Sentiment in the global long steel market is improving following a recovery of demand in most regions during the third quarter of 2020 but the Covid-19 pandemic remains a concern, the International Rebar Producers & Exporters Association (Irepas) said last week.
Generally, regional markets across the globe have been performing well so far this quarter, enjoying both higher demand and prices.
Demand for long steel in Europe started to improve in July, with construction activity in most countries recovering from what sources called “the lockdown coma.”
“Demand has returned in Europe. Cut and benders are very busy and so far a relatively low number of projects are on hold,” Irepas said.
Longs producers in the Southern Europe took a shorter-than-usual summer break in August, bringing back operations to meet returning demand.
A gradual recovery of key steel-consuming industries alongside a bullish scrap market started to push rebar prices upward in Europe from September; buyers have largely accepted these increases.
Rebar prices in Southern Europe have stabilized after a massive increase last week.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Southern Europe was unchanged on Wednesday September 9 at €۴۴۵-۴۵۰ ($۵۲۵-۵۳۱) per tonne.
Producers are also planning further prices increases for bookings made in October, market participants have said.
“Italian rebar producers are willing to close orders only for September, not October, at the mentioned price, and not a one euro less. Prices for October will be up by €۱۰-۲۰ per tonne,” a buyer source said.
*** Costlier scrap
The rising costs of a key steelmaking raw material – scrap – are another factor supporting long steel prices.
Fastmarkets’ daily index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was calculated at $298.49 per tonne on Tuesday, up by $3.21 per tonne from a day earlier. The index has risen by more than $20 per tonne in the past month.
Prices started to rise in late August when mills resumed their purchases after they stopped booking for more than two weeks.
*** Chinese demand
Investments and stimulus measures in China bode well for the long steel segment – the country’s construction sector in particular is driving demand for such products as well as billet, market sources said.
“The country’s domestic demand is strong and it appears to not be in the mood to export. It became a net importer in June, maintained this trend in July and would have probably done so in August as well. With what China is consuming, the rest of the world feels the positive effects,” Irepas said.
Last week, a steel mill in Turkey reportedly sold 52,000 tonnes of rebar to Hong Kong at $443 per tonne fob on an actual weight basis.
A cargo of Russian billet to be shipped from the country’s Far East ports in November was heard to have been sold to China at $445 per tonne cfr. Had the cargo been sold by a supplier shipping from Black Sea ports, the price would have been around $400-405 per tonne fob, according to market sources.
The World Steel Association expects Chinese steel demand to rise 1% year-on-year to 916.5 million tonnes this year from the 2019 total.
*** What’s next?
Irepas’ outlook for the fourth quarter is cautiously positive, with regional markets expected to perform well and prices anticipated to strengthen.
At the same time, pandemic-related concerns are casting a shadow because there is “huge uncertainty regarding what the winter may bring as a second wave of the pandemic seems to be around the corner,” Irepas said.
As well, most mills outside China were hit very hard by the Covid-19 crisis in the first half of the year – their production rates and the state of their business have yet to recover to pre-crisis levels, it added.
Irepas is therefore cautioning steelmakers against bringing back all capacity idled in the first half of this year because it might create oversupply during the forthcoming winter, when demand usually cools off.
“The key here is that steel producers should not be misled by the current demand into firing up more of their furnaces, which could exert more supply pressure on the market during winter,” the association said.
این مطلب بدون برچسب می باشد.
ثبت دیدگاه