There were 123 representatives from 49 different producers among the 406 registered delegates from a total of 56 different countries. There were also 79 registrations representing 41 different raw material suppliers.

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, said that demand is still very weak in the global longs market and the situation remains difficult as mills are cutting back on production and protectionist measures are continuing full speed ahead, while China and other countries in Asia are exporting a lot, putting pressure on prices.

The IREPAS chairman added that there is very severe competition in the market, and every producer is fighting with its last penny in order to keep operating.

On the last day of the conference, producers of long steel products, 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: Global trade conditions are “devastating” due to uncertainty

Jens Björkman, the chairman of the raw material suppliers committee, said that, in the recent period, global trade conditions have been extremely difficult, describing the situation as “devastating” amid the current uncertainty. Pointing out that trade barriers and uncertainties continue to weigh heavily on the market, particularly with the US tariffs forcing some countries to find alternative destinations, he added that this shift has created pressure on other markets, including Turkey. Regarding the protectionism in the market, he stated that there are rumors that the EU will impose some duties on Asian materials due to the huge inflows of cheaper steel from the region. Meanwhile, noting that China, which is the main exporter of cheap steel, has signaled plans to reduce steel production and exports in 2025 and 2026, albeit the actual outcome remains uncertain, he said that, in the longer term, larger investments in EAF-based production are expected, supported by stable electricity supply and growing domestic scrap availability. China has also announced a cut of about 90 million metric tons in its steel production in 2025.

Highlighting that the planned green transition in the steel industry is increasingly being questioned, with many investments being cancelled and projects being delayed, Mr. Björkman stated that the EU’s move toward electric furnace-based production has now been postponed by at least three to four years. He underlined that, if carbon emission trading in Europe and the related pricing system are fully implemented, emission reduction technologies will need to be installed more widely. However, he said that, instead of hydrogen-based DRI, natural gas could be used in the short term. In addition, the raw materials committee chairman said EU waste shipment regulations treating scrap as waste will create more bureaucracy, especially for non-OECD countries needing formal approvals to buy European scrap, while OECD trade remains unaffected. Regarding the concerns over domestic scrap oversupply, he stated that Europe already faces excess supply overall, but certain grades like clean automotive scrap could face shortages. This imbalance, he explained, is why EU steel producers push to keep scrap within Europe.

Looking at Turkey, Björkman noted that the recent increase in freight costs has become a burden for suppliers, leading prices to increase slightly in Turkey, though how long this situation will last remains difficult to predict. Regarding the changes in Turkey’s inward processing regime, the committee chairman stated that Turkish mills, who are already struggling amid high costs, may become less competitive in the short term as scrap prices may increase slightly, leading the mills to reduce production.

Meanwhile, stating that raw material demand in the GCC market is expected to focus more on DRI/HBI, which remains limited in supply, he emphasized that larger volumes will be needed in Europe to support flat steel production and the green transition, though a mix of DRI/HBI and scrap is likely to be used.

Traders at IREPAS: Protectionist measures will continue for foreseeable future

F.D. Baysal, the chairman of the traders committee, said that China’s exports have increased at a much higher pace than its production. He stated that there are no expectations for production cuts in China and that its domestic stock levels remain at normal levels. In response to questions on how China is reacting to trade barriers, he explained that Chinese producers have begun investing in production facilities in other regions, including Africa and South America.

Looking at Turkey, Mr. Baysal said that the high cost of energy remains a key challenge for Turkish mills. He noted that, in order to save energy and comply with CBAM regulations, Turkish producers have started investing in solar and renewable energy sources, which are expected to reduce production costs. Meanwhile, saying that there are no clear plans in the EU to ease green transition requirements, though delays remain a possibility, he commented that CBAM will eventually be enforced, but significant work is still needed to establish reference levels for both European and overseas mills. He added that, despite uncertainties, European producers are already moving from blast furnaces to EAFs and investing in renewable energy sources such as solar to balance costs and meet future carbon requirements.

Commenting on protectionist measures, the committee chairman stated that the Trump administration’s tariffs, reaching 75-100 percent in some cases, have nearly halted steel imports into the US, while Canada and Mexico have also imposed strong protective measures, leaving the North American market heavily restricted. Stating that he believes that protectionist measures will continue for the foreseeable future, Baysal said that further barriers against cheaper Asian steel are likely, but stressed that free trade remains the best option, though current trends are moving in the opposite direction.

Regarding prices, he highlighted that the current spread between rebar and scrap prices stands at around $200 or slightly less. He suggested that this points to a likely regression in scrap prices. He also compared production methods, stating that blast furnaces currently hold a cost advantage of about $25/mt over electric arc furnaces as the latter depend on electricity prices, though these are lower in countries like the US. On freight, Baysal noted that container freight rates have come down from post-Covid highs of around $4,000 to about $1,200, adding that he does not expect them to fall further.

Producers at IREPAS: Chinese exports and protectionism squeeze global steel industry

Murat Cebecioglu, chairman of IREPAS and also chairman of the producers committee, said that, as demand is very limited, everybody is trying to protect what is theirs. “We can sell to the EU only once every three months because of the quota and it fills up as soon as the quota is opened. Because of China we cannot sell to many places. Chinese exports are hurting everyone,” he explained. The committee chairman pointed out that China is the main driver, exporting heavily at low prices, exerting pressure everywhere amid generally limited demand. Many countries are imposing protective measures not only on China but also on some other Asian countries, considering that the Chinese are quick to move their production elsewhere to avoid trade barriers.

