Apr 08, 2022
War in Ukraine major game changer for global long steel market: IREPAS
2022-07-05
The war in Ukraine has changed the global long steel products market sentiment, as well as fundamentally altering the flow of raw materials and finished products almost overnight, the International Rebar Producers & Exporters Association said in its latest short-term outlook released April 7.
“Before the war, the expectations were that demand would determine the direction of prices, contrary to 2021 when supply was the driving factor. Today, however, supply has definitely taken the lead again and the market is in fact distorted,” it said.
Pointing out that supply disruptions of semi-finished and finished products had opened new opportunities for others, especially for Turkish mills that share the same geographical region, the association said it was for sure that the sanctions on Russia would remain in place for some time to come.
Highlighting the price imbalance between Asia and the rest of the world, IREPAS said international markets were becoming more regional than ever.
“European steel prices are now the highest in the world. Asian and especially Chinese prices are substantially lower than anywhere else. The steel trade is changing direction from selling to Asia to buying from Asia,” it said.
As scrap exports from Russia and Ukraine were almost at a standstill, Turkish mills had compensated for the missing quantities by the extra availability of European scrap. This had allowed them to keep scrap prices under control while at the same time exporting extra volumes of steel to the EU market, IREPAS said.
Turkish deepsea import ferrous scrap prices have remained largely stable in recent days after initially rising $150/mt from $508/mt CFR on Feb. 24, when the Russian invasion began.
The Platts Turkish import price of premium heavy melting scrap 1/2 (80:20) was assessed at $653/mt CFR April 6, up 50 cents/mt on the day, according to data from S&P Global Commodity Insights.
Scrap price increases would continue, but the war was a major negative factor for the market, IREPAS said.
“It will take some weeks for the market to find its equilibrium. Under the current circumstances, the market can be described as fluctuating and unstable. The outlook is very uncertain as the fundamentals may change daily,” IREPAS added.
— Cenk Can
Source: Eurometal
