The months ahead for the steel industry are unpredictable, but hold some positive factors, long product trade organization Irepas said in its short-term outlook published Friday.
Falling oil prices have begun derailing investment projects related to gas and sustainable energy construction.
Regional changes are expected to be prominent, split among industries — some good such as automotive, some bad such as energy.
The oil slump will have an important defining role to play in the health of the markets, Irepas said.
Recent holidays saw the long steel market quiet, though low demand and high levels of competition have squeezed margins for producers, and consumers felt strong construction-side pressure.
This is expected to become fiercer as prices soften between Russian, Ukrainian and Chinese producers.
Scrap and iron ore have seen an increase on the back of a strong US dollar, with scrap additionally affected by tight winter supply.
The weakening of the euro saw numerous scrap exports taking advantage of the disparity, but imports to the region have slammed to a halt.
Continued strong growth in the US and expected increasing activity in Europe are positives for the global market, Irepas said.
Cancellation of the Chinese tax rebate on exports of boron-added steel products may have a brief positive effect on the market, but long-term effects remain to be seen.
Some offers for material from the region were withdrawn after the announcement, sparking hope that oversupply issues may reduce for a time.
Chinese merchants have however been quick to replace these offers with chromium- and vanadium-added steel products, according to market participants.
Zhejiang Yaang Pipe Industry Co., Limited