Orbis Turkish Scrap Forecaster – December 2016

 

 

What happened in the last 3 months?

September - December 2016 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:

  • Scrap prices continue to fall in September

Scrap prices, which had started to soften in August, continued to decline throughout September since Turkish mills’ demand for scrap remained limited due to their weak finished steel sales and as finished steel demand in the global market failed to recover as expected following the end of the summer holidays.

  • Finished steel demand remains weak in September

Demand for Turkish finished steel remained weak in the domestic and export markets in September because finished steel buyers postponed their purchases as prices of scrap and iron ore continued to fall.

  • Scrap prices start to move up as of October

Scrap demand from Turkish mills, who had long postponed their scrap purchases, increased as of the beginning of October and global finished steel buyers accelerated their purchases because of the sharp increase in prices of coking coal and iron ore. As a result, scrap prices moved on a rising trend in October.

  • Rising scrap prices in October boost domestic finished steel demand

At the beginning of October, global finished steel prices increased due to higher raw material costs, resulting in livelier finished steel demand in Turkey. During the given month, raw material prices continued to register sharp increases, convincing Turkish buyers that the increases in finished steel prices would continue and so they accelerated their finished steel purchases.

  • Demand for Turkish rebar exports picks up in October

In September, US-based producers filed a complaint seeking an antidumping duty investigation against rebar imports from Turkey, Japan and Taiwan, and so US buyers accelerated their purchases from Turkey amid concerns that domestic rebar prices in the US would increase. In Egypt, another target market for Turkey, demand from buyers for Turkish rebar increased since domestic prices were considered to be high and also as safeguard duty was reduced. However, UAE-based buyers continued to consider rebar offers from Turkey to be on the high side.

  • Scrap prices start to soften as of mid-November

Having increased rapidly in the first half of November, scrap prices started to soften in the middle of the month when Turkish mills slowed down their scrap purchases after the sharp declines followed by fluctuating movements recorded both in the Chinese futures market and in iron ore prices.

 

 

November: Forecast vs Actual Situation

Scrap HMS I/II 80:20 CFR Turkey

In the Orbis Turkish Scrap Forecaster for November 2016, we had predicted that scrap prices would remain strong and would continue to increase, supported by the ongoing strong upward trend of coking coal and iron ore prices and impacted by the slight tightening of scrap supplies due to holidays and the start of the winter season. In line with our prediction, scrap prices continued to record sharp increases until mid-November, but switched to a downward trend in the middle of the month when Turkish mills slowed down their scrap purchases since the Chinese steel futures market and iron ore prices - which had trended upwards since the beginning of October - first recorded sharp declines and then adopted a fluctuating trend, prompting instability in the market. Accordingly, iron ore prices were nearly at the same levels that we predicted for the end of November. The deviation between our forecast and the actual price stands at 2.3 percent.

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

  • US domestic scrap prices increase

Domestic scrap prices in the US, which had recorded steady downward movement since June, began to indicate a recovery following the upward trend of prices in export markets in late October and increased by a total of $30-45/mt depending on quality in November.

  • European producers’ scrap purchase prices lower than Turkish mills’ prices

Even though prices in the European domestic scrap market had started to increase in October, European scrap suppliers preferred to direct their sales to the export markets during most of November since Turkish mills’ scrap booking prices were higher than European steel producers’ scrap purchase quotations. For this reason, European producers’ needs for scrap with prompt shipment increased, though their purchases still remained limited due to the soft trend of scrap prices since mid-November.

  • Turkish producers slow down their scrap purchases of mid-November

The uptrend of prices and the positive sentiment in the global market continued until mid-November. With iron ore prices and the steel futures market in China showing a sharp and sudden fall on November 15, Chinese suppliers reduced their billet export offers, thereby giving rise to a cautious mood in the global market. Although scrap prices moved on a fluctuating trend during the rest of the month, their sharp ups and downs created a mood of caution in the market and Turkish steel producers slowed down their scrap booking activity and adopted a wait-and-see stance.

  • Turkish mills exert pressure on ex-Black Sea scrap prices

Turkish steel producers postponed their deep sea scrap bookings in mid-November amid cautious sentiment in the market and began to look at ex-Black Sea scrap offers in order to conclude bookings at prices significantly below the price levels in their most recent purchases and so they exerted pressure on Black Sea scrap suppliers’ prices. As a result, ex-Black Sea scrap offers to Turkey decreased by $10-15/mt within a short time.

