EAFs turn from costlier scrap

Higher prices for ferrous scrap in recent weeks have prompted EAFs to turn to semi-finished products, according to the latest outlook from the International Rebar Exporters and Producers Association (Irepas).

Its March review notes that markets have seen an almost US$ 30 per tonne increase for scrap. ‘The increases in scrap prices force EAF based mills to replace their scrap purchases with the procurement of semis,’ the outlook says. EAF-based mills are already priced out and the smart choice is semi-finished imports from Asia as evidenced by recent Turkish import statistics. It is a battle of costs right now and nothing else matters.’

Overall, Irepas says, the level of competition in the global market is very strong – almost at maximum levels. ‘The current situation in the market can be described as unstable with high volatility, with a similar outlook.’

Overwhelmed

Irepas believes the global longs market has been overwhelmed by ‘a spiral of trade measures’ including US tariffs on steel. ‘Because of the uncertainties created by the US administration on top of the already existing problems, the markets are now somewhat lost. It seems the US finally discovered the best method of protection by creating uncertainties and making it hard to export to the USA.’

Looking to Europe, the outlook says mills feel the EU is lagging far behind the fast-changing landscape of international trade. It notes that the European Commission has not proposed any defence measures against surging imports, leaving the EU ‘wide open’ for more imports and thus more trade measures from the US.

The general steel business in the US has worsened, adds Irepas. ‘The current demand in the market is actually opportunistic buying in anticipation of higher duties in the future. As for reinforcing bars, there is slower demand with less construction due to the market uncertainty and continued high interest rates.’