Global long steel market faces challenging outlook for next quarter - Irepas

The global long steel market has deteriorated slightly, with demand remaining weak and relatively stable, while fluctuations in scrap prices continue to influence rebar prices, according to the International Rebar Producers and Exporters Association (IREPAS) in its November 2026 short-range outlook.

Higher scrap prices have increased demand for billets from the Far East, while excess production capacity and uncertainty over Chinese supply remain major concerns. Although Beijing appears willing to control steel output, there is little evidence so far of a meaningful improvement in demand or a slowdown in Chinese exports.

In Europe, sharply rising energy costs are putting pressure on steel producers and limiting supply. The increase in gas and electricity prices has added more than USD 120 per ton to direct steelmaking and rolling costs, making production increasingly difficult at current finished steel prices.

IREPAS said recent increases in European steel prices have been driven mainly by higher energy and logistics costs rather than tighter import quotas. With reduced safeguard quotas and the implementation of CBAM, import availability has also become more limited. However, competition among European mills remains intense, with producers still prioritizing volumes over margins.

Demand in Germany's construction sector remains subdued, as the industry awaits the launch of state-funded projects while private investors remain cautious. The broader European market is expected to remain relatively stable for the next few weeks, although further price increases are anticipated in the first quarter of 2027.

In the US, demand is relatively stable, supported by investment in AI data centres, energy and selected infrastructure projects. However, residential and commercial construction remain weak due to high financing costs. High import tariffs and trade restrictions have also reduced opportunities for international suppliers, while domestic producers benefit from a more protected market.

India and parts of Southeast Asia remain relatively strong markets, with some potential for gradual improvement in Southeast Asian demand during 2027. Elsewhere, global competition remains intense as excess capacity, particularly in Asia, and trade barriers force exporters to compete for fewer market opportunities.

IREPAS also highlighted rising production costs for electric arc furnace (EAF)-based producers due to electricity shortages and inadequate transmission infrastructure, potentially benefiting integrated steelmakers using coal-based production routes.

Looking ahead, the association described the outlook for the next quarter as challenging, with weak but stable demand and further pressure from rising raw material costs. Scrap prices are expected to increase as the US and Europe consume more material domestically, reducing export availability. Higher energy costs are also likely to support steel prices, particularly in Europe.