Conflicts’ ‘serious’ impact on global steel industry

The wars in Ukraine and Iran are having serious repercussions for the industry, steel producers and exporters have been told.

The global situation was set out by Ioannis Manessis, chairman of the International Rebar Exporters and Producers Association, at the organisation’s 94^th meeting in Amsterdam in late April.

Manessis said the conflicts were having consequences for global trade in general and serious repercussions for the industry in particular. Steel trade was affected by both demand destruction and supply disruptions, as well as by elevated energy costs, higher freight rates and the practical difficulty of securing vessels on time to transport materials.

Subdued demand

The Irepas chairman added that protectionism continued to intensify. He also said that real demand in the global long products sector remained subdued while geopolitical tensions had driven up freight, energy and raw material costs. Combined with some degree of inventory replenishment, this had supported higher prices, he concluded.

Speaking at a panel session, Jens Björkman, from Stena Metal International and chairman of the Irepas raw material suppliers committee, highlighted significant shifts in global market dynamics over the past year. He pointed to tighter supply conditions, changing trade flows and increasing geopolitical influence on pricing and demand.

One of the key developments has been the slowdown in Chinese steel output, with March production falling to the lowest monthly level in six years. This decline, linked to weaker margins and stricter controls, supported sentiment in other regions, while iron ore prices had remained relatively firm.

Indian growth

India stood out as a major growth market, Björkman pointed out, supported by strong domestic sponge iron production. This had reduced its reliance on scrap imports, although the country was an attractive destination based on freight costs and pricing conditions.

Wilhelm Alff, director at Duferco and chairman of the traders committee, added that exporters were likely to face growing challenges in accessing traditional markets. Tightening EU quotas and rising protectionism were forcing suppliers to seek alternative destinations, though options are becoming increasingly limited as more countries introduce similar trade barriers.

He thought Africa would be a key growth market in the medium term, supported by rising imports from Asia, particularly China, although the expansion of local production capacity and potential protectionist measures could gradually slow this trend.