ahmet can pehlivan

[Steel Dude @steelmarketnews]

It's been quite some time since my last market thoughts. Work has been extremely busy, and it still is. However, I didn't want to leave the questions from my followers unanswered. Please keep in mind, these are only my views and opinions. Honestly, I hope to be very wrong for the sake of the market. lol.

Although global steel activity has slowed significantly, the analytical side of this business has actually become much more demanding. The extraordinary volatility in political, economic, and geopolitical developments means that understanding today's steel market requires following far more than just steel fundamentals.

The reason I've been successful in this business is that I don't focus solely on steel. I constantly monitor dozens of different variables that influence the market. As the number of variables increases, so does the complexity and the time required for proper analysis. Unfortunately, there's no shortcut if I want to provide the most accurate and easy-to-understand insights to the limited number of clients I work with.

If I've missed any of your questions, feel free to send me a DM or leave a comment below this post. I'll do my best to reply as soon as possible.

As usual, I'll divide this report into sections. This time, I believe it's best to begin with Asia, as the region has started flashing warning signs over the past two weeks.

ASIA

Over the past few months, cautious optimism had dominated the Asian steel market, largely because China had at least managed to maintain price stability. The closure of the Strait of Hormuz pushed up energy and logistics costs, providing support for iron ore and scrap prices, and the overall momentum had remained positive throughout the last three months.

Japanese scrap prices climbed to exceptionally high levels. The monthly export auction, which settled at around $290 FOB in May 2025, reached approximately $338 FOB in May 2026. While the increase was even larger in Japanese Yen terms, the depreciation of the currency meant that scrap still appreciated by roughly $50 per tonne in US dollar terms. However, deteriorating market conditions during the second half of May finally caught up with the market, and Japanese scrap prices recorded their first monthly decline in ten months, albeit a modest one.

As tensions between Iran, the United States and Israel eased considerably, steel prices gradually lost momentum. Brent crude oil, which had previously traded above $110 per barrel, first fell to $90, then $80, and has now declined to around $75. As a result, market sentiment has once again turned negative. Even though demand remained weak throughout the conflict, production costs had become the dominant pricing factor, limiting sellers' willingness to offer discounts. Once the conflict subsided, however, expectations of lower freight rates, insurance premiums and energy costs encouraged buyers to step back from the market.

Today, China has posted seven consecutive trading sessions of losses, which I believe is more than enough reason to become cautious. We have now entered the hottest, most humid and rainiest period of the year, when domestic steel demand in China traditionally weakens. Since demand is already fragile, any further slowdown is likely to push Chinese mills towards even more aggressive export pricing over the next two months. Looking at China's property sector and broader economic data, expecting a meaningful short-term recovery seems unrealistic. Although steel production has declined somewhat, I do not believe those cuts will be sufficient to balance supply and demand throughout the summer. Excess supply is therefore likely to remain a major source of downward pressure.

In my opinion, if the tragic Liushenyu mining accident—which claimed the lives of 82 miners and injured another 120—had not occurred, the market correction we witnessed over the past ten days would likely have been much sharper. Billet prices have already fallen back to April levels, while iron ore has returned to where it traded in March. The problem is becoming increasingly obvious.

Economic conditions remain one of the biggest challenges facing the Asian steel market. India is a good example. So far in 2026, the Indian economy has shown virtually no signs of recovery. The depreciation of the Rupee, persistent labor shortages caused by extreme heat, continued capacity expansion and sluggish steel sales are all weighing heavily on regional market dynamics.

Demand weakness has even forced many blast furnace producers in eastern India to ship material to the western part of the country, disrupting domestic market dynamics. Benefiting from lower production costs, these producers are putting significant pressure on induction furnace and electric arc furnace mills in western India. More importantly, India's surplus production has resulted in extremely aggressive export pricing over the past two months. In fact, it would not be an exaggeration to say that Indian suppliers have often been more competitive than Chinese exporters in Vietnam's flat steel market this year. With major domestic producers such as Hoa Phat and Formosa already supplying the market, substantial Chinese imports continuing to arrive, and India now adding further pressure, it is difficult to see prices moving higher in the near term. Any meaningful change will likely require a catalyst outside the steel industry—whether economic, political or geopolitical.

Equity markets are not usually my primary focus, but the recent geopolitical environment has made them impossible to ignore. Capital has been moving rapidly between different asset classes, creating unusually large swings across financial markets. Many investors have benefited from the technology rally, yet we've also seen Asian equity markets suddenly turn sharply lower without any obvious trigger. South Korea's stock market recently posted its first 10% correction since March, while Japan, China, Taiwan and other regional markets also weakened. Although indirect, these developments inevitably influence sentiment across the steel industry.
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Scrap | Europe | U.S. | TURKEY

Unfortunately, scrap has become the market where I keep getting my forecasts right—something that brings me little satisfaction, even though I'm glad it has helped my clients make the right decisions.

