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.”

DO YOU AGREE OR DISAGREE?  

PLEASE LEAVE A COMMENT AND SHARE YOUR OPINION WITH US        

Demand is picking up in the global long steel products market after the holidays and it will be even better once the weather becomes warmer in the northern hemisphere. It seems the market is getting back to normal. Section 232 is practically over. General demand is strengthening with the pandemic possibly coming to an end. Bottlenecks seem to be easing somewhat, such as breakbulk freight rates, which have returned to more normal levels. International trade has resumed, bringing confidence to the market. Covid restrictions are being removed. At some point, automakers’ chip shortages will come to an end and this will boost car manufacturing. Market players are looking forward to seeing how raw material prices will settle this week after the Chinese holiday, though the situation so far seems to be positive.

Integrated mills still hold an advantage over their EAF-based counterparts

Steel consumption is still excellent around the world, while the ferrous scrap market has strengthened since the New Year. Input costs for both integrated and EAF-based mills have increased in a similar fashion. However, the advantage still lies with the integrated mills. The relatively high prices for ferrous scrap, along with increasing prices for non-ferrous scrap, are expected to keep the flow of obsolete scrap at elevated levels. Raw material demand is increasing and is expected to drive costs everywhere, along with energy, with EU steel producers contributing significantly to this increasing raw material demand.

Steel producers start announcing green initiatives

Global attention is shifting to steel producers announcing green initiatives, and so now we are all on a three to four-year road to change. Green changes are primarily for local and somewhat regional markets.

Spread between rebar and hot rolled flats mostly returns to historical normal level

The spread between reinforcing bar and hot rolled steel sheet in coil prices is returning to the historical normal level of less than $100/ton in every region, except the US and Canada.

Energy costs remain biggest issue facing producers

Energy is still the biggest issue nowadays facing producers and costs are double compared to the previous year with energy prices reaching all-time record high levels. Costs of raw material will also be another item to deal with. The geopolitical situation is also unstable.

Demand reasonable for EU mills, supported by mild winter weather

Demand is reasonable for EU mills as there are some serious projects in the Mediterranean region. The extremely mild winter in Europe has not interrupted construction yet. All yards are running at 100 percent and mills are nicely booked with orders. Building companies are still trying to push cut and benders down with prices, but the resistance of more and more benders gives hope that bending prices will rise very shortly. Almost every EU market is performing well, and imports are more and more regulated or are not available. Buyers have almost no option. International demand is also either going up or is strong at least, despite the winter season.

Prices soften in US, contrary to global trends

However, the situation is very different in the US from that in the rest of the world. While the rest of the world is experiencing price increases, prices in the US are still softening. Though the US market is coming from much higher prices, the further softening of prices is confusing. Demand is still strong, but the fear of further price reductions keeps distributors from making future commitments. After the EU, the lifting of the Section 232 measures from Japan may not help expectations. However, if the reduced quotas are also applied to Japan as was done in the case of the EU, the effect may be minimal. The US-EU agreement on the removal of tariffs has strengthened EU demand, though it has been a slight negative for US producers during the past month. Expectations in the US are for price stabilization soon and slow price increases to follow due to the inevitable high inflation with low interest rates.

China to produce less steel in 2022, good news for other producers

China has stopped increasing steel production and Beijing’s policy is to produce 100-150 million tons less steel in 2022 than in 2021. Steel demand is still strong in China and exports are not of real interest to them. Chinese steel exports are firmly below six million tons per month. Furthermore, the Chinese government seems to be proposing more infrastructure investments. If China does not produce as much as it did in 2021 and if exports do not increase, then all other suppliers will have the chance to export to Southeast Asian and Far Eastern markets as well. Another major positive is that, if less steel is produced, it will create a mini boom in import demand from mainland China. Also, China’s stimulus in December brought production back in line after the Evergrande debacle, which boosted sentiment.

