There were 123 representatives from 49 different producers among the 406 registered delegates from a total of 56 different countries. There were also 79 registrations representing 41 different raw material suppliers.

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, said that demand is still very weak in the global longs market and the situation remains difficult as mills are cutting back on production and protectionist measures are continuing full speed ahead, while China and other countries in Asia are exporting a lot, putting pressure on prices.

The IREPAS chairman added that there is very severe competition in the market, and every producer is fighting with its last penny in order to keep operating.

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: Global trade conditions are “devastating” due to uncertainty

Jens Björkman, the chairman of the raw material suppliers committee, said that, in the recent period, global trade conditions have been extremely difficult, describing the situation as “devastating” amid the current uncertainty. Pointing out that trade barriers and uncertainties continue to weigh heavily on the market, particularly with the US tariffs forcing some countries to find alternative destinations, he added that this shift has created pressure on other markets, including Turkey. Regarding the protectionism in the market, he stated that there are rumors that the EU will impose some duties on Asian materials due to the huge inflows of cheaper steel from the region. Meanwhile, noting that China, which is the main exporter of cheap steel, has signaled plans to reduce steel production and exports in 2025 and 2026, albeit the actual outcome remains uncertain, he said that, in the longer term, larger investments in EAF-based production are expected, supported by stable electricity supply and growing domestic scrap availability. China has also announced a cut of about 90 million metric tons in its steel production in 2025.

Highlighting that the planned green transition in the steel industry is increasingly being questioned, with many investments being cancelled and projects being delayed, Mr. Björkman stated that the EU’s move toward electric furnace-based production has now been postponed by at least three to four years. He underlined that, if carbon emission trading in Europe and the related pricing system are fully implemented, emission reduction technologies will need to be installed more widely. However, he said that, instead of hydrogen-based DRI, natural gas could be used in the short term. In addition, the raw materials committee chairman said EU waste shipment regulations treating scrap as waste will create more bureaucracy, especially for non-OECD countries needing formal approvals to buy European scrap, while OECD trade remains unaffected. Regarding the concerns over domestic scrap oversupply, he stated that Europe already faces excess supply overall, but certain grades like clean automotive scrap could face shortages. This imbalance, he explained, is why EU steel producers push to keep scrap within Europe.

Looking at Turkey, Björkman noted that the recent increase in freight costs has become a burden for suppliers, leading prices to increase slightly in Turkey, though how long this situation will last remains difficult to predict. Regarding the changes in Turkey’s inward processing regime, the committee chairman stated that Turkish mills, who are already struggling amid high costs, may become less competitive in the short term as scrap prices may increase slightly, leading the mills to reduce production.

Meanwhile, stating that raw material demand in the GCC market is expected to focus more on DRI/HBI, which remains limited in supply, he emphasized that larger volumes will be needed in Europe to support flat steel production and the green transition, though a mix of DRI/HBI and scrap is likely to be used.

Traders at IREPAS: Protectionist measures will continue for foreseeable future

F.D. Baysal, the chairman of the traders committee, said that China’s exports have increased at a much higher pace than its production. He stated that there are no expectations for production cuts in China and that its domestic stock levels remain at normal levels. In response to questions on how China is reacting to trade barriers, he explained that Chinese producers have begun investing in production facilities in other regions, including Africa and South America.

Looking at Turkey, Mr. Baysal said that the high cost of energy remains a key challenge for Turkish mills. He noted that, in order to save energy and comply with CBAM regulations, Turkish producers have started investing in solar and renewable energy sources, which are expected to reduce production costs. Meanwhile, saying that there are no clear plans in the EU to ease green transition requirements, though delays remain a possibility, he commented that CBAM will eventually be enforced, but significant work is still needed to establish reference levels for both European and overseas mills. He added that, despite uncertainties, European producers are already moving from blast furnaces to EAFs and investing in renewable energy sources such as solar to balance costs and meet future carbon requirements.

Commenting on protectionist measures, the committee chairman stated that the Trump administration’s tariffs, reaching 75-100 percent in some cases, have nearly halted steel imports into the US, while Canada and Mexico have also imposed strong protective measures, leaving the North American market heavily restricted. Stating that he believes that protectionist measures will continue for the foreseeable future, Baysal said that further barriers against cheaper Asian steel are likely, but stressed that free trade remains the best option, though current trends are moving in the opposite direction.

