The DOC found that revocation of the countervailing duty (CVD) order on the given product from the country would be likely to lead to a continuation or recurrence of subsidies. The final subsidy rates are at 44.18 percent for Ferriera Valsider, and 4.16 percent for Ferriere Nord and all other Italian companies.

The subject merchandise is provided for in subheadings 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and 7227.90.6035 of the Harmonized Tariff Schedule of the United States (HTSUS).

As a result of the ITC’s affirmative determinations, the existing orders on imports of this product from Belarus, Italy, Russia, South Africa, South Korea, Spain, Turkey, Ukraine, United Arab Emirates, and the United Kingdom will remain in place.

The DOC found that revocation of the antidumping duty orders on the given product from the given countries would be likely to lead to continuation or recurrence of dumping.

The DOC has determined weighted-average dumping margins of up to 280.02 percent for Belarus, 18.89 percent for Italy, 41.10 percent for South Korea, 756.93 percent for Russia, 142.26 percent for South Africa, 32.64 percent for Spain, 4.44 percent for Turkey, 44.03 percent for Ukraine, 84.10 percent for the UAE, and 147.63 percent for the UK.

The products in question are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and 7227.90.6035.

The investigation was initiated in September 2020, after a complaint filed by domestic steelmakers AltaSteel Inc., ArcelorMittal Long Products Canada G.P. and Gerdau Ameristeel Corporation, and the provisional antidumping duties were announced in February this year ranging from 3.7 percent to 28.4 percent.

Accordingly, the final antidumping (AD) margins determined for these countries are as follows:

• 3.3 percent for Indonesia,
• 4.8 percent for Algeria,
• 10.5 percent for Vietnam,
• 23.1 percent for Egypt,
• 23.1 percent for Italy,
• 23.1 percent for Malaysia,
• 23.1 percent for Singapore.

The subject goods are classified under the following tariff classification numbers 7213.10.00.00, 7214.20.00.00, 7215.90.00.90 and 7227.90.00.90.

The investigation was initiated in September 2020, after a complaint filed by the below domestic steelmakers

• AltaSteel Inc.
• ArcelorMittal Long Products Canada G.P.
• Gerdau Ameristeel Corporation.

The products subject to antidumping duty investigation currently fall under the following Customs Tariff Statistics Position Numbers

• 7213.10.00.00
• 7214.20.00.00
• 7215.90.00.90
• 7227.90.00.90

The preliminary antidumping duties are as follows:

Algeria
Spa Tosyali Iron Steel Industry Algerie                4.5%
All Other Exporters                                                 13.7%

Egypt
Al Ezz Dekheila Steel Company—Alexandria    22.0%
All Other Exporters                                                 22.0%

Indonesia
PT Putra Baja Deli                                                   11.3%
All Other Exporters                                                 28.4%

Italy
All Exporters                                                            28.4%

Malaysia
All Exporters                                                            28.4%

Singapore
All Exporters                                                            28.4%

Vietnam
Hoa Phat Dung Quat Steel Joint Stock Co           3.7%
All Other Exporters                                                15.4%

The products subject to antidumping duty investigation currently fall under Customs Tariff Statistics Position Numbers 7213.10.00.00, 7214.20.00.00, 7215.90.00.90 and 7227.90.00.90.

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.

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As expected, things are getting more difficult for exporters in the global steel market. The EU opened fire with an antidumping investigation on HRC imports from Turkey, with Turkey firing back with duties on steel products from the EU. Canada started a similar investigation against imports of heavy plates from several countries, while Egypt has been working on a 10 percent duty. Accordingly, the world market is shrinking further and Russian mills are taking the lead and dominating the market. It will be a real game of survival for a while and the cost of production is the key.

Global longs consumption still very uncertain, prices move up especially in Asia

While prices are heading up (particularly in Asia), consumption in the global long steel products market seems very uncertain. Demand for physical steel is held up by the optimism in the futures market. This is somewhat worrying for the supply and demand situation in the market if the support from the futures market were to weaken. On the bright side, despite the impact of the Covid-19 pandemic the World Steel Association (worldsteel) in its recent report still foresees an increase in steel demand in China in the current year, predicting a rise of one percent from 2019 to 916.5 million mt. This helps restrict the fall in global steel demand in 2020 to an anticipated drop of 6.4 percent, whereas demand in the rest of the world excluding China is foreseen to contract by 14.2 percent compared to 2019. Meanwhile, market players are hoping that June and July will be months of stabilization before a recovery later in the year.