Levels of competition are reasonable, Turkish mills struggle to compete in Asia

The levels of competition in the market are reasonable. The competition in the reinforcing bar segment is between Asian and Gulf countries as it seems that Turkish mills have difficulty competing at the buying prices seen in Asia.

Outlook very good for an overall strong market

The current status of the market can be described as very stable and strong, perhaps with the only exception of the US for the time being. The outlook is very good and satisfactory.

DO YOU AGREE OR DISAGREE?

PLEASE LEAVE A COMMENT AND SHARE YOUR OPINION WITH US

In the global long steel products market, there are signs that supply has caught up with demand and that the supply-demand balance is becoming more neutral. The market seems to be getting back to normal in terms of lead times, prices, etc. We are now in a period where things have to get back to normal, which in fact may be different from where it all started. A price range higher than the beginning of the fourth quarter of 2020 will probably be the new normal. On the other hand freight rates are still incredibly high.

…but Section 232 and EU safeguards still in place

The supply-demand balance seems to be back on track, but of course with the caveat that Section 232 is still in force as well as the EU safeguards, which make supply in both places shorter than necessary. The protected markets will continue enjoying their positions until the measures in question are terminated.

Slowdown in Far East a blow to the global longs market

We should also be following the Southeast Asian and Far Eastern markets. The slowdown in the Far East has dealt the market a strong body blow. The Asian markets are making adjustments, but most would say that everyone is happy over there. The Indian and Vietnamese mills are exporting, while new plants in Indonesia as well as the Japanese mills are making historic profits. South Korean mills most likely will do the same. The Russian mills located close to the ports are still paying their export tax and continuing to export.

EU cut and benders face rising stocks

The stocks of the cut and benders in the EU are being filled up more and more and a number of projects are being put on hold or being delayed due to the high prices for all sorts of construction materials including deformed reinforcing bars. The cut and benders are feeling a significant drop in order income and are holding their breaths to see how the EU mills will react to fewer order entries. But with the holidays ending, stronger demand is expected before the winter starts. As a result, no meaningful drop in EU mills’ prices is expected, especially due to the lack of alternatives from imports. Most of the cut and benders have been managing the drastic price increases so far and low-priced projects are fading out.

Supply seems to be catching up with demand in US market also, imports still difficult

Demand in the US is high, but supply seems to be catching up with the demand in this market as well. There are still some shortages, especially on the West Coast.  However, it is difficult for imports to fill the demand shortages due to shipping constraints. With the erratic and historic high shipping prices, most mills prefer to offer on FOB basis. Importers who buy on FOB basis on all occasions are in for a surprise when cargoes are ready to ship. To add to the problem, most ports are full and do not wish to receive more cargoes. Especially for rain-sensitive cargoes, indoor storage space hardly exists. With all these high prices, credit has become an issue for importers. Hardly any buyers have full credit to insure the receivables.

Freight rates out of touch with reality, no one wants to book on FOB basis

Freight is a major factor nowadays. Even for the traditional routes, freight rates have lost touch with reality. Traders have been punished by the high and unpredictable freight costs and are now careful as regards new business. No one wants to book on FOB basis. It is getting more and more difficult to get a quotation, which makes it difficult and/or risky to offer on CFR basis as well. This situation will create short-term downward pressure on prices and long-term shortages in importing countries. Regionalization is the current trend as sea freights are exceptionally high.

China’s steel output restrictions may buoy up steel pricing

China’s restrictions on steel production at 2020 levels will mean stronger Chinese demand for semi-finished steel imports, which should support other regions, especially ASEAN producers. It could also buoy up steel pricing. China’s announcement of production cuts is welcome amid environmental concerns and may support worldwide billet prices, but it may also put further pressure on ferrous scrap prices due to less demand. Most Chinese production is based on iron ore and has already gone down a notch, and so the impact on ferrous scrap may be limited.