Regarding prices, he highlighted that the current spread between rebar and scrap prices stands at around $200 or slightly less. He suggested that this points to a likely regression in scrap prices. He also compared production methods, stating that blast furnaces currently hold a cost advantage of about $25/mt over electric arc furnaces as the latter depend on electricity prices, though these are lower in countries like the US. On freight, Baysal noted that container freight rates have come down from post-Covid highs of around $4,000 to about $1,200, adding that he does not expect them to fall further.

Producers at IREPAS: Chinese exports and protectionism squeeze global steel industry

Murat Cebecioglu, chairman of IREPAS and also chairman of the producers committee, said that, as demand is very limited, everybody is trying to protect what is theirs. “We can sell to the EU only once every three months because of the quota and it fills up as soon as the quota is opened. Because of China we cannot sell to many places. Chinese exports are hurting everyone,” he explained. The committee chairman pointed out that China is the main driver, exporting heavily at low prices, exerting pressure everywhere amid generally limited demand. Many countries are imposing protective measures not only on China but also on some other Asian countries, considering that the Chinese are quick to move their production elsewhere to avoid trade barriers.

Regarding Turkish mills’ capacity utilization rates, Mr. Cebecioglu pointed out that, under current market conditions, utilization rates are not at decent levels and, with protectionist measures still in place, Turkey has limited space to export, with only a few countries left, and competition is very tough in those countries. He also added that the countries to which Turkey used to export have become exporters themselves and this affects Turkish production in return. Turkey’s steel production capacity stands at around 60 million mt, but the country is currently producing just 38 million mt. In addition to trade measures, China is exporting heavily all around the world and, as it is difficult to give low prices to compete with the Chinese, in the end Turkish mills have to cut production, he remarked.

Commenting on China’s work plan for the steel industry in 2025-26, the IREPAS chairman underlined that the Chinese are always coming up with some kind of plan, but it is yet to be seen how much of it will be implemented and how they will proceed. This work plan, he noted, consists of many things; regulations, environmental constraints, shutting of inefficient mills, and technological upgrading for green steel and low carbon production. In the end, future competition will depend on being cleaner, he stressed. He also commented that, if this Chinese work plan goes through, it will mean that there will be export regulations, leaving room for Turkish mills to breath.

Talking about the mega projects in the GCC region, Cebecioglu said that demand is quite good in the region and GCC-based mills are also exporting to the EU and North African countries, where they are very competitive against the Turkish mills. As GCC mills have lower costs compared to Turkish mills, they have the upper hand in prices in terms of costs.

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, emphasized that the global long products market has been slowing down in general, which is putting pressure on producers. He added that demand for reinforcing bars and wire rods remains very weak and there is strong pressure on prices from the new exporters who are in the market with very aggressive offers and who are not subject to antidumping or countervailing duty measures so far.

The IREPAS chairman said protectionism still prevails as the EU has extended its safeguard measures for another year, which is clear proof that world trade is no longer as it was defined by the Uruguay Round and will continue with its current protectionist structure, which will exert pressure on developing countries. He also added that the CBAM in the EU will replace the current safeguard measures in the region within 12 months.

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: Situation in China exerts huge impact on global market

Jens Björkman, the chairman of the raw material suppliers committee, stated that construction activities in China were slowing down, while steel production remained at high levels despite government restrictions, which has increased the demand for iron ore in the country. The high levels of steel production in China lead to an increase in its exports, negatively impacting the global market. He added that steel production in the country is expected to be cut during the winter season, which may provide a bright spot for the global market going forward, especially for Turkey which is struggling to compete with China’s competitive prices. Noting that the Chinese economy has been struggling for a while, Björkman said that the recent monetary policy easing and stimulus measures in the country to boost the real estate and steel industries will not be enough to boost demand and prices in China.

Looking at Turkey, commenting that domestic production rates are slower than last year due to difficulties such as the high inflation and the hike in interest rates which Turkish mills are facing, he noted that the industry continues to generate demand. However, the production costs from energy are expected to decline, which would positively impact steel production rates.

Focusing on scrap, noting that the US, which still outperforms the rest of the world in economic and business terms, keeps generating decent scrap volumes, while the EU will continue to generate low volumes of scrap, the chairman of the raw material suppliers committee stated that the rising volumes of ex-US scrap supply to Asia were supported by lower container freight rates.

