Leader of various Irepas committees envision more regionalisation, and less globalisation, of scrap flows, with European markets currently underperforming, Kallanish hears while attending the organisation’s spring conference in Berlin.
Evaluating the regions separately, producers committee chairman Murat Cebecioglu from İçdaş Çelik finds that market conditions are more optimistic in the GCC, Saudi Arabia and Kuwait given the new big infrastructure projects that are expected to direct producers to their domestic markets. Egyptian market conditions are getting better as the currency issue has mostly been solved and inflation is expected to drop, although the Suez Canal crisis continues to cause trouble.
Cebecioğlu says inflation is under control in Italy, there is Turkish and Italian competition in Greece and demand is still weak in Spain and Portugal. Housing in general is an issue in the EU.
“High interest rates and inflation are causing problems in many regions in terms of demand. I am afraid China’s exports will reach 2015 levels this year although the number of export markets is limited this time due to increased protectionism,” observes Cebecioğlu. He expects European safeguard measures to continue for another two years as already 14 countries applied for the extension of the quotas.
Responding to a question regarding the increase in Turkish steel production in the first quarter of 2024, Cebecioğlu states that exports to the EU contributed to the improved sales this year.
Raw material suppliers committee chairman Jens Björkman from Stena Metal says scrap generation in the EU is down by 15-50% depending on the region due to slow economic conditions although the market is hopeful for improvement after the start of expected interest rate cuts.
“Scrap flow will change significantly in the next 10 years and we will see more regionalisation and less transportation to far distances. Steel producers have already started looking for alternatives such as HBI, DRI and pig iron,” observes Björkman. He expects European scrap exports to Turkey, which has a significant demand for scrap, to drop with he arrival of the carbon border adjustment mechanism.
Björkman noted that the market feels fairly comfortable at scrap prices at $380-400/t and the generation might improve in the US as the US economy is doing well. He expects higher demand to continue in India.
“Global trade is becoming more local trade,” adds traders committee chairman F.D. Baysal from Seba International. Baysal notes that there are only limited markets left for Turkey with possibilities of Africa, Syria, Iraq, Eastern Europe and Yemen. He observes that the US market is showing healthy and steady growth while the EU market is the slowest among all. He also expects the quantity of Chinese exports, which increased 14% year-on-year in the first quarter, to continue growth this year.
“Nobody can compete with China at price,” contends Baysal.
Commenting on Turkey, Baysal says there is not much Turkish producers can do on their own and the Turkish government should get involved to lift current barriers.
Burcak Alpman, Turkey
