Shortages, China strength keep second-quarter prices elevated: Irepas
Posted on 08 April 2021
With output in key regions failing to increase in January-February, there is still a shortage of long steel, which is keeping prices and margins elevated, says the International Rebar Exporters and Producers Association (Irepas). China meanwhile will seemingly continue consuming in 2021 at similar rates to last year.
In Europe, the reduced number of offers and stronger seasonal demand will speed up price increases. “The hand-to-mouth buying mood of EU clients is good for local mills as they can adjust their prices instantly depending on the cost and sales situation,” Irepas says in its April short-range outlook. Even if EU safeguard measures are terminated from July, this would most probably not create a flood of imports under the current circumstances.
In the US, the situation has become even worse for importers. Most supplying mills are booked full. Availability is three to four months for flat rolled products and a minimum of two months for long steel products. In addition, the availability of vessels is even worse, making shipping more difficult, Irepas observes.
Lead times are longer than ever in the global long steel products market and producers “are all making money”, Irepas says in the outlook sent to Kallanish.
Instead of exporting, China keeps importing, and its buying of billet gives the global market additional strength. Post-pandemic government stimulus programmes will meanwhile hit consumer products and construction markets soon. “It seems the current prices will hold for the next three months and that reductions will be gradual rather than sudden,” Irepas comments.
From a global perspective, there is very little competition as transport costs are skyrocketing. The only competition that exists today is the competition among buyers, the association concludes.Source : Kallanish