Trump stated that the tariffs, which will apply to the products from trading partners with duty-free exemptions or tariff-rate quota deals, including Canada, Mexico, Australia, Argentina, Brazil, South Korea, the EU, Japan and the UK, will be effective as of March 12, 2025. However, a White House official subsequently stated that the tariffs will be effective as of March 4, 2025.

The supply and demand balance in the global long steel products market has not improved compared to previous months. Unfortunately, the positive expectations after the Chinese New Year holidays have not materialized. It seems Chinese exporters will continue to be aggressive, which of course will also drive other Asian exporters (Japan, Vietnam, Taiwan and South Korea) to adopt a similar stance. If we look at the EU import statistics, we see a massive shift towards Asian suppliers. On the other hand, demand is not picking up as the market had anticipated or hoped, which puts pressure on both prices and production. However, the markets still hold positive hopes for the second half of the year.

Chinese real estate sector in deep trouble, Chinese exports may surge again

Two major Chinese developers, namely, Evergrande and Country Garden, are in deep financial trouble. There are some worrying rumours of infrastructure projects being cancelled due to the lack of funding. Iron ore with 62 percent Fe content is trading at around €116/mt and coke prices have dropped as well. This weakening of raw material costs brings many mills in China into positive territory. The pressure on Chinese long product mills is mounting and, if the rumours of the cancellation of infrastructure projects materialize, this could cause a surge in Chinese exports, supported by reduced raw material costs.

EU market very quiet amid reduced residential construction in northern Europe

The EU market is very quiet as residential construction has declined substantially in northern Europe. There is very little activity and prices from domestic mills are as stable as a rock. There is some increase in imports including unusual origins such as China, Oman and the UAE. Other sources are not able to compete with domestic offers.

Situation unchanged in US but higher interest rates a problem

As for the US, the situation is unchanged. However, the earlier optimism that the interest rates would come down sooner has vanished. Commercial and residential construction has not picked up and any improvement will have to wait until the summer. Government-funded projects were also affected by the lockdown of finances by the House of Representatives, which have just been released. There are discussions about converting empty office spaces to homes to cover the home deficit, which will not help the steel industry. Auto sales are also affected by the interest rates and are flat. In short, we are on hold for the next two moves of the US Federal Reserve. Rebar prices are steady but face downward pressure with lower raw material costs. Due to higher shipping costs, imports are not as competitive. HRC prices are still on a downward trend, which is affecting all steel futures. Slow economic activity in China after the Lunar New Year holiday and the lack of prospects for a quick easing of interest rates in the US have put pressure on commodities worldwide.

Turkey struggles in markets where it was formerly dominant

Turkey is competing on many fronts. Asian, GCC and North African exporters are now exporting heavily to markets where Turkey used to be dominant.

Lower raw material prices the only good news for steel mills

Iron ore prices have hit a six-month low, while ferrous scrap is being generated in decent volumes in the US, which has meant more tonnages destined for export. In Europe, the slow economy has reduced ferrous scrap flow and also demand from the steel industry which is struggling with poor order books. The only good news for steel mills nowadays could be that the raw material prices, both for iron ore and scrap, are going down. Also, lower activity means lower volumes, reducing supply pressure on the markets.

State subsidies for climate action to be a major issue for years to come

One of the main topics for market players to discuss for years to come will be the definition of state subsidies related to climate change, because it looks like this issue will definitely be used for the next level of protection measures. 

Competition remains local or regional

Competition is still mostly local or regional rather than global due to existing protectionist measures and it is strong where such measures do not exist.

Status of markets generally unstable, outlook slow and unsatisfactory

Under such circumstances, the current status of the market can be described as unstable in many markets or stable at a low level at best. The outlook, unfortunately, is slow and unsatisfactory.

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The applicable duties range between 2.4 percent and 108.5 percent. The antidumping duties were imposed in May 2017.

The products in question currently fall under Customs Tariff Statistics Position Numbers 7213.10.00.11, 7213.10.00.12, 7213.10.00.13, 7213.10.00.90, 7214.20.00.11, 7214.20.00.12, 7214.20.00.13, 7214.20.00.14, 7214.20.00.21, 7214.20.00.22, 7214.20.00.23, 7214.20.00.24, 7214.20.00.31, 7214.20.00.32, 7214.20.00.33, 7214.20.00.34, 7214.20.00.90, 7215.90.00.20, 7215.90.00.30, 7215.90.00.50, 7228.30.00.51, 7228.30.00.52 and 7228.30.00.53.

