Deviations in trade flows are challenging markets and spurring mills to maintain production discipline, speakers said at last week’s Eurometal International Steel Trade Day in Antwerp, attended by Kallanish.
Logistics companies increasingly “may have to go to countries with no previous relations, and we may have to pay an entrance fee for that, as they are not awaiting us”, said Gina Sventers of Conti-Lines. As an example of redirected trade flows, she pointed at the advantages for mills in the Middle East, with their lower costs for natural gas used in production. “One Far Eastern buyer in recent months bought half a million tonnes of rebar from GCC countries, which they normally used to buy from Turkey,” she said.
A Turkish observer, Tayfun Iseri of flat steel association Yisad, noted that mills “need to learn to cut production, rather than prices, when the market is low.” He cautioned that “the lower the prices, the more customers will wait for even lower prices.”
He recalled the market turmoil in 2015, when Chinese sellers exported a six-digit tonnage of coil to Europe. “They wasted us and themselves until their government stepped in and put an end to it,” he reiterated. “Back then, we sold coil below the price of billets.”
Christian Koehl Germany