“Will scrap be the new gold?” asked Turkish Flat Steel Import, Export and Industry Association (Yisad) chairman Tayfun Iseri. “I’m not sure.” Technological innovation will see alternatives developed to scrap in future, he predicted.
Decarbonisation and CBAM, meanwhile, are just new means of “protecting their own”, he said in reference to EU authorities. In the past, the EU has levied anti-dumping or countervailing duties, but “this will be thrown out of the window” after the huge subsidies being given to EU steelmakers to decarbonise, Iseri added.
“I think protectionism is self-defeating,” observed Marcel Genet, founder and president of consultancy Laplace Conseil. “What we forget is that if we don’t do something with steel, the product has no value.”
He emphasised scrap trade restrictions are unlikely. “It’s pure nonsense for countries to limit trade when it is more efficient to do it in one place than the other,” he noted. “Turkey is not trying to steal scrap from the EU or US. They are very nice to create an outlet for countries that do not have capacity to consume their own scrap.”
Moreover, monthly price negotiations between scrap suppliers and steelmakers must be scrapped and all parties should work towards the goal of maximising steel recycling, he added.
“Regulation will not move needle, the scrap industry itself will. More scrap will be kept in Europe, knowing that demand for it is increasing. So yes, there will be less available for Turkey but it is not regulation that will cause it,” said McKinsey senior expert Steven Vercammen.
Turkey’s dependence on scrap imports is a big problem, meanwhile. The country must “reengineer its capacities and type of steel it is producing,” noted Muammer Bilgic, managing director of Bilecik Demir Celik. CBAM and environmental regulations will hit Turkish steelmakers, with its integrated mills likely to soon lose competitiveness.
Scrap shortages are unlikely to be a problem in the next ten years, Iseri observed. China could enter the scrap export market, while consumption of steel will decline in the coming decades. Car owners are holding onto their vehicles for longer, and car ownership in general is decreasing. “That’s why I’m saying scrap may not be the new gold,” he concluded.
Adam Smith Poland
