Stability in global long steel market but future prospects appear brighter

The global long steel products market maintained its generally stable condition during the month of November on the back of stable ferrous scrap prices. Major exporters have been able to find some opportunities for product volumes in the North African and Middle Eastern markets, and, on top of that, maintenance closures at a number of mills due to the upcoming holiday season are offsetting the seasonal slowdown in demand.

Competition levels in the market are still very high but with less speculation, while this strong competition pushes mills to adjust production levels to maintain reasonable market conditions.

As winter has started in the Northern Hemisphere, the flow of ferrous scrap has been reduced. On the other hand, demand levels have maintained their strength, keeping scrap prices firm. Tight supply during the winter months may push scrap prices upwards.

The combination of increasing scrap prices and expected decline in iron ore and coal prices constitute a major advantage for BOF-based long product mills. Accordingly, several players are able to compete against the traditional suppliers from Turkey, Ukraine and China with the help of currency exchange rate fluctuations and DRI and/or iron ore-based production costs.

Despite the low price levels in the market, economic developments are positive compared to the past and any further positive movement in terms of the Iranian situation could provide a boost for the long products market.

On the other hand, the markets in North America are showing good prospects, while the EU market also appears to have turned the corner. Demand is definitely expected to grow in 2014.

Outlook for December

The potential increase in ferrous scrap prices may push the long steel products market upwards. Even though increased buying activity is expected in certain areas, market conditions are still very tough.

Long steel product prices are expected to increase gradually throughout the first quarter of 2014.

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