Orbis Turkish Scrap Forecaster – November 2017

 

 

What happened in the last 3 months?

August 2017 - November 2017 HMS I/II 80:20 CFR Turkey Prices

 

Weekly price movements of different steel products and grades in major markets can be viewed comparatively in the SteelOrbis Historical Steel Prices section. Market trends can thus be seen more clearly, while desired charts can be created and used in reports or presentations.

All charts included in the Orbis Turkish Scrap Forecaster are for HMS I/II 80:20 CFR Turkey prices, while prices and charts for other scrap grades and regions can be found on our website.

Summary:

  • Uptrend of scrap prices comes to an end in August

Having started to move upwards in mid-June, import scrap prices in Turkey reached their highest level of the last three years in mid-August, before switching to a sideways trend towards the end of August due to factors including the softening of raw material and finished steel prices in China, the weakening of domestic finished steel demand in Turkey and also as Turkish mills reduced their demand for scrap due to the approach of the Feast of Sacrifice holiday.

  • Turkish domestic finished steel demand slows down in mid-August

Having begun the month of August on a rising trend, Turkish domestic finished steel prices softened in mid-August as demand slowed down since buyers did not want to build up inventories ahead of the Feast of Sacrifice holiday. Subsequently, in the second half of August Turkish domestic finished steel prices mostly moved sideways, though with occasional fluctuations due to the fluctuating trend of Chinese raw material and finished steel prices and the fluctuations in the US dollar-Turkish lira exchange rate.

  • Turkish mills’ demand for scrap remains weak in September, import scrap prices decline

In September, the Chinese authorities announced that during the winter season (November 2017-March 2018) production cuts would be implemented and that work on public projects would be suspended,  within the scope of measures to reduce air pollution during the winter. Accordingly, steel futures prices and raw material and finished steel prices indicated sharp declines. Domestic steel demand in China remained weak as buyers’ inventories were already at high levels and they were reluctant to add to their inventories ahead of the National Day Holiday in the first week of October. This resulted in the soft trend of Chinese steel export prices, causing buyers in the global market to slow down their purchases. In this context, Turkish mills’ demand for scrap remained weak throughout September. Import scrap prices in Turkey started to decline after the first week of September and continued to decrease during the remainder of the month.

  • Finished steel in global market fails to recover in September

With Canada revising its antidumping margins for rebar imports for some Turkish steel mills to zero and initiating a minimum import price instead, Turkish mills succeeded in concluding sales to this destination in early September. However, during the given month, buyers of Turkish finished steel in the domestic and export markets decided to postpone their purchases as Chinese semi-finished and finished steel export prices softened and so demand for Turkish finished steel in the global market remained weak in September.

  • Import scrap prices in Turkey move on fluctuating trend in October

In the first week of October, import scrap prices in Turkey moved up slightly in line with increased demand from Turkish mills, though they then started to decline as the soft trend of Chinese steel prices following the National Day Holiday (October 1-8) in China gave rise to concerns in the global market. In the last week of the month, import scrap prices in Turkey increased again amid rising demand.

 

 

October: Forecast vs Actual Situation

Scrap HMS I/II 80:20 CFR Turkey

In the Orbis Turkish Scrap Forecaster for October this year, we had predicted that the slackness of Turkish mills’ demand for scrap would come to an end as of the middle of the month as their scrap purchases had been falling short of meeting their needs, and so we predicted that import scrap prices would move up. We also expected a positive outlook for Turkish steel exports - and hence also for Turkish mills’ scrap demand - as Chinese suppliers were not foreseen to exert any pressure on the global market, but would instead focus on their domestic market after the National Day Holiday, ahead of the production cuts scheduled for November. Although import scrap prices in Turkey followed a fluctuating trend in October, price levels at the end of the month were exactly in line with our predictions. The more radical scenarios which we omitted and which resulted in the fluctuating trend of scrap prices are listed as follows:

                a. The visa row between Turkey and the US resulted in a significant depreciation of the Turkish lira against the US dollar during October and caused Turkish domestic finished steel demand to remain weak.

                b. Although Chinese suppliers returned to the market amid an brief initial improvement of domestic demand after the National Day Holiday, on the same day (October 9) both demand and steel prices in China indicated rapid declines due to a sharp drop in steel futures prices caused by announcements in China that production cuts and suspensions of public projects would be implemented immediately.

Although Turkish mills started to purchase scrap in the first week of October, expecting that the Chinese domestic market would pick up after the holiday, in the second week of the month the abovementioned events resulted in reduced scrap demand from Turkish mills and their demand for scrap remained weak until the last week of the month.

In the last week of October, Turkish mills, whose scrap purchases had heretofore fallen far short of meeting their needs, were convinced that they could not in any case achieve their desired scrap price levels due to increased freight rates and so they stepped up their demand for scrap, thereby causing import scrap prices in Turkey to increase again.

As a result, as of the end of October, the deviation between our forecast price and the actual price of import scrap stood at 1.1 percent.

