The global long steel products market is oversupplied and overcrowded. The situation has worsened and is now structural. The competition in the global market is predatory.  Margins are dead. The only strategy is cashflow and turnover. Whoever can ship first, wins. Whoever negotiates for $5/mt more, loses the order. Every confirmed business is a major success. Moreover, without the US market, competition may become brutal.

Latest US blanket 50 percent Section 232 duty marks unprecedented shift

The latest US decision to impose a blanket 50 percent Section 232 duty on all steel imports marks an unprecedented shift – one that severely impacts importers while handing a windfall to domestic producers. Although there was previously a similar measure targeting imports from Turkey, this universal application is unparalleled. What makes this especially jarring is its immediate enforcement, affecting cargoes due to arrive soon, offering no transition period or due process. This abruptness feels inconsistent with the values and principles we have long associated with the US marketplace – predictability, fairness, and rule of law.

New US decision cuts its market off from rest of world, importers handed long vacation

If the 50 percent Section 232 duty holds, it may ironically render the US the most expensive steel market globally, shutting it off from the world at a time when collaboration and balance are most needed. It seems importers in the US have been handed a long, scorching summer of vacation, just as they brace to absorb the financial fallout of all US-bound cargoes. These are extraordinary times and must be navigated with clarity, unity, and resolve.

Demand still weak in Europe and Turkey, with imports putting pressure on prices

Demand is still soft in the European market and imports are putting a ceiling on any potential price increases. Unless there is an actual pickup in end-user consumption, prices will hover at current levels or drop, especially if more cheap Asian billet flows in. Demand in Turkey is still lacking also, but more important is that, with the current iron ore and coal prices, there will be more supply pressure from Far Eastern and Southeast Asian suppliers. Far Eastern and Southeast Asian origin steel billet prices are going down almost every day.

Scrap-based producers falling behind in terms of costs

Scrap-based producers are getting priced out. Billet from Asia is cheaper than melting scrap. There is almost no point in running a melt-shop when you can just roll. This shift reshuffles power, as cheap billet exporters win and EAF-based mills are now considered high-cost producers.

Chinese long steel exporters start to push out Southeast Asians

Southeast Asian mills, who had dominated the market, are now being quietly pushed out by China. Chinese long product exports surged by over 100 percent year on year in the first quarter of 2025. Reduced blast furnace costs, falling domestic demand, and export subsidies mean this wave of Chinese exports will not slow as it is policy-driven, not market-driven. A serious displacement is taking place. Vietnam, Malaysia and Indonesia are all fighting for markets. Even South Korean mills, who were deemed to be bulletproof previously, are now closing lines for the first time in decades. China is stable, but prices are not going up and their steel is cheap, hoping for new export markets. Oil prices are also weak which is good for some players in the steel market, terrible for others.

Market currently very unstable, outlook unsatisfactory, seems to depend on political decisions

The market is currently very unstable. No one is making money. Everyone is quoting, but very few are actually booking orders. The outlook is unsatisfactory and seems to depend on political decisions.

OECD: Some brighter prospects in ASEAN and MENA regions

The recently published OECD Steel Outlook 2025 states, “Demand in the OECD area will remain roughly constant, while Chinese demand will decline appreciably due to the downturn in construction and structural shifts in China’s economy. Prospects are brighter in the Association of Southeast Asian Nations (ASEAN) and Middle East and North Africa (MENA) areas, where demand will grow strongly.”

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The supply and demand balance in the global long steel products market is becoming more unstable, with China now actively moving steel billets at the lowest prices. Finished products from China continue to dominate most markets, both in the long and flat segments. Even though there is a lot of material being offered in the market, it seems that the current raw material price levels are supporting prices. What we are going through today keeps reminding us of what the market went through 10 years ago. So far, there is no sign from China of a slowing down of production or of exports. If the Chinese continue in the same way for another year or two, it will surely cause big damage to the global steel industry.

Weakness in Asia continues to undermine global steel markets

The weakness in Asia, most importantly in China, continues to undermine the steel markets. Due to low capacity utilization rates and excess stocks of raw materials at Chinese ports, BOF-based producers managed to push through lower prices for iron ore and coke, which in turn helped to push down the prices of finished products. The weakness in Asia is continuing to spread to the rest of the world.

Scrap costs increase for EAF-based mills

For EAF-based mills, the situation is the opposite. Because of the changes in the quota system in the EU, Turkish mills managed to sell good quantities of material to the region. But the scrap market is very tight. So, just a few purchases of scrap have pushed up prices in the scrap market, at least for the time being.

Will scrap remain so costly? Will China take steps that will change the market dramatically?

Going forward, demand remains weak, EAF-based mills struggle to compete with BOFs and it is hard to imagine how scrap can remain so expensive. The weakness in China is built into market expectations all over the world. Unless the central government in China comes up with measures that would change the market dramatically, it is hard to imagine how the market might improve.

