19:00 – 22:00                   Welcome cocktail at Marriott Rive Gauche Hotel Paris

Day 2: Monday, September 16, 2024

09:15 – 09:30                  Welcome address by Chairman of IREPAS

09:30 – 11:00                   SESSION ONE – Global markets and CBAM impact

- Latest developments in the global steel market and recent trends in steelmaking capacity

Luciano Giua, Economist/Policy Analyst, The Organisation for Economic Co-operation and Development (OECD)

- Navigating the EU CBAM: Financial impacts and strategies for cost mitigation

Louis Redshaw, Ceo/Founder, Redshaw Advisors Ltd

                                           SESSION TWO – ASEAN steelmarket outlook

Moderator: Anastasiia Kononenko, Head of Market Intelligence-Asian markets, SteelOrbis

Yeoh Wee Jin, Secretary General, South Asia Iron and Steel Institute (SEAISI)

11:00 – 11:30                     Networking break

11:30 – 12:30                    SESSION THREE – Macroeconomic overview

- Evaluation of economies – in EU, US, China globally

Wars and impacts of political crises
Predictions of possible scenarios for US elections

Daniel Gros, Professor, Bocconi University / Director, Bocconi University’s Institute for European Policy Making / Advisor, European Parliament

13:00 – 14:30                    Networking lunch

14:30 – 16:30                    IREPAS Committee Meetings

• 14:30 – 16:30 IREPAS Producers Committee (by invitation only)
• 14:30 – 16:30 IREPAS Raw Material Suppliers Committee (by invitation only)
• 14:30 – 16:30 IREPAS Traders Committee (open to all attendees)

16:00 – 18:00                    Monday cocktail reception

Day 3: Tuesday, September 17, 2024

10:00 – 11:30                   SESSION FOUR – Panel with Committee Chairmen

• IREPAS Producers Committee
• IREPAS Raw Material Suppliers Committee
• IREPAS Traders Committee

Lead times are longer than ever in the global long steel products market and there is still strong demand, encouraging mills to continue increasing their prices. The situation has certainly become better from the producers’ point of view. They are all making money and their lead times are elongated.

Shortages of material keeps prices and margins high

It was somewhat surprising to see that the steel output outside China had not increased during the first two months of the year compared to the same period last year, despite the increases reported in India, South Korea, Turkey and Brazil. Outputs in the US, Japan, Russia, Germany, Taiwan and France were all lower year on year. That means there is still a shortage of material, which keeps prices and margins high. Meanwhile, output in China increased by 13 percent year on year, though it seems China will continue consuming at similar rates compared to last year.

Strong demand also supports price rises across the world

There are still shortages for many products in the global market, which are exacerbated by the disruptions in logistical and shipping chains. Customers are buying less than what they need, but these local shortages keep pushing the markets up. Prices keep on climbing in most areas across the world as demand is strong.

EU longs mills enjoy good order books, price increases to gain momentum

The long steel products market in the EU is very stable and EU mills are enjoying good order books. The reduced number of offers and stronger seasonal demand will speed up price increases. The hand-to-mouth buying mood of EU clients is good for local mills as they can adjust their prices instantly depending on the cost and sales situation. The termination of safeguard measures in the EU on July 1 – if it were to happen – would most probably not create a flood of imports under the current circumstances.

US mills enjoy high margins and high capacity utilizations, importers still struggle

On the other hand, US domestic mills are enjoying very high margins with high capacity utilizations and the ability to take any business from imports at will. The situation has become even worse for importers in the US. Most supplying mills are booked full. The availability of products is three to four months for flat rolled products and a minimum of two months for long steel products. In addition, the availability of vessels is even worse, making shipping more difficult. Prices for all commodities are high and now shipping costs are hitting an all-time high. With all these factors, importers are finding it even more difficult to make projections for future business. It is not clear how long all this will last.

China keeps importing, its billet buying gives global market additional strength

China seems to be happy with its situation and is not interested in increasing exports, but instead keeps importing. Their new five-year plan promises considerable public spending on many projects. China’s buying of billets gives the global market additional strength.

Hopes rise amid vaccinations, stimuli, US infrastructure bill and low Chinese exports

Although we are in the third wave of the pandemic, vaccinations are boosting hopes and the positive mood is helping demand to stay strong. There is an expectation that post-pandemic government stimulus programs will be hitting consumer products and construction markets soon. In addition, the expected US infrastructure bill and China’s timid export behaviour are the main positives for the second and third quarters of the year. It seems the current prices will hold for the next three months and that reductions will be gradual rather than sudden.

Competition mainly seen among buyers, not suppliers

Tight availability from most exporting countries and companies is affecting the level of competition in most markets. On a regional level, competition is very limited due to long lead times, but it is still healthy. From a global perspective, there is very little competition as transportation costs are skyrocketing. The only competition that exists today is the competition among buyers.