The conditions which impacted the import scrap market in Turkey in October are as follows:

  • US domestic scrap prices move down

Amid weak demand from Turkish mills in September, US scrap export prices indicated sharp declines, while scrap supply in the US domestic market was at sufficient levels given the lower-than-expected scrap demand from US mills. Consequently, US domestic scrap prices moved down by $26-56/mt CFR in October compared to the previous month, depending on the region and grade.

  • Turkish mills adopt cautious stance on scrap purchases in October

Turkish mills slowed down their scrap purchases as of mid-August, while they subsequently stepped up their demand for scrap in early October, which coincided with the Chinese National Day Holiday. However, as Chinese suppliers returned to the global market with lower prices after their holiday, Turkish mills had to adopt a cautious approach towards scrap purchases and so their demand for scrap remained weak until near the end of the month. In the last week of the month, Turkish mills’ demand for scrap picked up slightly as their scrap needs increased and as it was proving difficult for them to find scrap at the desired lower prices amid rising freight rates.

  • Import scrap prices in Turkey remain under pressure during October

Although Turkish mills’ rebar export sales picked up slightly during October, the US dollar strengthened significantly against the Turkish lira amid recent political developments, negatively affecting Turkish mills’ domestic sales and also preventing any recovery in rebar prices. In this context, import scrap prices in Turkey rose slightly in the first week of October in line with demand; however, they declined later due to pressure from buyers, before starting to rise again at the end of the month amid higher freight rates.

  • Scrap collection slows down in global market

Scrap collection activities slowed down in the global market as scrap prices in the main scrap supplying regions, the EU and the US, indicated significant declines compared to two months previously and as scrap supply was at sufficient levels against a backdrop of weak global demand.

  • Freight rates move up

The upward trend of freight rates in October and the slowdown of scrap collection activities made it difficult for scrap suppliers to provide the price levels desired by Turkish mills during most of the month in question.

  • Iron ore prices follow fluctuating trend

Further liquid steel production cuts in China, the high levels of Chinese domestic steel inventories and weak demand from Chinese finished steel buyers put pressure on iron ore prices, which accordingly dropped below $60/mt in mid-October. During most of the rest of the month, iron ore prices picked up in line with the rising trend of futures prices. However, at the end of the month, iron ore prices again dipped below $60/mt due to newly-announced production cuts.

  • Chinese billet export prices move on a fluctuating trend

The National Day Holiday in China in the first week of October and the early start of production cuts - scheduled for November 2017-March 2018 - in Tangshan in the second week of October resulted in reduced steel supply in China, while the halting of construction projects in the country resulted in reduced steel demand. As a result, given the volatile supply-demand balance and the fluctuating trend of the Chinese steel futures markets, ex-China billet prices followed a fluctuating trend throughout October.

  • Demand for ex-CIS billet remains sluggish during October

CIS-based billet suppliers’ sales to their main export markets such as Egypt and Turkey remained weak in October, just like in September. Despite sluggish demand, Chinese billet export prices failed to decrease below the levels of ex-CIS billet prices, thereby preventing any sharp declines in ex-CIS billet prices. Although CIS-based suppliers sought to raise their prices, ex-CIS billet prices followed a soft trend during the given month.

  • Turkish domestic rebar prices impacted by strengthening of US dollar

In October, Turkish domestic rebar buyers were cautious, limiting their purchases to their immediate needs because of the significant strengthening of the US dollar against the Turkish lira caused by political developments during the month. Despite the downward trend of scrap prices and the lack of a recovery in rebar demand, domestic rebar prices in Turkey moved in line with the US dollar-Turkish lira exchange rate, with the strengthening of the dollar preventing declines in rebar prices.

  • UAE-based buyers continue to buy from domestic suppliers

UAE-based buyers continued to prefer domestic suppliers for their rebar purchases in October, showing no interest in Turkish rebar. In the first week of October, it was heard that a Turkish supplier gave billet offers to the UAE, though no officially confirmed price range was given for these Turkish billet offers.

  • Turkish mills conclude rebar sales to US

Since April when the US initiated its Section 232 investigation, demand for Turkish rebar in the US came to a halt, also aided by the influence of the antidumping duties on Turkish rebar. Turkish mills, who had failed to provide the price levels desired by US buyers since early July, were able to reduce their prices to the desired levels in October, supported by the decline in import scrap prices in Turkey in the given month. In the third week of October, Turkish mills concluded rebar sales to the US at $580-585/mt CFR, including antidumping duties, on theoretical weight basis.

  • Egyptian buyers show no interest in Turkish rebar in October

Egypt extended the antidumping duty ranging between 10 percent and 19 percent on Turkish rebar imports which was expected to end in September to December 6. Consequently, Egyptian buyers also showed a lack of interest in Turkish rebar in the month of October.

  • Turkish rebar sales to other export markets continue

In October, Turkish rebar producers, particularly those based in Turkey’s Iskenderun region, continued to sell small tonnages by truck to Syria and Iraq, regardless of price changes; however, these sales volumes were slightly reduced due to increased political tensions in these destinations. Towards the end of the month, Turkish mills’ sales of small tonnages picked up and they concluded sales to Israel, Lebanon, the UK, Germany and Yemen, as well as to Australia.