Demand at very low levels in Europe, global freight prices stable and competitive

Demand in Europe seems to be at the lowest levels, with no sign of any improvement. The freight market seems to be stable, with competitive fares.

Turkish rebar exports up 15 percent from 2023, but still down from previous years

Turkish rebar exports are up by 15 percent (1.5 million mt) compared to last year, but they are still down 20 percent compared to the year before and less than half compared to the previous usual export volumes of 6-7 million mt per annum. The absence of the Israeli market for Turkish exporters will be felt more sharply in the second half of the year

Longs prices in US under pressure from domestic competition, but margins still healthy

As for the US, business conditions have not changed, but due to the Fourth of July holiday week and the July vacations, most buyers have been reluctant to make big purchases. Commercial and residential construction is still slow due to high interest rates, but infrastructure projects continue at normal speed. Long product prices are under pressure from domestic competition rather than from imports.  Flat product prices have kept going down even more than long products, but this situation may change soon. US domestic mills still operate with very healthy margins in spite of the competition.

Competition stable at high levels, Chinese leave little breathing space

The competition in the market is stable at high levels, with Chinese exports leaving no breathing space for others.

Market very unstable, outlook not so promising, question mark over China

Under these circumstances, the market is quite unstable and fluctuating, with a not so promising outlook, as nobody can foresee what official decisions will be taken in China in July.

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As far as metallurgical sector is concerned, the export tax will be applicable to the products like steel slab, billet, most of the long and flat products, pig iron, coal and coke, HBI and iron ore.

The size of duties for the mentioned products to be exported outside of Russia and Eurasian Economic Union are tied to the ruble exchange rate and are as follows:

Export duty rate according to USD/RUB exchange rate

• 0 in case the exchage rate is less than 80
• 4%  in case the exchage rate is 80-85
• 4.5% in case the exchage rate is 85-90
• 5.5 % in case the exchage rate is 90-95
• 7% in case the exchage rate is 95 and above

For the cargoes declared for exports after October 1, 2023, the exchange rate monitoring period is from August 26 till September 25, and the latest publication results of estimated average exchange rates should be no later than September 27.

As a result, 15 percent export duties from India on major longs and flat steel products, as well as pig iron, have been lowered to zero, while the export duty of 45 percent on pellets has also been scrapped. The export duty on iron ore lumps and fines with less than 58 per cent Fe content has been reduced to zero, while that on iron ore with Fe content more than 58 percent has been reduced to 30 percent from 50 percent earlier. High export duties were imposed six months ago to help redirected some needed volumes to the local Indian market, and this led to a significant reduction in exports and the lower competitiveness of Indian mills, at a time when more Asian suppliers wanted to increase their export market share.

In other changes to Indian tariffs, an import duty of 2.5 percent has been imposed on anthracite, PCI, coking coal and ferronickel used by the steel industry and five percent duty on imported coke and semi-coke, from zero earlier.

The Indian government reduced import duty on ferro-nickel, coking coal from 2.5 percent to nil and that on coke and semi-coke from 5 percent to nil to bring down cost of production of steel mills and thereby soften finished product prices.

On the other hand, the government hiked export duty on iron ore and concentrates to 50 percent and imposed a new export levy on pellets at 45 percent. New export duty of 15 percent has also been imposed on pig iron and spiegeleisen in pigs, blocks, or other primary formats; flat-rolled products of different kinds, including hot-rolled, cold-rolled, plated and coated; bars and rods; stainless steel.

There has been no significant change in the global long steel products market compared to last month in terms of supply and demand balance. Demand remains relatively weak, but we have seen better discipline on the supply side, which has had a positive impact on pricing dynamics. Demand is expected to pick up in the coming weeks. Economic numbers are strong and most fears regarding Brexit, the American election or European Union problems are disappearing. All of these factors have helped the year to finish with positive sentiment for 2017 and a better forecast for demand, particularly in the US and EU markets.

Market expected to maintain its strength after the holiday

In December, after some hesitation, buyers in the global long steel market understood that the fundamentals of demand and raw materials dynamics were pushing up long product price levels. Subsequently, buyers completed a last round of purchases before going on holiday, in the belief that the market will stay strong after the break.

Long product pricing has not changed very much during past 30 days

While demand was rather slow during the holiday season, actual pricing has not changed very much during the past 30 days. The big swings have come in China, but these swings seem to be rebalancing themselves after the fluctuations in the volatile futures markets.

Chinese steel exports to continue to decline, increasing opportunities for others

Trade is becoming more regional as China’s excess output is capped due in part to capacity cuts, greater domestic consumption and trade limitations, which is good news for the capacity utilization rates of steel operations elsewhere. Manufacturing PMIs are rising in Asia, the US and Europe. There are expectations that Chinese steel export volumes will continue to be reduced, which will increase trade opportunities for others. In this context, after so many years the first reinforcing bar export contracts for shipment to the Far East were concluded by Turkish suppliers.

