The overall business environment in the global long steel products market remains relatively stable. However, regional differences have become more pronounced than ever. Protectionist measures in the United States, combined with the implementation of CBAM in Europe and the upcoming reduction of EU import quotas, are reshaping trade patterns and market dynamics.

Ongoing conflicts continue to create uncertainty and raise costs

At the same time, the ongoing conflicts in Ukraine and the Middle East continue to create uncertainty, disrupt trade flows and influence supply-demand balances across multiple regions. Higher oil and natural gas prices have increased transportation and production costs, while steel availability from Gulf region suppliers has become extremely limited. Marine insurance costs for cargoes have also risen due to increased geopolitical risks. Expectations that these disruptions will be short-lived have largely disappeared. As a result, many distributors and stockists are holding onto inventories amid concerns about future supply availability and stock replacement costs. Consequently, the market remains highly fragmented, with conditions varying considerably depending on geography.

EU market sees last-minute import buying ahead of new quota system on July 1

In the European Union and in the United Kingdom, the market is now starting to search for a new equilibrium because of the changes in the import regime from July 1. During the past few weeks, some last-minute import buying has been taking place, as buyers and traders try to position themselves before the new quota system enters into effect. After this, market players will have to adjust their strategy to the supply which is actually available in the market. There will still be imports, of course, and there will still be competition, but buyers will have to build their strategies around actual market availability, not around the cheapest theoretical import offer.

Scrap prices remain strong despite weak demand

There is no demand to support the continuing strength of scrap prices, but it seems that prices will stay where they were before the Eid holiday or they may come down by a few dollars to motivate Turkish buyers to resume buying. Deep sea scrap prices for Turkey remain some way above US$400/mt CFR despite weak Turkish rebar sales, while the strong scrap prices provide support for finished product prices. Meanwhile, Turkish mills do not expect much long product demand from the EU because of the new quotas to be introduced shortly in the region. Regional differences will certainly create different results for different regions and producers, especially for those who source scrap from the US and the EU and need to export their products.

Turkey’s production costs may increase, political situation to impact investment

Turkish mills were enjoying cheap energy costs due to the rainfall during the winter season. This will most probably end when temperatures start rising and the country starts using cooling systems. With the political turmoil in the country, investments will slow down, which will also be another factor causing demand for long steel to slacken.

Demand for semis due to Iran’s absence contributes to higher long steel costs

Demand for semis due to Iran’s absence is another factor contributing to increased costs of long products. In this context, Chinese exports of slabs and billets increased to around 900,000 mt in the January-April period this year.

Long steel market in Germany remains very weak

The market in Germany is still very weak. After the shockwave of higher energy prices (the impact of the Iran war) and price increases for all steel products and for logistics, many projects were put on hold. Consequently, cut and bend prices did not move up but are on the way back down. Benders are desperately looking for orders at somehow manageable prices. German and Polish mills have had to adjust prices down as well, otherwise benders do not buy. So, there has been a drop of around €30/mt in prices despite the seasonal improvement which reflects the level of investment in Germany right now. Better prices for benders from imports are practically not available anymore. Reduced quotas, CBAM and high ocean freight rates make business very difficult. New building permits went down by 10-15 percent and industrial projects by 20-30 percent. There is not even any input from the public sector.

Mixed bag of positive and negative factors in US market

In the United States, inflation remains a concern, and expectations for interest rate cuts have largely been pushed back, with higher rates now expected to continue into 2027. This has negatively impacted housing and construction activity, keeping demand relatively subdued. Meanwhile, steel imports remain restricted by the 50 percent Section 232 tariffs, higher freight costs and logistical uncertainties. Reduced import competition continues to support a gradual increase in domestic steel prices despite overall moderate demand. On the other hand, domestic steel prices are moving closer to import parity, which may improve future import opportunities. In addition, inventories remain relatively low, and continued investments in AI infrastructure, energy and industrial projects are providing some support for steel demand. The primary area of growth remains AI infrastructure and data center investments, although this business is largely supplied directly by domestic mills and these big projects are for consumption of reinforcing steel 12-18 months from now. However, these positives are still overshadowed by geopolitical uncertainty, high interest rates and weak construction activity.

Some positive developments in terms of investments

One of the key positives in the marketplace is the substantial level of investment being directed toward infrastructure projects, energy-related developments and data centers, all of which generate significant demand for reinforcing steel products. In addition, many governments in developed economies are increasingly focused on addressing housing affordability challenges. Policies aimed at expanding residential construction could support additional demand for long steel products in the medium term. Another positive factor for certain markets is the implementation of measures designed to protect domestic industries from unfairly priced imports. While these measures support local producers, they also reduce market access opportunities for exporting countries, highlighting the differing impacts across regions. There are areas like the Balkan and Baltic regions where demand is really great and investment in infrastructure is huge.

China’s crude steel output decreases, its iron ore imports increase

China’s crude steel production decreased by 4.1 percent in January-April, but its iron ore imports increased by eight percent to 418 million mt in the same period, and port stocks are close to 160 million mt. This is a very strange situation: steel production is characterized by weakness, but iron ore imports remain strong.