Europe impresses with steel production performance in January-July

European steel production strengthened during the first seven months of the year at a stronger pace than production in many other regions. Scrap demand in the intra-European market has been stronger than normal, and this situation seems set to continue for the coming quarter. Semiconductor and component shortages continue to weigh on industry. Supply of higher quality scrap grades and industrial scrap has become tighter.

Coronavirus vaccinations should support demand levels

Although the number of Covid cases is still high and we are again entering the season of colder weather in the northern hemisphere, the post-pandemic rebound and reopening are continuing despite setbacks due to the Delta variant of the coronavirus. The vaccination process will surely allow us to continue with our daily lives and so demand should continue.

Insurance becomes an issue due to increased value of cargoes

Demand is still good and mills are booked for the next few months. Moreover, huge investments are on their way. Payments seem not to be a problem even though insurance is becoming an issue simply because the value of cargoes has reached very high levels.

Future looks promising due to planned infrastructure investments worldwide

Almost all countries are looking at some type of stimulus plan, with infrastructure being high on the list as it is the easy choice. Money is easy to print for the US and the EU, while all others have to borrow at somewhat reduced rates. Stimulus money is still flowing and infrastructure spending in particular looks to continue for several years in the EU/ UK and North America.  Nevertheless, the future looks promising for infrastructure investors. It is also a good time to be melting domestic scrap and selling long products regionally.

Competition starts to normalize

The competition in the market is also expected to get back to normal, with demand reaching pre-pandemic levels. There is strong competition between Turkish long product exports to Asia and Asian-produced material. Otherwise, competition is normal and acceptable. As for the ferrous scrap market, there is regionalization and competition is strong in general,

Overall situation stable in global longs market

Overall, the current situation in the global long steel products market can be defined as stable and perfect to proceed, with some fluctuations here and there.

Satisfactory outlook for next quarter in EU, some price cuts possible in North America

For the most part, there is very little steel to be sold during September, October, November and December. The outlook for the next quarter is satisfactory in the EU, as for the ferrous scrap market. However, some downward adjustments in the North American market may be seen and negativism is bound to spread and may affect other markets. Accordingly, it may be time to wait and see or to proceed with caution in some markets.

DO YOU AGREE OR DISAGREE?

PLEASE LEAVE A COMMENT AND SHARE YOUR OPINION WITH US

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, emphasized that the industry is experiencing a very difficult period for world trade. Cebecioglu said that the US tariffs have triggered similar protectionist reactions from certain other countries. Not only the US, but others as well are using every possible alternative to assign maximum antidumping or countervailing duties or quotas in each case, whether this is fair or not, he added.

The IREPAS chairman also stated that the global long steel products market is depressed at the moment and added that many steel producers have already started slowing down their operations, extending maintenance and idling facilities.

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: Trade barriers contribute to slower growth

Jens Björkman, the chairman of the raw material suppliers committee, said that scrap prices have seen dramatic decreases in past months. He added that trade barriers are negatively affecting growth and in turn scrap generation. Trade conflicts between the US and China, Turkey and the US, and South Korea and Japan have all contributed to slower growth in the past year.

Commenting on Russia’s quota and license system for scrap exports, Mr. Björkman said that this will limit scrap availability from Russia, affecting tonnages. He pointed out that the quota and license system creates a bit of confusion as it depends on the exporting region, while he added that scrap exports from Russia are expected to be 30-50 percent lower.

Björkman also highlighted the issue of the new International Maritime Organization (IMO) regulation, that will limit sulphur dioxide emissions as of January 1, 2020, explaining that this will raise logistics costs and indeed has already done so, as the number of ocean-going vessels has been reduced to comply with this new rule, and significant price hikes in logistics costs have been witnessed in recent months.

He also pointed out that the slowdown in the automotive industry is affecting the whole supply chain, posing a very big challenge for recyclers as it is one of the largest industries that recycle. The committee chairman said that another problem last year was German recyclers’ insufficient capacity for incineration, which is used to get rid of organic waste from the shredding process.