Traders at IREPAS: EU may adjust quotas amid higher long product imports

F. D. Baysal, the chairman of the traders committee, stated that the situation has changed dramatically in the EU steel market due to high interest rates, while investments in construction and consequently steel demand and prices have moved down considerably. Stressing that the EU protects its steel market with safeguard measures, he stated that increased long product imports do not carry as much risk as the surge in flat product imports. He said that the EU may tighten future quota allocations for ‘other countries’ as the long product exports of Egypt and Algeria into the region have increased. In addition, the chairman of the traders committee stated that the subsidies provided under “decarbonization targets” will continue to increase in the  EU, which evaluates the governmental support in the other countries as unfair.Continuing with China, he stated that Chinese steel mills have not reduced steel production in accordance with government restrictions, raising concerns for global suppliers, as China’s exports will increase if its production cannot be utilized domestically. Even though he said he does not believe that Chinese mills will cut production, he added that, if they do so, it will not affect scrap imports but will reduce iron ore demand as 90 percent of the country’s steel production is blast furnace-based.

Noting that the EU continues to put pressure on Russian products with sanctions, Baysal stated that Turkey’s rebar exports have decreased as the country cannot use sanctioned Russian billets to produce products for shipment overseas. Russian billet was at first used in the reconstruction of the earthquake-hit zone in southern Turkey, while now the region’s needs are supplied by domestic production. Noting that Turkey has lost most of its traditional steel export markets, the chairman of the traders committee said that the Turkish industry needs government support as the mills are facing the US Section 232 tariffs and the EU’s safeguard measures.

Producers at IREPAS: Longs market is slowing down amid weak demand 

Murat Cebecioglu, chairman of IREPAS and also chairman of the producers committee, stated that the long steel market has been slowing down amid weak demand which is putting immense pressure on prices. He talked about the general situation in the market, pointing out that previous importers such as Egypt, the GCC and Algeria have now become exporters. Since these countries are not subject to protectionist measures for the time being, they are exporting anywhere they can, especially claiming the market share of Turkey, which is being squeezed by protectionism all over the place, he noted.

Focusing on the Turkish market, Mr. Cebecioglu said there are many unknowns for the future, while protectionism in particular is a big issue for Turkey whose exports are hindered by Canada, the EU and the US. “There are only a few markets left where there is demand and everybody is focusing on those markets,” the IREPAS chairman said. Regarding the Turkish government’s change of monetary policy and starting to raise interest rates, he indicated that this gives hope to the market, though he went on to say that the local market is doing alright, but this will depend on whether the government will continue to increase interest rates.

With Turkey facing some difficulties such as the energy crisis, high production costs and inflation, Mr. Cebecioğlu said that electricity prices are a major factor for Turkish mills and, compared to oil and gas-rich countries, competing has become impossible for Turkey. Replying to a question about possible steps by the government to support the Turkish steel industry, the producers committee chairman pointed out that, under today’s economic conditions, subsidization also leads to another problem, namely, countervailing measures.

Commenting on the longs and semi-finished imports from the ASEAN region, Cebecioğlu said that ASEAN-based mills have been exporting all around the world including to destinations such as Central America, the EU and South America, adding that, together with the newcomers, they have taken all of Turkey’s market shares.

At the opening of the conference, Murat Cebecioglu, chairman of IREPAS, emphasized that the Covid-19 pandemic has moved in a wave from Asia to America through Europe and the Middle East and has certainly worsened the market situation. He added that there has been a reduction in both supply and demand around the world, except in China where output keeps growing, and that demand in the global long steel products market is indeed not as bad as the newspapers and media outlets report.

IREPAS chairman also added that the very strong quarter seen in China and the current outlook supported by the country’s net importation of steel products have been driving the rebound. He said almost the whole market is driven by daily news and signals from China nowadays, adding that after a poor spring characterized by the idling of production capacities due to the coronavirus pandemic, we are currently in a period of recovery. But the Chairman also warned that with the ongoing political uncertainties and new threats from many corners around the globe, the overall market situation is becoming cloudy and more uncertain.

Raw Material Suppliers at IREPAS: Main savior was Chinese demand

Jens Björkman, the chairman of the raw material suppliers committee, stated that, with the start of the pandemic, prices, demand and scrap collection crashed, noting that scrap collection halted dramatically all over the world but that in some regions the steel industries were hugely affected.

The committee chairman said that, for example, in the northern EU the lockdown was less dramatic than in the southern EU, and so some raw material businesses shifted their focus to northern EU scrap-based mills. He pointed out that, once the initial effect faded, scrap prices were fairly stable from April. Looking at the summer months, Mr. Björkman said that most regions were recovering fairly quickly. He recalled that scrap prices were slightly under $300/mt in the pre-pandemic period, went down to around $220/mt, and are now back at levels similar to those before the pandemic, underlining that the main savior was China’s extreme demand for raw materials and semi-finished steel, which they imported from many regions of the world. During this period, the weakening of the US dollar also resulted in scrap prices going upwards, he noted.

