Category: Latest Updates

At the first session of EUROMETAL Steel Day & YISAD Flat Steel Conference, held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Ayhan Uçar, procurement manager of Turkish steel producer Tatçelik, commented about the current situation in the steel industry and shared his expectations.

Stating that his company has an annual production capacity of 1.5 million mt at its three production plants in Ereğli, Mr. Uçar stated that the company’s galvanized steel capacity will increase with the commissioning of a new line with an annual 650,000 mt capacity in June this year, in addition to the existing 800,000 mt of galvanized steel capacity. The new line will enable Tatçelik to coat steel up to 4 mm thick and produce galvanized steel with widths over 1,600 mm. Adding that Tatçelik exports steel to more than 70 countries, he said that the company’s export percentage will increase to 60-70 percent this year, compared to 40-50 percent last year. In addition, as the company aims to meet its energy needs with its own electricity production, Uçar said that Tatçelik has invested over €60 million in solar and wind power plants.

He pointed out that Turkey’s flat steel production and consumption in 2023 totaled 13.68 million mt and 19.68 million mt, respectively, while indicating that 48.2 percent of flat steel consumption was met by imports despite duties and the production capacities in Turkey. The country’s exports decreased especially for hot rolled coil and cold rolled coil, he noted.

Meanwhile, anticipating that the population increase in India, where steel consumption was lower previously, will result in a hike in steel consumption, Uçar said he expects India to become the main steel supplier for Europe, with the higher steel production in the country.

Stating that energy, iron ore and coal prices will decline with the approaching summer season, the Tatçelik representative said that steel demand, which will move sideways in the next two to three months, will increase from the middle of the third quarter this year with the start of new and postponed projects. Saying that the scrap will be more valuable in the medium-to-long term amid the green transition, Uçar noted that Turkey, which produces steel via electric arc furnaces, may face scrap supply issues. In addition, regarding Turkey’s ongoing antidumping investigation into HRC from four countries, Uçar commented that the potential dumping margins could widen the gap between local and global prices, pointing out that the gap between the prices increased to $100/mt with the hike in duties.

At the EUROMETAL Steel Day & YISAD Flat Steel Conference, held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Hakan Aran, general manager of of Turkish bank İş Bankası shared with the participants his evualation of the effects of global inflation on the Turkish economy and his recommendations for the steel industry and possible solutions.

Mr. Aran started his speech by saying that economic plans were completely disrupted by the Russia-Ukraine war in 2022 and the February 6 earthquakes in Turkey in 2023, and he said that he wished that this year, which is the 100th anniversary of İşbank, would be a more comfortable year for the market. Stating that one of the main reasons for global inflation is the way the 2008 crisis was resolved, Mr. Aran underlined that issuing too much money into the market as a way out of this crisis and then resorting to monetary expansion, and also given the impact of the pandemic, led to global inflation. He stated that Turkey lost control of inflation by twice and being “stubborn” about its economic policy. Aran said that they expect the next two years to be economically difficult after 2023 when inflation was on the agenda as the first problem. “The global economic congestion will continue for the next two years. However, do not be pessimistic about the 4.5 percent monthly and 67 percent annual inflation announced yesterday. The worst period is over. The period between May 31, 2023, and May 31, 2024 will be remembered as the historically worst period in Turkey in terms of inflation, impacted by the general elections in May 2023. We think that we will close this year with annual inflation of 40-45 percent. The tight monetary policy implemented will be further strengthened by the decisions to be taken in fiscal policy in April, and this will contribute to the achievement of medium-term inflation targets. In this regard, we estimate that annual inflation will decrease to 22-25 percent by the end of 2025, and again to 10 percent by the end of 2026,” Aran said.