  • Scrap prices switch to downward trend in mid-November

Since the beginning of October, scrap prices had recorded sharp and steady increases. However, the positive sentiment in the market gave way to a cautious mood due to the sudden price decreases in China in mid-November and also since the US dollar rapidly gained in value against many currencies. Because of these market conditions, Turkish mills reduced their scrap bookings and prices of scrap then switched to a downward trend as of the middle of the month.

  • Sharp fluctuations in iron ore prices

In November, iron ore prices indicated sharp increases as a result of the rises seen in coking coal prices since June and the upward movement of the Chinese futures market. From November 7 to 11 iron ore prices increased by $10/mt, and then declined by $7/mt on November 15 following the sharp declines seen in Chinese iron ore futures prices on the previous day. However, on November 18, after steel production cuts were announced in Tangshan for the November 15-March 15 period, the Chinese futures market saw a sharp increase and global iron ore prices started to move up again. However, as the futures market recorded sharp fluctuations because of speculation in the market, iron ore prices followed a fluctuating trend.

  • Chinese billet export prices fluctuate in November

In the first two weeks of November, Chinese billet offers to the export markets increased by nearly $65/mt, on the back of the increases in raw material prices and the rising movement of the Chinese futures market. However, with the sharp declines observed in the Chinese futures market on November 14, Chinese billet prices declined by $30/mt during the third week of the month. During the remainder of November, Chinese billet suppliers frequently had to revise their prices due to the fluctuating movements of the Chinese steel futures markets and of iron ore prices. Accordingly, Chinese billet offers moved on a fluctuating trend, closing the month with a downward movement.

  • Turkish mills continue to prefer scrap instead of billet

In November, Turkish mills continued to prefer scrap instead of billet for their steel production due to its long-standing advantage in terms of costs. Even though Turkish producers’ stepped up their inquiries for import billet following the weakening of billet prices as of mid-November, their bookings of billet remained limited.

  • Rebar demand in Turkey starts to weaken in mid-November 

During the first half of November, prices in the local Turkish rebar market showed rapid increases with the impact of the upward trend of raw material prices. This uptrend of prices triggered an increase in domestic rebar demand in Turkey. However, after the third week of November Turkish buyers’ rebar inventories almost reached desired levels and, with the ongoing political and economic uncertainty in the country and with the sudden strengthening of the US dollar, Turkish rebar buyers again began to adopt a wait-and-see stance and their demand for rebar weakened accordingly. Even though the weakening of rebar demand exerted downward pressure on prices, prices moved on a fluctuating trend amid the sharp depreciation of the Turkish lira against the US dollar.

  • Turkish rebar exporters restart sales to UAE

No Turkish rebar booking had been heard in the UAE market for a long time since UAE-based buyers considered Turkish producers’ rebar export offers to be on the high side. In the third week of November, Turkish rebar offers started to gain acceptance again in the UAE and bookings were concluded, since local producers had filled their order books and as local traders had increased their prices sharply with support from the ongoing lively demand for rebar in the country. However, demand for Turkish rebar again became weak as Turkish prices still remained higher than the prices of UAE-based steel mill Emirates Steel Industries (ESI) even after its upward price adjustment announced on November 23.

  • US-based buyers reduce their bookings of Turkish rebar in late November

Donald Trump’s victory in the US presidential election on November 8 was considered a positive development by players in the local US rebar market, where producers’ prices had increased in late October. US-based rebar producers, expecting that trading activity in the country will increase on the back of the new president’s promised projects, continued to revise their prices upwards, also with the support of the rising trend of scrap prices. With domestic rebar prices in the US foreseen to record a further slight increase following the anticipated announcement in December of the preliminary result of the countervailing duty investigation against rebar imports from Turkey, Japan and Taiwan, demand for Turkish rebar remained lively until the last week of the month. In the last week, US-based buyers’ demand for Turkish rebar slowed down since scrap prices were softening and as buyers’ rebar inventories had increased; and also since import rebar shipments to be made following the preliminary determinations will be subject to the preliminary duty rates and buyers wanted to avoid the related risk.

  • Turkish rebar sales volumes to Egypt decrease

In November, Turkish producers’ rebar export activity to Egypt weakened, since the Egyptian pound lost approximately 50 percent of its value compared to the US dollar following the country’s move to a freely floating exchange rate system after signing an agreement with the IMF for a loan of $12 billion, and also since Egyptian producers’ domestic rebar prices were more advantageous as compared to Turkish mills’ rebar offers.

