The global ferrous market is witnessing a strong recovery after a poor H1 2020 that was characterized by the idling of production capacities due to the COVID-19 pandemic, according to the Irepas monthly short-range outlook.
Steelmakers are ramping up production to normal levels as economies open up and global demand recovers, Irepas noted, adding that regional demand and business is recovering as inventories in the supply chain get replenished.
China is driving the global steel rebound and investment activities and stimulus measures in the Asian nation, are positive for the long steel product segment. According to Irepas, the country is showing strong domestic demand because of which, its exports have decreased. In fact, China became a net importer of steel in June, maintained this trend in July, and will probably also have done so in August. The rise in Chinese consumption, as a result, has had a positive effect on the rest of the world, the outlook noted.
The rest of the market seems smaller. Buyers and producers are more active regionally as a safeguard against the pandemic. The outlook described the overall market as mostly stable with fluctuations in certain areas and instability at higher demand- and higher price-levels.
Service centers in Europe and the US are low on stocks, which are being replenished on any sign of an uptick, thus resulting in higher transaction prices, according to Irepas. These price increases have followed a rise in raw material prices and are being deemed positive for those who have sufficient stocks for September.
However, Irepas warned that while the outlook for the next quarter is satisfactory, it is surrounded by many unknowns due to the pandemic, which could result in uncertainty if infections spike again.