The global long steel market has weakened slightly, with demand stable but low in recent months, according to IREPAS. Rebar prices have fluctuated with scrap costs, while more expensive scrap has supported demand for steel billets in the Far East.
Excess capacity, particularly in China, remains a major concern. Beijing appears willing to curb supply, IREPAS said, but it is unclear whether effective measures will follow. There are still no signs of a meaningful recovery in Chinese steel demand or slower exports. Uncertainty and high interest rates in Western economies are weighing on market expectations.
European producers face weak demand, intense competition and rising costs. Reduced import quotas and the CBAM carbon mechanism have so far offered only limited price support. EU natural gas prices have risen by about 150% over the past three months, while Dutch TTF futures have exceeded €100/MWh. Since August, higher electricity and gas prices have added more than €110 per tonne to direct steelmaking and rolling costs.
Recent steel price increases have been driven mainly by higher production costs, rather than stronger demand. Prices could rise further in the first quarter of 2027 if energy costs remain high, particularly if output is cut.
US demand is relatively stable, but tariffs and trade restrictions have constrained foreign suppliers. Growth is concentrated in AI data centres, energy and selected infrastructure projects, while residential and commercial construction remain weak. North American capacity utilisation is around 80%, although stronger domestic competition could lead to oversupply in the next two to three years.
India and parts of Southeast Asia remain relatively strong markets, with gradual improvement expected in Southeast Asia in 2027. Overall, IREPAS expects demand to remain stable but unsatisfactory next quarter. Higher energy costs and tighter scrap availability could push prices up: increased domestic scrap consumption in the US and Europe is expected to reduce exports and support international prices.
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