Commenting on the possible impacts of the outcome of the US presidential election on the scrap markets, the raw material suppliers committee chairman said that what is important for the scrap market is investments in new melting furnaces and these capacity growth projects cannot depend on a president’s term of office. So in the long run, he said he does not expect the election to affect the steel industry, though there may be some differences in how to conduct trade.

On China becoming a net importer, Mr. Björkman said that this means China will probably have less trade frictions with the US when it comes to steel, while he sees a build-up of steel capacities outside China, namely in ASEAN countries, as being more problematic.

Regarding the outlook, while admitting that there is a lot of uncertainty about the continuation of lockdowns or possible new lockdowns, Björkman said that he is a little bit more optimistic for the demand side. The committee chairman stated that, after the initial phase of shock due to the pandemic, many have been surprised regarding the positive aspects. He added that some companies issued warnings regarding negative results, but business turned out to be better than expected in many cases, though some are still struggling.

Traders at IREPAS: Prices increase amid regional trade flow interruptions

Wilhelm Alff and F.D. Baysal, co-chairmen of the traders committee, informed the participants about the market developments during the last six months. Mr. Baysal said that market conditions in the US are stable, improving after the big shock caused by the pandemic, while capacity utilization rates are still way behind 2019 levels. He pointed out that, compared to early September last year, capacity utilization rates are still 15 percentage points lower. Regarding the construction sector, he said that the residential segment showed an improvement, though the non-residential segment is still down with little prospects of a recovery. He also said that in September prices finally saw an increase in all categories.

Mr. Baysal said that there will not be many changes regarding trade measures depending on the US election results. He said he believed that if Trump wins the US will continue filing a maximum number of AD and CVD investigations until no competition is left and that Section 232 will continue and ,while Biden may be more sympathetic to free trade, Section 232 will still remain in force if Biden wins.

Baysal also added that, for non-residential construction in the US, there will be some fundamental changes and some are already in progress. For example, as people are working from home and companies will occupy less office space, he expects a major stagnation in this market. He also expects less demand for commercial buildings.

As regards Central and South America, Baysal said that these countries are on the verge of a slow improvement in both demand and supply. Some countries such as Mexico and Brazil were hit hard by the pandemic. However, both of these countries including Argentina are exempt from Section 232, and so their supply will increase with demand coming from the US. Nevertheless, he added that he does not foresee a big improvement in terms of domestic demand in 2020.

Commenting on Europe, Wilhelm Alff said that in Germany construction continued uninterruptedly, with demand for steel being even higher than normal, as many construction sites speeded up projects worrying that they might have to shut down altogether. On the other hand, in countries such as Spain, France, Italy and Poland, demand decreased as trade flows were interrupted and consumption decreased by 10-25 percent in these areas. He noted that, after declining at the beginning of the pandemic, scrap prices have increased by $90/mt up to the present because of the regional interruption of trade flows. Meanwhile, rebar prices in the EU have increased by €60 compared to the beginning of the pandemic.

Regarding EU quotas, Alff gave some background information on the changes in EU safeguard measures, indicating that the quarterly allocation which came into force as of July 1 is an advantage, because this way the market is not flooded with all the material arriving at the same time. He said that the safeguard measures have already led to a drastic reduction in imports, and pointed out that in 2019 steel imports into the EU totaled 1.8 million mt, while in the first half of the current year total steel imports came to less than 400,000 mt.

Producers at IREPAS: Global long steel demand more or less same as before pandemic

Murat Cebecioğlu, chairman of IREPAS and also of the producers committee at the virtual event, said that the pandemic did of course worsen the market situation, reducing demand, while remarking that China has been the driving force behind the whole market and has no intention to export. He indicated that the situation in the global long products market is now unchanged compared to the pre-pandemic period; the market is stable and demand is more or less the same as it was before. Regional markets are performing well, with demand returning and EU-based cut-and-benders are quite busy. Looking at North America, prices in the US finally moved up on the back of higher raw material prices. The IREPAS chairman stated that the upward trend of scrap prices has already started slowing down, with a downward correction observed these current days, adding that producers prefer billet unless a strong spread appears between billet and scrap prices.