He went on to say that the major challenge for the raw materials segment is the recession in Turkey, with demand for construction steel declining and scrap demand going down as well. Mr. Björkman said he thought this situation is likely to continue for at least one more year and will result in lower scrap prices amid reduced demand. He added that scrap suppliers have already witnessed a 15-20 percent decline in scrap inflow and indicated that this trend is expected to continue.

Regarding the declines in iron ore prices, the committee chairman said that there is still a structural deficit when it comes to iron ore supply. Although he said that it is difficult to talk about prices for the long term, he stated that current iron ore availability is below necessary levels because of the Vale dam disaster.

Traders at IREPAS agree EU quota changes specifically target Turkey

Wilhelm Alff from Duferco, the chairman of the traders committee, said that the main question is whether the trade conflict between the US and China is coming to an end. He expressed the view that it will probably go on as long as the administrations do not change. “In any case, the result will not change much as China is not in the US market,” Mr. Alff said. Commenting on the possible reduction in the US of antidumping duties on Turkish rebar, the committee chairman said that this will not help because Turkey cannot compete with domestic producers nor with Mexico which has zero duty. Against this backdrop of trade barriers, he said the role of a trader is becoming more vital as the trader acts as a risk-taker.

He pointed out that electric arc furnaces have a $40-50/mt price advantage compared to blast furnaces and said that the traders committee expects that this gap will become more balanced in the near future as they believe the downtrend in scrap prices seems to reaching the end.

Mr. Alff said that, with Turkey reducing capacity utilization to approximately 50 percent, a substantial reduction has been seen in the material which is available in the market. He added that, as the US and EU markets are closed, Turkish mills are looking to the Far East, Yemen, Israel and Africa. Turkish exporters have already taken away some market shares from the Chinese mills who had been dominant in the Far Eastern markets. The Duferco official pointed out that, although Chinese mills have increased their production, most of this has been consumed domestically and put into stocks.

The committee chairman said that China will not be entirely absent from the market in terms of long products, but definitely they can hardly compete with Turkey and Middle Eastern countries. Turkey seems to be in a better position today in the ASEAN region; however, it is out of necessity rather than out of desire, he noted.

Commenting on the recent changes in the EU safeguard duty, Alff agreed that the changes are specifically targeting Turkey. He went on to point out that, while determining the quota, the EU left out the year when Turkey had exported the most products to the EU and that, as a result, Turkey got a relatively small quota. He also remarked that there are other countries concerning which you would wonder why they received a large quota that they will probably never use.

Producers at IREPAS: Only bright spot is possible reduction in US AD rates on Turkish rebar

Murat Cebecioğlu, chairman of IREPAS and also of the producers committee, said that during the producers committee meeting the main topic under discussion was protectionism. Recalling that the due to tariffs in the US it is not possible for Turkey to export to this market, he pointed out, however, that the preliminary results of the AD review in the US on Turkish rebar signal that the duty rates might come down. Mr. Cebecioğlu said that, if this happens, it will help Turkish exporters. He added that trade measures have changed the way business is shaped. “Exporters become importers and imports become exporters,” he noted.

The IREPAS chairman stated that most Turkish producers are slowing down their operations or are extending maintenance periods. He went on to remark that, with the major markets closed, Turkey is left with South America and Africa for its exports, while the number one and number two markets for Turkish exports are currently Yemen and Israel. “At the moment, things do not look so bright, if protectionist measures keep on like this,” he said. He added that the only bright spot is the antidumping duty review in the US. Given the fact that the EU is trying to toughen the rules on safeguards, he said that he did not really know what to expect but commented that “things are not good at the moment”.

Amid difficulties in finished steel sales, Turkish exporters have turned to billet exports. The producers committee chairman said that, if the current situation continues, Turkish billet exports might see further increases.