To begin with, next month doesn't look particularly encouraging.

I expect further corrections across the European domestic scrap market, regardless of the region. The main drivers will be weak demand and mounting pressure on producers' margins. At this point, lowering scrap costs is one of the few practical ways for mills to protect profitability.

Whether we look at Italy, Germany, Poland or Romania, demand for both flat steel and long products has weakened considerably. Mills have now accepted that the €740–750/t levels seen two months ago are no longer sustainable, forcing them to reduce selling prices. The real challenge is that shorter lead times mean mills need fresh orders to keep August and September production schedules running, but demand simply isn't there.

With the ECB raising interest rates again, GDP forecasts being revised downward, new safeguard quotas, and ongoing uncertainty surrounding CBAM, I don't expect sentiment to improve in July. On top of that, August is traditionally the holiday season across Europe, with many mills shutting down for several weeks. Naturally, this should slow domestic scrap trading even further.

It may still be a little early to say this with confidence, but I believe European dockside prices will soon test levels below €280 delivered. As I'm writing this, the EUR/USD exchange rate is trading around 1.1405, which gives Turkish mills additional leverage to push European exporters for lower prices.

For that reason, I simply cannot say that the decline in scrap prices is over. We would need several positive catalysts to justify such a view—and at the moment, those catalysts simply don't exist.

We're also beginning to see weakness in the short-sea market, particularly in Romania and Bulgaria. Romania's dominant buyer has already lowered purchase prices and, like many European producers, is complaining about weak demand. This will likely accelerate scrap flows toward ports and increase the probability of more aggressive export offers.

The decline hasn't been dramatic yet, mainly because vessels are still waiting to be loaded. However, I expect prices to move lower over the next 10 days. Poland could follow a similar path. One colleague even suggested a potential €15/t correction—and honestly, I can't dismiss that possibility. It's another reminder that this market needs to be monitored continuously.

Those who have followed me for a long time know that I rarely pay much attention to futures markets. Recently, however, futures have become more realistic. If I remember correctly, shortly after the war began, August–September contracts were trading around an unrealistic €770–780/t. Today, pricing looks far more rational. While futures are far from perfect, they still provide a useful indication of overall market sentiment.

United States

The U.S. domestic market remains relatively comfortable.

Demand for both scrap and flat steel continues to be solid. Capacity utilization has eased slightly over the past two weeks but remains healthy at around 80%. Nucor also announced another modest $5/st price increase this week, while rebar prices remain stable. Korean imports along with one producer’s aggressive pricing policy is probably the reason for rebar not moving up.

As temperatures continue to rise, scrap collection activity is likely to slow seasonally. I don't expect any significant downside in the domestic scrap market, although upside also appears limited. Depending on region and grade, we may see only minor price adjustments—and if that happens, it will most likely be driven by lower-priced Turkish import bookings.

Turkey

Now let's turn to the world's largest scrap importer: Turkey.

Unfortunately, business conditions remain weak here as well—arguably even more so than in the rest of the world.

Tight monetary policy and ongoing economic challenges have slowed activity significantly. Many producers were forced to buy scrap and billet at much higher prices earlier, leaving them under considerable pressure today.

After weeks of extremely weak demand, mills finally managed to secure roughly a $20/t decline in imported scrap prices. Domestic prices also shares the same faith but at a smaller pace. However, judging by today's domestic rebar prices, even that correction doesn't appear sufficient. It would therefore be perfectly understandable if producers continued pushing for even lower scrap prices.

One of Turkey's biggest problems is shrinking export demand. Political uncertainty, geopolitical tensions, and Europe's weak economy have all contributed to an unusually disappointing start to the summer. Normally, this period brings strong activity in both domestic consumption and exports, but as of June 22, there are very few positive signs.

The U.S. market has become much less accessible as buyers increasingly favor South Korean rebar imports, while anti-dumping concerns continue to limit Turkish exports. At the same time, major buyers such as Yemen have significantly reduced purchases compared to normal years. At this point, Israeli market is probably being missed.

Flat steel prices have held up better than rebar, but if mills want to generate meaningful sales, additional discounts will likely be necessary. At least that can be said considering bids of EU buyers.

Russia has recently increased flat steel exports to Iran, while high freight costs have kept Asian offers from becoming truly competitive for Turkish buyers. That said, following China's recent price weakness, I do expect import offers into Turkey to soften somewhat over the coming weeks.

The main challenge remains delivery times. In such an uncertain environment, it's extremely difficult to predict market conditions several months ahead. Cargoes arriving toward the end of September are unlikely to attract many buyers. For that reason, I still believe imported scrap will remain the preferred raw material over semi-finished imports.

