Demand in the global long steel products segment has returned to pre-pandemic levels, Murat Cebecioglu, chairman of Irepas, said during the 83rd Irepas meeting on September 21.
Indicating that the worst was behind for the market, Cebecioglu noted that the COVID-19 pandemic moved in a wave from Asia to America through Europe and the Middle East and had certainly worsened the market situation. However, currently, it is in a period of recovery and is driven by positive signals from China, where output keeps growing.
Regional markets are performing well, with demand returning and EU-based cut-and-benders are quite busy. Looking at North America, prices in the US moved up in September on the back of higher raw material prices, Cebecioglu said.
The Irepas chairman stated that the upward trend of scrap prices has already started slowing down, with a downward correction observed at present. He added that producers prefer billet unless a strong spread appears between billet and scrap prices.
He also noted that the increase in Turkey’s domestic steel consumption may be the result of the reduction in interest rates, which boosted demand for steel, providing support for the domestic market. However, he doubts whether this growth will persist.
Jens Bjorkman, the chairman of the raw material suppliers committee said during the meeting that most regions were recovering fairly quickly during the summer months. He recalled that ferrous scrap prices were slightly under $300/mt cfr Turkey in the pre-pandemic period, went down to around $220/mt cfr, and are now back at levels similar to those before the pandemic.
He underlined that the main driver was China’s extreme demand for raw materials and semi-finished steel, which they imported from many regions of the world. The weakening of the US dollar also resulted in scrap prices going upwards.
Uncertainty over potential or extended lockdowns remains, but Bjorkman was optimistic about the future, expecting healthy demand for scrap. The committee chairman stated that, after the initial phase of shock due to the pandemic, many have been surprised regarding the positive aspects. He added that some companies issued warnings regarding negative results, but business turned out to be better than expected in many cases, though some are still struggling.