Scrap becomes a more attractive raw material

Ferrous scrap has become a more attractive raw material as the share of steel output outside of China is rising and since virgin raw material costs have continued to remain at inflated prices. Demand for scrap has risen in integrated steel production.

Trading conditions fundamentally stronger compared to a year ago

Positive sentiment continues to be observed in the global long steel products market and, for a few reasons, a better supply and demand balance seems to be contributing to an improvement in trading conditions, which definitely benefits market players as China seems to be out of the picture now. Regional changes are not affecting the global market much. There is again optimism in trade, with current conditions fundamentally stronger than conditions a year ago.

Improvements anticipated both in US and EU

Consumption in the US is expected to rise higher. That said, it may come with severe limitations on imports. Conditions in the EU market are also expected to be better. Raw material price increases and the trade cases against companies and countries with non-market practices are also helping the market to protect its strength. New dumping cases will almost certainly have an additional impact. On the other hand, we have seen metcoal prices coming down significantly but not having an impact on the market. The general mood for 2017 is certainly better than 2016.

Some uncertainties remain; Turkey holds its ground in rebar exports

Only the political environment and uncertainty about what is going to happen after January 20 may cause concerns. The weakening of the euro, the financial situation in Italy, Brexit and the upcoming election in Germany still pose some question marks. Growing protectionism, like the recently-initiated antidumping and CVD case by Egypt is also a concern. Nevertheless, Turkey has achieved the same total rebar export figure as in 2014 and 2015 despite all trade actions in 2016. The same figure is also expected to be achieved in 2017.

Production increases in Western world may contribute to greater competition

Competition in the market is still intense, but seems to be more reasonable due to a better supply and demand balance thanks to demand improvements, as well as being fairer due to trading cases. However, we might see more competition than in the last quarter of 2016 due to the tendency towards production increases in the Western world.

Supply-demand balance is vital to support workable prices

Price increases may have stalled in the market for the time being. Any further increases may face more downward pressure. Accordingly, the equilibrium of demand and supply is vital in order to support workable prices for both producers and consumers.

Stability generally prevails in market at present

The current status of the market is stable and bodes well for the future despite some fluctuations in certain regions.

Satisfactory outlook for coming quarter

The outlook for the coming quarter is satisfactory despite some uncertainties. A strengthened US dollar will add to dollar debt costs in emerging markets, but it will also add to US purchasing power and should boost importation into the US, especially of goods such as long steel products. Raw material costs have also been increasing as well as the demand. Steel prices need to rise significantly in the first quarter.

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Conditions in the global long steel products market have improved significantly and a clear change to positive sentiment has been observed in the industry, something not seen in recent years.

Chinese demand and supply restructuring boost prices and margins

Domestic demand in China, together with a restructuring of supply at all levels from raw materials to finished products, is helping the market to move up in terms of both price and margins. Meanwhile, the supply and demand equation has already been balanced in the rest of the world. Most countries have already closed their doors to outside supply, creating a protected environment. It yet remains to be seen, of course, how healthy protectionism will be for the industry. That said, the international aspect of the steel market has declined significantly, as the focus is more domestic nowadays.

Chinese export growth does not appear to be on the horizon

Chinese origin steel products are staying mostly in Asia. Currently, the largest non-Asian destination for Chinese steel products is Latin America, which is not the strongest market. Therefore, export growth does not seem to be on the horizon for China. As exports from China are no longer significant outside of Asia, there is not much pressure on international prices, giving confidence to the markets.

Very positive price dynamics for flat products also influence pricing of longs

Very positive price dynamics in flat products are also influencing pricing policies for long products. In North America, the EU, Turkey and Asia, we have seen several price increases in the range of $40-60 per metric ton, which is also unusual, on back of cost increases. The whole world has adjusted, though with South America lagging behind.

Latin America remains open to Chinese exports

Some price improvements, mainly driven by costs (coal, iron ore), have been seen in Latin America, but very little or no demand growth has been observed. While protectionism continues to increase and is reshaping the international trade flow, Latin America remains open to Chinese exports and imports into the region have continued to increase.

Higher raw material prices also contribute to better sentiment for longs prices

The rise in raw material prices is also contributing to the positive sentiment in regard to long product prices in the market. Margin management seems to be back in the forefront of steel producers’ thinking, which is a very good development.

Restocking of steel has picked up  

With lower steel exports month on month from China, producers in the rest of the world have seen better demand for their own steel products and higher commodity prices have resulted in added demand for scrap, which likely will continue into the New Year. Restocking of steel is picking up, adding demand to the supply chain. China has imported scrap for the first time in a while in order to make use of its relative advantage over virgin raw materials. Greater activity is observed in derivatives, especially for iron ore, creating some commotion and resulting in increased volatility.

