Tepid global construction demand and fiscal obstacles provide little prospect of support for long steel prices this year, market participants at the 88th meeting of the International Rebar Exporters' Association said this week. Regions with potential for strong growth are likely to be slow until 2024, while major economies are hampered by macroeconomic conditions.

 

In north Africa and the Gulf Council countries, rebar consumption growth is likely to be flat in 2023, said Ahmed Ezz, chairman of Egyptian steelmaker Ezz Industries. Higher consumption in Iraq, Libya and Yemen is expected to offset a fall in Algerian rebar consumption, as Algerian investments have recently been focused on steelmaking capacity geared towards exports. But the region's rebar demand has potential to continue swift growth in 2024 or 2025, Ezz said. Egypt, in particular, could consume an estimated additional 3-4mn t/yr in the long term if government restrictions on private construction, implemented to protect agricultural land, were lifted.

 

Europe's construction sector is expected to remain stunted by high energy prices and interest rates until at least the end of the year. While infrastructure projects in northwestern European countries will continue to generate demand, private housing sectors are suffering. Of a planned 400,000 apartments planned for construction in Germany this year, only half are expected to be built, said a market participant. "Southern European rebar producers are operating at around 60pc of capacity but are still fighting for orders," he added.

 

The outlook for US rebar demand is dim for 2023, with construction projects slowed by a shortage of funding. The failure of several mid-sized US banks over the past few months has had a disproportionate effect on the construction sector, as most projects are funded by mid-sized rather than larger banks, said a trader. And with new capacity due to come on line, any added US demand may be covered by domestic production over the next few years. argusmedia