The US-EU trade agreement could boost EU rebar and wire rod exports to the US, although the quotas are unlikely to be large, says the International Rebar Exporters and Producers Association (Irepas). On the other hand, it suggests trade is going to become even more regional.
Potential US-bound shipments could bring relief to EU mills suffering from costly energy but, besides the size of quotas, US-demanded product specifications do not suit EU mills, and high freight costs will restrict shipments, Irepas says.
The deal confirms protectionism is here to stay. “The US and EU are forming a new structure to trade to each other and to leave others out,” Irepas says in its latest short-range outlook sent to Kallanish. The increased regionalisation of trade will affect the whole supply chain. More trade cases, also even for downstream products, can be expected to be filed, the association observes.
Overall, lead times are back to normal, energy and logistics are the main issues affecting steelmakers, and underlying demand in Europe and North America is solid and expected to remain good in 2022, Irepas says. The Chinese market weakness could slow its imports and hit general sentiment.
Congestion in shipping and at ports is also hampering business. “Any contract that was done in the second quarter now faces huge shipping costs, thus making the contract unprofitable,” Irepas observes.
“The outlook for the global long steel market for the next quarter is satisfactory and surprisingly stable. There is a lot of downtime being scheduled for November and December, and important new capacities will be coming on to the market in 2022. It will be critical to see if these new capacities will find new customers,” it concludes.
Adam Smith Germany