  • Turkish rebar mills continue sales of small tonnages to Syria and Iraq

Similar to their sales observed in previous months, in November Turkish rebar producers, particularly those based in Turkey’s Iskenderun region, continued to sell small tonnages by truck to Syria and Iraq, despite the political tensions and conflict in these destinations.

 

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

  • Turkish domestic finished steel demand unlikely to recover in short term

In early November, Turkish buyers accelerated their finished steel purchases, accepting the increases recorded in finished steel prices. Entering the month of December, amid high inventory levels, the sharp depreciation of the Turkish lira against the US dollar and the ongoing economic uncertainty in Turkey, Turkish buyers are expected to remain cautious as regards finished steel purchases and to continue to conclude purchases only in line with their needs. In the short term, Turkish domestic finished steel demand is unlikely to recover.

  • Turkish rebar sales to UAE expected to remain limited

As the month of December begins, demand for Turkish rebar in the UAE is still weak since UAE-based buyers consider Turkish rebar offers to the UAE to be on the high side compared to the rebar offers announced on November 23 by domestic producer ESI for December production. In the coming period, the pricing strategies of UAE-based producers will likely result in the reduced competitiveness of Turkish rebar offers. Accordingly, ex-Turkey rebar sales to the UAE are expected to remain limited.

  • Preliminary CVD determination may halt US imports of Turkish rebar

The preliminary determinations of the countervailing duty (CVD) and antidumping (AD) cases launched by US producers in September against rebar imports from Turkey, Taiwan and Japan are expected to be announced in mid-December and at the end of February respectively. Since the shipments to be made following the preliminary determinations will be subject to the preliminary duty rates, US-based buyers’ rebar imports from Turkey are expected to come to a halt as buyers will seek to avoid risks.

  • Turkish rebar sales to Egypt foreseen to decline slightly

With lower-than-expected price increases announced by Egyptian mills in late November, as the month of December begins Turkish rebar offers are considered to be on the high side by Egyptian buyers. Additionally, in late November demand for Turkish rebar in Egypt slackened slightly since Egyptian rebar buyers adopted a cautious stance due to the rapid fluctuations in the value of the Egyptian pound against the US dollar. As a result, in December demand for Turkish rebar in the country is not expected to improve and Turkish rebar sales volumes to Egypt will likely decrease further compared to November volumes.

  • Turkish mills to continue rebar sales to Syria and Iraq by truck despite conflict

Turkish mills are expected to continue their sales of small tonnages of rebar to Syria and Iraq by truck despite the political tensions and conflict in these destinations as buyers’ demand for Turkish rebar in these countries does not depend on price levels and is expected to remain stable in the coming period.

  • Turkish demand for Chinese billet unlikely to improve

Given the production cuts announced in Tangshan for the period from November 15 to March 15 aimed at reducing air pollution and CO2 emissions, Chinese billet supply is expected to decrease, which will prevent Chinese suppliers from giving competitive billet offers to the export markets. As a result, the weak demand situation for Chinese billets in Turkey is likely to continue in the short term.

  • Demand for ex-CIS billet expected to remain stable

Over the past two months, buyers in the MENA region have considered ex-CIS billet offers to be attractive and have concluded deals for billet from the CIS, also since Chinese billet suppliers are not making aggressive offers to the export markets due to domestic production cuts. Accordingly, CIS-based billet suppliers are expected to continue their sales to the MENA region in the coming period. Meanwhile, Turkish mills are not likely to risk paying import duties on billet amid the uncertainty of demand in their finished steel export markets, and so they are expected to use scrap instead of billet in their production. Accordingly, demand for ex-CIS billet in Turkey is not expected to improve in the coming period.   

Assessment of raw material markets

  • US domestic scrap prices expected to rise further

Entering the month of December, rising coking coal and import pig iron prices in the US caused integrated steel producers to make more scrap purchases and compete with EAF-based producers for scrap supply. Supplies of HMS scrap and shredded scrap have been on the low side because of worsening weather conditions, while it has not been possible to compensate for the losses in scrap supply seen during the June-October period when scrap prices declined. Supply at scrap yards is not expected to improve given the approaching holiday season and, with the rise in demand, scrap prices will likely increase by $20-35/mt in December, with increase margins varying depending on the scrap grade.

  • Scrap supply unlikely to increase

Scrap supply will decrease in the coming period due to the Christmas and New Year holidays and is unlikely to increase in the short term with scrap collection becoming more difficult because of harsh winter conditions.