Sharing his evaluations and suggested solution for the steel industry, Aran stated that China turned to exports as a result of the contraction in domestic demand, affecting the export sales of all other countries, and surpassing Turkey in the European market. He underlined that Turkey’s steel exports decreased and its imports increased in 2023, and that production lagged behind consumption in both the flat and long product segments for the first time since 2012. Stating that he expects this situation to be reversed in 2024 and 2025, Mr. Aran said, “In this difficult period, it is important to focus on projects related to energy and labor efficiency and to see this congestion as an investment opportunity. The smartest thing for the Turkish steel industry to do would be to combine energy efficiency with green transformation and implement the requirements of the carbon border adjustment mechanism that will start in 2026, thus not being affected by a possible tax on exports and being able to participate in competition while demand is recovering,” he said. At this point, the İş Bankası official said that his bank has created an investment loan and with its own resources to ensure that production and investments in Turkey do not stop and to prevent exports from decreasing. In this context, he stated that investors can obtain a loan of TRY 100-800 million from the bank with a two-year grace period, a 10-year maturity period, 20 percent of which will be financed from the equity capital of the buyer and 80 percent of which will be financed by the bank, at 35 percent interest. Aran underlined that, in this way, the next two years can be well utilized in terms of investments.

At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis and with nearly 300 participants, Metin Tayfun İşeri, chairman of Turkey’s Association of Flat Steel Exporters and Manufacturers (YISAD), and EUROMETAL board member Alexander Julius, made the opening speeches.

Tayfun İşeri stated that safeguard measures have shaped the last five or six years of global iron and steel trading. While producers were considering globalization before, they have now started to focus on regionalization. According to Mr. İşeri, the Section 232 measures that entered into force with the approval of the former US President Donald Trump in 2018 led to the regionalization, and the EU had to bring in quotas on steel trading in line with this, though reluctantly. US producers took advantage of this period, the YISAD chairman said, by making more investments than before, commissioning over 10 million mt of new steel capacities and replacing old facilities with new and modern ones. Even though the EU fell behind, they have started to invest in green production and electric arc furnaces as part of the Carbon Border Adjustment Mechanism, and the EU governments have funded their local producers. In the meantime, İşeri said, the geopolitical unrest in the Middle East that began towards the end of 2023 changed and affected trading despite the opportunities. After the Suez Canal was shut down and the Panama Canal limited the number of vessels passing through, many issues surfaced. He added that several factors such as inflation and high interest rates will continue to affect demand this year.

The second welcome speech was given by Alexander Julius, EUROMETAL board member and managing partner of macroMETAL. He talked about the mission of Eurometal, giving some organizational details, including scope of their operations. He also added that Turkey is a precious source for the steel industry in Europe.

Mr. Julius added that EUROMETAL is very glad to have Turkey as a partner, as it is one of the major steel exporters to the EU. Although last year the steel export volume of Turkey to the EU was down 36 percent due to safeguard duties, AD duties and energy costs, in 2023 Turkey was still the second-biggest source of steel imports for the EU, with a total of 3.33 million mt. Furthermore, Turkey is very committed to the decarbonization issue, with 72 percent of Turkish steel production being EAF-based. Thus, its advanced technologies in this field make it a big player in the steel industry and a great supply partner for EUROMETAL.

Source: steelorbis.com

Some of the press articles that emerged from this event:

• Prof. Roland Döhrn: Economic environment for steel sector remains challenging
• Anthony de Carvalho: Excess capacity makes decarbonization efforts more difficult
• Veysel Yayan: Turkey’s exports expected to increase in 2024
• Ayhan Uçar: Scrap will be more valuable during green transition, Turkey may face scrap supply issues
• Hakan Aran: Worst period for inflation in Turkey is over
• Turkey 2024 steel production seen similar to 2021 levels
• Global capacity growth set to ‘flood’ market with higher emissions steel: OECD
• Turkish Tatcelik to start new galvanized line in June
• Turkish steel exporting body calls on EU to stop ‘double standards’ on trade rules

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Mills in Northern Europe kept their official offers in the range of €730-750 ($791-813) per tonne ex-works, but they still gave discounts on firm bids, Fastmarkets heard.

Demand for HRC remained sluggish; buyers continued to postpone restocking, waiting for further price drops, market sources said.