  • Turkish mills continue to sell rebar to Canada

With Canada revising its antidumping margins for rebar imports for some Turkish steel mills to zero and initiating a minimum import price instead, Turkish rebar producers who had started selling rebar to Canada continued to see interest from this destination in October as well, benefiting from the price advantage provided by lower scrap prices.

  • Far Eastern buyers continue their price inquiries for Turkish billet and rebar

In October, Chinese rebar prices followed a fluctuating trend without indicating any sharp declines, allowing Turkish mills whose production costs had decreased to gain a price advantage in the Far East. Accordingly, Turkish mills continued to see interest from Far Eastern buyers in October, concluding a rebar booking to Singapore.

  • US imposes preliminary AD duty on Turkish wire rod

In the last week of October, the US Department of Commerce imposed preliminary antidumping (AD) duty on imports of carbon and alloy steel wire rod from Italy, South Korea, South Africa, Spain, Turkey, Ukraine, and the United Kingdom, ranging between 2.8 percent and 147.63 percent, while the preliminary duty rates for Turkey range between 2.8 percent and 8.01 percent.

 

 

What is our expectation for the next 3 months?

Scrap HMS I/II 80:20 CFR Turkey

 

Assessment of semi-finished and finished steel market

  • Finished steel demand in Turkey not expected to strengthen

As November begins, in the Turkish finished steel market where demand is weak, prices have been moving in line with the changes in the US dollar-Turkish lira exchange rate. Accordingly, in view of the uncertain market situation, buyers in the Turkish market are expected maintain a cautious stance and to continue their purchases only in line with their needs. As a result, in the short term, finished steel demand in Turkey is not expected to strengthen.

  • Demand for Turkish rebar in UAE unlikely to recover

Rebar buyers in the UAE - one of the target markets where Turkish mills previously used to sell large tonnages - are expected to continue to buy from local suppliers due to price and lead time advantages. Considering the sufficient supply of rebar in the UAE, demand for Turkish rebar in the country is not expected to recover.

  • US demand for Turkish rebar not foreseen to regain strength

Having concluded purchases of Turkish rebar in October, US-based buyers’ demand for Turkish rebar is not expected to reach strong levels until mid-January 2018 when the Section 232 investigation results are scheduled to be presented to President Trump.

  • Demand for Turkish rebar in Egypt likely to remain weak

As the antidumping duties imposed on rebar imports from Turkey - which were initially imposed in June this year in a range between 10 percent and 19 percent - have been extended until early December, demand for Turkish rebar in Egypt is not expected to recover in the short term.

  • Demand for Turkish rebar in other export markets to remain stable

Demand for Turkish rebar is expected to continue to be observed in other export markets to which Turkish mills have been selling small tonnages of rebar by truck, as demand for Turkish rebar from buyers in these countries does not depend on price levels. Turkish mills’ rebar sales to these markets are foreseen to continue.

  • Canadian buyers expected to continue to show interest in Turkish rebar

Since Canada revised its antidumping margins for rebar imports from some Turkish steel mills to zero and initiated a minimum import price instead in September, inquiries for Turkish rebar from Canada are expected to continue to be heard in the coming period and sales are expected to be concluded as long as buyers obtain their desired price levels.

  • Demand for Turkish rebar in Far East likely to continue

Due to the steel production cuts seen in China starting from October and the further production cuts to start in November and to continue until March 2018, Chinese steel producers are expected to focus on demand coming from their domestic market and thus to avoid adopting an aggressive pricing strategy in the export markets in the short term. As a result, demand for Turkish rebar in the Far East, which is a target market for Chinese exporters, is expected to continue to be observed in the coming period.

  • Ex-CIS billet prices unlikely to decline sharply

During October, ex-CIS billet prices did not indicate any sharp declines despite weak demand, and in the short term billet export prices from the CIS region are unlikely to soften significantly, supported by the ongoing electrode shortage and also as Chinese billet export prices remain higher than ex-CIS billet prices as the month of November begins.

  • Chinese billet suppliers not expected to adopt aggressive pricing policy

While steel demand in China is expected to increase with infrastructure and construction projects scheduled for after the 19th National Congress of the Communist Party of China, steel supply in the country is likely to decline a little further due to the steel production cuts seen in Tangshan region starting from October and the further production cuts in the country to start in November. Therefore, Chinese billet suppliers are expected to direct their sales to domestic market and to avoid adopting an aggressive pricing strategy in export markets

  • Turkish wire rod demand in US expected to strengthen

In the last week of October, the US imposed an antidumping duty ranging between 2.8 percent and 147.63 percent against wire rod imports from seven countries, while duty rates for Turkish exporters are in the range of 2.8-8.01 percent. As a result, Turkish wire rod demand in the US is expected to strengthen.

 

Assessment of raw material markets 

  • Domestic scrap prices in US not expected to increase

Following their sharp declines in October, domestic scrap prices in the US are expected to remain stable for obsolete scrap such as HMS, shredded and bonus scrap in November. However, the prices of bundles and busheling scrap are expected to face downward pressure and to soften due to the increased Canadian scrap flow to the US and due to planned maintenance works and outages at US mills, who aim to reduce their finished steel inventories in the last quarter of the year.