  • Scrap suppliers expected to destock as year-end approaches

As the end of the year draws closer, many scrap suppliers are expected to seek to liquidate their inventories. Amid this pressure to conclude sales, scrap suppliers are foreseen to prioritize sales volumes instead of pricing.

  • EU-based scrap suppliers to gain advantage in sales to Turkey

Entering December, the depreciation of the euro against the US dollar is expected to provide an advantage for EU-based scrap suppliers in their scrap export pricing and, accordingly, ex-EU scrap booking volumes in Turkey will likely be higher compared to booking volumes from other regions.

  • Turkish mills to adopt cautious stance on scrap purchases

Since the ongoing political and economic uncertainty in Turkey has negatively affected finished steel purchases, Turkish steel mills are expected to adjust their scrap purchase strategies in line with their slower finished steel sales and to cautiously limit their purchases of scrap.

  • Ex-Black Sea scrap supply expected to decline further

With Ukraine having raised its scrap export duty, ex-Black Sea scrap supply which has already decreased slightly is expected to see a further decline due to worsening winter conditions.

  • Iron ore prices unlikely to soften in short term

With coking coal prices continuing to increase entering the month of December and with the increases in the Chinese futures market supporting iron ore prices, global iron ore prices are unlikely to indicate a significant softening in the short term. Although iron ore consumption will decrease in China as a result of newly-announced production cuts, these cuts are currently providing support for the futures market, resulting in increases in iron ore prices. Meanwhile, many research companies, investment banks and analysts have increased their iron ore price estimates for 2017.

 

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

 

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?

September 2013- March 2014 HMS I/II 80:20 CFR Turkey Prices

September 2014- March 2015 HMS I/II 80:20 CFR Turkey Prices

September 2015 - March 2016 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

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

 

 

Related news

Fuat Tosyalı: Turkey cannot use its 19 million mt steel capacity due to imports

Monday, 28 November 2016 17:33:06 (GMT+3)   -   Istanbul

In an interview with NTV Türkiye, Fuat Tosyalı, chairman of both Turkish steelmaker Tosyalı Holding and of the Turkish Steel Producers' Association (TCUD), stated that the Turkish steel industry imports approximately 20 million mt of steel products annually and therefore cannot use its 19 million mt capacity. Mr. Tosyalı stressed that this is not an understandable and sustainable situation for the Turkish economy, adding that urgent measures should be taken against imports of dumped and subsidized steel.

Meanwhile, Mr. Tosyalı also stated that Tosyalı Holding is carrying out intensive market research studies in Africa, which has significant potentials and opportunities, and that they are continuing their efforts to evaluate these opportunities. In this context, the company will increase its daily steel production capacity in its facilities in Algeria from 5,000 mt to 14,000 mt next year.

Tangshan issues heavy pollution weather warning

Friday, 25 November 2016 11:13:49 (GMT+3)   -   Shanghai

The municipal government of Tangshan in China’s Hebei Province has issued a level-three heavy pollution weather warning effective as of November 25, with the aim of limiting air pollution. 

Accordingly, Tangshan City requires all industrial enterprises in the city to reduce production activity during the usual peak production hours. Meanwhile, enterprises which cannot meet certain conditions will be forced to stop production to ensure good air quality. Tangshan is a major hub for steel production in China.

China to assign investigation teams to verify capacity reductions

Friday, 25 November 2016 13:35:12 (GMT+3)   -   Shanghai

Chinese Premier Li Keqiang has stated at an executive meeting of China’s State Council that China has achieved its steel capacity reduction target of 45 million mt and its coal capacity reduction target of 250 million mt for the current year ahead of schedule. 

To examine capacity reduction, Premier Li has requested the central government and local governments to assign investigation teams to carry out selective inspections of capacity reductions at steel enterprises and coal enterprises in China to make sure they have really eliminated the stated capacities. Any enterprises found guilty of fraud or illegal production in the steel and coal sectors will be held accountable and receive severe punishments, the Chinese premier said. 

NDRC: China encourages medium and long-term coal supply contracts

Friday, 18 November 2016 10:15:06 (GMT+3)   -   Shanghai

China’s National Development and Reform Commission (NDRC) has announced in a joint teleconference with China’s State Administration of Coal Mine Safety (SACMS) and China Coal Transport and Distribution Association (CCTDA) that China is encouraging medium and long-term coal supply contracts between coal producers and buyers in order to maintain the stability of coal prices and of the market. In particular, contracts must include a basic price of RMB 535/mt ($77.65/mt) for 5,500 kcal/kg thermal coal effective as of December 1 this year, with reasonable price adjustments allowed according to fluctuations in the market.

