In his speech at the SteelOrbis Market Talks held at the Wellborn Luxury Hotel in Kocaeli with the sponsorship of Turkish flat steel producer Yildiz Demir Celik, SteelOrbis general manager Murat Eryılmaz stated that iron ore prices are not likely to strengthen much, citing the rapid decrease in iron ore prices in August, down from a level of $120/mt caused by supply concerns driven by the Vale dam accident at the beginning of this year. Mr. Eryılmaz stated that the underlying reason why iron ore prices will not show any significant increase is that economic growth in China will slow down further due to the escalating US-China trade war and that demand for iron ore slackened following the concerns about infrastructural investments coming to a halt. As for coal prices, Mr. Eryılmaz pointed out that, driven by lower demand from China, coal prices have decreased sharply, adding that coal prices, which were recorded at $150 recently, are not likely to rebound.
As for scrap, which is the key raw material for Turkey, the SteelOrbis general manager said he expects import scrap prices, which had declined to $256 as of September 4, to weaken further, stating, “Demand for scrap is strong in the US, there has been a serious cost advantage due to the depreciation of the euro against the US dollar driven by the parity adjustments in Europe. As for the Baltic region, there is an export quota implemented by Russia. This quota will affect scrap from St. Petersburg in the Baltic region, but it will have no influence on countries like Finland and Sweden. There is also an exchange rate advantage for ex-UK scrap. Supply pressure is too strong, while demand is slackening continuously.”
Commenting on the import quota adjustments offered by the EU, Mr. Eryılmaz said the restriction of sales from any single country to 30 percent of the overall HRC import quota is totally targeted at preventing Turkey’s deliveries to the EU. He also stated that the sector is not able to find a solution for this problem on its own, and therefore the governments should step in.