  • Scrap demand in Turkey not foreseen to increase sharply

Entering the month of November, demand for import scrap in Turkey has increased as Turkish mills’ scrap purchases had fallen short of meeting their needs in September and October. However, the negative effects of the political tensions in Turkey on domestic mills’ finished steel sales and of the electrode shortage in the global market are expected to continue to be felt in the short term. As a result, Turkish buyers are expected to remain cautious about making new scrap bookings and will likely limit their scrap purchases.

  • Global scrap supply to remain plentiful

As the month of November begins, scrap supplies in the global market are in excess of demand, while steel producers are expected to conclude new scrap bookings only to meet their immediate needs in the coming period as the impact of the ongoing electrode shortage will deepen. In this context, global scrap supplies are not expected to decline, despite the approach of winter.

  • Scrap prices not expected to rise sharply

Although scrap suppliers started to give slightly higher price offers ahead of November, this situation is not related to any tightness of scrap supplies and is due instead to the rises in freight rates and the increased scrap demand from Turkish steel producers. Accordingly, scrap prices are not expected to record sharp rises in the coming period and may even soften due to the increased price pressure from steel mills amid their higher production costs resulting from electrode shortages, and also since the mills may reduce their scrap bookings after replenishing their stocks.

  • Global iron ore prices unlikely to gain strength

Demand in the global iron ore market has weakened and iron ore prices have come under pressure due to liquid steel production cuts seen in China starting from October. Given the further production cuts due to start in China in November, this picture is unlikely to change and so global iron ore prices are expected to move downwards in the short term, amid fluctuations in parallel with the trend of the Chinese steel futures market.

  • Graphite electrode shortage expected to deepen

The graphite electrode market first started to show signs of a supply shortage in 2016 and this has been reflected in the steel markets this year. Supplies of needle coke, the feedstock for graphite electrodes, have failed to meet demand and some graphite electrode plants in China have been shut down in order to reduce air pollution. Accordingly, the graphite electrode shortage is not expected to be resolved in the short term, while market participants expect the shortage problem is even likely to deepen in the coming year as electrode producers have not started making contracts or shipments for 2018 yet. 

 

 

More radical scenarios excluded in forecasts

Negative 

  • Sudden changes in foreign exchange rates
  • Possible new tax applications and increases in tax rates which would negatively impact global trade
  • Possible new antidumping cases
  • Changes in global economy due to political uncertainties
  • Sudden changes in Chinese and global futures markets
  • Geopolitical developments
  • Presenting of the Section 232 investigation results to President Trump before the January 14 deadline

 

Positive

  • Acceleration of economic improvement in developed countries
  • Easing of political uncertainties in the Middle East region
  • Governmental statements that may directly impact steel production/consumption

 

 

What was the situation in recent years?

August 2014- February 2015 HMS I/II 80:20 CFR Turkey Prices

August 2015- February 2016 HMS I/II 80:20 CFR Turkey Prices

August 2016 - February 2017 HMS I/II 80:20 CFR Turkey Price   
2005-2009 HMS I/II 80:20 CFR Turkey Prices

 2009-2013 HMS I/II 80:20 CFR Turkey Prices

 2014 - YTD HMS I/II 80:20 CFR Turkey Prices

 

 

Related news

US DOC announces preliminary AD margins in wire rod trade case

Thursday, 26 October 2017 17:32:01 (GMT+3)   -   Istanbul

The US Department of Commerce (US DOC) has announced that it has imposed preliminary antidumping (AD) duty on imports of carbon and alloy steel wire rod from Italy, South Korea, South Africa, Spain, Turkey, Ukraine, and the United Kingdom.

Accordingly, the preliminary antidumping duty rates range between 2.8 percent and 147.63 percent for the mentioned imports from seven countries.

According to the DOC's statement, in 2016 imports of carbon and alloy steel wire rod from Italy, South Korea, South Africa, Spain, Turkey, Ukraine, and the UK were valued at an estimated $12.2 million, $45.6 million, $7.1 million, $40.7 million, $41.4 million, $55 million, and $20.5 million, respectively.

The DOC is scheduled to announce its final determinations on or about January 8, 2018, while the ITC is scheduled to make its final injury determinations in February 22, 2018.

The products in question currently fall under the Harmonized Tariff Schedule of the United States (HTSUS) 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030 and 7227.90.6035.

Country

Exporter/Producer

Preliminary AD duty rate

Italy

Ferriere Nord S.p.A.

22.06%

Ferriera Valsider S.p.A.

22.06%

Others

22.06%

South Korea

POSCO

10.09%

Others

10.09%

South Africa

ArcelorMittal South Africa Limited, Scaw South Africa (Pty)
Ltd. (also known as Scaw Metals Group), and Consolidated
Wire Industries

142.26%

Others

135.46%

Spain

Global Steel Wire/ CELSA Atlantic SA/ Compania Espanola de Laminacion

20.25%

ArcelorMittal Espana S.A

32.64%

Others

20.25%

Turkey

Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S.