As indicated by the NDRC, China is accelerating and increasing the release of coal capacity to ensure coal supply given the peak season for coal consumption as well as the increasing coal demand for heating purposes in China’s northern region. In particular, all legal coal mines conforming to safety standards can organize coal production based on 330 working days annually during the heating season (mid-November to mid-March), up from the previous 276 days, in order to guarantee coal supply.

Meanwhile, the NDRC stressed that it would strengthen coordination with transportation departments to increase coal shipments to ensure coal supply for power generation and heating purposes, especially to those key power plants and steel enterprises which support the livelihood of residents in China’s northern region. “We need to push forward optimal regulation on power resources, promoting the development of hydropower, nuclear power, wind power and solar power, to ease the supply pressure on regions where coal supply is tight,” the NDRC added.

CISA: China completes 80% of 45 million mt capacity cut target for 2016

Thursday, 17 November 2016 17:00:46 (GMT+3)   -   Istanbul

Speaking at the "New Horizons in Global Steel Markets" 11th Annual Conference organized by SteelOrbis in Istanbul on November 17, Su Changyong, director of international cooperation at the China Iron and Steel Association (CISA), said that more than 80 percent of this year’s capacity reduction target of 45 million mt in China was completed by the end of September, with some regions already meeting their target for the whole year. 

China’s crude steel production registered a growth of 3.9 percent year on year in September reaching 68.17 million mt, bringing total crude steel production for the first nine months to 604 million mt, up 0.4 percent year on year. Although the growth rate in October is small, it is important to note that it is the first growth for 20 months since 2015, Mr. Su pointed out. 

According to the CISA official, in the January-October period this year China’s imports amounted to 10.91 million mt, up 2.1 percent, while the country’s exports for the first ten months increased by 0.7 percent to 92.74 million mt, both year on year. Mr. Su indicated that in the January-September period China’s supply volumes to its main export destinations continued to grow, while its exports to the EU, the US and Latin America declined. During the same period, Chinese exports to Turkey totaled 1.8 million mt, down 16 percent year on year. 

Mr. Su said that Chinese finished steel prices began to rebound in December 2015 after sliding continuously over a period of four years. Meanwhile, total steel investments in China came to RMB 269.94 billion for the January-August period, down 7.53 percent year on year. Investment in mining and iron-making dropped by 30.14 percent and 20.19 percent respectively, while investment in steelmaking increased by 12.74 percent and investment in steel processing rose by 2.22 percent.

According to the CISA, in the January-September period this year, China’s domestic iron ore production was 941 million mt, down 3.3 percent year on year, its iron ore imports increased by 9.79 percent to 92.99 million mt while the average iron ore import price was $53.58/mt, down $8.86 year on year. Mr. Su stated that the good news is that the iron ore price is moving in a more coordinated way with steel prices, which contributes to the more sustained profitability of the steel industry. 

The Chinese economy remained stable in general for the third quarter of 2016 with a GDP growth rate of 6.7 percent, down slightly by 0.2 percentage points over the same period last year. Mr. Su said that the producers price index (PPI) rose by 0.1 percent year on year in September, which is six percentage points higher compared to the same month last year and 0.9 percentage points higher than the previous month. This is the first positive growth since the index fell below zero in March 2012. 

Mr. Su concluded by saying that in the 2016-2020 period China aims to reduce steel capacity by 100-150 million mt and to increase capacity utilization from 70 percent to 80 percent, while it also aims to reduce energy consumption and polluting emissions by over 10 percent and 15 percent respectively.

Erdemir's Basak Turgut: Sentiment far more positive in global economy entering 2017

Thursday, 17 November 2016 10:13:00 (GMT+3)   -   Istanbul,  Istanbul

During the "New Horizons in Global Steel Markets" 11th Annual Conference organized by SteelOrbis in Istanbul on November 17, Basak Turgut, marketing and sales coordinator at Turkish integrated steel producer Erdemir, stated that, following its rapid growth from 2000 to 2007, the world economy recorded sharp contractions at the beginning of the 2008-2015 period though later showing signs of a recovery, while the beginning of the 2016-2021 period can be defined as a period of cautious recovery and fragile optimism. 

Mrs. Turgut stated that there have been signals of an economic recovery in many countries as of the second half of 2016, while the world purchasing managers index (PMI) increased to 52 points in October this year, reflecting a revival of global economic activity. Meanwhile, the PMI in the US moved upwards, while unemployment in the country lessened. The producer price index (PPI) in China, which had moved downwards over the previous 55 months, has started to increase. Considering these market conditions, a far more positive sentiment prevails in the global economy entering 2017, as compared to late 2015.

