NEW YORK The embattled
long steel products market is likely heading toward a new
pricing floor and any rebound is a long way off, according to a
short-range forecast by the International Rebar Exporters and
Producers Association (Irepas).
"(The) situation in general is
very difficult, as the market is looking for a new direction
and is probably heading towards a new baseline," the
association said last week in its May forecast.
"The outlook still does not look
very bright in the short term," Irepas said. "Consumers are
trying to forecast the second half of 2013 but still see clouds
on the horizon. After a long-standing low and flat market
trend, we may see some improvements during the last quarter of
Demand in the global long steel
products market failed to recover in April, with business
volumes showing significant declines in the overall global
marketplace, "even though volumes are either unchanged or have
increased in some regions," Irepas said.
Finished product prices in East
Asia have fallen slightly due to an increase in Chinese output
and supply, with no demand improvements in Europe.
In the Middle East and North
Africa, political instability has hampered growth and
protective measures imposed by countries such as Egypt and
Morocco are set to further affect the region, Irepas said.
Prices fell in the U.S. market
in April as supply improved as demand stayed flat, it said.
While demand remains a concern
for long steel producers, scrap supply has picked up. "However,
demand for scrap is also lower due to reduced steel production,
as steel producers continue to adapt production levels to
market conditions," Irepas said. "Consequently, further
production cuts put a lot of pressure on scrap prices, helping
steel producers to protect their margins, if they have
The news is not all dire,
however, with business in such countries as Saudi Arabia and
Qatar staying healthy. "Competition in the market is still very
strong, while some market players seem to have already given
up," the group said said. "Some steel producers are
capitalizing on their advantages in terms of raw material
costs. But in general the focus is mainly on securing new
orders rather than on the competition issue under the current,
very unstable market circumstances."