According to IREPAS, as the end of the year and the holiday period approach, the situation on the global long products market is far from positive, and the market prospects are affected by many uncertainties. Demand remains low in most regions, and rising costs worsen the situation of many factories, making daily operations more difficult. The balance of supply and demand has not improved at all, as consumption continues to weaken, and not many factors support expectations of a recovery in demand.
In the EU, scrap metal supplies were slightly more limited than usual, which some market sources attributed to the CBAM approach and the uncertainty associated with it. High raw material prices combined with higher energy tariffs have led to a new high in cost levels, while overall demand for finished steel has remained relatively unchanged. The entire cost structure in the EU has changed, and now the market has become even more cost-oriented than last month. Some temporary relief may come from the adjustment of protective regulations in Europe, which will further restrict imports. Combined with CBAM, the adjustments could bring more orders to local manufacturers, but overall end-user demand does not have much potential to increase at the moment.
Between January and October of this year, China's steel production fell by almost four percent year-on-year to 817.87 million tons, which is considered a significant drop and, theoretically, it should have partially reduced the pressure from oversupply in the global market. In fact, China continues to export significantly, taking into account unstable domestic consumption. As a result, steel exports remain attractive to the Chinese, and the situation is not going to change dramatically.
In the US, demand stabilized last month, partly due to severe import restrictions. Most sellers try to minimize their inventory before reporting at the end of the year. The pace of investment in the country is quite slow, which affects the formation of new demand, as interest rates are high and many commercial projects have been suspended. Although the 50% tax is still in effect on steel imports to the United States, many countries are still hoping to negotiate and obtain an exemption from the tax, especially Mexico. Similar hopes exist in the EU, where new protective measures have been announced.
It is assumed that a somewhat unexpected increase in the prices of imported scrap in Turkey will affect the level of capacity utilization in the country, but much will depend on the consequences of the introduction of CBAM. For most of November, there was a pretty decent demand for local fittings in Turkey.,