Competition still observed in markets where demand is stronger

There is obviously not much competition in the protected markets, but competition can still be unreasonable in open markets, though not to the extent seen before the improvements recorded in the past couple of months. Nevertheless, we still see competition in markets where demand is stronger than in others. As long as Chinese steel products stay at home, the rest of the world can get along very well despite strong competition. Latin America, of course, remains very much exposed to exports from China.

Outlook very good for next quarter, gloomier for longer term

The global scenario remains gloomy in the medium-to-long term, with too much uncertainty still evident. However, the current status of the market is very stable and is set to continue into the first quarter of 2017. The outlook for the next quarter is very good and satisfactory. Any change in raw material costs should lag one quarter before translating into finished product prices. It looks to be a very happy New Year for steel producers and for consumers that are well stocked at the end of the year.

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The global long steel products market is currently enjoying its best environment since 2013, while sentiment has improved significantly. Supply and demand in the market are now a lot more in equilibrium compared to previous months.

Fewer offers from China and Russia seen in global market

Demand had made a weak start to October, as sellers were continuing with their seasonal fourth quarter destocking. At a certain point, supply in the market was on the short side as Russian and Chinese suppliers increased their offer prices, especially for billets. Russia and China are obviously enjoying better domestic market conditions than before with improved economic indicators and stronger demand. As prices increased first in China and then in Russia, there have been less offers from these countries in the global market lately and as such an improvement has been observed in the global business.

Lower availability of coking coal has been pivotal for scrap pricing and demand

Billet imports from China to Turkey have halted, pushing rebar prices up, with the support of the increase in ferrous scrap prices of course. Trade has bounced back with price hikes of 20 percent in late October for ferrous scrap in light of low availability and increased demand. Scrap has become more sought-after since alternatives are expensive in comparison and less available. The lower availability of coking coal after capacity cuts in China has been pivotal for pricing. It is estimated that availability will remain tight for some quarters and will likely keep demand for scrap at a higher level for an extended period.

Higher costs for BOF-based producers have impacted billet prices

As a result of the raw material price increases, costs of BOF-based production have gone up, with the hikes in costs exceeding the increases seen to date in finished product prices, and this has been impacting billet pricing as well. Higher raw material prices will keep product prices on the high side.

Scepticism on possible price hikes led to low finished product inventories

There were many non-believers in the likelihood of price increases and so finished product inventory levels held by consumers are low. But buyers are now realizing that they may have to hurry to ensure supply amid very low inventories and this has pushed the price increases from scrap to finished products. Some market players in North America were also late in taking stock of the new dynamics in costing, following the new antidumping cases announced.

Influence of Chinese exports on international prices now much diminished

The negative influence of Chinese exports on international market prices has recently been much diminished as a result of trade actions and measures against China. Such trade measures have brought some stability to certain markets, while the prevailing low inventory levels also provide support for the current environment. Trade is becoming more and more regional and therefore major exporters like China and Russia are losing their share and influence in certain markets like the EU and the US. As prices are finally moving up internationally, such increases will be seen in Europe as well.

Strong positive sentiment for coming months, though China needs to be watched

There is strong positive sentiment in the markets as regards the prospects for the coming months. Prices are not expected to fluctuate as much, as long as prices from China stay at the same level as international prices. Demand has increased in the Chinese domestic market, thereby lowering the amount of export availability. This fuels demand and pricing for the supply chain. In such circumstances, suppliers are not prepared to sell at certain levels and prices will continue to move up consistently. However, we should still be cautious as we never know how sustainable the improvements in China are and how long they will last. Besides, we understand that the price increases have been driven much more by raw material costs than by a general improvement in demand.

Rebalancing of trade to normal routes

Competition is still strong in the market but within more reasonable economic terms. Trade has been refocusing on nearby and home markets, lowering global competition. Trade is being rebalanced to normal routes.

Competition easier in some regions due to protection against aggressive exporters

Competition is easier in some regions that are protected against aggressive exporters. Although in general rebar prices are moving up, in some traditional export markets like the UAE rebar prices are still way below the current international market levels.

Satisfactory outlook for next quarter but challenges remain for BOF-based producers

The current status of the market is stable and the outlook for the next quarter is satisfactory although it remains challenging for the BOF-based producers which depend on coking coal imports.

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According to Mr. Schmiedel, the spike in coking coal prices should eventually increase the percentage of scrap used within the integrated sector of the steel industry. An integrated mill in Turkey has indicated that it will increase its scrap usage to 20 percent from under 10 percent, and, if followed by other integrated mills internationally, this should change the dynamics of the supply-demand continuum for steel scrap worldwide, stated Mr. Schmiedel.