Irepas: Global longs market under pressure as weak demand persists

The global market for long steel products continues to face severe headwinds, according to the latest short range outlook from Irepas, the international association of long steel producers and exporters. Demand remains low, output is being reduced, and competition is intensifying as China and other Asian exporters exert additional price pressure.

"Every producer is fighting with its last penny in order to keep operating," the report notes, pointing to the global effects of protectionist trade measures and excess volumes displaced by US tariffs.

European outlook remains fragile despite summer production cuts

The European market remains oversupplied, with weak domestic demand and ongoing import pressure. German prices declined substantially between June and August, though mills are now attempting to regain lost ground. According to Irepas, "with European mills cutting production over the summer there is at least a chance of some balance returning to the market in the fourth quarter." Whether this will lead to a sustained recovery is still unclear.

Chinese price movements offer modest optimism, interest rate cuts could help

In China, a small upward movement in domestic steel prices in recent weeks has had a mildly positive effect. However, as Irepas stresses, "further developments in China need to be observed." Anticipated interest rate cuts might also support a more positive sentiment in the global market, though most mills are still operating without profit due to low capacity utilisation.

US market continues to soften despite ongoing tariff protection

In the United States, domestic demand remains subdued. "With little to no imports, domestic supply seems to be meeting demand," the outlook notes. Prices are continuing to soften, and capacity utilisation remains below 80 percent even after six months of protectionist measures. Additional production capacity is expected to push this figure down further. Uncertainty is growing, not least due to ongoing court challenges to five Trump-era tariff rulings. "This will throw the market into uncertainty, more than before," Irepas warns.

Outlook for global longs market remains unsatisfactory

Overall, the market remains "unstable and unpredictable." Prices are still within long-term trend channels, but structural fundamentals and political signals remain weak. The outlook for the next quarter is described as "unsatisfactory," with continued weak demand and policy uncertainty likely to weigh on market dynamics.

Source: IREPAS, Photo: Fotolia