IREPAS Committees: Oversupply still remains the main problem
The 62nd meeting of IREPAS (International Rebar Exporters and Producers Association) was held in Budapest on June 6-8. There were 92 producer representatives amongst the 241 attendees from 45 different countries.
At the conclusion of the event, the chairmen of the committees for raw material suppliers, traders, rebar and wire rod suppliers and billet suppliers came together to share their view of the current state of the markets with the general participants at the meeting.
The chairman of the Raw Material Suppliers Committee, Mr. Ioannis Meimaroglou, said that in Europe/Black Sea region current scrap sales prices are lower than the cost of buying in new scrap supplies, adding that scrap prices are not realistic at current levels. The committee also declared that reduced finished steel production would not be detrimental to the market situation.
The Traders’ Committee, chaired by Mr. Michael Setterdahl remarked that demand is low in the market in general, resulting in a situation of oversupply. Mr. Setterdahl said that, China, with its rebar output of 350,000 metric tons per day mostly via consumption of iron ore, is pushing production costs up, as raw material suppliers keep on raising prices backed by high demand for ore, and this situation has an adverse effect on the global steel industry.
Mr. Mohammed Al-Saadi, the chairman of the Rebar and Wire Rod Suppliers Committee, said that low demand, coupled with high production costs due to higher iron ore and scrap prices, is putting pressure on steel prices. Considering expectations that iron ore prices will further increase in the third quarter and given current demand levels, Mr. Al-Saadi said that oversupply remains the main problem and it can only be solved by less overproduction in the short term.
The chairman of the Billet Suppliers Committee, Mr. Ugur Dalbeler, also the chairman of IREPAS, said that in the first quarter of this year rebar output rose by 35 percent as compared to the corresponding period of 2009. Stating that the crisis had taught producers how to adjust their production to demand levels, Mr. Dalbeler said that producers will continue adjusting their capacity usage in line with sales. The IREPAS chairman concluded by saying he expected activity in the industry to revive very soon.
Notes to Editors:
IREPAS is a global association of producers and exporters of long steel products. It was founded by CELSA and GERDAU 27 years ago to develop understanding between producers, traders and consumers around the world. Today, IREPAS unites producers, traders, consumers of steel and professionals from the shipping and finance industries.