Commenting on the possible change in the US tariff on Turkish steel, Mr. Cebecioğlu said that, if the tariffs are replaced with a quota, this will be to Turkey’s advantage, although he said he did not know which year they would take into consideration to set up quotas. He said he hoped a quota is established, though adding that he did not know what the US side will ask in return.

Regarding the new changes suggested in billet import duty in Egypt, Cebecioğlu said that a 50 percent reduction in the duty rate would give importers relief as Egypt has traditionally been a billet import market.

Mr. Cebecioglu added that there is positive sentiment among the European based steel producers as there is certain growth in Europe but it certainly is not enough.

The global long steel products market has been going through a volatile period since March this year. Volatility in pricing has led to swings in availability of both steel and steel scrap, and this continues to be a challenge for the business environment. With low inventories in general throughout the supply chain comes larger pricing swings.

Mills currently searching for new orders for post-holiday period

Due to competitive price levels in some areas, restocking took place a few months ago and brought significant demand – which had previously been delayed – back to the market. In return, prices went up and pressurized those who had not bought at the time and so even more demand emerged. However, it now seems that most urgent demand needs have been met and mills are currently searching for new orders for the post-holiday period.

Short lead times preferred; both buyers and sellers expect market to rebound soon

The northern hemisphere has entered the summer lull, with reduced activity for both buyers and sellers. This has caused decisions on relevant volumes being postponed for a few weeks. Stocks in the system are not at high levels and so purchases to replenish stocks need to continue. In this situation, short lead times are a requirement and so supply from neighboring regional sources is the first option. Even with the most recent price decreases, the sentiment in the market is not too negative and both buyers and sellers expect the market to rebound soon.

US and EU markets to see greater stability due to protectionist measures

The US and EU markets will remain relatively more stable after all their protectionist measures. Ongoing firm pricing is observed in North America. It looks like a gradual decline in prices may have started in the larger EU market, but this may not mean reduced margins for producers as input costs are down.

Turkey waiting for improvement though markets likely to be more challenging

Turkey is waiting for any uptick, from wherever it will come. Many markets are not ordering as many tons as they used to. The Far Eastern and Middle Eastern markets are expected to be more challenging.

Production adjustments contribute to more balanced market

After shutdowns and production adjustments, some markets are showing improved equilibrium, but more needs to be done. The market is more balanced than before, but unfortunately is still far from being balanced.

Some positive signs from China but outlook still negative

There are positive signs from China such as production cutbacks, environmental policies and relatively smaller-than-normal amounts of inventory, though the outlook still remains negative. There are fewer export destinations and many closed markets.

China expected to take serious steps to eliminate pressure on global market

China is expected to take serious steps to eliminate the pressure they have created on the global long steel products market. There are continuing signals from China of capacity reduction through mergers of steel assets.

Price upticks in China a positive for the global market

Stocks in China are still relatively low and domestic prices have started to rise with a similar trend for Chinese export prices. In addition, the iron ore price seems to be stable at above US$50/mt CFR FO main Chinese ports, which is a positive for the market outlook.

Brexit result still has to be digested

On a separate note, the Brexit result in the UK still has to be digested and it is really difficult to foresee the consequences yet. The political uncertainty does not really help to stimulate economies throughout the EU. However, so far we have not seen any collapses due to Brexit.

Levels of competition not as strong as they have been

Pricing cuts have redistributed demand to a broader scope, bettering the fundamentals going forward. As a result, competition in the market is still high in general but reasonable in some areas. Overall, it is less than at any time over the last twelve months or so. Domestic markets continue to buy domestic products and mills in North America and the EU are fairly well booked through August. However, competition will be serious in the coming months.

Satisfactory short-term outlook for North America and EU but greater concerns for rest of world

The global long steel products market is still fluctuating and remains unstable. The short-term outlook is satisfactory for the North American and EU markets. However, it is still worrying for the rest of the world as uncertainty continues in an unpredictable market.

DO YOU AGREE OR DISAGREE?

PLEASE LEAVE A COMMENT AND SHARE YOUR OPINION WITH US