Pressure still rising in global longs market, some answers expected after January 20

The pressure in the global long steel products market is increasing as there is no positive news from China yet, while everywhere there is weak demand, market protection and excess capacity. Some questions about the future are expected to receive answers after Trump’s inauguration on January 20

Still no positive news heard from China

Chinese export data for November 2024 showed that China was on its way to a record year in steel exports. The economic news coming from China is less than encouraging and there is no anticipation of any resurgence in its domestic demand for long steel products in 2025. In fact, it is puzzling how Chinese steel users still manage to consume 900 million mt of steel annually.

Global markets face economic strains, inflationary pressures and trade measures

The global economy faces significant challenges amid uncertainties over US trade policy before the new administration takes office. The proposed tariffs, including a 25 percent duty on imports from Canada and Mexico, could disrupt supply chains, raise costs and increase global economic strains. Rising borrowing costs could further burden industries like construction, which are already struggling with low demand and inflationary pressures. While some importing countries who are already subject to Section 232 tariffs may benefit from a more level playing field in the US, the proposed tariffs may also increase costs for domestic construction. These costs impact businesses, especially in capital-intensive industries like construction and could slow economic growth further, thus adversely affecting steel demand in general.

Could actions by Trump prove to be counter-productive?

In the US, after Trump becomes president again, mass deportations of undocumented workers could create labour shortages, particularly in construction, driving up costs and slowing growth. Domestic mills, like Commercial Metals, report losses due to domestic competition with high production capacities recently added by all domestic mills and with more capacity increases expected. While rebuilding after the Los Angeles fires may eventually boost activity, this may still be years away.

Europe still experiencing negative growth, to issue new protective measures

Europe is still experiencing negative growth. The European Union is anticipated to announce a revision of its protective measures on April 1. Turkey and India have also announced market protection measures.

Unpredictable period with low visibility ahead: what will China do?

Although market observers are expecting some answers to their questions to be made clear after January 20, the fact is that we are probably entering a very unpredictable period with low visibility. That said, there is still hope that after its New Year holiday China may repeat what it did back in 2016, but we need to wait for another month to find out.

Very strong competition in very poor market, with quite unsatisfactory outlook

Competition in the market is very strong, while the market can be described as very poor and unstable, with a very unsatisfactory outlook.

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