Conclusion

With the exception of the United States and the GCC region (war & logistics), we're witnessing a broad global correction in steel prices.

Considering current production costs, steel prices are now becoming uncomfortably low. This is putting serious pressure on both producers and steel traders.
It's been a difficult year—and frankly, the single biggest factor that could change the outlook would be an end to the ongoing wars.

I also wanted to discuss the broader macroeconomic picture, but to be honest, it's too depressing.

What global markets need is clear: lower interest rates. Unfortunately, current conditions simply don't allow that to happen. Poor political decisions have significantly reduced the chances of a meaningful recovery during the remainder of 2026 while leaving central banks with very limited room to maneuver.
With U.S. markets now assigning roughly a 32% probability to another rate hike as early as July, despite expecting rate cuts before year-end, there's not much more to add.

Until demand returns or geopolitics improves, costs and financial positions will continue to dictate pricing. At this stage, I still don't see the catalyst that could reverse the current trend so far.

The market needs a miracle.

See you again in a few weeks.

Dude & Co.

[ahmet can pehlivan @seyircilidefter]

@steelmarketnews Spain
France

[Steel Dude @steelmarketnews]

Here are my personal thoughts for the steel market situation. unfortunately, i had to focus on other things more than steel for this one but blame the war dudes. ps: this was written earlier in the day

peace talks which occurred in Pakistan over the weekend did not have a positive outcome and both parties left the country without agreeing to a deal. Obviously it is important but if history has taught us anything, it is that the 1st round of negotiations are almost never successful so the negative outcome is not surprising. Markets will want to hear a timetable for a 2nd round of negotiations soon though. I believe we are going to hear that kind of news within this time frame. If a development on that does not occur within the next 72 hours, sentiment will start to get negative because Trump’s recently announced strategies regarding to Hormuz will not achieve much except for higher energy prices. They will not want prices to go up permanently

Well, shortly after the US team left negotiations, Trump has announced that ‘’effective immediately’’ US navy will be blockading ships trying to enter or leave Hormuz. We can argue about the potential outcome of this strategy for several hours. The obvious and primary point of this move is to prevent Iran from making money by selling its own oil. They also want to make sure that Iran does not receive the $2 million from the vessels which are allowed to sail through. As you know, Iran has been allowing friendly countries vessels (such as China and others who pay their fees) to pass although the numbers allowed were only a few vessels per day. Now, if US navy actually lets no vessel to leave, we might have other countries getting involved in this conflict directly and things can get a little chaotic. Also, if Iran can’t sell its own oil for several weeks, they are going to be squeezed and pressure will mount. However, from what we have seen during these past 6 weeks, Iran is capable of making things pretty miserable for other regional powers. So, the difficulties Saudi Arabia & UAE & Qatar are facing are not going to be solved within the next week. I don’t even want to talk about Houthis potentially blocking Bab al-Mandab but according to some ‘’unverified sources’’ they are preparing for it (if that actually happens, there is not much left to talk about global economy).

The real important question right now is: will the 2-week ceasefire be respected until the time it will be over and that is due on midnight of 21st of April. Some might say, it is quite doubtful as US is still moving serious amount of military including naval forces to the region and Israel & UAE & Saudi Arabia are pressuring the US to keep using military force. Also, Trump makes it clear that if the Iranian navy attacks a US vessel which is set to block the Hormuz, ‘’Iran will be blown to hell’’. Basically, threats do continue and the language being used is still very hostile. On the other hand, if US actually does respect the ceasefire and continue pressuring Iran by only blockading the Hormuz without taking military action, some might even call the situation a ‘’de-escalation’’ because this can pressure Iran to come back to the negotiation table and make a quicker deal. Interesting times but we have no choice other than watch and observe. I am only talking about the possibilities.

SO WHERE ARE WE AT SO FAR?

The number of vessels passing through Hormuz is still limited to 10 – 12 per day by Iran but actual numbers sailing are fewer than that. Iran is still in full control of the strait. Majority of the vessels being allowed to leave are not energy related and they are mostly dry-bulk cargoes. According to estimates, 4 - 5 tankers which were related to oil & gas left the Hormuz during the past 4 days and Iran is selectively allowing passage to friendly countries (2 tankers owned by China and 1 tanker was Greek owned). Basically, supply shock is growing and the problems regarding to global energy supply is not being solved. Trump’s recent decision to block the entrance / exit of Hormuz will only serve as a catalyst. Shipping activity is likely to remain very slow and participants will be extremely cautious. No vessel owner would be risking getting his vessel confiscated by the US navy. We have had some examples of that in the past.

