At the summit organized by SteelRadar in Çeşme, İzmir, the steel raw materials market — rapidly transforming under the influence of global trade policies, carbon regulations, and energy dynamics — was discussed in detail. The opening speech of the session titled “Scrap, Billet and DRI on the Axis of Global Raw Materials” was delivered by S&P Global Energy Middle East Manager Wesley Monteiro.
“Net margins have been negative since the beginning of 2025”
Presenting price movements across the value chain to participants through charts, Monteiro pointed out that the rate of increase in billet prices has lagged behind the rise in raw material costs. Stating that this situation has placed serious pressure on producer margins, Monteiro said:
“When we add the spread and costs, we see that the resulting net margin is negative. This clearly explains why the desired balance could not be established in the market, not only this year but since the beginning of 2025, due to logistical disruptions and many other reasons. When we look at the data, we see that net margins were also negative in the relevant quarter of 2025, and this negative trend continues in 2026 as well.”
“Ship traffic in the Red Sea decreased by 95%”
Monteiro stated that the main reasons behind the transformation in the markets and the sharp price movements in the second half of the year were energy costs and geopolitical crises, presenting striking data regarding congestion in logistics routes.
Comparing ship traffic management in the region “before and after the crisis,” Monteiro shared the following information:
“Before the blockade in the Red Sea and Suez region, we were tracking an average of 140 ship transits. Following the outbreak of conflicts and war in the region, this average dropped to as low as 40. This means a decrease of up to 95% in transit passages. Although there have been serious disruptions in energy flows coming from the United States, which is the world’s largest energy exporter, there has been a 5% increase due to power generation. Because of this crisis scenario, electricity prices continue to rise in many parts of the world, especially in Europe. The increase in scrap prices, however, is following a somewhat softer trend compared to these developments.”
“The largest price difference of recent years is being seen in the second quarter of 2026”
In his speech, Wesley Monteiro emphasized that all these global risks should be taken into account in supply and procurement decisions and issued warnings regarding pricing mechanisms in the market. Stating that despite time constraints they closely monitor short-term general cargo (GC) benchmark prices and the reflection of discounts on the market, Monteiro said:
“There is very clear pressure on prices. Under normal conditions, the price difference should have been higher. According to the data in the charts, the largest price gap and deviation are seen in the second quarter of 2026. This is the biggest difference we have witnessed in the last four to five years. Prices continue to rise in both the first and second parts of the value chain. At the end of the day, the only determining value for the market is prices.”
S&P Global Energy Middle East Manager Wesley Monteiro stated that data-driven analysis and accurate pricing provide vital direction for the sector during times of crisis and thanked the SteelRadar team for organizing an event that brings together the global steel industry.
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