IREPAS: The global long position market is in danger of further decline, although geopolitical shifts may signal a turning point

According to the latest report published by IREPAS, the global association of long products exporters and manufacturers, the global business environment in the long products sector has experienced another downturn: growing difficulties are compounding market difficulties. However, the apparent easing of conflicts involving Iran could be a decisive shift for the industry. According to IREPAS, if geopolitical risks continue to decrease, the market may finally approach the absolute bottom of the current cycle.

Weak customer confidence is dragging down the international rebar segment

Conditions in the international rebar sector have softened over the past month. IREPAS noted that high supply combined with stagnant demand reduces both profits and prices. Although some steel producers have begun reducing utilization factors to restore balance, IREPAS stressed that the apparent lack of customer confidence remains a major obstacle to any recovery in demand. In addition, IREPAS expressed concern that the expected increase in the availability of Iranian and Russian billets could seriously affect rebar prices, as well as rising energy costs during the peak summer season, creating an additional financial burden on manufacturers.

Regional prices are falling in Europe as Chinese exports grow

Economic progress in the EU continues to slow down due to inflationary pressures and high utility costs. IREPAS said that despite a 50 percent reduction in import quotas, European steel producers have been unable to maintain recent price increases, forcing domestic quotations to decline due to widespread weakness in demand. At the same time, IREPAS noted that the gradual reduction of steel production in China has done little to change the short-term fundamentals of the market, as exports from China continue to grow.

US factories are heavily dependent on building data centers

In the US domestic market, the capacity utilization rate is stabilizing at about 81%, even though local plants are trying to raise prices by $10 per ton. IREPAS noted that the entire long steel sector in the United States is currently supported by investments in data centers, although a number of these large-scale projects have not yet received full funding or appropriate construction permits.