Unless some manipulative positive news hit the market, we are likely to see very volatile movements on energy related commodities on the paper markets again. However, these past few weeks showed us that US controlled media is very good at manipulating the paper markets by keeping oil below $100 per barrel. Anyways, we already had strong signals entire Sunday (while I had begun writing this analysis, Hyperliq Brent futures were up by %7.5 on Sunday afternoon). We are beginning the week with paper Brent at $102.12 per barrel (+%7.27) and US oil prices also began the week by a near %10 increase at around $105 per barrel. In the case for physical markets, the gap between paper markets is still huge (more than +$30 per barrel). Gasoline, diesel, jet fuel spot prices will keep increasing because Hormuz remains closed and now Trump’s blockade means no vessels will be entering or exiting. Well, the little activity we were having will be stopped as well. EU gas futures were also showing an increase of %17 earlier in the day but currently we are around €47.4 (+%8).

Simply, I can say that logistics costs both for bulk and container shipments will remain on the high side and it will not be possible for freight rates to come down unless a 2nd round of negotiations begin and positive developments occur. Therefore, scrap offers to Turkey, India, Bangladesh, Pakistan, and Egypt will be flying high until we see a significant downward movement on logistics and market feels confident that a peace deal will be achieved. That will not happen immediately so I see no reason for a decline on scrap prices for this week.

Let’s not forget, if ceasefire breaks and military actions intensify, insurance premiums will also go up immediately and that will drive many major companies to ask for surcharges. People do not pay enough attention to this but in the EU, US and many other places in the world, many sales are done on CPT basis which means goods are delivered to the buyers by trucks. Increasing oil prices will also cause domestic based trading levels to increase. Mills and traders will ask for higher levels and end-user will have to accept those levels. As you can see, all these energy related developments create a chain reaction.

Finally, if the activity at Hormuz fails to recover by the end of this month, many countries will be screwed. Major financial institutions believe that oil prices can stay above $100 per barrel for the remained of the year if Hormuz fails to open by the end of the month. I believe that is an optimistic prediction. I would assume physical tradeable levels to be higher.

Just to remind you again: near %50 of Chinese crude imports pass through Hormuz and although Iran lets several vessels pass, the number is too little compared to regular times. China is heavily dependent on Iraqi, Saudi and Iranian barrels. Eventually, their industry will suffer due to supply related problems and they will need to reduce output. It would actually be a positive development for the steel industry because if China actually cuts steel production more than expected, psychologically, it might help global situation.

India is another country which is seeing very negative impact. I have read an article on The Guardian which claims many people are unable to eat a ‘’hot meal’’ lately due to gas shortage. The article also claims that food prices are seeing sharp hikes as well. I had told you earlier that due to natural gas shortage, domestic scrap generation has also declined significantly and many industries are now being requested to reduce production hours to save gas. Government is working very hard on alternatives though.

Anyways, Japan, Korea, Bangladesh, Pakistan and several others will continue to hurt even more if the strait fails to open until the end of the month. I do not want to get into more detail because I would once again have to write about economy but Japanese 10-year yields hit the highest level since 1997 so economies are already very fragile. Many countries will not be able to handle a lengthy energy crisis.

SO WHAT CAN WE EXPECT FROM THE STEEL MARKETS IN THE SHORT RUN?

Unfortunately, many things will continue depend on economic and political variables.

First of all, we have to prioritize the direction of energy prices. Brent started to trade at $102.17 as soon as markets opened. It had closed the week at $95.20 per barrel. TTF natural gas had closed the week at €43.63 after seeing a reduction of %5.49 on Friday and at the moment it is trading around €47. Basically, volatility will remain the case and petrol above $100 just means that things are not going to normalize. Efforts will need to be made this week to keep it under $100 threshold. We will hear a lot of news dropping again in order to manipulate the market so we will have to keep using our brains. So we must always consider the fact that; spot oil prices are still trading above $130 per barrel and the longer the Hormuz is closed, the higher the prices will have to go. Paper markets at this point are just not relevant with what is actually going on at the spot markets.

US inflation data was published on Friday afternoon and it does not look good despite coming slightly below expectations. CPI came at %3.3 (exp: %3.4) which is the highest level in 2 years. This means inflation is getting hot and it is mainly driven by the increasing energy costs. In my honest opinion, US is not even feeling the real thing because these type of shock usually start messing economic data up after 2 months. Anyways, we will talk about it when the time comes. At the current inflation rate, it is clear that FED will not be able to reach their target inflation level of %2. This means FED will have to delay interest rate cuts until 2027. It is also possible that if oil falls back and the Strait of Hormuz situation stabilizes, one cut might happen in December 2026 but honestly speaking if war continues for another month (hope not), there is just no chance of that happening. In fact we will hear talks regarding to a rate hike. Anyways, as you know from my previous analysis, many central banks including Turkey’s TCMB were planning to cut their rates in line with FED. Expectation was for US to ease their monetary policy during by 3rd quarter of the year which would improve global trading activity despite tariffs but this scenario is probably gone now.

