Global long steel market faces rising pressure amid uncertainty

The global long steel products market continues to face mounting pressure, with weak demand, market protection measures, and excess capacity presenting significant challenges. According to industry insights from the International Rebar Producers and Exporters Association (IREPAS), the market remains in a state of uncertainty, with key developments expected following the inauguration of former U.S. President Donald Trump on January 20.

IREPAS, a global organization representing producers and exporters of reinforcing steel products, provides regular market assessments and insights into the challenges facing the industry.

Recent Chinese export data for November 2024 indicates that the country is on track for a record year in steel exports. However, economic signals from China remain lackluster, and there are no signs of an imminent recovery in domestic demand for long steel products in 2025. Despite the high levels of consumption—approximately 900 million metric tons annually—the outlook remains uncertain, raising questions about the sustainability of such demand.

Globally, economic conditions are strained, with inflationary pressures and trade measures adding further complexity. The pending U.S. administration's proposed 25 percent tariffs on imports from Canada and Mexico could disrupt supply chains, elevate costs, and intensify economic strains. Rising borrowing costs are another concern, potentially impacting industries such as construction that are already grappling with low demand and inflation.

While some countries previously affected by Section 232 tariffs may benefit from a more balanced competitive landscape in the U.S., the potential increase in domestic construction costs could slow economic growth and negatively affect overall steel demand.

In the United States, policy changes under Trump's new administration could lead to labor shortages, particularly in the construction sector, due to potential mass deportations of undocumented workers. Increased costs and slowed growth could follow as a result. Domestic mills, such as Commercial Metals, have reported losses amid heightened domestic competition and rising production capacities, with further capacity expansions on the horizon. Although reconstruction efforts following the Los Angeles fires may eventually stimulate demand, such efforts are expected to take years to materialize.

Europe remains mired in negative growth, with the European Union expected to revise its protective measures on April 1. Meanwhile, other key players, such as Turkey and India, have also announced new protective policies to safeguard their domestic steel industries.

Despite hopes for greater clarity after January 20, the market is bracing for an unpredictable period with low visibility. Observers remain watchful for potential actions by China following its New Year holiday, drawing comparisons to the market shifts observed in 2016.

Source: Irepas, Photo: Fotolia