2.80%

Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S

8.01%

Others

5.41%

Ukraine

ArcelorMittal Steel Kryvyi Rih OJSC

44.03%

Public Joint Stock Company (PJSC) Yenakiieve Steel

44.03%

Others

34.98%

UK

British Steel Limited

41.96%

Longs Steel UK Limited

147.63%

Others

41.96%

Pakistan imposes final AD duty on rebar imports from China

Wednesday, 25 October 2017 17:29:04 (GMT+3)   -   Istanbul

Pakistan’s National Tariff Commission has announced that it has imposed final antidumping (AD) duty on imports of deformed concrete reinforcing steel bars from China for a period of five years effective from October 23. The commission stated that the antidumping duty will not be levied on imports of the investigated product that are solely used as input in products destined solely for exports.

Accordingly, the final AD duty for the deformed concrete reinforcing steel bars imports from China stand at 19.15 percent.

The investigation was launched in November 26, 2016, upon the application lodged by local producers Amreli Steels Limited, Agha Steel Industries Ltd. and Abbas Engineering Industries.

The products subject to final AD duty currently fall under the Customs Tariff Statistics Position Numbers 7214.2010, 7214.2090, 7214.3010, 7214.3090, 7214.9910, 7214.9990, 7215.1010, 7215.1090, 7215.5010, 7215.5090, 7215.9010, 7215.9090, 7228.2090, 7228.3090, 7228.1000, 7228.4000, 7228.5000 and 7228.6000.

BIR: More balanced scrap market expected for remainder of year

Friday, 20 October 2017 16:14:08 (GMT+3)   -   Istanbul

At the recent BIR (Bureau of International Recycling) Ferrous Division meeting held in New Delhi, board member Tom Bird of UK-based Liberty Steel stated that, overall, scrap demand is still healthy and volatility is now expected to be lower than in previous months. “We have seen a softening over recent weeks but it is felt that we have reached the bottom and should see a more balanced market for the remainder of 2017,” he said.

Divisional president William Schmiedel of Sims Management Global Trade agreed that, in terms of ferrous scrap pricing, “We have experienced quite a volatile marketplace, with traded cargoes at levels close to US$ 240/mt all the way up to US$ 360-370/mt”. He added, “This volatility is typical in a market in the recovery stage, with fixing levels finding new highs then backing off, but always only to a level that exceeded the previous bottom.” 

Despite a strong scrap market for most of the year, India has been priced out of the international marketplace and its imports are expected to be around 40 percent lower than last year, it was noted by Mr. Bird. “Overall steel demand has been sluggish,” he said.

In the first half of 2017, the EU-28 had remained the world’s leading steel scrap exporter following an increase in its overseas shipments of 15.8 percent to 9.961 million mt, with the four biggest buyers being Turkey (+19.5 percent to 5.975 million mt), Pakistan (-6.4 percent to 0.718 million mt), the US (+31.5 percent to 0.651 million mt) and Egypt (+118.5 percent to 0.614 million mt). 

The world’s second-largest steel scrap importer in 2016 with 6.4 million mt, India is currently the third-largest steel producer globally and will soon take over the second position from Japan, according to guest speaker R. R. Ganesh, director of sourcing at Jindal Stainless, India’s largest stainless steel manufacturing group.

Jefferies: Graphite electrode shortage could last more than five years

Tuesday, 17 October 2017 15:54:47 (GMT+3)   -   Istanbul

According to a report by investment bank Jefferies, the bank said that after spending the last several weeks with management of Japanese graphite electrode manufacturer Tokai Carbon, they are confident that graphite electrode prices in fiscal year 2018 will be higher than their estimates and supply-demand tightness of  graphite electrode could last more than five years.

According to Jefferies, the current cycle of tight supply-demand could last much longer than most investors anticipate as more than 10 percent of needle coke is now being redirected to produce LiB batteries, anode material production requires same facilities as graphite electrode production and hurricane Harvey taking some capacity offline.

As SteelOrbis previously reported, Japanese graphite electrode manufacturer Tokai Carbon Co. Ltd acquired Germany-based SGL Carbon’s US graphite electrode business for about $114.4 million, giving the Japanese manufacturer a production presence in North America.

Worldsteel in Brussels: Ferriola confident Trump will take action on Section 232

Tuesday, 17 October 2017 10:22:25 (GMT+3)   -   Istanbul

At the announcement by worldsteel of the short-range global steel demand outlook at the 51st annual meeting of worldsteel (World Steel Association) held in Brussels on October 16-17, John. J. Ferriola, worldsteel chairman and chairman, president and CEO of US steelmaker Nucor Corporation, responding to a question on the Section 232 investigation in the US, remarked that while there has been no further movement on the issue the investigation is due to be completed by a mid-January deadline and President Trump will then have a 90-day period to make his decision. Mr. Ferriola said that the industry in the US is still confident a comprehensive trade remedy will be applied, adding that he himself is concerned by the delay but confident action will be taken by Trump.

In addition, questioned about Trump’s planned infrastructure spending program, the worldsteel chairman said that he hopes that if the program passes it will have a major impact on steel consumption in the US next year, though adding that he is still cautious on the issue.

