Murat Cebecioglu, chairman of IREPAS (International Rebar Exporters and Producers Association), highlighted at a conference the growing instability in the global long steel industry’s supply and demand balance, with Chinese finished steel products dominating many markets. He warned that ongoing Chinese practices could severely impact the global steel sector and noted a bearish market sentiment affecting the overall outlook.
Jens Bjorkman, chairman of the raw material suppliers committee, reported that optimism for the second half of 2023 has shifted to 2025, citing pressure on iron ore prices due to reduced production in China, which may decrease export volumes and benefit the global market. He also noted that slowing sales in the EU’s downstream industries, driven by decreased personal spending, have led to a decline in scrap generation, resulting in stable scrap prices. While Germany initially showed improvements in construction and housing, business is now slowing. In Turkey, competitive semi-finished products from Asia have led to postponed scrap purchases, with expectations to continue importing billets and slabs, negatively impacting scrap prices.
Wilhelm Alff, chairman of the traders committee, discussed the rise in China’s exports, projecting monthly averages to increase from 5.6 mln tons in 2022 to 8.7 mln tons in 2024. He indicated that the competitive pricing of Chinese steel would likely deter Turkish mills from purchasing higher-priced scrap, further pressuring scrap prices.
Alff also explained that a decrease in rebar production in China, due to destocking and new rebar standards, has lowered demand for iron ore. With iron ore stocks at Chinese ports currently at 149 mln tons, he highlighted the widening spread between scrap and iron ore costs, leading many producers to prefer blast furnace methods for the next six months.
Cebecioglu reiterated that the global steel industry is largely influenced by China’s movements, creating significant supply and demand imbalances. While producers in GCC countries remain optimistic due to new projects in Saudi Arabia, he noted stagnation in the EU market and restrictions on Turkish exports due to Chinese competition. He cautioned that the near future looks bleak for the global long steel market without a halt in Chinese exports.
He also emphasized that China needs to not only reduce production but also stimulate lagging domestic demand, particularly due to challenges in the real estate sector, and called for government intervention. Additionally, he indicated that Turkish mills might shift from scrap to billet imports, potentially leading to reduced semi-finished production and downward pressure on scrap prices.
