The war in Ukraine changed the mood in the global long products market and also fundamentally changed the flow of raw materials and finished products almost overnight, according to the latest short-term forecast of the International Rebar Manufacturers and Exporters Association (IREPAS), published on April 7.
p>“Before the war, it was expected that demand would determine the direction of prices, in contrast to 2021, when supply was the driving factor. Today, however, supply has definitely taken the lead again and the market is actually distorted,” the post reads.
Noting that disruptions in the supply of semi-finished and finished products have opened new opportunities for others, especially Turkish factories located in the same geographic region, the association said that sanctions on Russia are likely to remain for some time.
Highlighting the price imbalance between Asia and the rest of the world, IREPAS notes that international markets are becoming more regionalized than ever.
“European steel prices are currently the highest in the world. Prices in Asia and especially in China are much lower than elsewhere. The steel trade is changing direction from selling to Asia to buying in Asia,” the message reads.
Since the export of scrap metal from Russia and Ukraine has almost ceased, Turkish factories have compensated for the missing volumes with the additional availability of European scrap. This allowed them to keep scrap prices under control while exporting more steel to the EU market, according to IREPAS.
The rise in prices for scrap metal will continue, but the war has become the main negative factor for the market, IREPAS notes.
“The market will take several weeks to find its balance. Under the current circumstances, the market can be described as fluctuating and unstable. The outlook is very uncertain as fundamentals can change daily,” IREPAS concluded.