Worldsteel: Global steel demand to grow by seven percent in 2017, 1.6 percent in 2018

Monday, 16 October 2017 14:47:32 (GMT+3)   -   Istanbul

Worldsteel has forecast that global steel demand will rise by seven percent in the current year to 1.62 billion metric tons, while predicting a further rise of 1.6 percent to 1.65 billion metric tons in 2018, both year on year. The announcement was made at the 51st annual worldsteel meeting in Brussels on October 16, at a press briefing on the short-range outlook for global steel demand chaired by T. V. Narendran, managing director of Indian steel producer Tata Steel and chairman of the worldsteel economics committee, who commented that the world steel industry is looking at significantly better times than in recent year. These predictions compare with one percent year-on-year growth in world steel demand in 2016 to 1.51 billion metric tons. However, worldsteel pointed out that special mention needs to be made of the impact of China on the forecast growth figure for the current year. China closed most of its outdated induction furnaces in 2017, a category which was generally not previously captured in official figures. The demand satisfied by this sector of the market is now satisfied by the mainstream steelmakers in China and thus is now captured in the official demand statistics in 2017, driving up the demand forecast for China, and thus the global demand figure.

Global steel demand excluding China is predicted to rise by 2.6 percent to 856.4 million metric tons in 2017 and to expand by three percent in 2018 to 882.4 million metric tons, year on year. 

As regards China on the other hand, its steel demand is forecast to rise by 12.4 percent year on year in 2017 to 765.7 million metric tons and to move sideways in 2018 compared to 2017. Excluding the induction furnace issue, worldsteel estimates China’s steel demand growth in 2017 at three percent year on year. worldsteel said that the Chinese economy, which has been gradually decelerating, is increasingly supported by consumption while investment continues to decelerate. At the same time, government stimuli, particularly a moderate boost to the construction program, contributed to increased GDP growth in 2017.

In terms of other major regions, steel demand in the EU is predicted to rise by 2.5 percent in the current year to 162.1 million metric tons and to move up by 1.4 percent in 2018 to 164.3 million metric tons.

The NAFTA region is expected to see a 4.9 percent growth in steel demand this year to 138.7 million metric tons but to record a 1.2 percent rise in demand in 2018 to 140.4 million metric tons. Steel demand in Central and South America is predicted to grow by 2.5 percent in 2017 to 40.4 million mt and by 4.7 percent in 2018 to 42.3 million mt.

As for the CIS, its demand for steel is foreseen to grow by 3.6 percent to 51.1 million metric tons in the current year and is expected to rise by 3.8 percent in 2018 to 53 million metric tons, year on year. Steel demand in the Middle East is forecast to increase by 1.5 percent to 52.9 million metric tons in 2017 and to rise by 4.8 percent to 56.5 million metric tons in 2018.

As for the ASEAN region, demand is forecast to increase by 4.8 percent in 2017 to 77.7 million mt and to rise by 6.8 percent in 2018 to 83.0 million mt, year on year. Steel demand in the MENA is predicted to move sideways in the current year compared to last year at 72.6 million mt and to rise by 4.5 percent year on year to 75.8 million mt next year.

Turkish steel demand is expected to resume growth momentum in 2018, rising by six percent to 35.5 million mt, following a disappointing 1.7 percent negative growth to 33.5 million mt in the current year.

Steelmakers in Tangshan to bring forward off-peak production cuts

Thursday, 12 October 2017 12:10:46 (GMT+3)   -   Shanghai

The municipal government of Tangshan in China’s Hebei Province has announced that it will implement further air quality improvement measures as Tangshan is expected to experience serious air pollution on October 13 and October 19. Accordingly, it has asked local steelmakers to start the production cuts planned for non-peak hours during the winter season at an earlier date, now beginning from October 12 compared to the previous starting date of November 15. Accordingly, steelmakers in Tangshan will now have to cut their sintering and pellet-making outputs by 50 percent as of October 12, more than a month ahead of schedule.

Furthermore, from October 12, 2017 to March 15, 2018, in Tangshan, all earthworks must cease and all construction, road, and water projects and housing demolition will be halted.

Tangshan issues eight measures to speed up improvement of air quality

Wednesday, 11 October 2017 15:44:10 (GMT+3)   -   Istanbul

The municipal government of the northeastern Chinese city of Tangshan has issued today, October 11, eight measures to speed up the implementation of the ongoing environmental program which aims to improve air quality in the autumn and winter seasons.

Accordingly, the measures include the strengthening of inspections in the steel and coal industries, the strengthening of the supervision of coal-fired facilities and suspension of production of rolling mills and smelting mills in the steel industry and suspension of production in other industries which have not been able to replace their gas furnaces with natural gas.

BIR: Positive signals for remainder of 2017

Wednesday, 04 October 2017 15:20:35 (GMT+3)   -   Istanbul

The Bureau of International Recycling’s (BIR) divisional president William Schmiedel, also president of US-based scrap recycling company Sims Group Global Trade Corporation, has stated that during July and August this year global steel prices strengthened and continued to support the world’s ferrous scrap prices, especially in Turkey. July represented a record month for Turkish crude steel production at over 3 million metric tons, and by August scrap prices had reached a five-year high of $357/mt CFR Turkey. The BIR divisional president said that year-over-year hot metal production did not increase in Turkey; therefore, the higher output came from electric arc furnace production - hence more scrap consumption, resulting in higher prices.

