According to IREPAS, the global association for longs exporters and producers, the global longs market has been going through turmoil recently, triggered by the ongoing tariff issues spiraling in the US as a part of Trump administration policies. Moreover, the countries affected have started retaliating and the market uncertainty keeps increasing, deepened by the adjustment of the safeguard measure in the EU on steel imports. As a result, while the costs of production have also been rising, pushing longs prices upwards, demand has been lagging behind somewhat due to Trump’s policies it is rather unclear where the whole situation is going to end up. The risks have increased greatly and the pressure on trade is quite high.
In Europe, regional producers are not so positive regarding the mentioned safeguard revisions. European producers still believe that their market remains wide open for more imports, which is threatening in view of the US tariff situation. In addition, it is believed that lobbyists have got stronger chances now of achieving their aims for the downstream industries and consumers. However, taking into account the safeguard adjustments, some suppliers to the EU longs market will have to slow down a little.
In the US, the unpredictable policies on tariffs, accompanied by almost daily announcements, have affected the general market situation. The current demand is due to more customers taking their chances to book materials now in view of the high possibility of coming price hikes triggered by trade measures. In addition, there has been more interest in import offers, while there had already been a surplus of import material in the US market. With higher prices for rebar, competition between US domestic suppliers has also been rising, while construction has become weaker due to the high level of uncertainty and high interest rates. A flat 25 percent import tariff will benefit low-cost countries, such as those in North Africa, SteelOrbis estimates.
Still, the announcements from China have been somewhat promising especially regarding production reductions, though the market wants to see the actual steps in this regard. The economic situation in China has been getting more and more difficult, which results in exports remaining essential for mills.
Steel scrap prices globally have been rising, triggered by US tariff-related decisions and seasonality. Particularly, the levels have added almost $30/mt over the past several weeks, reflecting quite a cost increase for mills, which urges them to replace some of the import scrap by overseas semis. The key issue is the long lead time for shipments from Asia, while the risks for buyers are increasingly worrying.
Overall, the current market situation is far from bright given the level of risks, concerns and uncertainty being at very high, while competition in the global market is very strong. IREPAS describes the current situation as well as the outlook as unstable with high volatility.