The wave of global safeguard measures is likely to cause a shift from a globalised market to more localised markets, analyst Matt Watkins said at Eurometal’s Steel Trade Day in Rotterdam attended by Kallanish.
Regarding the immediate trade war between China and the USA, he believes that the two powers will find a deal to clarify the situation sooner or later. In the longer run however, steel sellers will not be looking for international opportunities as much as they used to. And this will lead to overcapacities as people have to rely on their local mills, he said at the meeting entitled ‘The Paradigm Change in the Global Steel Supply Chain’.
In detail, he observed that cheap steel for the EU is not coming so much from Turkey these days as it is originating from India. “We have seen many Indian imports, partly for seasonal reasons: high inventories in India plus the monsoon period, which is slowing down local activity, therefore more imports,” he said. And there may be a change ahead. “Recently, it was mostly hot-rolled coil because these new capacities built up faster than for cold-rolled. So, we may see less import of HRC next year, but more CRC,” Watkins continued.
Also, the possibility of a carbon border adjustment in which the EU is imposing CO₂ costs on exporting countries may hit nearby suppliers of slab. “Much of European steel is based on a re-rolling model, and that could affect the main slab suppliers Russia and Ukraine,” he added.