China may continue to be a threat to global steel industry in 2024: TCUD

China may continue to be a threat to the global steel industry in 2024, including the Turkish steel sector, due to the possibility that it could continue focusing on export markets with subsidized prices arising from insufficient growth in its own market, Turkish Steel Producers’ Association said in a statement.

Stiff competition by China in some of Turkey’s main export markets restricted Turkish mills’ market shares in 2023, while low-priced inflows from China into the Turkish steel market pressured domestic mills’ steel pricing and output, the association said in a statement seen by S&P Global Commodity Insights Feb. 29.

The rise seen in steel imports from China was despite the anti-dumping (AD) investigation opened by the Turkish Ministry of Trade on Oct. 31, 2023, against imports of hot-rolled coil from China, India, Japan and Russia.

The result of the investigation, which is expected to be announced in the coming months, could limit import volumes in 2024, according to industry sources.

Meanwhile, Turkey’s crude steel production fell 4% year on year in 2023 to 33.7 million mt, TCUD data showed, owing to slow demand and stiff import competition that pressured Turkish mills’ prices and output.

Turkish steel producers, however, are aiming to exceed the 15.2 million mt steel export volume in 2022, which is also expected to support their output volumes.

Turkey’s steel exports already increased notably by 23% on the year to 895,000 mt in January, the recent TCUD data showed.

“The rise in high quality steel investments in Turkey in recent years, like stainless steel, armor steel as well as railway wheels, supported January steel exports,” the association said.

Turkey’s flat steel exports increased substantially by 89.1% year on year to 348,000 mt in January, while long steel exports rose only 2% to 537,000 mt due to shipping disruptions in the Red Sea, TCUD noted.

According to TCUD data, the steel export/import coverage ratio of the Turkish steel industry rose to 61.6:100 in the first month of 2024 from 55.1:100 a year prior amid the rise seen in export volumes.

The association is expecting the increase in Turkish mills’ steel exports to continue in the coming months, with interest rate cut expectations in the EU as of the second quarter of 2024 to support steel demand in Turkey’s main steel export destination.

Slowed demand both in the domestic and export markets, however, has put pressure on Turkish mills’ steel pricing in recent weeks.

Platts last assessed the Turkish HRC steel price at $680/mt ex-works Feb. 23, down $10/mt on the week in a slow market, according to S&P Global data.

Author: Cenk Can