TCMB will be announcing its interest rate decision on Wednesday, 22nd of April. Currently, interest rate is kept at %37 after it was left unchanged past month. It would be extremely foolish to expect a rate reduction from TCMB while all major financial institutions are revising their inflation expectations upwards and Turkish banks are also pushing borrowing & deposit interest rates higher by %3 - %5 during the past 2 weeks. The question is, will TCMB leave rates stable or will they send a message by increasing rates by 100bps – 200bps. There is no regular meeting scheduled in May and the next TCMB meeting will be on 11th of June so TCMB will have to act smart. I think rates will be kept stable for the time being.

So why did I write a lot of things about the economy this morning?

Well, we have to realize that current economic conditions will remain unfavorable for the steel markets. Governments and big contractors will continue delaying their scheduled infrastructure & housing projects as longs as they can because no one will want to finance themselves while interest rates are high. Therefore, either we are going to see things slowing down or governments will need to provide subsidies or some sort of liquidity support. Eventually, although construction season is nearing in Turkey, Europe and the US, expected domestic steel consumption might not be very strong while there are many uncertainties. Unfortunately, ongoing wars are also causing export activity to remain limited and big buyers cut down their usual volumes. There are also planned quota reductions on steel imports which are going under effect by 1st of July in the EU and that certainly will not help.

In my honest opinion, due to all the bombings and ongoing wars, there will be a lot of regions which are going to need reconstruction. Ukraine, Palestine, Israel, Lebanon, Syria and Iran will see a lot of steel demand but in order for this demand to actually become a reality, wars need to be over. It is a pity that we are not seeing strong efforts to end all the conflicts. Technically, we will enter a phase in which steel demand will increase tremendously but the timing is still unclear. Brighter days will be the case but we just can’t figure out the timing.

WHAT CAN WE EXPECT FROM THE STEEL MARKETS THIS WEEK?

First of all, we must realize that scrap prices will continue to trend high. We have ‘’acceptable quality’’ 80:20 cargoes from the EU & UK being offered at above $395 cif and those are finding buyers. Although, many Turkish mills do not want to pay these levels and want a discount of at least $5/t, it is unlikely to happen.

As I had informed you before anyone else (even before the market, lol!) and predicted correctly, European domestic scrap market is seeing decent improvement this month. Even scrap suppliers did not expect such increase until last week but to me it was pretty obvious. Well, I am good at what I do and I read the ‘’global situation’’ better than most people so no surprises for me. Anyways, when EU domestic scrap prices gain strength, when you combine that with weakening USD, with the € - $ exchange rate now over 1.1690 (was 1.1720 on Friday), it just simply means ‘’no cheap bulk scrap available’’.

Scrap market movement and buyers decisions will continue to remain volatile. 3 weeks ago, it was a smart idea for Turkish mills buying US & Baltic origin cargoes compared to EU origin material due to quality issues but now ‘’price’’ has once again became the priority. While finished good sales are struggling, that is always the case. However, this can always change depending on market activity.

Many US scrap exporters were staying out of the market last week but now that EU deals are concluding above $395 cif, it means they will target price levels close to $410 cif. Honestly speaking, I find that level quite high to be accepted by any Turkish mill regardless of what they produce. Turkish REBAR and HRC demand & prices do not support paying such extreme levels for the time being. That is actually the main reason for Turkish domestic scrap prices increasing faster than Usain Bolt’s 100 meter run. I can confirm many mills are now paying $390 - $392 delivered on average for decent quality material and ship scrap situation is no different.

Now many of you are asking me how the recent situation can impact Turkish rebar prices

As you know, I am mostly right with my predictions because I look at the situation as a whole. I look at scrap, I calculate mills production costs, I look at Turkish trader’s positions, I look at export potential, I look at competitor nation’s positions, I look at economic situation & expectations and then I come up with my predictions.

So let’s briefly look at it.

1) Scrap will continue to remain high. Now that Hormuz situation is unsolved and the chance of military actions increasing, I would not anticipate a significant decline on freight rates. As a result, scrap prices shall remain within the range of $395 - $405 cif. I am pretty sure suppliers will target $400 - $410 cif and seeing those levels would not surprise me despite slow Turkish end-user demand. Technically, it does not make sense for a Turkish mill to pay such levels but there is no alternative while semis imports are seeing reductions.

2) Even if we take average scrap inventory levels at $390, a breakeven for a Turkish mill after the recent energy price increase shall be no less than $595 - $600 exw depending on a mill’s capacity utilization rate and other energy related factors. Therefore, if a mill does not produce its rebar & profile & wire rod from imported steel billets, selling their products below $595 exw shall be a net loss. We know that many Turkish mills avoid Asian billet offers since the start of the war and only a few have secured those lately so most mills have to quote a sales price based on scrap costs. Therefore, at worst case scenario majority of the mills will insist on last week’s price levels and discounts are unlikely. However, we always have one or two mills which impact market sentiment negatively. My analysis are based on the majority’s position.

