Near the end of SteelOrbis’ annual Rebar & Wire Rod conference held January 20 in Las Vegas, tensions were high, as attendees had the rare chance to hear perspectives on the current rebar trade case against Turkish and Mexican mills from someone representing Turkish exporters. But before Namik Ekinci, Chairman of the Turkish Steel Exporters Association, took the podium, an optimistic groundwork for the US longs market was laid by the two other speakers.
Bob Risser, President and CEO of the Concrete Reinforcing Steel Institute (CRSI), opened his speech by informing everyone in the reinforcing steel business that they’re really in the concrete business. The CRSI aims to bridge that gap, Risser said, and urged attendees to shape the future of the market rather than just “letting it happen to us.” The association is following this strategy by developing its own set of standards for downstream reinforcing steel, and also by focusing on target markets and game-changing opportunities. Healthcare, education, and office buildings are all end-use sectors with a high level of potential future activity, said Risser, but above all, the US needs a long-term, well-funded highway bill, as infrastructure accounts for 25 percent of the reinforcing steel market. But aside from end-use possibilities, Risser touched on a certain emerging technology as the biggest game-changer in the market: voided slabs. Because voided slabs involve hard plastic balls taking up most of the space, the technology can accomplish much bigger spans of concrete than what standard reinforced concrete is able to. While voided slabs are not commonplace quite yet, Risser still sees demand for rebar on a strong uptrend; CRSI forecasts an increase in rebar consumption in the US to reach 8.2 million tons this year, thanks to pent-up demand in the construction sector.
Burke Byer, President and CEO of Byer Steel, was not as entirely optimistic as Risser, pointing out various concerns for the independent steel producer/fabricator while still expressing hope. Byer claimed that US domestic steel consumption was only up 1 percent in the last two years while production was down 1 percent--and the gap represents an opportunity for imports. Overall, said Byer, the US imports about 30 percent of the steel the country consumes, and the more the problem of global overcapacity grows, so will the margins between import and domestic prices, as foreign mills get desperate to unload steel elsewhere. He noted that US mills could help boost consumption of domestically-sourced steel by increasing capacity utilization, but the rate has stagnated in the low 70 percentile since the end of the economic crisis. Nevertheless, Byer said, the US still has several advantages over other steel-producing countries. Access to raw materials, top-notch technology, increasing energy efficiency, and high productivity will carry US steel producers into the future, despite global dynamics.
Finally, Ekinci took the podium to declare that Turkish steel producers desire a free and fair global steel market, and in no way believe they are harming US rebar producers. In fact, Ekinci pointed out, the US is not even Turkey’s main market for exports--the Middle East is, exemplified by the fact that all the rebar used to build the world’s tallest building, the Burj Khalifa in Dubai, was produced in Turkey. While he claimed the US is too “protectionist”, he insisted that Turkish steelmakers do not receive any subsidies from the government, and there is no way Turkish rebar imports are injuring the US market because the US has many advantages—most of them the same as described by Byer earlier, emphasizing the fact that the US has all the scrap it wants in its own backyard, while Turkey has to import most of the 32.5 million tons of scrap it consumes each year. Ekinci said he expects the antidumping/countervailing duty investigations to be canceled, as such cases do more harm to the overall global market than they aim to fix. But this explanation was not satisfying to some in the audience, who pressed Ekinci further during the Q&A session after the presentations. One attendee asked how it was possible for Turkey to buy scrap from the US and send it back as cheaper rebar. Ekinci answered--to much laughter--that profit margins in the US are too high, and Turkish producers are satisfied with smaller margins. Byer even joined in, asking if the subsidies were not direct, but perhaps the result of Turkish mills selling at a loss, and then the government subsidizing the loss. But Ekinci said that this is not possible--Turkish mills are not that punitive. Additionally, subsidies are not even legal in the Turkish market, based on the terms of Turkey’s treaty with the European Union. Finally, someone else in the audience pointed out the VAT, which allows a Turkish producer to be rebated 18 percent when it exports steel. Ekinci stated this was not considered a subsidy, but even so, without it they would find it difficult to export steel to the US.