Brazilian steel industry faces serious demand crisis

Brazilian crude steel production continued to fall in April amid the ongoing Covid-19 pandemic. Its crude and rolled steel outputs in the given month fell by 39 percent and 36 percent, respectively, while its semis output declined by 24 percent, all year on year, according to the Brazilian Institute of Steel (IABr). Domestic steel sales in April decreased by 36 percent year on year, in line with apparent consumption of steel products which collapsed by 35 percent. Due to the adverse conditions in the international market, Brazilian steel exports fell by 17 percent year on year. These data demonstrate the seriousness of the demand crisis that the Brazilian steel industry is facing, which led it to operate with only 42.2 percent of its installed capacity in April. As a result, in the first four months of the year Brazil’s crude steel production fell by 14 percent year on year to 10 million mt. The output of finished steel products contracted by nine percent  year on year to 7.1 million mt due to the decrease in apparent consumption in the period under review (down nine percent to 6.2 million mt). In the January-April period, Brazil’s steel imports contracted by 18 percent to 705,000 mt, while its steel exports fell by five percent year on year to 4.1 million mt.

Mills in EU struggle, buyers only order what they need and wait for lower prices

The construction business in the EU has been hit harder than expected by the Covid-19 crisis. New building permits in May were substantially lower than in March and April and many projects have either been put on hold or stopped. The public sector still has big infrastructure projects in the pipeline. However, since the Covid-19 crisis has kept everybody at home for almost three months, these projects have been delayed significantly. Cut-and-benders are trying to grab any order available as they start to believe the next one will be at a lower price anyhow. EU-based mills are selling hand to mouth as buyers will only order what they need and wait for prices to fall further. Italian mills are selling at almost any price to collect cash, and this has pulled the market downwards. The same goes in Poland where mills are pushing clients into placing orders by lowering their prices almost daily. At the same time, scrap prices have increased, which is a toxic combination for cut-and-benders and the mills. The biggest threat for importers is the ongoing discussions in Brussels on the reevaluation of safeguard measures. The EU is once again changing  the rules in the middle of the game under pressure from EUROFER.

Demand recovers in ferrous scrap market

On the other hand, demand in the ferrous scrap market has recovered and the raw material inventories that were depleted have had to be rebuilt as the markets have been opening up after the lockdowns. Activity has been general and has taken the markets by surprise.

Stimulus packages and normalization procedures provide a boost

Stimulus packages around the world are acting as fuel. There are concerted efforts to avoid a U- or L-shaped economic rebound, with a V-shaped rebound being what the financial markets are seeking. Finally, normalization procedures have been initiated in many countries. The automotive sector is back in business in various countries, e.g., in the US, EU and Turkey.

China’s recovery a very important factor

China has acted as a powerhouse in the past month for commodities. Industrial activity in the country returned to normal in May. The quick return of Chinese companies to the market and China becoming an importer have been very positive factors.

Japanese production cut is good news for other exporting countries

Japanese mills have announced a production cut of approximately 20 million mt, which of course is not a positive development for them but does represent good news for other exporters in the global market.

Difficult to talk about the existence of a global market nowadays

We cannot really talk about the existence of a global market nowadays. There will be 100 percent self-sufficiency in Asia in the medium term and then exporters will be wandering in search of the next market. Every producer outside of China is struggling with insufficient volumes and, under such circumstances, competition can come from anywhere at any time. The mills in many countries have to follow what the Russian mills are offering in the market and then to decide whether they can compete.

Future remains very much uncertain but some signs of optimism seen

The current status of the market is clearly unstable. The markets are still assessing the damages from the Covid-19 pandemic and the future remains very much uncertain. But at least investors and industries are showing optimism.

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Prices in the global long steel products market are better compared to our last report, though there is a certain degree of uncertainty regarding how sustainable the current price levels are. The situation has gotten worse generally in terms of demand and supply, as there seems to be a general worsening of expectations and the numbers coming in do not bode well.

Brazilian dam accident pushes up iron ore prices

Scrap prices have again started to increase slightly, which means the recent improvement in long product prices has no positive effect. Iron ore prices have risen due to several force majeur declarations following the dam collapse in Brazil.