Commenting on whether the recent increase in Turkish rebar cargoes to the US will continue, the chairman of the producers committee said, “New shipments were booked in the aftermath of the Section 232 duty rate going back to 25 percent; that is why it looks like there is a surge. The truth is that Turkey will not be able to reach the level of exports it had prior to Section 232. When the duty rate was 50 percent, Turkey was replaced by domestic producers and other countries such as Spain, Italy and Portugal. It is not easy to recover the market shares in the US lost to other countries, especially while Turkey is still subject to AD and CVD measures.”

Mr. Cebecioğlu said that the increase in Turkey’s domestic steel consumption may be the result of the reduction in interest rates, which boosted demand for steel, providing support for the domestic market. He added, however, that he has doubts about whether this growth will persist.

There is still no clarity and no sign of economic recovery around the globe. Nevertheless, European and US production cuts at blast furnaces for extended periods have given much needed relief to the rest of the steel industry. The global long steel products market is picking up due to the production cuts, as anticipated. However, there may not be a considerable improvement in terms of the profit margins of steel producers. Current sales prices in Europe, the Middle East, North America and South America still provide inadequate margins for producers. Today, the main problem for steel producers is demand as customers are reluctant to increase their inventories due to lack of confidence in overall sentiment. The current state of the worldwide economy makes clients extremely cautious as regards every procurement or any larger restocking.

Regionalization continues, international playing field gets smaller

On the other hand, the global market is smaller than it used to be because of protectionist measures. As regionalization continues, the playing field is getting smaller for some suppliers who have been hit by high dumping margins. As such, there is no balance between supply and demand and therefore prices in the international markets are still poor.

Unhealthy situation with higher scrap prices not backed by long product demand

The other reason for the recent price increase is the increasing price of scrap, which is not healthy at all if it is not backed up by product demand. Availability in the supply chain has become thinner as manufacturing has strengthened and most regions have been positively surprised over scrap demand. The rebound in November along with production cuts at blast furnaces against the backdrop of the depressed flat steel market has boosted demand at scrap-based electric arc furnaces and thus has also raised demand for ferrous scrap.

Uncertainties may increase  

The elections in the UK in December may bring even more uncertainty depending on the outcome, while a simple tweet can also change things in a heartbeat.

EU producers squeezed by absence of North African outlet, but buffered by lack of imports

Stock levels in the EU are normal to low, and buyers are waiting for some more clarity to order to restock again. The lack of North Africa as a market is putting EU producers under pressure to find places to dispose material. As a result, the EU is becoming very competitive. On the other hand, the lack of imports into the EU market should give EU mills the chance to adjust their prices in line with increased scrap prices. Restocking may start during January and February if the scrap prices keep their vigorous levels.

China remains a force to be reckoned with, especially in Asia

China is now the major world influencer of prices of iron ore, coke, HBI, basic pig iron, slab and billet. China may still not be the major influencer in the markets for hot rolled steel sheets in coils, plates, reinforcing bars and wire rods outside of Asia, but it is certainly dominant in the Asian market. The rest of the world will have to come to terms with that fact in the current market.

China’s domestic focus and semis imports create opportunities

Thanks to good steel consumption in China, Chinese suppliers are not interested in increasing exports. As the prices of Chinese suppliers increase thanks to good demand in their domestic market, other exporters see opportunities to take over. Moreover, Chinese buying of semi-finished steel due to the winter season caps on carbon emissions has been adding steam to regions around China.

Some positive signs  

Destocking and less work in progress inventory in the US are leading to higher transaction prices, despite the political doom and gloom. Warm winter conditions along with low interest rates and liquidity in the global marketplace are among the other positive signs for the market.

Levels of competition still very high

The level of competition in the market is still very high. There is stiff competition for volumes region-wise. Nowadays, there are adequate volumes only in China. Certainly more capacity has to be idled to bring demand and supply into balance and to increase margins in the marketplace.

Scrap inventories depleted in many regions and need replenishing

As for ferrous scrap, the market seems to be playing catch up as inventories in many regions are depleted and need replenishing.

Market outlook to remain relatively stable for first quarter of new year

The market is generally stable in the last quarter of the year and the outlook for the first quarter of the new year is also relatively stable even though conditions are still challenging. As for scrap, the winter market seems to be fairly tight throughout.

