At the opening of the conference, Murat Cebecioglu, chairman of IREPAS said that the steel industry has once again succeeded in overcoming the significant challenges posed by the global economic situation, with the supply and demand balance in the long steel market continuing to improve in the US, Europe and Asia.

On the last day of the conference, producers of long steel products and steel billets, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.

Raw Material Suppliers at IREPAS: Favorable outlook for scrap market despite geopolitical concerns

Jens Björkman, the chairman of the raw material suppliers committee, stated at the end of the 76th IREPAS meeting that the raw material suppliers have observed a big improvement in the scrap market because of reduced steel exports from China. He added that in the US steel production operating rates have increased significantly boosting scrap demand, with the outlook being very bullish.

Mr. Björkman indicated that Trump’s America First policy may lead the scrap markets to perform better, but the amount of scrap available for export from the US market may be reduced a bit. Commenting on the $1 trillion infrastructure spending plan announced in the US, he said that, since November, operating rates have already picked up due to stronger domestic demand and this was not because of infrastructure spending. He added that investment is also rising in the US irrespective of Trump’s pledge for $1 trillion in infrastructure spending.

The chairman of the raw material suppliers committee also added that industrial demand is picking up in the EU, supporting scrap demand in the region. He went on to say that demand for prime grade scrap is getting stronger, while making predictions about the market has become more difficult due to its volatility. However, he indicated that the outlook for the global scrap market in 2017 is more positive compared to the previous year, adding that he expects that the market will be favorable for scrap despite geopolitical concerns in the EU or elsewhere, such as Brexit or the referendum in Turkey.

Traders at IREPAS: The market has become very China-centric

Thomas Elford, representing the IREPAS traders committee, commented on China’s capacity reduction, saying that he has always been skeptical of its capacity reduction numbers, though he added that the situation feels more under control than it did in the second half of 2014, with Chinese exports now declining. He said that China’s capacity/production cuts have more to do with demand. Regarding China’s effect on the rest of the world, Mr. Elford said, “When China is strong, the world is strong, when China is weak, everybody is in a panic”, adding that the market has become very China-centric.

Commenting on the preliminary antidumping duty imposed by the US on rebar imports, Mr. Elford said that the US will continue to import rebar. Regarding the possible outcomes of Trump’s announcement of plans for $1 trillion in infrastructure spending, Mr.Elford said that this does not constitute real demand for the time being and these projects will take time to become a reality. He also said that he does not believe the infrastructure spending plan will have a huge positive impact on the global steel markets.

Mr. Elford also remarked that, during the discussions held by the traders committee, the probability of a wire rod shortage in the EU came up, in response to which Kim Marti of CELSA said that wire rod shortage is not an issue, indicating that the majority of the mills in southern Europe have been forced to export because of the lack of domestic demand, while adding that the mills are fully covered in terms of supply and can easily shift supply to their domestic market if needed.

Commenting on a question on the Algerian market, Mr. Elford said that the country is becoming a billet importer rather than a rebar importer, and also added that the traders believed the scrap-based EAF mills will have a cost advantage over iron ore-based mills for the next few months.

Steel Producers at IREPAS agree market sentiment is very positive

Murat Cebecioglu, chairman of IREPAS and also of the IREPAS producers committee, stated that the IREPAS producers committee agreed that market sentiment is very positive, with steel consumption increasing in parallel with GDP growth. He said that rising production volumes will not be a problem in terms of prices because China is not exporting as much as it used to.

Mr. Cebecioglu said that reduced exports from China have provided an opportunity for other producers: for example, Turkish mills have had a chance to sell to the Southeast Asian markets and he believes that as long as they continue to have a price advantage they will continue selling to these markets. Regarding the sales of Turkish mills to the UAE and Egyptian markets, the committee chairman said that in the UAE new capacities are coming online, which means enough capacity to cover domestic demand. He added that the Turkish mills are out of the picture because of prices. With the price structure today, it is not possible for Turkish mills to make profitable sales to the UAE, he said, while also noting the current trade case in Egypt.

Commenting on the preliminary duties imposed by the US against rebar imports, Mr. Cebecioglu said that Turkey will still be exporting to the US since demand is present. He pointed out that, as long as the final rates remain around the same range as the preliminary rates, Turkish exports to the US will continue. Nevertheless, he affirmed that protectionism remains a problem around the world, stressing that at the end of the day it hurts everyone in the market.

The IREPAS chairman concluded by saying that he does not expect much change following the referendum to be held in April in Turkey, given the healthy demand and many projects such as metro expansions and the bridge being built over the Dardanelles.

19:00 – 22:00      Welcome cocktail at Intercontinental Budapest

March 27th, Monday

09:00 – 09:15      Welcome address by Chairman of IREPAS

09:15 – 10:15        SESSION ONE – Global economic outlook

- Global economic developments and expectations

Gergely Tardos, OTP Bank / Chief Economist

• Where is the European economy heading?
• Current situation and expactations for Chinese economy
• Prospects and challenges for the U.S. economy

10:15 – 10:45 Networking break

10:45 – 12:30          SESSION TWO – Critical changes expected in global long steel markets

- Long product market outlook

Jose Angel Rey, Celsa Group / Commercial Director

• Overview of global construction sector
• Steel and long products consumption
• Rebar markets
• International price situation

- Focus on China: Are the exports going to be back?

