The global steel market is likely to strengthen further in the second quarter amid improving order books, higher capacity utilization, rising prices, and stronger macroeconomic factors, according to the latest Irepas short-range outlook.
A global tightness in supply and rising demand has kept price margins high for long steel products, the outlook noted, as product shortages were worsened due to logistical headwinds such as the recent Suez Canal blockage.
Countries have also been slow to improve supply with steel output ex-China not increasing by much despite higher reported production from countries like Brazil, Turkey, India, and South Korea. Outputs in the more advanced economies like the US, Japan, Russia, Germany, and France were reportedly lower in the same time compared to the previous year, Irepas indicated.
Price increases are gaining momentum in the EU as order books strengthen, while in the US domestic mills have increased capacity utilization and are also looking at high price margins for their products. On the imports front, however, buyers are struggling to find volumes due to longer lead times and a shortage of containers and vessels as well as increased freight rates. China’s billet buying spree, on the other hand is adding strength to the global market, according to the outlook.