No major deals were heard in the market.

Sources estimated tradable prices in the range of €700-730 per tonne ex-works.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €715 per tonne on Monday, down by €0.50 per tonne from €715.50 on Friday March 1.

The index was down by €3.75 per tonne week on week and by €46 per tonne month on month.

Mills might have to cut output to stop the downtrend in prices, several buyer sources in Germany said.

“Demand is unlikely to rebound [soon],” one German buyer source said.

Mills would probably need to cut production due to low demand and falling prices, a buyer source from the Benelux area said.

“But [trimming production] will not happen immediately because some mills have just restarted operations. They will need a few months or even half a year to take such a decision,” the buyer source added.

Several European steelmakers restarted blast furnaces in early 2024 that were idled in late 2023, Fastmarkets reported previously.

In Southern Europe, Fastmarkets’ daily steel HRC index, domestic, exw Italy was calculated at €694.00 per tonne on Monday, down by €13.92 per tonne from €707.92 per tonne on March 1.

The index was down by €21.50 per tonne week on week and by €61 per tonne month on month.

In Italy, HRC offers were heard mainly at €700 per tonne ex-works and some buyer sources reported even lower offers at €680-690 per tonne ex-works.

But other industry sources could not confirm that offers below €700 per tonne ex-works were widespread in the spot market.

According to Fastmarkets’ sources, these lower prices might be offered to clients such as big stockholders and steel service centers for more significant tonnages.

“I cannot say prices below €700 [per tonne ex-works] are widely available in the spot market now, but we are moving in that direction,” a distributor in Italy said.

Tradable prices for HRC in Italy were in the range of €680-700 per tonne ex-works, market sources said.

Import offers from Vietnam to Italy with May shipment and end-July delivery were heard at €610-620 per tonne CFR.

Similar offers were heard from Egypt for June-delivery material.

India was also offering HRC at similar prices, but the country’s utilization of EU’s import quotas was uncertain, because European buyers have already purchased significant quantities from India, Fastmarkets heard.

Sales of India-origin HRC for first- and second-quarter delivery to Europe amounted to more than 850,000 tonnes, according to buyer estimates.

The EU’s January-March import allowance for India-origin HRC was 574,440 tonnes, including 279,777 tonnes rolled over from the last quarter of 2023. The April-June import allowance was 294,662 tonnes.

Published by: Julia Bolotova, Darina Kahramanova

fastmarkets.com

The Director General of EUROMETAL, Ricardo Silva, visited last week the long products service center and proximity multi-product stockholding distributor TIRSO CSA in Santander and the Tata Steel Layde flat service center in Durango.

During the visit to the TIRSO CSA facilities, it was possible to meet and exchange with the president of the Spanish federation of distributors UAHE and member of the EUROMETAL presidency, Roberto Gongalez.

TIRSO CSA covers the distribution of certified steel products and custom supplies, by performing oxyfuel cutting, plasma cutting, longitudinal cutting, drilling, shot blasting and painting of steel parts and structures. Equipped with modern cutting lines, it has an area of ​​25,000 m2, of which approximately 12,000 m2 are under cover. The company is present in Cantabria, Gran Canarias, Tenerife and Asturias.

During the meeting, it was possible to address the context of steel distribution in Spain but also to reflect and prepare the meeting of the National Federations members of EUROMETAL, to take place later in the year 2024.

The visit to Durango allowed us to meet with the managing director of Tata Steel Layde and president of EUROMETAL, Fernando Espada.

Layde managing director told us about the long history of this Bizkaia service center in northern Spain and the various processes such as slitting lines, cut-to-length, pickling, annealing, skinpass, cold rolled services and sendzimir rolling technology supplying to different and demanding sectors like automotive, industry, construction, home appliances and furniture.

This meeting also made it possible to prepare the first meeting of the EUROMETAL presidency, to be held on April 11, 2024 in Santiago de Compostela and address various pending issues related to the day-to-day life of our federation.

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