Turkish mills maintain rebar production at low levels

Turkish mills have reduced their production considerably and at the same time the sudden increase in scrap prices has pushed up their rebar prices. If Turkish rebar production continues to run at low volumes, then it will be difficult for scrap prices to continue at their current levels. If production increases, then we might see another drop in rebar prices.

Margins still better than average in US where there is not much room for imports

Margins have been reduced in the US, but they are still better than average. With lower domestic prices in the US and the 25 percent tariff, there is not much opportunity for import trade.

EU market faces many uncertainties

Many in the EU are very much concerned about a hard Brexit, the ongoing trade wars, the potential impact of the recently introduced safeguard measures, the American market situation, exports from Turkey, the GDP forecast in Germany, the expenditures of the new government in Italy, etc. If Germany is to correct its GDP growth forecast from 1.8 percent down to 1.0 percent, then other EU markets may follow suit. German stocks are also under pressure, which does not encourage a positive outlook for the EU overall.

US and EU markets expected to improve pricewise

Having said all the above, the US and EU markets are expected to improve pricewise. However, we need to wait until the Chinese New Year holiday is over to see where the rest of the world will be heading.

Less pressure from Chinese supply, but what will happen after the holiday?

There is obviously less pressure on the market from Chinese supply offers due to the somewhat higher prices offered and the Chinese New Year holiday. Chinese origin steel prices are very high and not competitive for the time being, giving suppliers of steel from other countries the chance to fill the gap. Chinese exporters usually push up their prices after the New Year holiday, and so we will have to wait and see what move they will make after the holiday.

Temporary end to US government shutdown is welcome, but other issues remain

The US government shutdown is temporarily over, which is good news, but there is still no mention of revoking the 25 percent and 50 percent Section 232 duties which were imposed citing the defense of US national security. Perhaps an agreement may be reached by President Xi and President Trump by March 1, which would obviously be positive news.

Industrial output recovery after year-end provides a boost

Industrial output has recovered after the end-of-year slowdown, and sentiment seems to have improved somewhat, and global growth, although slightly lower, is still pacing at decent numbers. 2018 saw strong production development in most regions, apart from Europe and Turkey.

Scrap prices show clear rebound from bottom levels in early January

Restocking and the industrial ramp-up to normal levels have been strong during January and, with winter drawing down scrap flows in the northern hemisphere, scrap pricing development saw a clear rebound from the bottom during early January.

Competition generally at high levels and heating up further

Competition in the market is high as usual and is even heating up further as we can see. Ukrainian suppliers have been exporting rebars to the Far Eastern market for the first time in a long time, competing with exports from Turkey and Qatar. Elsewhere, competition is slackening in the EU market. EU mills are expected to set their goals in the coming period and will start dictating prices sooner rather than later. With the continuation of trade restrictions, the global trade will see further suboptimal effects.

Current market characterized by instability and uncertainty

The current status of the market can be described as unstable given the uncertainty caused by Brexit, the government shutdown in the US, the situation in Venezuela, the Chinese New Year holiday and the difficult winter conditions in North America and the north of Europe. The scrap market outlook and the future of ex-Brazil iron ore only adds fuel to this uncertainty.

Difficult to make predictions: Implementation of EU measures and post-holiday period in China need to be watched

Under these circumstances, it is pretty difficult to make any predictions for the market. The picture will become a little clearer with the full implementation of the measures in the EU and the end of the Chinese New Year holiday.

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Accordingly, the US DOC has stated that it has amended the final antidumping determination for Turkey to reflect the correction of this ministerial error in the calculation of the final dumping margin assigned to Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. (Habas), which changes from 4.74 percent to 4.93 percent.

In addition, because the “all-others” rate for Turkey is based on the margins for Habas and the other mandatory respondent, Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S. (Icdas), it has revised the “all-others” rate from 6.34 percent to 6.44 percent.

With respect to the final antidumping determination for Spain, the US DOC has revised the final dumping margin of CELSA to 10.11 percent from 11.08 percent, while it has also changed the “all-others” rate for Spain from 11.08 percent to 10.11 percent.

Meanwhile, the final subsidy rate for Turkey-based Habas has been revised to 3.88 percent from 3.86 percent, while the final subsidy rate for “all-others” in Turkey has been revised from 3.84 percent to 3.85 percent.

The US DOC will also instruct the US Customs and Border Protection (CBP) to require cash deposits equal to the amounts of 1.05 percent, 4.15 percent and 2.59 percent for Habas, Icdas and all others in Turkey, respectively.