Mr. Schmiedel went on to say that in China the government-enforced shutdown of induction furnaces and illegal steel mills, as well as pollution control measures, continue to influence the domestic steel market. The production/supply constraints have led to increased steel prices and a subsequent reduction of 29 percent in the country’s exports in January-August 2017 when compared to the same period last year. Rebar futures, a sensor of Chinese sentiment, have seen variations but have maintained an upward trend, he stated.

Tangshan achieves iron and steel capacity elimination target for 2017

Friday, 29 September 2017 10:00:30 (GMT+3)   -   Shanghai

The municipal government of the northeastern Chinese city of Tangshan has stated that 12 converters and 9 blast furnaces have been eliminated in the current year at 12 steelmakers in Tangshan, with Tangshan thereby achieving its iron and steel capacity elimination target for 2017. In September alone, Tangshan eliminated two 50 mt converters and one 450 cubic meters blast furnace, thus eliminating 1.27 million mt of steelmaking capacity and 0.52 million mt of iron-making capacity.

As reported at the beginning of this year, Tangshan municipal government had stated that in 2017 it planned to eliminate 8.61 million mt of steelmaking capacity and 9.33 million mt of iron-making capacity for 2017.

Egypt extends temporary AD duties on rebar from Turkey, Ukraine, China

Wednesday, 27 September 2017 15:40:02 (GMT+3)   -   Istanbul

Egypt’s Ministry of Industry and Trade has announced that it has extended the period of the temporary antidumping (AD) duties imposed on rebar imports from Turkey, Ukraine and China for two months. Accordingly, the duties will end on December 6 this year, bringing the total period to six months.

The ministry first imposed the antidumping duties on rebar imports from the three countries in June this year for a period of four months. The duties range between 10 percent and 19 percent for Turkey, between 15 percent and 27 percent for Ukraine and stand at 17 percent for China.

Frank Bergren at IREPAS: Section 232 creates shockwave on import side

Monday, 25 September 2017 16:46:46 (GMT+3)   -   Istanbul

Speaking at the SteelOrbis 2017 Fall Conference & 77th IREPAS Meeting held in Athens on September 24-26, Frank Bergren, managing director at Metal Partners International, said that the Section 232 investigation created a shockwave especially on the import side resulting in price increases, adding that there is still no clarity regarding the investigation. He said that the administration wants to find a way to implement the Section 232 but for now it is focusing on tax reform, going on to say that nothing is certain other than the fact that a report should be presented to President Trump in mid-January and then he is going to have 90 days to decide on an action plan.

Mr. Bergren also commented on the antidumping (AD) duty investigation which resulted in AD duties against rebar imports from Japan, Taiwan and Turkey. He said that Japan was removed from the US market because of the extremely high AD rates, thereby affecting the western part of the US where the limited number of domestic mills and limited volumes of imports resulted in the highest transaction prices. On the other hand, with four domestic mills and the highest import flow, Texas has the lowest transaction prices.

In the first half of 2017, Turkish rebar supply to the US increased by 7.5 percent, while the Japanese rebar supply declined by 85.9 percent, both year on year. In July this year, rebar imports to the US decreased to 73,894 mt, from 301,011 mt in July 2016. Bergren said that US domestic mills do not have the ability to supply the remaining 200,000 mt.

According to Mr. Bergren, rebar consumption in the US is expected to grow by 2.6 percent in 2017 and by 2.8 percent in 2018, signaling a very positive outlook on the horizon for the US. He added that it is important that the domestic mills, namely CMC, SID and Nucor, finally announced capital expenditure investments to increase their capacities.

Jose Angel Rey at IREPAS: Price spread between rebar and scrap widens due to higher electrode costs

Monday, 25 September 2017 15:42:35 (GMT+3)   -   Istanbul

At the SteelOrbis 2017 Fall Conference & 77th IREPAS Meeting held in Athens on September 24-26, Jose Angel Rey, international commercial director of Spanish steel producer CELSA Group, said that when global GDP growth exceeds three percent steel demand sees a healthy growth and he expects this scenario to be observed in the coming years. Mr. Rey stated that the global construction sector will grow at an average of 2.8 percent year on year in the 2017-21 period. 
 
Mr. Rey indicated that world steel demand is expected to grow by 1.3 percent in 2017 to reach 1.53 billion mt, with finished steel products demand growing in all areas of the world at the same time. In 2018, only Asia will be affected by a slight slowdown of 0.1 percent. Long products consumption in the first half of 2017 amounted to 400 million mt, only up by one percent year on year. He pointed out that wire rod is the only long product that is expected to see a decrease in its consumption figure in 2017. In the first half of 2017, the Asian markets accounted for more than 67 percent of total longs consumption, with China alone accounting for about 55 percent. 
 
The CELSA official said that during the first half of the current year global rebar consumption increased by two percent year on year, with significant strength in Europe and East and Southeast Asia and with signs of recovery in North America. He added that the recent rebound of the Turkish market will be reflected in the third quarter figures, but in the first half of 2017 only one percent growth was reported.
 
