Global Long Steel Market Under Siege: War, Trade Walls, and a Demand Vacuum

The International Rebar Exporters and Producers Association (IREPAS) has released its March 2026 short-range outlook, and the picture it paints is the most turbulent in recent memory. The global long steel products market is being hit from every direction simultaneously — a Middle East war that has sent energy and freight costs soaring, a European market paralysed by regulatory uncertainty, a Turkish industry in contraction, and a US trade policy landscape that was upended by the Supreme Court only to be hastily reassembled under different legal authority. For Indian steel exporters, traders, and producers of long products, understanding these intersecting forces is not optional. It is the difference between navigating the next quarter profitably and being caught on the wrong side of a volatile market.

The Hormuz Effect on Long Steel: Costs Up, Confidence Down

The war in the Middle East — triggered by US-Israeli strikes on Iran on February 28 — has fundamentally altered the cost structure for global long steel trade. Energy prices have surged, with Brent crude climbing from approximately $70 per barrel in mid-February to over $92 today. Bunker fuel, which directly determines shipping costs for bulk steel cargoes, has risen in lockstep. Freight rates for routes involving the Persian Gulf or requiring Cape of Good Hope diversions are up roughly 38% from pre-crisis levels.

But the more insidious effect is on confidence. IREPAS notes that while concerns over cargo deliveries from eastern regions have helped push prices upward in Western markets, demand has not followed. Buyers across Europe and the developing world are adopting a wait-and-watch stance, unwilling to commit to medium or long-term purchases when nobody can predict whether the conflict will last weeks or months, or whether it might spread further into the Gulf.

The scrap market — the lifeblood of electric arc furnace long steel production — adds another layer of uncertainty. Scrap prices have risen by approximately $30 per tonne in recent weeks, driven both by seasonal supply tightness and logistical disruptions. IREPAS observes that this surge is making semi-finished steel imports a more attractive option for EAF mills, particularly from Asian origins. As the association puts it plainly, it is a battle of costs right now, and nothing else matters.

For Indian producers, this scrap dynamic is particularly relevant. India’s induction furnace and EAF sector — which produces the majority of the country’s TMT bars and rebar — relies heavily on both domestic and imported scrap. With Gulf-origin scrap shipments disrupted by the Hormuz closure and global scrap prices firming, Indian IF and EAF mills are facing input cost pressures that will inevitably feed through to finished long product prices.

Europe: Mills Hike Prices Into a Cautious Market

European steel mills have responded to the crisis with price increases, but the market response has been notably muted. IREPAS reports that the EU market is still emerging from its winter slowdown, and the price hikes have not triggered panic buying or accelerated restocking. Buyers are purchasing cautiously, on a hand-to-mouth basis, unwilling to build inventory in an environment of profound uncertainty.

The deeper structural problem in Europe is regulatory. Brussels has still not announced final regulations for the Carbon Border Adjustment Mechanism, which entered its definitive financial phase on January 1, 2026. EU importers are now required to begin purchasing carbon certificates for steel imports, but the operational details, calculation methodologies, and enforcement mechanisms remain unclear. Simultaneously, the future of the EU’s safeguard measures on steel imports beyond their current June 2026 expiration is undetermined.

This regulatory limbo has made importing steel into the EU, in IREPAS’s assessment, extremely risky. Traders and importers face the prospect of buying steel today under one set of rules, only to have those rules change by the time the cargo arrives. The result is a significant chill on import activity — which would normally provide competitive pressure on domestic EU mill prices, but is currently absent, allowing mills to push through hikes with limited market resistance.

For Indian exporters of long products to Europe, this creates a paradox. The price environment in Europe is strengthening, but the barriers to accessing that market — CBAM costs, safeguard quotas, and sheer regulatory uncertainty — are higher than ever. Only exporters with robust emissions data, clear CBAM compliance processes, and established buyer relationships will be able to capitalise on the opportunity.

Turkey: Construction Slowdown Meets Export Decline

Turkey, traditionally one of the world’s largest exporters of long steel products, is facing a particularly difficult period. Domestic construction activity remains sluggish, reflecting broader macroeconomic challenges including high inflation, elevated interest rates, and muted infrastructure spending. On the export front, Turkish long steel shipments have fallen by approximately 20% year-on-year, a significant contraction for an industry that has historically relied on export markets to absorb surplus capacity.

Turkish mills are responding by adjusting capacity utilisation — effectively cutting production to match the lower level of demand. This is a defensive strategy that preserves margins but signals a market where producers see no near-term recovery in volumes.

The Turkey situation matters for Indian long steel producers for two reasons. First, Turkey is a key competitor in export markets across the Middle East, North Africa, and parts of Asia. If Turkish mills are cutting output and losing export share, Indian producers — particularly those with access to competitive raw materials and the INSTC corridor — may find opportunities to capture redirected demand. Second, Turkey is a major scrap buyer, and its reduced procurement is contributing to softer global scrap demand in some segments, even as Hormuz disruptions tighten supply in others.

The United States: Legal Whiplash on Tariffs

The US trade environment has been through a period of extraordinary legal upheaval. On February 20, 2026, the US Supreme Court ruled 6–3 that the International Emergency Economic Powers Act (IEEPA) does not authorise the President to impose tariffs, effectively striking down the “Liberation Day” reciprocal tariffs and other duties that had been imposed under IEEPA since early 2025. The Court held that while IEEPA grants the President authority to “regulate” imports during emergencies, this does not extend to the distinct power of taxation.

