The looming second wave of the Covid-19 pandemic is creating huge uncertainty over steel demand and pricing in the fourth quarter after the market improvement witnessed in Q3. So said International Rebar Exporters and Producers Association (Irepas) committee members at the association’s virtual meeting this week.

Scrap is back to pre-pandemic levels of $300/tonne cfr Turkey, thanks in large part to “…extreme” raw materials and semi-finished products demand from China, which has proved a “…saviour,” Irepas raw materials suppliers committee chairman Jens Björkman said.

There is a lot of uncertainty over renewed lockdowns, Björkman added, but also positives such as the strong construction sector performance.

Traders committee member F.D. Baysal said the US market has stabilised from the pandemic-induced shock, but average capacity utilisation of 65% is still down on the September 2019 level of 80%. Residential construction has grown but non-residential is down with lower recovery prospects, he added. Steel prices have increased, driven by costlier scrap and low inventories, but some of these prices may not hold if the pandemic intensifies, he observed.

Producers committee chairman Murat Cebecioglu, meanwhile, said the pandemic has resulted in investment delays that have reduced demand. Chinese stimulus measures and reduced exports are driving the global market. However, there is huge uncertainty regarding the future development of the virus.

Baysal said there will be fundamental changes to economies after the pandemic, with more people working from home and companies occupying less office space. This will create office overcapacity, considering the segment was already oversupplied before the pandemic. However, there will be more warehouses and distribution centres built to cater for growing online retail.