Meanwhile, Mrs. Turgut said that, while the 2000s started amid globalization of the economy, protectionism has become the new trend in the last 15 years for all industries including steel. Due to this new trend, a rapid increase has not been observed in growth rates. Even the EU, which actually supports free trade, has taken surprising measures and has become one of the most protectionist regions. The Erdemir official also stated that China, Russia, South Korea and Brazil are not welcomed in many markets around the world, particularly in the US and the EU, amid 355 ongoing trade investigations. While the world economy is expected to grow by only one percent this year, it seems that countries are mostly adopting independent stances and, similar to all other leading industries, trade in the steel industry will likely become more regional.

11th Steel Conference: Turkish crude steel output cannot regain levels of 2012 for now

Thursday, 17 November 2016 10:15:57 (GMT+3)   -   Istanbul

During the "New Horizons in Global Steel Markets" 11th Annual Conference organized by SteelOrbis in Istanbul on November 17, Dr. Veysel Yayan, general secretary of the Turkish Steel Producers Association, said that over the last three years there has been a pause in the expansion of global steel production capacity. Amid the widened gap between steel production and consumption, the uptrend of production capacity in the Turkish steel sector has been nearly at a halt beginning from 2012 due to the global overcapacity problem. According to Dr. Yayan, production capacity in the Turkish steel sector increased by 15 percent in the 2010-2012 period and has remained at 49-50 million mt since then. Also, since 2012 steel consumption in Turkey increased, while output has moved downwards. Meanwhile, in 2016 crude steel production in Turkey is expected to increase to 32.8 million mt as compared to 31.5 million mt of 2015, he said.   

Dr. Yayan stated that the overcapacity problem exists not only in China, but also in Turkey’s neighboring countries such as Ukraine and Russia, where overcapacity levels are currently at 39 million mt and 47 million mt respectively. Iran also has a serious overcapacity problem in its steel industry, he added. 

Furthermore, he continued, opposing trends have been observed in crude steel production and consumption in Turkey; while consumption is on the rise, output started to decline as of 2012, though recovering slightly this year. However, Turkey’s crude steel production is far from reaching 2012 levels for now. 

Regarding Turkey’s steel trade, Dr. Yayan said that the share of imported products in Turkey’s steel consumption has increased to 50 percent from 40 percent and this situation is not acceptable for a country which has sufficient production capacity to meet customers’ needs in its domestic market. “Turkey has increased to fifth rank from ninth among steel importer countries as imported steel has become more attractive for Turkish buyers, and, from being a net steel exporter, Turkey has entered the league of net importers in 14th position. Turkey’s steel exports have decreased both on value and volume basis, while imports have increased both in value and volume. Meanwhile, for 2016 Turkey’s steel export volume is expected to decline to 90 percent of its steel import volume, while the country’s steel imports are expected to exceed its exports in value by $11 million in the given year.      

Dr. Yayan also stated that, while there are many antidumping investigations against Turkish producers, protection measures against imports in Turkey are very few and insufficient. 

Gerdau: Trump’s infrastructure plan may boost steel demand

Thursday, 10 November 2016 01:42:00 (GMT+3)   -   Sao Paulo

Brazilian steelmaker Gerdau said this week the infrastructure deficit in the US could result in opportunities to the local steel sector.

The company said that the anticipated infrastructure spending promised by elected president Donald Trump could also help the steel sector.

“There is low demand in the industry and also it's a moment of caution due to the presidential election,” said the company’s CEO, Andre Gerdau Johannpeter.

“On the other hand, we see that steel growth in the construction industry is recovering. There is also a significant infrastructure deficit in the US, which represents a good opportunity for the industry in the region in the next coming years,” he said, while talking to analysts in a company’s earnings call.

Talking to analysts, Johannpeter said Gerdau was “monitoring” the plans of both candidates and all of them had “very strong government” plans in terms of infrastructure.

“We believe there should be more investments in infrastructure,” the executive said.

“The United States really needs investments in infrastructure. And this has been the case for many years. Therefore, we believe that they should resume investments in infrastructure once the new president takes over,” he said.

MOC: China’s foreign trade to indicate stable movement

Friday, 11 November 2016 16:48:58 (GMT+3)   -   Shanghai

On November 10, China's Ministry of Commerce (MOC) stated at a press conference that China’s foreign trade will likely maintain stable movement with support from the government’s foreign trade policies.