Divergence between open and protected markets

Competition remains extremely intense in international markets that are open to imports. Excess production capacity in several regions continues to put pressure on prices and margins. In contrast, markets that benefit from trade protection measures or restricted import access generally experience more balanced competitive conditions.

Current market status stable and challenging, outlook varies according to region

Under these circumstances, the current status of the market can be described as stable and challenging. While demand remains generally subdued in many regions, market participants have largely adapted to current conditions and no major short-term disruptions are anticipated. The outlook, on the other hand, varies significantly by region. In Europe and the United States, market sentiment is relatively decent, supported by infrastructure spending and protective trade measures. In many other parts of the world, however, the outlook remains difficult to predict.

Supply side will need to be monitored if Middle East crisis is resolved

Even if geopolitical tensions in the Middle East ease, the resulting increase in availability of supply could place additional pressure on already oversupplied open-trade markets. Furthermore, the current interest rate environment continues to weigh on construction activity and investment decisions in several regions.

DO YOU AGREE OR DISAGREE?  

PLEASE LEAVE A COMMENT AND SHARE YOUR OPINION WITH US

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

The weighted-average dumping margins are at

• 114.53 percent for Belarus,
• 133.0 percent for China,
• 60.46 percent and 71.01 percent for Indonesia,
• 17.21 percent for Latvia,
• 232.86 percent for Moldova,
• 47.13 percent and 52.07 percent for Poland
• 41.69 percent for Ukraine

The subject merchandise is provided for in subheadings

• 7214.20.00,
• 7228.30.8050,
• 7222.11.0050,
• 7222.30.0000,
• 7228.60.6000,
• 7228.20.1000

of the Harmonized Tariff Schedule of the United States (HTSUS).

The weighted-average dumping margins stand at

• 114.53 percent for Belarus,
• 133.00 percent for China,
• 60.46 percent and 71.01 percent for Indonesia,
• 16.99 percent for Latvia,
• 232.86 percent for Moldova,
• 47.13 percent and52.07 percent for Poland,
• 41.69 percent for Ukraine.

The subject merchandise is provided for in subheadings 7214.20.00, 7228.20.8050, 7222.11.0050, 7222.30.0000, 7228.60.6000, and 7228.20.1000 of the Harmonized Tariff Schedule of the United States (HTSUS).

The DOC found that revocation of the antidumping duty orders on the given product from the given seven countries would be likely to lead to continuation or recurrence of dumping. The DOC has determined weighted-average dumping margin of up to

• 114.53 percent for Belarus,
• 133.00 percent for China,
• 71.01 percent for Indonesia,
• 16.99 percent for Latvia,
• 232.86 percent for Moldova,
• 52.07 percent for Poland,
• 41.69 percent for Ukraine.

The subject merchandise is provided for in subheadings 7214.20.00, 7228.20.8050, 7222.11.0050, 7222.30.0000, 7228.60.6000, and 7228.20.1000 of the Harmonized Tariff Schedule of the United States (HTSUS).

Current AD margins are as follows:
Country                          AD margin
Belarus                               114.53%
China                                  133.00%
Indonesia                             60.46-70.01%
Latvia                                      4.87-17.21%
Moldova                             232.86%
Poland                                  47.13-52.07%
Ukraine                                41.69%

As a result of the ITC’s affirmative determinations, the existing antidumping duty orders on imports of this product from Belarus, China, Indonesia, Latvia, Moldova, Poland, and Ukraine will remain in place.

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS emphasized that there is obvious confusion and uncertainty in the global long steel products market triggered by the announcement of new tariffs on steel imports by President Trump as a result of the Section 232 investigation in the US, the subsequent exemptions from these tariffs, and the resulting safeguard investigation announced in the EU. Mr. Cebecioglu added that it has become extremely difficult to make business decisions as the prevailing question in the markets is, “What’s going to happen next?”.

On the last day of the conference, producers of long steel products and steel billets, 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: Chinese scrap exports not a long-term threat

Mr. Jens Björkman, the chairman of the raw material suppliers committee, stated that since 2015 a rebound has been seen in commodities, as well as scrap, mainly driven by China. He added that most scrap suppliers are worried about the growth in Chinese scrap generation and that the shift in Chinese production to electric arc furnaces might not be quick enough to accommodate the rise in scrap supply. According to Mr. Björkman, there will no long-term exports of Chinese scrap, which will be used in the domestic industry as much as possible.

Mr. Björkman indicated that the EU has seen better-than-expected growth, while the US has performed very well with solid domestic market demand amid the Section 232 tariffs. The raw materials committee chairman said that there is still uncertainty in the market on account of protectionism. He said that, as the uncertainty caused by Section 232 is better for the US domestic market, the discussions of the tariff itself boosted domestic demand and steel production in the US even prior to the implementation of the tariff. Accordingly, he expects that the final decision might be delayed until after the June 1 deadline. Regarding the Turkish steel market, Mr. Björkman said that it is characterized by political uncertainty due to the early election, the weaker lira and shorter lead times.