Commenting on the international price situation, Mr. Rey said that long steel export prices are following the trends in raw material prices, though the average price spread between the rebar export price and scrap price which was €189/mt since 2009 has increased as a result of higher costs, namely, higher prices for electrodes, ferroalloys and refractories. In particular, costs of electrodes have increased to €30/mt from just €1-2/mt previously.

Tangshan issues emergency measures to tackle heavy pollution

Monday, 25 September 2017 13:22:18 (GMT+3)   -   Shanghai

The municipal government of Tangshan in China’s Hebei Province has issued emergency emissions reduction measures to tackle heavy air pollution as of September 25.  

According to Tangshan Meteorological Bureau, starting from September 25 meteorological conditions in Tangshan are expected to become worse, with reduced dispersion of atmospheric pollutants.

The emergency emissions reduction measures include 50 percent capacity cuts for pelletizing shaft furnaces and sintering machines, production restrictions at coke plants, the suspension of work at rock quarries in three districts in Tangshan, as well as the halting of work at demolition sites. 

The emergency measures will remain in effect for the time being until further notice.

Tax reform to take priority over Section 232 results

Friday, 22 September 2017 19:14:51 (GMT+3)   -   San Diego

US Secretary of Commerce Wilbur Ross told Bloomberg Television today that the Trump administration will postpone a decision in the Section 232 investigation until after tax reform is achieved in Congress.

“The policy decision has been made to postpone that until the tax bill,” Ross said, adding that overhauling the tax system is the “single most important” item on the administration’s agenda. In another interview on CNBC, Ross said the DOC isn’t “backing away,” but “it’s a question of timing.”

In particular, Ross said the administration doesn’t want to “unnecessarily irritate” members of Congress while trying to build support for tax overhaul legislation.

Shares of major US steelmakers, including US Steel, Nucor, AK Steel, and Steel Dynamics Inc. declined after Ross’s remarks.

EUROFER: Graphite electrode shortage threatens EU steel production

Monday, 18 September 2017 14:36:30 (GMT+3)   -   Istanbul

The European Steel Association (EUROFER) has commented on the tight supply conditions for carbon graphite electrodes which are threatening to stall EU steel production, stating that graphite rods are indispensable in electric arc furnace (EAF) ‘secondary’ steelmaking and in the ladle furnace (LF) metallurgy stages of both the EAF and ‘primary’ blast furnace-basic oxygen furnace (BF-BOF) production routes.

According to Axel Eggert, director general of EUROFER, the global shortage of graphite electrodes has been caused by the idling of global production capacity over the past few years, followed by production stoppages recently enforced by the Chinese authorities as a result of additional environmental standards.

Mr Eggert stated that European steel production is dependent on imported graphite electrodes. Around 226,000 mt of electrodes are consumed every year in the EU. Of this, more than 60 percent of the smaller LF-type rods come from China, meaning that both primary and secondary steel production could be seriously affected by the ongoing shortage and supply volatility.

“Seamless supply of these electrodes has long been the norm for the sector. However this stability is now at risk, steel producers will need to be very cautious and take the necessary steps in order to prevent production disruptions caused by any prolonged shortage of electrodes,” concluded Mr Eggert.

Algerian government releases new import licenses for rebar

Friday, 15 September 2017 16:56:13 (GMT+3)   -   Brescia

According to market sources, the Algerian government has released rebar import licenses for a total of 400,000 mt.

These tonnages have been added to the 534,100 mt that were released in late July and that had caused dissatisfaction among Algerian importers as in 2016 the Algerian government had granted licenses for a total of 2 million mt of rebar imports for the full year. Moreover, 180,000 mt of the 534,100 mt were allocated to state-owned companies, while the remainder was distributed to a little more than 100 private companies. This situation also pushed European exporters to target alternative markets, such as Canada, the US and Libya. 

The latest decision by the Algerian government - which has changed after the recent elections in the country - is due to strong demand and high domestic prices. 

Meanwhile, according to sources, European producers have lately been selling rebar to the export markets at €480-490/mt FOB. 

Russia reduces export duty on scrap as of September

Tuesday, 05 September 2017 16:39:15 (GMT+3)   -   Istanbul

The Russian government has announced that starting from September 1 this year export customs duty rates for ferrous scrap shipments outside the Eurasian Customs Union have been reduced. 

Accordingly, the export duty rate has been reduced to five percent, not lower than €5/mt, from 7.5 percent.

The resolution was drafted by Russia’s Ministry of Economic Development in line with the country’s international commitments and in connection with its accession to the World Trade Organization (WTO).

CISA: Suggested elimination of China’s 15% export tax on rebar and wire rod receives initial approval

Thursday, 03 August 2017 12:21:12 (GMT+3)   -   Shanghai

Suggestions made by the China Iron and Steel Association (CISA) for the elimination of 15 percent export tax on steel bar and wire rod have received initial approval from China’s Ministry of Finance and Ministry of Industry and Information Technology (MIIT), as stated by Liu Zhenjiang, CISA secretary general, at an executive council meeting of the CISA. According to Mr. Liu, some steelmakers with overseas processing facilities have complained of the taxes on rebar and wire rod bought from the Chinese market. Accordingly, the CISA made suggestions to the ministries in question for the adjustment of export taxes on the mentioned products.

 

 

 

 

 


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