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The outlook for the global long steel products market differs for the scrap industry, the steel producing industry and for steel consumers. The market can be described as generally unstable as there is still a lot of uncertainty and even a tweet may turn a lot of things upside down. We are going through a tough period particularly for BOF-based producers, especially due to increasing raw material costs. There have already been closures and threats of potential closures of several BOFs in Brazil, the
US, Scotland, China, and perhaps even elsewhere. A similar tough period was observed back in 2016, but it was not long-lasting. It seems as if the only way out is to slow down and stop inefficient facilities.

Fundamentals unlikely to support higher scrap prices, supply and demand balanced for billet

Ferrous scrap prices are also picking up, but are not expected to stay where they are now since the fundamentals do not support higher levels. Pig iron prices have seen a downward adjustment to match low residual scrap, which has not made any real gains. Overall, in the market there is an excess supply of slabs, while for billets supply and demand are balanced.

Supply increases in US amid unchanged demand

Demand in the US market for long steel products has not changed, but supply, especially from domestic mills, seems to be
increasing, thus putting pressure on prices. Domestic mills face very little pressure from imports, but, ironically, they are racing against each other to offer deals to even small buyers. On the other hand, US mills are trying to increase their HRC prices, which were unusually low. Of course, the main factor must be the closure of US Steel’s blast furnace-based mills, which have had a hard time competing while using very expensive iron ore.

Canada soon to be number one exporter to US, Mexico more cautious

Canadian mills are now offering to the US with zero duty and will soon gain their number one position as the largest exporter to the US. Mexico has made inroads in the US market, but is cautious as it seeks to avoid further antidumping action on its main products.

Very low demand in South America due to lack of infrastructure investment

The situation in the South American market is pretty much the same as last month. There was a small growth in reinforcing bar consumption in the first five months of this year, but general demand is still very low due to the lack of infrastructure investment. The rebar price level is low when one considers that the iron ore price has hit $117/mt CFR. Integrated mills have no margin to export. The only business opportunities are within Latin America, where the freight cost is less expensive.

Turkish mills’ export opportunities are limited

The EU quotas are almost used up for long steel product exports from Turkey, meaning there will not be any more Turkish sales to the EU market for a year. As a result, the supply-and-demand balance will not be in better shape than it is today for the Turkish mills.

EU market unusually quiet, domestic mills protect their margins, EUROFER not happy

The EU market is very quiet, which is very unusual for this time of the year. EU mills have been trying to move prices upwards but in vain. However, they have not been forced to reduce prices in line with developments in the scrap market and, as a result, have very good profit margins. However, EUROFER is complaining that the EU steel industry is suffering and is thus asking for further measures, which will probably make things even worse for the market. Under such circumstances, it will be very difficult to commit to any international transactions. Subsequently, manufacturing in Europe will even be harder due ot the lack of visibility, which eventually will cause considerable damage to downstream industry. Such actions by the EU have already started eroding common values, i.e., open markets, free trade, etc. EU member states may soon start accusing each other due to the inevitable consequences.

HRC prices in US prove that protectionism is not the solution

It has already been proved that protectionism is not the solution, as prices of HRC in the US are lower than in many other markets nowadays. Free and fair market rules have to be followed. There are already other ways and means to fight unfair trade practices.

No resolution in sight in US disputes with China and Iran

We still have no resolution to the US-China trade war. China is not giving in and the US has no reason to do so. Iran as an important steel producer and there is also no resolution in sight in its case. While there has been some positive sentiment after the G20 summit in Osaka, there is not much confidence because of past behaviours and sudden changes in the political arena.

Iron ore prices soar 18 percent in June, causing cuts in BOF outputs, shift to EAFs

Iron ore pricing soared by 18 percent in June on the back of strong demand and supply disruptions. Some idling of blast furnace production will mean production shifting toward scrap-based electric arc furnaces, which are extending their order books. The production cuts announced by many BOFs in the market will help bring balance to supply and demand.

Exports remain under control in China which shows increased demand for billet imports

Internal consumption in China has so far continued to keep exports under control. Any real or prolonged downturn in China will certainly change the direction of the iron ore market trend. Demand for billet imports is increasing in the Chinese market due to the high domestic production costs. The risk of China exporting steel products is absent, which helps support a balance between supply and demand. On the contrary, China is becoming a destination for semi-finished products. Going forward, we can expect continued investment in the electric arc furnace route in China.

Intense competition within regions, few markets left for exporters

Competition in regional markets is intense, but there is much less competition from deep sea sources due to protectionism. The lack of consumption pushes competition higher. There are very few markets left for exporters.