3) Turkish traders have acceptable inventory levels. They are not empty but they are not full either. As a result, they will continue observing demand from the end user. The weather conditions are getting better this week and according to the Premium weather application that I use (lol), Istanbul, Ankara, Izmir, Iskenderun and Karabuk see no rain until Friday. Technically, weather conditions shall enable things to get a little faster compared to last week.

4) Turkey has some export potential in the near future but as I had written above, the real increase and improvement will be seen once the wars are over. For now, things are going to be challenging. EU’s new quota period and rules which are to commence on 1st of July will reduce rebar, wire rod and HRC exports to the EU significantly. In total, quotas are cut by %47 and if the quota is breached, tariffs are increased to %50 (prev: %25).

Turkey was exporting around 1.29 million tonnes of HRC to the EU per year but now this is going to be reduced by up to %15 which shall reduce the total number to 1.1 million. If times were regular, I would not really consider is as important at all but a near 200.000 tonnes of reduction means quite a lot under these difficult times.

Turkish rebar and wire rod exports will suffer much more compared to HRC. Current quotas were already insufficient enough and were quickly filled. Now that a reduction of around %40 - %50 will be seen, Turkey’s exports to Europe will be dramatically squeezed. Those Europeans who are scared of the situation has been concluding many deals from Turkey lately as they fear things will get difficult after 1st of July.

To conclude, when we consider the factors above; Turkish mills will continue to face difficult times. Production costs will increase as a result of energy related expenses and higher scrap imports. Mills export opportunities will be limited until wars end. Domestic market performance will remain volatile as we will continue to see a lot of ups and downs due to financial problems and limited domestic demand. Regardless, as long as the war situation continues, a sharp decline on Turkish steel is very unlikely and it will be driven by costs rather than demand.

Apart from that, just as I had predicted Asian scrap situation will remain strong. Japanese exporters will have no reason to reduce their offers after a strong Kanto Tender and higher domestic scrap bid adjustments. West Coast US containerized 80:20 offers to Asia will also increase above $355 cif within this week. Buyers are lagging behind but at some point they shall realize that scrap is not going to get any cheaper until war related logistics disruptions are solved. Major Asian steel mills will be increasing their domestic bids for scrap by up to $10/t this week. The only way that can change the current situation is the cheap billet availability. For now, many Asian suppliers including the Chinese are kind of firm with their offers. Russian producers from East of the country also have limited allocations and they target no less than $490 - $495 cif to the region. Therefore, unless Chinese suppliers decide to turn very aggressive, I do not expect a decline on regional scrap prices.

I do not have anything new to add about Europe. Demand remains weak but costs are higher. Mills will continue pushing both longs and HRC prices upwards. Last week was quiet due to many market participants taking days off due to Easter and movement was extremely limited. Depending on this week’s energy price movement, we might see interesting price levels. Last week, as peace talks were happening and market sentiment was positive, HRC futures saw significant declines. June – July – August got down to €735 - €745 range from €760 - €765 exw. Now that 1st round of peace talks were unsuccessful and Trump is blockading Iran’s blockade (lol) let’s see how the futures will adjust. It is stupid to take HRC futures seriously while making predictions for the future but think of it as a silly side-dish which comes with your food.

Things look healthy enough for the US. Steel capacity utilization rates are nearing %80, a level which we have failed to see in a long time. Domestic scrap demand is strong and flows are healthy. Domestic HRC demand remains strong with spot prices above $1035/st (I anticipate another tiny hike by Nucor this week). Scrap exporters have no issues collecting material as cut grade scrap availability is ample but some exporters are paying a little more money so they can receive flows at a stronger rate for upcoming vessels. The only weakness we can talk about is actual spot market rebar demand. Prices have been weaker during the past 2 weeks because one US supplier is very aggressive with their offers compared to others and also significantly cheap imported material from Korea will be arriving shortly. We will have to see how the construction season will develop. Economy related developments which I had mentioned above might cause things to be slower than expected.

CHINA

Steel demand and prices are still weaker than expected. There is no sign of real consumption recovery although the recent energy related costs are causing some price hikes. After 41 months of continuous price decline on Producers Price Index, we had an increase of %0.5 for the month of March (exp: %0.4). Some will argue that China is on the path to exit to deflationary cycle it has been sucked in for years but I do not agree. It is solely related to global energy price hikes and in reality the core problems Chinese market facing are not solved and Beijing’s measures are too vague to change anything. I am still waiting for the LPR and RRR reductions for People’s Bank of China but we are nearing May and there is not a sign on that. Anyway, any price increase in China will be cost driven rather than demand which technically is useless for steel markets. Higher prices will not mean higher demand and for a giant manufacturer like China, it is simply bad news. In reality, higher energy prices and logistics costs will continue to squeeze Chinese producers’ margins and steel consumption will decline while real estate market is still contracting. Beijing is also likely to postpone many infrastructure projects when the global and economic outlook is uncertain.

