Irepas is expecting a better second quarter compared to last year. “The market can generally be described as all set to prosper, with the exception of the import market in the US which still is unstable,” it said.
— Cenk Can