Demand in Western markets foreseen to remain slow

Demand in Western markets is expected to stay slow for the short term, but we might expect the markets to firm up during the last quarter of this year due to production costs and the anticipated slowdown in production.

Summer demand for scrap expected to be decent, with cheap prices compared to iron ore

As for raw materials, the summer will likely see some decent demand for scrap, which will mean stable pricing. The iron ore to scrap ratio is at a low point. In this respect, scrap looks cheap. The summer period in the European market will draw down scrap availability.

Foggy outlook for next quarter in an unstable market

The activity in the global long steel products market is expected to be slower than usual during the summer. In general, the market is unstable and the outlook for the next quarter is foggy.

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At the opening of the conference Murat Cebecioglu, chairman of IREPAS, said that IREPAS firmly believes in, has supported and will always continue to support free and fair trade in steel but is very concerned by the recent developments triggered by the unilateral US tariffs, which are unjustified and against the World Trade Organisation rules and principles.

The IREPAS chairman stated that, in spite of all such protectionist measures, the global long steel products market is currently in a positive mood amid good demand worldwide. He added that, had there not been protectionist actions like the additional tariffs, quotas or safeguard measures, the global business scenario would certainly be much better. Mr.Cebecioglu said that protectionism is like a virus, expanding and hurting the international trade environment.

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 : Two major events have impacted the market

Jens Björkman, chairman of the raw material suppliers committee, said that, since the previous IREPAS meeting held in September 2018 in Istanbul, two major events have impacted the raw materials market. The first of these events was the significant reduction in production by Turkish steel producers – the leading buyers of scrap in the world – and the corresponding reduction in their demand for scrap. Turkish mills’ scrap demand has stabilized somewhat since then but it still remains at low levels, a fact which scrap suppliers will have to get used to. Mr. Björkman said that most of the raw materials committee members believe that they will continue to see reductions in Turkish demand for scrap due to poor domestic market conditions in Turkey.

According to the committee chairman, the second major event that influenced the raw materials market was the iron ore waste dam collapse in Brazil, which has had a strong influence on iron ore prices. He added that iron ore prices increased by 20 percent within a short time and that prices have continued to move upwards. Mr. Björkman also touched upon some other factors affecting the raw materials market, namely, the low water levels on the Rhine which had made logistics extremely difficult and costly, leading to a slowdown in the accumulation of scrap at ports for export. He stated that the slowing down of the EU automotive sector in the last six months led to the lower availability of prime scrap for export.

The committee chairman said that there has been some buildup of scrap demand in areas such as Southeast Asia, South America and North Africa, which is balancing the reduced demand from Turkey though not entirely. Answering a question about the influence of the Section 232 tariffs on US scrap exports, Mr. Björkman said that in the past few months there have been some reductions in US scrap exports, partly because of lower import needs from Turkey and partly due to stronger demand in the US domestic market, adding that US domestic scrap demand is driving down the availability of scrap for exports.

Regarding steel production in the EU, he pointed out that it has declined somewhat in the first few months of the current year, while both demand for scrap in the EU and intra-EU trade have been active and strong.

Commenting on the financing of the scrap trade, Mr. Björkman said that, right after the currency crisis in Turkey, availability of letters of credit was tight in the country and financing costs for Turkish mills increased substantially, with the currency fluctuations making these issues much more challenging.

Traders at IREPAS: Safeguard measures have a major impact on trade

Representing the IREPAS traders committee, F.D. Baysal said that safeguard measures are having a major impact on steel trade. Referring to a question by his fellow traders, Mr Baysal commented on Turkey’s alternative markets and said that Africa will by no means replace the US and the EU as a destination for Turkish exports. Mr. Baysal said there are not a lot of places the extra supply in Turkey could go to and the only solution is reducing capacity utilization.

Answering a question regarding the potential for Iran’s billet exports, Mr. Baysal said that Iran is not likely to produce steel any cheaper than Turkey, Saudi Arabia or Algeria, while sanctions make it almost impossible to buy Iranian steel.

Mr. Baysal also stated that, while the Chinese government is taking serious measures and reducing production, Chinese suppliers will definitely not be absent from the global market but, as they are more contented in their domestic market, they will be less destructive in terms of pricing in the export markets. He added that the cut in VAT in China will help stimulate the economy.

Producers at IREPAS:  Importers have become exporters and vice versa

Mr Murat Cebecioglu, chairman of IREPAS and also of the IREPAS producers committee, said that GDP is growing in most countries worldwide although growth is slower than expected in some markets. Nevertheless, he added that things are getting better, which signals good demand. The IREPAS chairman said that protectionist measures are spreading like a virus throughout the world, changing trade flows.

