Turkish market experts focus on raw material prices
The Turkish representative of a European-based producer commented on 2024 that 'the whole market will be on hold under the expectations for raw materials'. In addition, officials from scrap importing companies told SteelRadar that 'scrap prices will not decrease due to the upcoming regulations on scrap exports from Europe, and even Turkiye will have difficulties in finding scrap in the EU'.
Another raw material supplier said, "Trade from Egypt is quite favourable, there is a free trade agreement with Malaysia, but the additional cost of wire rod imports indicates that the price will not decrease. In addition, scrap prices have been on a downward trend but with this news, scrap dealers may tend to increase their prices due to the winter months. In 2024, I expect high scrap prices in general,' he concluded.
Another market expert evaluated the SteelRadar representative with the following sentences; 'We are forced to say that we will wait and see. If we enter the election economy, credits will be opened, the market will be artificially revitalised to some extent, and prices and sales will increase. There is an expectation in this direction. If there is no election economy, the weak demand situation in the last 3 months (independent of price) will continue. At least we foresee this in the domestic market.'
An official from Turkish steel producers said, 'I expect that the first half of 2024 will be stagnant in general terms and some activity in the second half. I can say that we agree with the general market that 2024 will be a hopeful year for producers, thinking that it will be a year close to 2023, maybe a little better than 2023'.
Turkiye's HRC import volume may decrease
Turkiye's hot rolled coil imports are expected to decrease due to the anti-dumping investigation, which started on 31 October, into HRC imports from China, India, Japan and Russia.
Turkish firms with inward processing regime certificates are not subject to duties provided they export their finished products. Most flat steel producers used to use this certificate for HRC imports. However, due to weak demand in export markets and very low export tonnages, most companies failed to meet the targets required to qualify for the DIR certificate, a flat steel market expert said.
Expectations in the Russian market are hopeless
Expectations of a recovery before the new year failed to be realised. The decrease in spot prices has almost stopped. At the same time, metallurgical factories do not intend to reduce factory prices for sheet products. Costs are already quite high and may increase a little more with the start of the new year. Export offers for Russian hot-rolled steel have been almost stable for the past few weeks and fluctuate only with the ruble exchange rate, which has fallen below 90 rubles per dollar.
Market experts in the Balkans predict a difficult year
An official from a major trader in the Balkans told SteelRadar about the prospects for 2024 in Kosovo, Albania, Macedonia and Serbia in particular: "I think it will be a difficult period in our region. Prices will probably increase, but demand will be very low compared to previous years. Countries are more importers than exporters, and the construction sector will face various difficulties for this reason.
The Macedonian market representative said: "I think that this year will be better than the previous one. I hope that demand will increase as well as prices, the situation in the Red Sea creates additional problems and unexpected situations. Honestly, it is difficult to predict. If you are in the steel business, you know how much imports go from Asia to Europe. Oil, steel products, food, plastics, textiles... All of Europe will be affected, transport prices will increase. Raw materials for production will be delayed... It is too early to talk now because of the winter period and the Christmas holidays, but the impact will be high in the next 2 months.
A market expert from Albania said; "With the new regulations, if you earn more than 140.000 Euros per year, 23% tax will be deducted from the profit and will go to the state, before we did not have tax up to 140.000 Euros per year. 2024 seems to be a difficult year, I see China very aggressive and they like to sell when they are aggressive, this is not a good situation for us. Albanian steel traders are connected with Turkiye, so if Turkiye is expensive, it means that Albania is waiting for bad days, but last year was good, I hope everything will be fine this year.
Raw materials on the agenda for the USA in 2024
In 2024, fierce competition for premium scrap is expected in the US, as the increase in electric arc furnace (EAF) steelmaking capacity, which is expected to increase by 16.1 million st/year by 2025, will intensify the scramble among steelmakers for high purity scrap grades.
Despite small changes in total steel production forecast this year, the growing share of US EAF capacity in 2024 will likely continue to drive demand for prime grades, pushing steelmakers to explore cheaper alternatives such as low-copper shredded scrap, which has steadily increased its market share over the past few years.
What is happening in Southeast Asia?
In Southeast Asian markets, demand for long rolled products also weakened by the end of the year. Buyers are staying out of the market, waiting for the trend to become clearer in January and avoiding making significant purchases during the holidays. In a bid to attract buyers, Chinese exporters last week cut their offers by $5-10 to $520-530 per tonne fob for billet, $550-580 per tonne fob for rebar and $540-580 per tonne fob for wire rod. Suppliers in Southeast Asia are also forced to make concessions. Although billets were initially supplied to import markets at $535-545/tonne cfr due to the high procurement cost, weak demand is exerting significant downward pressure. Buyers refuse to pay more than $525-530/tonne cfr and transactions are mostly taking place at the lower end of the $523-540/cfr price range.