The ruling provided immediate breathing space for steel importers into the US. IEEPA tariffs, which had generated an estimated $160 billion in revenue, were terminated effective February 24. The Court of International Trade subsequently ordered that refunds be issued to all importers who paid IEEPA duties, with interest accruing at an estimated $650 million per month.

However, the relief was short-lived. On the same evening as the Supreme Court ruling, President Trump issued a new executive order imposing a temporary 10% tariff on all imports under Section 122 of the Trade Act of 1974 — a different legal authority that permits tariffs for up to 150 days to address balance-of-payments concerns. These replacement tariffs took effect on February 24.

IREPAS notes that while the Supreme Court decision gives some breathing space to importers, it is likely not long before new tariffs are implemented under different legal names. The administration has already announced Section 301 investigations targeting 15 countries and the EU, which could provide the legal basis for a new generation of tariffs.

Critically, the Section 232 tariffs on steel and aluminium — which are imposed under a national security authority separate from IEEPA — remain unaffected by the Supreme Court ruling. The 25% tariff on steel imports into the US continues to stand, maintaining the protective umbrella for American mills.

For Indian long steel exporters targeting the US market, the practical takeaway is that while the legal basis for tariffs keeps shifting, the protectionist intent remains constant. The US market will continue to be effectively shielded from import competition through one mechanism or another.

China: Production Down, Exports at Record Highs

The backdrop to all of this is China. The IREPAS February outlook noted that Chinese steel production fell to 960 million tonnes in 2025, dropping below one billion tonnes for the first time since 2019. But paradoxically, Chinese steel exports surged to a record 119 million tonnes in the same year. China is producing less but exporting more — a reflection of weak domestic demand from the continuing property sector crisis and deliberate efforts by Chinese mills to maintain utilisation rates by pushing surplus steel into global markets.

This flood of Chinese exports is the single largest source of supply pressure on the global long steel market. It is the reason why countries from India to Europe to the US are erecting trade barriers. India’s own safeguard duty of 12% on flat steel products (though not directly covering long products) is part of this defensive response.

For Indian long product producers, the Chinese export wave has a mixed impact. On one hand, Chinese rebar and wire rod exports into Southeast Asian and African markets that India also targets create price competition that compresses margins. On the other hand, the global reaction against Chinese dumping — including new safeguard measures in the EU and continued Section 232 protection in the US — is fragmenting global trade in ways that can benefit Indian exporters with access to markets that are restricting Chinese steel.

What IREPAS Is Telling Us Between the Lines

Reading the IREPAS outlook carefully, three themes emerge that are not stated explicitly but are clearly implied.

First, the long steel market is fragmenting into protected blocs. The US has its Section 232 wall. The EU has safeguards plus CBAM. India has safeguard duties. Turkey is retrenching. The era of relatively free global steel trade is giving way to a regime of managed trade, where access to markets depends as much on tariff engineering and regulatory compliance as on price competitiveness.

Second, the demand problem is structural, not just cyclical. Even without the Hormuz crisis, long steel demand in Europe was weak, US construction was softening, and Turkey was contracting. The war has made a bad situation worse, but the underlying demand environment was already challenging. A resolution of the Hormuz crisis will ease cost pressures but will not, by itself, restore demand.

Third, the cost-price squeeze is intensifying. With scrap and energy costs rising while buyers resist higher prices, mill margins — particularly for EAF long product producers — are being compressed. IREPAS notes that scrap prices continue to rise, making semi-finished imports more attractive. This signals that some producers are approaching the point where production becomes marginal at current selling prices. If the crisis persists another 4–8 weeks, expect capacity shutdowns beyond Turkey.

Implications for Indian Steel Professionals

For steel business owners: The combination of rising input costs and global demand weakness means that pricing power is limited. Domestic demand from infrastructure spending provides a floor, but export margins are under pressure. Focus on cost efficiency and selective market access rather than volume growth.

For purchase managers: Input cost volatility makes fixed-price forward contracts more valuable than spot purchasing in this environment. Lock in coking coal and scrap prices where possible.

For plant engineers and production heads: If you operate EAF or IF mills, monitor your scrap sourcing mix carefully. The Gulf scrap disruption may persist for weeks. Explore alternative sources — domestic ship-breaking, European origins, or increased sponge iron usage — and model the cost impact.

The months ahead will reward caution, preparation, and intelligence. The steel professionals who navigate this period successfully will be those who see the data clearly, act on it quickly, and avoid the twin traps of panic buying at the top and complacent inaction at the bottom.

Sources: IREPAS Short Range Outlook March 2026 (via Eurometal, Mesteel, Kallanish, SteelOrbis), US Supreme Court ruling in Learning Resources Inc. v. Trump 607 U.S. (2026), IREPAS February 2026 Outlook, World Steel Association Short Range Outlook October 2025. Disclaimer: This analysis is for informational purposes only. SteelMath does not provide financial or trading advice.

Related on SteelMath: See our freight cost analysis, EU strategy assessment, and use our Weight Calculator for production planning.