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.

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Demand is slowing down in the global long steel products market as we have entered the slow season in the northern hemisphere and the holidays are approaching. Market activity may remain slow until the Chinese New Year holidays and so we may see further price erosion in the coming weeks. However, such erosion should be limited due to higher costs of production. There is an energy shortage, and the cost of energy is higher. Moreover, since steel production is already at pre-pandemic levels and since that keeps alloying elements, refractories and electrodes all at high prices, this will be another supporting factor for higher costs of steel compared to the same period last year, preventing any sharp drops in prices of steel. Higher freight rates are also supporting higher steel prices in the international market.

Shift to volumes observed in international and domestic markets

Steel supplied to consumers and customers worldwide in 2021 has been determined by availability and price. Nowadays, there has started to be a shift to volumes in the international market and to a large extent also in domestic markets.

Blast furnaces gain further advantage over EAFs with lower iron ore and coking coal prices

As mentioned, energy costs are increasing everywhere, but coking coal prices have started their retreat. With relatively low iron ore prices and the downward movement of coking coal prices, integrated blast furnace-based producers have gained an even greater advantage over the scrap-fed EAF industry.

Lack of clarity on supply chain logistics adds to uncertainty in some regions

Contract pricing in the EU, South Korea/Japan and North America is still being discussed in a weaker market.  Contract tons, even at very attractive prices, are being returned to producers due to the lack of clarity in relation to supply chain logistics and chip shortages.

Demand also slows in EU, mills to use holiday period to limit supply pressure

Demand is also slowing down in the EU market due to seasonal factors. However, many buyers booked their last orders for the year in the latter part of November. It looks like the EU mills are done for the year and some of them will use the holiday period for revamping and additional extraordinary holidays, which will remove any supply pressure from the market. Imports are not a threat to the EU mills, while on the other hand the tariff quota agreement with the US and respective export options may lift prices further.

Good scrap demand in Europe, winter conditions impact scrap flows

On the ferrous scrap side, European logistics constraints persist. Demand remains good for the remainder of the year. At the same time, winter conditions are hammering scrap flows in areas of Europe. Energy costs have led to temporary outages at producers in Europe.

Hyperinflation in Turkey impacts trade

The hyperinflation in Turkey, which has been fuelled by a loose monetary policy and the subsequent devaluation of the Turkish lira, has slowed domestic consumption, at least temporarily. Ferrous scrap trade has been shaken up by this during the past few weeks.

Lack of increased exports from China provides important support for global market

China is still not increasing its exports of steel, which is an important supporting factor for the global market.

Mills have enough orders for coming months, demand bolstered by stimulus measures

The cycles of buying are getting shorter, i.e., shorter lead times. This takes a bit of the uncertainty out of the market, which should reduce the dislocation of the futures markets from the spot markets. There is plenty of demand and balanced supply should prevent strong volatility in the market. Mills have enough orders for the next couple of months. Stimulus packages and the availability of low-cost money will support demand. Freight rates seem to have peaked for the time being.

Competition becomes stronger worldwide amid limited export options

Competition in the market is getting stronger as there are not many markets left for exports; however, order books are still satisfactory. There are even some Chinese origin offers appearing in the market. Overall, the level of competition depends on the region.

Omicron virus variant raises concerns, US agrees with EU on quotas

The US dollar has strengthened, while fears surrounding the Omicron variant have dealt a blow to the prospects for reopening during the winter months. There may be lower prices and shorter lead times in the market.  The US has already agreed with the EU on quotas. Agreements with Japan and South Korea are expected to be finalized soon. The UK, Norway and Iceland are next in line.

Markets generally stable despite some fluctuations, Q1 outlook mostly stable

The current status of the market is generally stable despite some fluctuations in certain areas. The market is now more volume-driven. The outlook for the first quarter is mostly stable, particularly as no supply pressure is expected.

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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.

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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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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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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.