In October this year, China’s total foreign trade value amounted to $307.299 billion, indicating a month-on-month decrease of 6.1 percent and a year-on-year decrease of 4.9 percent. 

In the January-October period of the current year, China’s total foreign trade value amounted to $2.981481 trillion, down 7.6 percent year on year. With China’s foreign trade promotion measures gradually coming into effect and with its foreign trade structure being optimized, the China's foreign trade will likely see improvements and move on stable trend even though the growth rate in the January-October this year period was negative, the MOC stated.

The MOC also commented that China’s exports to the EU and Japan have increased. In the January-October period, the value of China’s exports to the EU and Japan amounted to RMB 1.82 trillion ($0.26 trillion) and RMB 694.9 billion ($102.01 billion), up 1.0 percent and 0.5 percent year on year, respectively. In addition, in the given period China increased its import volumes of 10 commodities including crude oil, iron ore, natural gas and copper ore concentrate, while import prices decreased, leading to overall cost savings of about RMB 423.2 billion ($62.12 billion).

NDRC: China’s coal demand-supply situation remains basically stable

Thursday, 10 November 2016 14:38:05 (GMT+3)   -   Shanghai

Xu Kunlin, deputy secretary general of China’s National Development and Reform Commission (NDRC), stated at a press conference held on November 9 that the coal demand-supply situation in China remains basically stable and so will not contribute to the irrational price surge seen recently.

Mr. Xu stated that China's annual coal production capacity is around 5.4 billion mt, though China has cut about 300 million mt of coal output capacity this year. In September this year, China’s average daily coal output rose by 2.9 percent month on month. Meanwhile, coal shipments on China’s railways, roads and waterways have been increased to ensure coal supply. In October this year, coal shipments by Chinese railways amounted to 170 million mt, up 6.6 percent year on year. In the first week of November, coal shipments by Chinese railways totaled nearly 40 million mt, up 10.2 percent year on year. 

In addition, inventories of coal at China’s large ports and key power plants have increased significantly. As of November 7, overall inventory of coal at the five main ports around Bohai Sea totaled 17.20 million mt, rising by 69 percent compared to the lowest level this year. While coal inventories at key power plants in China amounted to 65.76 million mt as of the given date, up 37 percent compared to the lowest level in August this year. “China is capable of ensuring coal supply and surging coal prices will not last in the long run,” Mr. Xu said.

Moody’s: Positive effects of trade cases will be limited in US

Tuesday, 08 November 2016 16:57:06 (GMT+3)   -   Istanbul

International credit rating agency Moody’s has stated in a report that US steel prices are unlikely to test the lows reached in the past year, despite recent price declines thanks to the US International Trade Commission’s determinations in favor of the domestic industry in recent unfair-trade cases which have led to significantly reduced imports in several product categories. However, Moody’s noted that import tariffs are likely to remain a buffer against price slides, but they are not a solution.

Moody’s stated that positive outcomes in unfair-trade cases led to a substantial decline in imports from November 2015 through April of this year and along with capacity curtailments and higher raw material costs supported rising steel prices through June. However, in the past few months prices have dropped again on the back of continued weaker demand from the energy, mining and industrial equipment sectors, as well as price decreases for scrap. In addition, the recent spike in imports from countries unaffected by recent trade cases signals that the positive effects of the cases will be limited unless there is a significant rebalancing of the global steel supply-demand equation.

CISA: Iron ore prices likely to indicate some fluctuations

Monday, 07 November 2016 09:50:17 (GMT+3)   -   Shanghai

According to a new report issued by the China Iron and Steel Association (CISA), as of October 31 this year, imported iron ore inventory at Chinese ports totaled 108.29 million mt, up 1.81 million mt month on month and rising by 23.84 million mt year on year.

According to the CISA, in the January-September period this year China’s pig iron output amounted to 528 million mt, down 1.59 million mt year on year, while China’s imports of iron ore totaled 762 million mt, rising by 63.81 million mt year on year, reflecting the ongoing oversupply in the market.

Currently, as there is no significant improvement in demand in China’s finished steel market with the approach of colder weather in China, it is thought that iron ore prices will likely indicate some fluctuations in the coming period, the CISA stated.

Tangshan government takes measures against heavy pollution

Friday, 04 November 2016 16:48:40 (GMT+3)   -   Istanbul

The municipal government of the city of Tangshan in China’s Hebei Province has announced that as of November 4 all sintering machines at steelmaking enterprises must stop production, while all blast furnaces, as well as all cement mills, rolling mills, casting mills and glass producing enterprises must halt their activities until further notice, in order to reduce heavy air pollution.

