Day: 26 August 2022

The Turkish steel sector has stepped up discussions on billet and raw material imports from Russia, fearing the risk of retaliatory sanction, although sources told S&P Global Commodity Insights that there are currently not many other options for Turkish producers.

“Especially our long steel producers could face sanctions, which are producing rebar from Russian billet,” Turkish Steel Exporters’ Union Vice President Ugur Dalbeler said in an Aug. 25 statement, highlighting that Canada had already started a circumvention investigation into this.

“The US and EU could also join this move,” he said, adding that this could “seriously” harm Turkey’s steel sector.US Deputy Treasury Secretary Wally Adeyemo warned Turkish Deputy Treasury and Finance Minister Yunus Elitas over the weekend that Russian entities and individuals were attempting to use Turkey to bypass sanctions on Russia, with a warning letter also sent to industry and business association TUSIAD on the subject.

One Turkish trading company manager told S&P Global that nearly all steelmakers in the country prefer to buy their semi-product and raw materials needs from Russia as this represents the “best and cheap supply option.”

“I don’t think that Turkey could easily stop trading activities with Russia,” he added.

Turkey’s semi-finished product imports from Russia totaled 1.79 million mt in H1, up 20% year on year on cheaper Russian billet offers, while scrap imports from Russia dropped 62% year on year to 408,000 mt due to the Ukraine war, according to the latest Turkish Statistical Institute data.

One manager at a flat steelmaker said that alternative scrap and billet supply options would be costly and further harm mills’ competitiveness.

However, a Turkish long steelmaker manager said low-priced semi-product imports from Russia were pressuring Turkish finished product prices, meaning that if Russian suppliers stepped back, some of this pressure could be relieved.

Platts, part of S&P Global, assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $402/mt CFR Aug. 24, stable on the day.

— Cenk Can

The UK has placed a 25% safeguard tariff on some steel construction products sold into Northern Ireland, HM Revenue and Customs informed industry players over Aug. 24-25.

The tariff affects construction steels, such as beams and reinforcing bar, and has come into effect after import quotas of the product to the European Union were filled.

As part of the Brexit trade agreement’s Northern Ireland Protocol, all goods going to Northern Ireland are subject to EU tariffs if they are “at risk” of making their way into the EU, and any goods subject to EU trade safeguards are automatically considered in this category.

The news was opposed by industry association UK Steel, with Director General Gareth Stace saying in a statement emailed to S&P Global Commodity Insights Aug. 25 that it was “beyond farcical that UK producers are now prevented by these tariffs from selling goods to customers in their own country.”

At the same time, EU steel producers could continue to export the same goods tariff-free throughout the UK, something that was not allowed in the opposite direction. Stace said.

“Consequently, much steel that would have been supplied from UK steel producers will now have to come from the EU,” he said. “At a time of looming recession, this is surely madness.”

Stace said that the UK government had been aware of the possibility of this issue since the start of 2021 and had kept it at bay until now with a makeshift solution.

However, the temporary workaround was no longer workable for some constructional steels due to recent changes to the EU’s steel safeguards.

In June, the EC released official definitive plans to introduce global quotas for some products, including product category 17 — including angles, shapes and sections — and continue steel safeguard measures to 2024.

“It is essential that the government acts immediately to suspend these tariffs and gets round the table with the EU to implement a lasting and workable solution.” Stace said.

In an emailed statement to S&P Global, a British Steel spokesperson said Aug. 25 that it was “staggering” that UK steelmakers had to pay tariffs of 25% to move steel between two locations in the UK.

“Brexit was supposed to give us new freedoms and enable us to better protect UK businesses, allowing companies like ours to flourish in a new trading environment,” he said.

“The UK government has long been aware of our position on this matter and the detrimental impact it will have on our business. We urge it to act now and resolve this critical issue,” the spokesperson added.

Tata Steel UK and Liberty Steel UK declined to comment on the tariff, however, the latter’s sales to Northern Ireland are limited.

The UK steel sector produces 7.2 million mt/year of crude steel, around 70% of the UK’s annual requirement.

Platts assessed the weekly UK hot-rolled coil price at GBP695/mt DDP West Midlands Aug. 19, down 16.3% from the start of 2022.

— Jacqueline Holman