Market is generally stable, outlook is very good and satisfactory

Even though there may be some fluctuations, the current status of the market is generally stable. Most market players have convinced themselves that Covid-19 is now in the past tense. Whether we are in for lots of unpleasant surprises is unknown. The second quarter should be better than the first quarter. Accordingly, the outlook of the market is very good and satisfactory.

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The situation in the global long steel products market has not changed much since last month. There has been a reduction in both supply and demand around the world, except in China where output keeps growing. Demand in the global long steel products market is indeed not as bad as the newspapers and media outlets report. However, the mills operating at more than 60 percent capacity utilization rate are blessed. Of course, those operating under 50 percent are in trouble.

Longs so far have not been hit as hard by Covid-19 as flats

Covid-19 has certainly worsened the market situation. Backlogs of building applications and delays in investments will reduce demand for all steel products. But, so far long products have not been hit as hard as compared to flat products.

Stimulus activities and reopenings gradually boosting demand

The pandemic has moved in a wave from Asia to America through Europe and the Middle East. In the Asian markets, demand has been strong during the past month, with industrial earnings strong in June in China. As the rest of the world is now gradually opening up following lockdowns, stimulus activities are buoying up the markets. Manufacturing and construction activities that had previously been completely halted in many places are gradually and simultaneously boosting demand.

Some EU countries hit harder than others, private investments could be put on hold

Some countries in the EU were hit hard by Covid-19, like Italy, France and Spain. Others have been operating almost as though there was no pandemic, like Germany. Nevertheless, the mood in the EU is far more negative compared to pre-pandemic times and unemployment will increase. The risks are not only observed in the public sector in general. A lot of private investments may be put on hold in the event of worsening sentiment. On the other hand, the public sector may use construction to stimulate the economy and inject money into it.

Brazilian steel output rises in May from April, still down 22.6% year on year

In Brazil, according to the Brazilian Steel Association (IABr), both production and demand were growing in May, but from a very low base in April. Production in May was down 22.6 percent year on year and capacity utilization was only 51 percent. In the first five months this year, production was down by 16 percent year on year and the IABr is forecasting a drop of 27 percent for the full year.

Scrap buying in June exceeds normal levels amid replenishing of stocks

Reopening means utilization rates have been picking up from bottom levels. Scrap inventories were depleted in May as industry closures meant low scrap availability. June buying surpassed the levels for a normal month as scrap needed to be restocked.

Positive developments in China, no threat from cheap Chinese exports

When China reopened after its lockdown, the backlog of demand was so high that they returned within a very short period of time to almost the pre-Covid-19 volumes. On top of that, they took advantage of low prices of semi-finished steel such as billets and slabs and also of HRC to conclude purchases from the global market. Production in China is running smoothly and demand is good and will certainly remain strong up to the end of the year. Strong Chinese domestic demand keeps Chinese steel from depressing export destinations. Accordingly, there is no threat to the world that “cheap steel from China will flood the market”; rather it looks more like “cheap steel from Europe” is searching for destinations.  

China’s share of world steel output approaches 65 percent

China used to produce 50 percent of the world’s steel, concrete, aluminum, etc. Nowadays that number is approaching 65 percent because of the downturn in the rest of the world and the increased production in China.

Demand from China helps global rebuilding, greater competition seen at low prices

Demand from China has even helped the rest of the global industry in its rebuilding process. However, there is generally more competition in the global market at the lowest price.

Politics in certain countries add to market instability

The market is unstable and fluctuating under current circumstances. Politics in the US, Brazil, Turkey, China and elsewhere are also adding to the unstability.

Next quarter outlook very good for raw materials, uncertain for longs

The outlook for the next quarter is very good from the raw materials point of view as the markets are rebuilding and stimuli are adding a push. However, it is difficult to make a prediction for the long products side. It could be the worst quarter of 2020.

DO YOU AGREE OR DISAGREE?

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The tariffs are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after March 23, 2018. Countries with temporary exclusions to the tariffs include Canada, Mexico, Australia, Argentina, South Korea, Brazil and  member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

Customs and Border Protection noted that exclusions are based on the country of origin, not the country of export. The merchandise covered by the additional duties may also be subject to pre-existing antidumping and countervailing duties.

On the last day of the conference, producers of long steel products and steel billet, 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: Scrap collectors may consolidate for sustainable future         

The chairman of the IREPAS raw material suppliers committee Jens Björkman indicated that scrap supply has found other places to go such as the Arabian Gulf, the Indian peninsula, as well as Turkey since the last IREPAS meeting in autumn 2014.