As I had warned you at the start of the war, Chinese exports to GCC and Turkey will see significant declines and probably the impact of those missing exports will be felt in the domestic market within the next 2 weeks. Traders have started quoting offers during the past 10 days to GCC as well and some deals are likely to be concluded but as long as the war continues, these deals carry significant timing and price risks. So far, GCC region had very sharp increases on domestic billet and rebar prices due to the ongoing war and they can probably pay higher levels for Chinese / Asian origin semis but any delay on shipment can have serious consequences for a buyer. It is difficult to make a production plan by solely trusting import cargoes while there are war related uncertainties. For example, now that US navy will be blocking the Hormuz, how will the vessels owners respond? Will insurance premiums from Asia to GCC see another round of increase? We will have to see.

Meanwhile, although Chinese steels mills are steadily reducing output, their inventory levels will increase. Chinese domestic steel consumption has already been very weak during the recent years and now that more goods will be available for domestic use due to reduced exports, local supply pressures will intensify. Chinese domestic steel prices have been falling lately by Yuan 20 – Yuan 40 ($2.80 - $5.60/t) but USD equivalent amount is mostly unchanged due to USD’s depreciation.

things do not look very hopeful for the Chinese steel market. monsoon season will begin which typically lasts between May – End of July. Outside construction activity significantly declines and personally, I think steel producers will have no choice but to reduce their output while exports will be limited (unless the war ends) due to logistics.

[Steel Dude @steelmarketnews]

here is my 2ndlong ass flood of the year. seven pages of my thoughts. As usual, I am happy to help and share them with you but keep in mind these are only my thoughts and analysis. Although it does not happen often, I am a human and some tiny fuck ups can occur. lol.

LETS BEGIN!

US steel market for finished goods remain strong overall. After the recent price increases we have seen on HRC and REBAR, the pace of increase has stabilized lately.

In reality, rebar supply remains somewhat limited. As weather conditions was pretty much terrible, rebar activity has slowed down over the past 10 days, so maybe this can help the supply situation a little but personally, I think US mills will be pushing for higher prices within the next 10 - 12 days due to higher domestic scrap levels. Imported rebar activity has increased. The anti-dumping investigation on countries such as Algeria, Bulgaria, Egypt and Vietnam helped South Korean to get back into the US market after a long time. Turkish mills may also benefit from the situation but the benefit will be limited as their prices are not as competitive. Yet, during such weak times it will create some sales opportunities.

Situation for HRC is not really much different. Spot market levels have jumped over $950/st and mills have been pushing to $970/st as they are capable of doing so due the lengthy lead times.

Now the question is: WHAT IS THE DIRECTION OF SCRAP?

As you know my hobby is writing analysis and predicting the future as good as I can. I don’t write news, we already have a lot of reputable companies and colleagues who does that. In order to come up with my predictions I use personal experience, close friends and colleagues. There are even a couple of very nice people whom I have met on twitter whose opinions I value greatly.

So after talking with them here is the situation and what I think about it.

First of all, it is possible to say that except for HMS, scrap supply is not a problem. There is ample prime grade material on the market and Canada & Mexico are certainly helping.

Market has been expecting a $30 - $40/gt on increase for the month of February but I was a little conservative expecting the increase to happen by $20/gt or at most $30/gt. We will see by next week but I was recently told that a mill in Georgia came up with $30/gt. It is likely that some mills will conclude deals at the higher of my range and then we might see other having to pay more. This is like an inevitable thing for scrap deals in any country while market is active. Regardless, I don’t think $40/gt will happen.

According a colleague of mine whom I met on twitter and is involved in the scrap business (great guy by the way), there are some questions we need an answer.

Does paying up to $30 or 40/gt get you any more scrap than 20/gt?

How much scrap is really able to logistically move this month?

By how much did severe weather conditions impact collection?

Will scrap suppliers be able to supply at regular capacities this month?

Will east coast US scrap benefit from higher scrap bids from the domestic market or will they choose export to Turkey?

Can Turkish companies match the quotes of US exporters? Will US find an alternative market?

Will the improvement at West Coast US exports continue?

These are all the questions we need to answer. As you know, I write my personal opinions to you guys on daily basis and so far I was correct with expectations. we just have to wait around 4-5 business days and it will all be clear.

