BIR: Ferrous stalling until 2024

Ferrous markets around the world are considered ‘bleak’ with recovery unlikely until the first quarter of the year, according to the latest outlook from the Bureau of International Recycling.

The Ferrous division’s Mirror sets out current difficulties facing the sector in China, Turkey and the rest of Europe because of their economic situations.

‘The outlook for the final quarter is bleak,’ says division president Denis Reuter. ‘While the Chinese economy appears to have bottomed out in August, the real estate crisis is far from over. Chinese steel mills have not yet reduced their production and so the world market is being flooded with the country’s finished steel. The Turkish market has been struggling with a large trade deficit since the previous quarter.’

‘Unfortunately, no improvement is expected in Germany or the rest of Europe, Reuter concludes. ‘While hope dies last, a recovery is unlikely until the end of the first quarter of 2024.’   

The Mirror notes that the global crude steel industry recorded a slight increase in output of 0.2% in the first eight months of this year when compared with the same period in 2022. This growth was mainly driven by China, India, Russia and Iran which all increased their production. The remaining six countries among the top 10 producers recorded declines in output, with Turkey and Brazil reporting the sharpest drops of 12.1% and 8.3%, respectively.

Recycled steel

The outlook reports that recycled steel price quotations in Europe and Turkey showed little change in the third quarter.

‘Prices on the world markets increased, mainly owing to buying interest from India, Pakistan and Bangladesh. Turkish consumers therefore had to increase their stocks at higher prices in September despite limited sales opportunities on the domestic and export markets.

Steel producers have tried to keep their purchases of deep-sea recycled steel to a minimum as the economic downturn in Turkey has severely affected the country’s construction and steel sectors.’

Indeed, according to Rolf Willeke, BIR’s ferrous statistics adviser, the first half of 2023 saw a 22.9% decrease in Turkey’s overseas recycled steel purchases to 9.637 million tonnes.

Meanwhile, US recycled steel exports have been in steady decline in recent years as domestic EAF capacity grows. ‘The demand for environmentally friendlier EAF steel made from recycled steel continues to increase its share over integrated production.

‘While the US and world economies will continue to face headwinds in the short term, including high interest rates and slowing demand, the demand for recycled steel should continue to grow and be supportive of the US recycled steel industry.