US President Donald Trump's tariffs on China and his recent statements on the trade war have caused major fluctuations in global iron and steel markets. In particular, prices of basic metals such as scrap, rebar and iron ore followed a weak course due to these policies.
Impacts on Scrap Prices
Last week, scrap prices moved downwards due to global trade uncertainties and rising costs. Trump's tariff hike announcements and China's retaliatory tariff hikes on US products put pressure on scrap prices. In the Turkish domestic market, scrap prices decreased by around USD 20 to USD 365/ton from USD 380/ton last week. In the US East Coast ports, prices decreased by around USD 20. Local producers tried to lure buyers with price cuts to stimulate this weakening demand.
China's tariff hikes in response to Trump's tariffs also played a major role in this decrease. China's increase in tariffs on US-origin goods to 84% affected Türkiye's scrap supply chain and led to a decline in prices. To offset the pressure on scrap prices, Turkish producers have started to follow a wait-and-see strategy by limiting their scrap purchases.
Decrease in Rebar Prices
The decrease in scrap prices is also reflected in rebar prices. Turkish producers cut prices in a bid to keep domestic demand buoyant. Last week, rebar prices decreased from USD 560-580/ton to USD 555-570/ton, indicating that price pressures continued.
On the export side, rebar prices ex Türkiye held steady at USD 570/ton FOB, according to market sources. However, even at this price level, new order flow is reportedly limited. Some market players say that buyers are cautious about buying in anticipation of a price decrease.
Iron Ore Prices Expected to Increase
Trump's tariffs had a different impact on the iron ore market. China is planning to take stronger stimulus measures to protect its economy in the face of increased tariffs. This expectation caused iron ore futures contracts to rise. China's measures created optimism in the markets that they could boost global iron ore demand. However, it remains unclear whether these stimulus measures will be enough.
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