Mr. Björkman pointed out that the whole supply chain is suffering from overcapacity – from the mills and mines to scrap collectors. He said that some companies have scrap sites that are not profitable and will have to shut down. For a sustainable future, scrap collectors might have to consolidate, he said.

Björkman also pointed out that the domestic supply and demand situation in the US during winter has been tough, with harsh winter conditions affecting scrap collection. Besides, the decline in scrap prices also contributed to the 15 percent reduction in scrap collection. He added that demand in the US has also been affected by lower demand in the gas and oil sectors.

Regarding the EU, the raw material suppliers committee chairman said that demand was subdued but relatively healthy in the last few months, with the weaker euro serving to protect the industry somewhat. Commenting on European Commission restrictions on scrap exports, he said that “it never really gets farther than a discussion point”, adding that there are already obstacles in EU legislation which restrict exports. However, he reiterated that he does not see restrictions going further than that.

Replying to a question on whether major iron ore producers are becoming a monopoly, Mr. Björkman said that these miners want to retain their margins by increasing output, adding that the industry will continue to see high supply for a while before more and more smaller miners start shutting down production.

Traders: Weak euro is a positive signal for trade              

Bernd Neuenkirchen, the chairman of the IREPAS traders committee, said that there were ups and downs in the market which the committee discussed, mentioning North America as a bright spot, in comparison to the EU and other markets. While competition has increased, demand for rebar has not been too bad despite harsh winter conditions, according to the traders committee. Mr. Neuenkirchen also pointed out that the bad weather conditions in the northeastern US did not affect the steel industry as bad as it did last year when demand and GDP experienced a fall due to harsh winter conditions.

The traders committee chairman indicated that the weak euro has certainly changed the picture in the market, and this is a positive thing for traders, meaning there will be a wider range of supply sources, with European mills suddenly coming into picture. Regarding China, Neuenkirchen said that trade actions against China have changed the picture a little bit in the US and Canada, and as a result either China is out of these markets or its volumes are lower. In response to a question on whether US producers will continue to pursue trade action against Turkish rebar exports, he said he believes the US producers will ask for a review.

Producers need to find new opportunities while preserving margins   

Kim Marti, the chairman of both IREPAS and of the IREPAS steel producers committee, stressed that there are three major points for steel producers: the markets are growing, Chinese exports are expected to continue putting pressure on the markets, while big producers are adjusting their production according to market conditions.

Mr. Marti said producers have to find new opportunities, while in the meantime they also have to preserve margins by adjusting production. He said that, regarding the EU, its economy is expected to grow by 1.5 percent and customers are financially healthy, thereby increasing the possibilities for business. The IREPAS chairman indicated that Turkey is involved in intense competition with China, while it is challenged by low demand in neighboring countries, such as Iraq and Syria, due to political unrest. Turkish exporters have been finding alternative markets in Africa and South America.

Looking at South America, Brazil is suffering a little bit because of political uncertainty, while other countries in the region are enjoying healthy conditions. Mr. Marti also said that seven percent GDP growth is expected in the Philippines, while construction in the country is growing as well. He added that the country needs 150,000 mt of billet per month, and with new production capacities coming on line the country will be self-sufficient.

19:00 – 22:00 Welcome Cocktail at Intercontinental Paris Le Grand Hotel

March 23rd, Monday

09:00 - 09:15 Welcome address by Chairman of IREPAS – Kim Marti

09:15 – 10: 30 SESSION ONE 

• Low raw material prices and booming Chinese exports: which consequences for the global steel sector?
  Eric Louvert, BNP Paribas
• Why The Future Begins – Navigating The Turbulent World of Small Ideas and Grand Narratives
  Special Guest Speaker: Magnus Lindkvist

10:30 – 11:00  Networking Break

11:00 – 12:30  SESSION TWO – Critical changes expected in global long steel markets

• Long product market outlook
  Franc Cardona, Celsa Group
• EU Steel market outlook
  Jeroen Vermeij, The European Steel Association (EUROFER)
• Chinese steel industry outlook
  Ralf Baltrusch, China Minmetals Corporation
• CIS market overview – How the Ukraine-Russia crisis is effecting the steel markets?
  Vitali Postolenko, Derzhzovnishinform (DZI)

12:30 – 14:00  Lunch Break

14:00 – 17:00  IREPAS Committee Meetings

• 14:30 – 17:00  Producers Committee (by invitation only)
• 14:30 – 17:00  Raw Material Suppliers Committee (by invitation only)
• 14:30 – 17:00  Traders Committee (open to all attendees)

20:00 – 23:00  Gala Dinner

March 24th, Tuesday 

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

Committees:

• Producers Committee
• Raw Material Suppliers Committee
• Traders Committee

All details will be announced soon.