Chinese steel markets optimistic for the first half of 2024
The year 2023 was a complicated year all over the world, especially in China. Factors such as economic fluctuations in China, property crises, traders' abstention, etc. throughout the year closely affected the global iron and steel industry. However, according to the analyses of market experts, there will be an optimistic outlook in the first half of 2024. In addition, it is rumoured that China's steel exports and profit margins in the Chinese steel market will be decisive in 2024.
In China, the national hot rolled steel market has been relatively stable for several weeks. The possibility of significant price fluctuations, including exports, has not been realised. According to market experts who spoke to SteelRadar, growth is possible in the spring, but this will depend above all on macroeconomic indicators. They continued their remarks with the price policies of European flat steel producers as follows; European hot rolled steel producers announced increases in the first quarter before Christmas. Consumers expect prices to decrease again in the spring.
India is trying to overcome its position as an importer country
India has started to take its place among the leading countries in the rapidly developing world of the iron and steel industry. However, looking at the country's domestic market, despite its strength, it was seen as a net importer of steel in July 2023. According to market analysts, this was because Indian steel prices were initially higher than import prices, which created a competitive disadvantage.
Although India's steel import orders appear to have stagnated at present, earlier orders could keep this level high until the first months of 2024, putting pressure on steel prices in the domestic market.
The managing director of one of India's major steel mills told SteelRadar that they are "emphasising that for 2024, they are mainly spending energy on value-added products". We will introduce niche products to the market by producing value-added products that are more demanded in the market". Thus, he added that they aim to achieve greater success in exports.
India Steel Market Review 2023 and 2024
In late 2023, Indian steel prices decreased due to global market challenges, increased imports and high inventory levels. Despite these challenges, government interventions offered some support and stabilised the industry.
Major TMT players reduced their prices significantly (Rs 8,000-11,000/tonne) in the first seven months in response to changing market dynamics and competitive pressures.
Fluctuations in Hot Roll and Cold Roll Prices: The market saw different trends in HRC and CRC prices. While hot roll prices decreased, cold roll prices showed less volatility. The year ended with some important export agreements to the European Union.
Market Challenges: 2023 was marked by increased imports, lower exports and inventory build-up. These factors, together with changing production dynamics, had a profound impact on market conditions.
The year ahead presents a number of challenges and opportunities, influenced by factors such as general elections and capacity expansions.
Forecasts point to a potential increase in demand in January 2024, which could lead to price adjustments at primary TMT plants. The market will closely monitor supply and demand dynamics to measure future trends.
The increase in Taiwan dollar boosts the trend of competitive steel imports
The increase in the Taiwan dollar against the US dollar due to the US Federal Reserve's interest rate cut expectations has lowered the cost of steel imports by around NT$506/tonne ($16), according to an assessment of the Taiwanese local market to SteelRadar. This reduction will make imported steel more competitive, leading to a potential revival in purchases if the Taiwan dollar continues to appreciate, benefiting buyers looking for cost-effective options in the import market.
Saudi Arabia cautious expectations for the first quarter of 2024, optimistic for the second quarter
As Saudi Arabia steps into the new year, the outlook for the steel market in the first quarter appears to be facing challenges. Market experts in Saudi Arabia's local market told SteelRadar that prospects remained weak in the first quarter, with cautious forecasts for the first months of 2024, while a more moderate outlook prevailed in the second quarter.
However, industry experts are optimistic about a positive turnaround as the year progresses. The Saudi Arabian steel market is expected to become more resilient towards the end of the second quarter. Strategic balances, potential economic stability and ongoing infrastructure projects are among the factors that could contribute to this positive change.
A senior official of an Iraq-based producer said, 'The Iraqi government receives a large amount of money from the Iranian government for allowing Iranian rebar to enter Iraq. Therefore, they do not want to stop rebar imports to Iraq. This problem has been affecting the Iraqi steel market for a long time, and rebar imports continue despite the ongoing pursuit of steel mill owners and the meeting held a few weeks ago between the government and the mill owners to solve this problem. For this reason, a very hopeful picture is not drawn in the Iraqi steel sector. He made an evaluation in the form.
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