The global long steel products market is improving and gradually returning to normal, with the next quarter promising a further improvement except for the US market according to the Irepas monthly short-range outlook.
Supply chains are currently restocking and orders are solid, though steelmakers are finding it hard to keep up with the demand. Prices for steel products have rebounded significantly and could increase further going into the next quarter, Irepas noted. Low levels of inventory and increases in raw material prices are also supporting the rise in finished-products tags.
As long as China’s net exports stay under 20mn mt per year, global market conditions will remain good, the outlook projected, and if the pandemic’s rise eases by the middle of next year, the longs market could return to trends that were last observed in the first half of 2008.
The market in the US, however, is not suitable for traders as its short-term demand is currently based on restocking efforts. The forecast noted that purchasing in the country was driven by a desire to buy ahead of further price increases, which is affecting traders. That said, there is optimism around the new administration in the US, which could help resolve the current trade disputes with other nations.
The weather is still relatively warm in the northern hemisphere, with no winter in sight. Many stimulus measures and vaccines will help put the world back on track, while China continues to play a huge role in the steel trade, according to Irepas. China is still performing well, with no signs of a slowdown. The US and EU have joined China as far as demand is concerned.
Vaccines appear to be coming on stream in December and January and so there is finally light at the end of the tunnel for a return in 2021 to a more normal life. That said, the news regarding vaccines has been overshadowed by the rapid rise in steel prices. These can only give way to price corrections in the future, thus making today’s purchase decisions even harder to make, Irepas observed.