The committee chairman concluded that, if there is a global trade war, then everybody will be a loser, adding that he does not believe the intentions are to start a trade war.

Traders at IREPAS: Chinese exports will be modest, if not absolutely absent

Mr. Wilhelm Alff, the chairman of the traders committee, said that the main topics discussed during the traders committee meeting were the tariffs in the US and the safeguard investigations launched in the EU and also lately in Turkey. He said he thinks that the EU will wait until the final announcement from the US to conclude its own investigation.

The traders committee chairman stated that, despite the 25 percent duty on imports, the US has to import rebar as they are not self-sufficient, though he also pointed out that Turkey, the biggest rebar exporter to the US, is unlikely to gain an exemption from the tariffs.

Regarding the outlook for Chinese exports, basis the reports that China will continue to close down unproductive and illegal plants and will shift production to electric arc furnaces, and that the EAF capacity they are going to build is about 40-50 million mt, while they will be reducing other capacity at the same time at a very similar rate, and there will be a surplus of 20 million mt, Mr. Alff said that while it might sound a lot for the EU, for example, is relatively small for China in terms of overall demand. The traders committee chairman said he thinks that the Chinese have learnt their lesson already, i.e., that the risk of antidumping duty is always there. He said that the Chinese are building new plants for their own consumption, adding that they will not be absolutely absent from the export scene but their contribution will be modest.

Steel Producers at IREPAS: Sentiment for rest of 2018 is very positive

Mr. Murat Cebecioglu, chairman of IREPAS and also of the producers committee, said that at the producers committee meeting everyone agreed that there is demand in the long steel market but also obstacles, adding that the two main worries are what China will do and where this current protectionism will take us. He indicated that sentiment was very positive for the remainder of 2018.

Regarding the Section 232 extension, Mr. Cebecioglu said that there might be some further extensions to the Section 232 deadline in order to see what the other countries are going to do. He added that it is a dangerous game the US is playing, saying that everyone needs clarity. He also pointed out that with the tariffs the US is targeting a capacity utilization of 75 percent, though they will still need to import at this rate.

Mr. Cebecioglu stressed that these trade disputes are not sustainable, stating that they have to end somewhere. According to the IREPAS chairman, if the EU is exempt from the duties after June 1 and rest of the world is not, it will create a problem for Turks as a major exporter. However, he went on to say that, if everyone gets 25 percent, then Turkey will still have a chance to export rebar to the US. He also said that a 25 percent duty rate across the board would be more fair compared to quotas granted for some countries.

Mr. Cebecioglu also commented on the removal of the import duty on Turkish rebar, stating, “We have not seen a real threat at the moment but we know small volumes are coming to Turkey. As of now, there is a safeguard investigation in Turkey. We have to protect what is ours.”

Responding to a question about the graphite electrode shortage, the producers committee chairman said the shortage has been relieved to some extent, though the steel industry needs more and more electrodes due to the new electric arc furnaces being built. He also indicated that the cost of electrodes is rising also because of higher needle coke prices.

19:00 – 22:00                        Welcome cocktail at Hilton Warsaw Hotel and Convention Centre

Day 2: Monday, May 7, 2018

09:00 – 09:15                        Welcome address by Chairman of IREPAS

09:15 – 10:15                         SESSION ONE – Global economic outlook

- Global Economic and Market Developments

Marek Rozkrut Ph.D., EY Poland / Partner, Chief 

10:15 – 10:45                           Networking break

10:45 – 12:30                           SESSION TWO – Critical changes expected in global long steel markets

- Long products market outlook

Jose Angel Rey, Celsa Group / International Commercial Director

• Overview of global construction sector
• Steel and long products consumption
• Rebar markets
• International price situation

- Most recent developments in graphite electrode market as well as future expectations

Dr. Mark Shujun Ma, CIMM Group Co. Ltd. / Chairman & CEO

• Causes of global electrode shortage
• China’s role in electrode shortage and most recent developments in global electrode market
• How is demand trending? And demand in electrode-consuming industries?
• Planned new capacities
• Solution alternatives for the existing shortage
• How can EAF-based plants survive under current conditions?
• Short-term and long-term expectations both on demand and supply side

- Global steel market developments and analysis

Peter F. Marcus, Managing Partner / World Steel Dynamics

12:30 – 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                            Cocktail Reception

Day 3: Tuesday, May 8, 2018

09:00 – 10:30                           SESSION FOUR – Panel with Committee Chairmen

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

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.

There were 210 attendees from over 30 countries. You may find the presentations of the 57th meeting, both under the Meeting section of this website and at www.steelorbisevents.com under the 57th IREPAS meeting page.

The meeting also hosted two panel discussions, with the first one being on the steel futures contracts to be launched by LME next April, and the second on the market putting forward the opinions of producers, raw material suppliers and traders.