Simon Yu, Jiangsu Yonggang Group Co., Ltd. / Vice President

• Outline of China’s long steel market from a major exporter’s perspective
• An outlook for 2017

- European steel market outlook and future expectations

Jeroen Vermeij, The European Steel Association (EUROFER) / Director Market Analysis & Economic Studies

• Setting the scene for European steel- using industries
• Key challenges and opportunities for European steel
• What’s next for the EU steel market

Keynote Speaker:
Matthew Nolan, Arent Fox LLP / Partner

- The fate of reinforcing bar imports to the US market

• Antidumping investigations against imports from Japan, Taiwan and Turkey
• Countervailing duty investigations against import from Turkey
• What to expect as final determination by U.S. Department of Commerce?

12:30 – 14:00 Networking lunch

14:00 – 14:30  SESSION THREE – Steel price risk management 

Alberto Xodo, London Metal Exchange (LME) / Business Development

14:30 – 14:45 Networking break

14:45 – 17:00        IREPAS Committee Meetings

• 14:45 – 17:00 Producers Committee (by invitation only)
• 14:45 – 17:00 Raw Material Suppliers Committee (by invitation only)
• 14:45 – 17:00 Traders Committee (open to all attendees)

20:00 – 23:00 Gala Dinner

March 28th, Tuesday

09:30 – 11:00             SESSION FOUR – Panel with Committee Chairmen

• Producers Committee
• Raw Material Suppliers Committee
• Traders Committee

For further information please click here.

Traders’ Committee concluded the demand was low in the market in general, resulting in a situation of oversupply. Rebar and Wire Rod Suppliers Committee chairman Mr.Al Saadi sad that considering expectations that iron ore prices will further increase in the third quarter and given current demand levels, oversupply remains the main problem and it can only be solved by less overproduction in the short term.

Stating that the crisis had taught producers how to adjust their production to demand levels, the IREPAS chairman Mr. Dalbeler said that producers would continue adjusting their capacity usage in line with sales.

At the conclusion of the event, the chairmen of the committees for raw material suppliers, traders, rebar and wire rod suppliers and billet suppliers came together to share their view of the current state of the markets with the general participants at the meeting.

The chairman of the Raw Material Suppliers Committee, Mr. Ioannis Meimaroglou, said that in Europe/Black Sea region current scrap sales prices are lower than the cost of buying in new scrap supplies, adding that scrap prices are not realistic at current levels. The committee also declared that reduced finished steel production would not be detrimental to the market situation.

The Traders’ Committee, chaired by Mr. Michael Setterdahl remarked that demand is low in the market in general, resulting in a situation of oversupply. Mr. Setterdahl said that, China, with its rebar output of 350,000 metric tons per day mostly via consumption of iron ore, is pushing production costs up, as raw material suppliers keep on raising prices backed by high demand for ore, and this situation has an adverse effect on the global steel industry.

Mr. Mohammed Al-Saadi, the chairman of the Rebar and Wire Rod Suppliers Committee, said that low demand, coupled with high production costs due to higher iron ore and scrap prices, is putting pressure on steel prices. Considering expectations that iron ore prices will further increase in the third quarter and given current demand levels, Mr. Al-Saadi said that oversupply remains the main problem and it can only be solved by less overproduction in the short term.

The chairman of the Billet Suppliers Committee, Mr. Ugur Dalbeler, also the chairman of IREPAS, said that in the first quarter of this year rebar output rose by 35 percent as compared to the corresponding period of 2009. Stating that the crisis had taught producers how to adjust their production to demand levels, Mr. Dalbeler said that producers will continue adjusting their capacity usage in line with sales. The IREPAS chairman concluded by saying he expected activity in the industry to revive very soon.

Notes to Editors:

IREPAS is a global association of producers and exporters of long steel products. It was founded by CELSA and GERDAU 27 years ago to develop understanding between producers, traders and consumers around the world. Today, IREPAS unites producers, traders, consumers of steel and professionals from the shipping and finance industries.

Flights across much of Europe will be severely disrupted well into Saturday (April 17) because of drifting ash ejected from the volcano in Iceland.

Much of the airspace across northern and western Europe has been closed, and air control officials said some 17,000 flights have been cancelled on Friday, April 16.

Forecasts suggest that the cloud of volcanic ash is continuing to move east and southeast and that the impact will continue for at least the next 24 hours,’ says Eurocontrol, which coordinates air traffic control in 38 European nations.

The National Transport Authority’s Directorate for Air Transport of Hungary has announced the closure of Hungarian airspace at 7 PM (CET) on Friday, April 16 for 24 hours.  

We understand from the announcements that the cloud of ash from the volcano in Iceland will reach the north of Hungary by dawn on Saturday. It is expected to clear the country only by Monday.

We will advise you as to the new date of the event as soon as possible.

As always the event is going to be the meeting point of 300+ long steel executives.

For all details please visit www.steelorbisevents.com