Short Range Outlook : April 2023

International business shrinks in global long products market, outlook unsatisfactory

Global business and its international scope have been facing some challenging times recently, with declining imports and exports and a lack of supply-demand balance in the global long products market. The reduced total production in 2022 is carrying over into 2023 and is able to satisfy actual consumption. This has resulted in an aversion to imported steel due to the lack of certainty, leading to a decline in the scope of international business.

Global market becomes more regionalized, negative factors prevail

The market is becoming more and more regional, with European domestic mills fighting for every order. However, the market is holding back and is in a bearish mood. The anticipated pick-up in the Chinese market after their New Year holiday did not materialize, and global political tensions are not helping to motivate investors, with higher interest rates doing the rest.

Despite stable demand, future also dimmer in US impacted by banking crisis

Although steel demand in the US has remained the same, the future looks even more dim. The new banking crisis for medium-size banks is governing the investment outlook, as more steel customers have been doing their business with these banks, which have started to squeeze credit lines. High interest rates, which are continuing to increase, are not helping the situation, leaving imports at the same disadvantage as before.

Competition strong, steelmakers mostly maintain margins

The level of competition in the global market is strong, with domestic steel businesses in most instances managing to achieve good margins. However, fewer imports and exports mean that the tonnages moving face stiff competition.

Market unstable in general despite positive such as lower energy and shipping costs

Despite some positives in the global market, such as energy prices and shipping costs coming down, the current status of the market is fluctuating and unstable in general.

Corrections could be in the offing unless consumption increases

The outlook for the next quarter is unsatisfactory. April, May, and June could be facing a market correction unless consumption of steel increases as new supply sources come online.

Market is fluctuating, unsatisfactory outlook for the next quarter

In conclusion, the global business and its international scope have been facing some significant challenges in recent times. Declining imports and exports and the lack of supply-demand balance have resulted in a decline in the scope of international business and the market is becoming more regional. Despite some positives, such as falling energy prices, the current status of the market is fluctuating and unstable, with an unsatisfactory outlook for the next quarter.




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