He pointed out that importers have become exporters and vice versa. Mr. Cebecioglu stated that US President Trump totally destroyed the markets with tariffs and that others are following suit, starting a chain effect, increasing customers’ costs and ultimately causing economies to slow down.

Answering a question about the troubled Turkish exports, Mr. Cebecioglu said that the main export markets for Turkey have become Yemen and Israel, with the US and Canada being out of reach. However, the committee chairman reiterated that the Turkish steel industry has gone through difficult times before and will get through this one as well.

The global long steel products market is currently in a positive mood amid good demand worldwide. Had there not been protectionist actions like additional tariffs, quotas or safeguard measures, the global business scenario would be much better. Protectionism is like a virus, expanding and hurting the international trade environment as we knew it.

Canada and Mexico follow the US and also jump on the protectionist bandwagon

In the Americas, after the US, Canada has also got on the bandwagon though not with the same intensity, and now Mexico has announced that it will be reinstating the 15 percent duty on steel imports. Demand in all three countries is strong, but the benefit goes to domestic mills only.

Canada and Mexico expected to eventually sign USMCA agreement

It seems that Canada will be the first to sign the USMCA (the new NAFTA) agreement, if they agree to a quota to replace the tariffs. Politics in both the US and Canada could delay this: however, it appears that the earliest resolution could happen by late summer. Mexico’s signing of the agreement may be delayed months after the signing by Canada.

US and China appear to be moving closer to a trade deal

On the other hand, the negotiations between China and the US seem to be improving as we read reports saying that they are getting closer to a trade deal. Obviously, the markets in China and Asia are all awaiting news on the China vs US feud.

EU quotas boost domestic markets, strengthening dollar discourages imports

The recently implemented quotas in the EU are having a very positive effect on the EU producers’ capacity utilisation and increasing their margins significantly. In addition, with the US dollar gaining strength against the Euro, imports are even getting less and less attractive which further improves EU producers’ advantage in the market.

Exporters continue to suffer amid uncertainties in the global market

Both US and EU mills still enjoy good business in their respective domestic markets with margins like never before thanks to the tariffs and safeguard measures in place. However exporters continue to suffer due to the uncertainties in the global market. The market players who benefit from fair and free trade are suffering because of protectionism and the current political mood.

Demand for ferrous scrap has recovered since the start of the year

The European, US, Chinese markets are all performing well with strong domestic demand for steel which drives scrap demand. Accordingly, demand for ferrous scrap has returned since the beginning of the year. After seeing bottom levels in December, the long steel products market has started moving in an upward direction since January and is also supported by raw material prices.

Turkish long product steel mills continue to suffer

The global steel market is indeed characterized by a positive mood at the moment, but the Turkish long product mills are still struggling because of protectionism in the global market and the lack of domestic consumption.

Turkish suppliers face shrinking export opportunities

Not many markets are left in which Turkish exporters can conclude business, as both the US and Canadian markets are closed because of duties, and the new quota regime makes it difficult to do business in Europe. The GCC and Far Eastern markets are also out of reach to Turkish suppliers for the moment because of the price gap. The remaining target markets are Central and South America, North and South Africa, Israel and Yemen, but the volume that can be generated from all these countries is quite limited.

Steel mills’ margins still positive though not as good as last year

The good news is that most steel mills globally have positive margins despite all the ups and downs, even though the margins are not as good as last year. Also, despite the increase in iron ore prices, scrap prices have not moved up at the same rate.

Good domestic demand in China continues to keep Chinese exports in check

Chinese exports are still being held relatively in check thanks to good demand in the Chinese domestic market. No downward price trend is expected in the short run in China due to the additional state support for the market. Also, the outlook for a deal with the US will help to keep the Chinese economy on an increasing GDP trend. Expectations for China and the US to reach an agreement on trade tariffs toward the end of March have been driving the financial markets for some time.

Strong competition exists in the international markets not blocked by protectionism

Competition is limited and moderate in most markets due to protectionism, tariffs and quotas. The markets are having to adjust accordingly as the playground is smaller now. There is strong competition in those limited number of markets which are not closed to international market players by protectionism.

Outlook for global longs market still satisfactory despite ongoing instability

The current status of the global long steel products market is perceived as being mostly unstable due to the aforementioned reasons. Having said that and despite all the existing issues, the outlook is still satisfactory, even though it remains challenging.

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