The announcement also stated that as of November 4 all surface mines should stop production, while it also prohibited all explosions, exploration, crushing and transportation at such mines.

The municipal government stated that it will later issue a separate announcement to cancel all emergency emission reduction measures.

US ITC votes to continue investigation into rebar imports from Turkey, Japan and Taiwan

Thursday, 03 November 2016 23:09:58 (GMT+3)   -  

The United States International Trade Commission (US ITC) today determined that there is a reasonable indication that a US industry is materially injured by reason of imports of steel concrete reinforcing bar from Japan, Taiwan, and Turkey that are allegedly sold in the United States at less than fair value and subsidized by the government of Turkey. All six Commissioners voted in the affirmative.

As a result of the ITC’s affirmative determinations, the US Department of Commerce will continue to conduct its antidumping and countervailing duty investigations on imports of this product from Japan, Taiwan, and Turkey, with its preliminary countervailing duty determination due on or about December 14, 2016, and its preliminary antidumping duty determinations due on or about February 27, 2017.

Worldsteel in Dubai: So is future for global steel industry now rosy?

Wednesday, 12 October 2016 09:59:09 (GMT+2)   -   Istanbul

The increases in global steel demand forecast by worldsteel in its short-range outlook announced at the association’s 50th annual meeting held in Dubai on October 10-11 prompted a question from journalists present on whether the future for the global industry is now rosy. Outgoing worldsteel chairman Wolfgang Eder, also chairman of Austrian steelmaker voestalpine, responded by saying that in his view the industry was still far from rosy times, though adding that signs of stabilization were evident and affirming that he foresaw no downturn in store for the industry in the short term. He went on to remark that there was some consolidation observed in the  markets, while also saying that it would help if there were no crises in Europe and the Middle East, though at the same time he expressed confidence that problems will be resolved. There still remains a lot of homework to be done, he said. Again on an upbeat note, he said that so many positive aspects will be seen in steel over the coming two to three years, especially driven by new steel grades and new developments in steel, and so in conclusion he asserted that there is light at the end of the tunnel. 

For his part, worldsteel director general Edwin Basson said that the positive signs regarding global steel demand allows the industry space to think of the longer term and of important issues such as sustainability. He went on to remind his listeners that without steel it would be very difficult to maintain modern standards of living.

Taiwan expects minimum harm from US rebar duty investigation

Thursday, 22 September 2016 16:57:00 (GMT+3)   -   Taichung

Regarding the petition filed by US-based producers for the antidumping investigation against rebar imports from Turkey, Japan and Taiwan, Taiwanese market sources state that the investigation should focus on Turkey rather than Taiwan, since Taiwan’s rebar exports to the US amount to only 10 percent of Turkish rebar exports to the country.

Taiwanese market players also expect that, even if high antidumping duties are imposed on Taiwanese exports, Taiwanese producers will not be affected so much since there are just about five mills in Taiwan exporting to the US irregularly. Overall, Taiwanese rebar mills produce 5.5 million mt of rebar annually and only export 5-7 percent of this total.

Namık Ekinci comments on US rebar investigation filing

Wednesday, 21 September 2016 17:06:31 (GMT+3)   -   Istanbul

Regarding the petition filed by the US-based producers for an antidumping (AD) duty investigation against imports of rebar from Japan, Taiwan, and Turkey, and a countervailing duty (CVD) investigation into imports of rebar from Turkey, Turkish Steel Exporters' Association (CIB) chairman Namık Ekinci said that it is nothing new for the US to use WTO rules through groundless reasons to protect the expensive prices and high profits of its producers He reminded that the antidumping duty investigation launched in 2013 was terminated without any duties and the countervailing duty resulted in a very low duty rate. He also wonders how the US authorities will react to a CVD petition while there is already a CVD rate in force. 

CIB chairman said that even if Turkey’s exports to the US increased, it is in line with the competitive and demand-driven sales within the order of free trade rules. Besides, US domestic demand has not remained stable since 2014 and showed a steady increase. He said it is only normal for imports to increase when there is strong demand. “If meeting of this demand via imports instead of domestic market which is highly-priced is seen as a problem, then the domestic producers should review their own terms and expensive prices, instead of blaming the imports” Mr. Ekinci added.

The CIB official believes that the US authorities will make an objective decision within the WTO rules.

 

 


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