Regarding Turkish mills’ capacity utilization rates, Mr. Cebecioglu pointed out that, under current market conditions, utilization rates are not at decent levels and, with protectionist measures still in place, Turkey has limited space to export, with only a few countries left, and competition is very tough in those countries. He also added that the countries to which Turkey used to export have become exporters themselves and this affects Turkish production in return. Turkey’s steel production capacity stands at around 60 million mt, but the country is currently producing just 38 million mt. In addition to trade measures, China is exporting heavily all around the world and, as it is difficult to give low prices to compete with the Chinese, in the end Turkish mills have to cut production, he remarked.

Commenting on China’s work plan for the steel industry in 2025-26, the IREPAS chairman underlined that the Chinese are always coming up with some kind of plan, but it is yet to be seen how much of it will be implemented and how they will proceed. This work plan, he noted, consists of many things; regulations, environmental constraints, shutting of inefficient mills, and technological upgrading for green steel and low carbon production. In the end, future competition will depend on being cleaner, he stressed. He also commented that, if this Chinese work plan goes through, it will mean that there will be export regulations, leaving room for Turkish mills to breath.

Talking about the mega projects in the GCC region, Cebecioglu said that demand is quite good in the region and GCC-based mills are also exporting to the EU and North African countries, where they are very competitive against the Turkish mills. As GCC mills have lower costs compared to Turkish mills, they have the upper hand in prices in terms of costs.

According to the statement, the US continues to face unfair competition from China’s overcapacity in steel, which is among the world’s most carbon-intensive, while China’s policies and subsidies for their domestic steel industry mean high-quality, low-emissions US products are undercut by low-priced Chinese products produced with higher emissions.

Next week, the US Trade Representative will issue a Federal Register notice announcing procedures for interested persons to comment on the proposed modifications.

Supply and demand are balanced in the global long steel products market, as regional producers are now back to almost normal lead times.  Energy prices are soaring and logistical challenges have made business more uncertain, though underlying demand remains solid in Europe and North America. The ongoing weakness in China may slow its imports, which could negatively affect general sentiment. Inflationary pressure and soaring energy prices are observed around the world and especially in emerging markets where demand is normally strong.

New US-EU deal could bring opportunities for European longs producers

The new agreement between the US and the EU may open opportunities to see more EU origin reinforcing bars and wire rods in the US market, which may provide relief for EU mills, which are currently suffering from high energy prices. However, it seems that the EU long product mills do not have much appetite for exports to the US market, at least for the time being. The quotas to be given to the EU mills will not be large and the specifications required by the US market are not ideal for EU mills. Incredibly high freight costs constitute another negative factor. The scope of international business in the US depends on the country exporting to this market. Prices in the EU are already high and immediate capacities are full, and so no significant impact on prices can be expected until the third quarter. In addition, because the quantity for export will be limited to 3.3 million mt, the incentive to sell at low prices will be eliminated.

Protectionism foreseen to continue, with more regionalization of trade

On the other hand, the US-EU agreement confirms that protectionist measures will unfortunately continue. The US and EU are forming a new structure to trade to each other and to leave others out. Business is now going to be even more regional and this will affect the whole supply chain. More trade cases, also even for downstream products, can be expected to be filed.

Congestion in shipping and at ports still a major negative factor worldwide

For the rest of the world, the main negative factor is still the congestion in shipping and at ports. Any contract that was done in the second quarter now faces huge shipping costs, thus making the contract unprofitable. With this and the tightening of scrap prices, one can expect domestic long products in the US market to continue to remain strong even in the first quarter next year.

Asian markets see swing movements, centre of gravity moves more to Asia

The Asian markets, including the Asian subcontinent, have continued to see swing movements in buying and selling. It feels like the centre of gravity is moving more towards what we all expect from Asia.

Overall demand expected to remain good in 2022

Regional demand is strong for long products and raw materials. Overall demand is expected to remain good in 2022. Stocks in the EU have been replenished and demand is back to normal and so is supply. This situation will prevail throughout 2022 as investments are popping up all over the place. Moreover, it seems like China is going to keep its promise to limit steel production to last year’s level. Miners, steelmakers, consumers and service centres are all making money.

Greater focus now on environmental impact of steel production

The awakening of many steel producing countries to the environmental impact of steel production is a very good sign. Starting with the largest producer China, the EU and the US have now begun to pay attention to environmental impacts, adding new restrictions. Though this is positive for the Earth, it will certainly increase the cost of steel production and will add more regulations for traders.

Competition in global longs market appears to be lower

Competition in the global long products market appears to be lower, most probably due to all the current trade measures. As for raw materials, competition is generally in a good solid condition.

Global longs market stable despite many uncertainties

The global long steel products market is stable at the moment despite many uncertainties including power shortages and costs, the Evergrande case in China, and the US-EU deal.

Outlook for next quarter is satisfactory, new capacities in 2022 need to be watched

The outlook for the global long steel market for the next quarter is satisfactory and surprisingly stable. There is a lot of downtime being scheduled for November and December, and important new capacities will be coming on to the market in 2022. It will be critical to see if these new capacities will find new customers.

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