By the way, I am told that shredders are either making losses or barely breaking even on the ferrous side (although they are enjoying non-ferrous side of the business) so we will have to observe that as well.

As I mostly focus on the international side of the business and its impact on global markets, my main concern is: What would be the impact of US domestic market settlement on March shipment offers to Turkey. If the US domestic market settles with an increase of $30/gt on HMS, is there any reason for major steel exporters to reduce their bulk shipment offers to Turkey?

Technically, there is no reason but current offers are around $380 cif which is a level too high for majority of the Turkish mills. So the decision will be up to the sellers. In my honest opinion, it is possible to see a little discount to Turkey if their market fails to recover during the next 10 – 12 days but a sharp decline is very unlikely.

My reasoning:

I) China is going on a long break by the end of next week until the 23rdof February and an already quiet international market is likely to wait for their return before taking positions

II) Turkish mills can seriously not afford to pay high scrap levels while they are running on two digit net losses.

III) I am told that some US scrap exporters are holding positions for the past month so they are adding more margins while market is moving up. Instead of getting busy with several clients and dealing with domestic logistics, they might prefer to discount a little and load up a single 40k vessel. Their margins are strong enough.

IV) The HMS quality that goes for exports are not the same standard as what US mills want in the domestic market.

We will also have to keep focusing on economic and geopolitics issues.

We had one of the most interesting nights in human financial history last Friday. Silver futures plummeted %31.4. Gold had declined by around %12. President Donald Trump has officially nominated Kevin Warsh to be the next FED chairman but confirmation of the US senate is still needed. Warsh is widely seen as less dovish (supports stronger dollar & fewer rate cuts) and more likely to preserve Fed independence and maintain stronger monetary policy compared with the more extreme scenarios traders had priced in. Volatility on that front is likely to be the case so we need to see how things will work out. However, a March rate cut is also unlikely and the probability of a rate cut is currently only at %8.9 according to CME’s FedWatch. Although CPI data is still hot, there are also positive things. For example, US ISM manufacturing data was announced and it came way above expectations at 52.6 (exp: 48.6). Data is mixed and we need more to be released before making any assumptions.

Unfortunately, Russia – Ukraine talks are progressing very slowly and heavy bombings continue. It looks like the pressure on Russia is only growing by hurting their economy. Recent trade deal between US and India will surely hurt Russia. India will stop buying Russian oil (probably will increase import of US energy). They will reduce tariffs on US products to %0 (clear victory for Mr. Trump), India will buy US products worth of $500 billion (probably will include energy). The only thing Trump did was lowering India’s tariffs to %18.

India has been one of the most important buyer of Russian energy. Since the start of the Ukraine war (February 2022 up until this day):

India has imported a total of roughly €162.5 billion worth of fossil fuels from Russia. This includes:

About €143.9 billion of crude oil, and around €18.2 billion of coal. It will be interesting to see if Russia will be able to divert these to somewhere else. They have been selling at way below average market levels for a long time.

Anyways, as you can see the agenda is very busy, but many things are not directly related to iron and steel. What concerns us is how these side factors will affect iron and steel for the short and mid-run. This requires close monitoring and I am doing my best to do so.

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We will also have to understand the current dynamics of Europe. Things are not great but they are not very bad either.

Energy costs are very high right now so it would not be wise to expect any price reductions on finished goods. In fact, in many regions a hike of €15 - €20/t is seen on rebar despite weak demand. Deals do happen below official prices due to cash needs but trend has been upward for the entire month of January.

Central and Northern Europe scrap collection is still limited due to frost as temperatures are below 0 degrees Celsius. This is the coldest winter of I don’t know how many years. Obviously, a severe weather situation like this creates logistical problems such as delays with transportation and working with cranes and machinery takes more time. Things generally slow down significantly.

An Eastern Germany mill who had been closed for a while began operations and also increased scrap bids by €30 - €35/t in January. A Polish colleague of mine informed me that has influenced prices in Poland. Well, Polish market is not receiving stronger flows since New Year’s due to Ukraine’s scrap export ban as well so things are challenging. Energy cost is too high, scrap is high, and sales are weak so it is not a good time to make money.

On the other hand, EU HRC prices are remaining firm. We have been stuck at €630 - €645 exw for a while now and that has not really changed. In my opinion, domestic demand is still not booming despite support from CBAM and quota related factors. It is possible that mills will try to push prices over €650/t exw (some have been trying for a while now). I don’t really like the futures markets but currently April is trading at €665 and May is trading at €670 exw which kind of means expectations are positive. Technically, EU scrap shall stay flat this month but a further upward movement of €5 - €8/t would not be surprising either.

Another factor we have to look at is the € - $ exchange rate. After hitting 1.20 late last week, we are not down to 1.1830. With current dockside levels at €265 - €270 delivered, it is possible to say that in best case scenario, offers to Turkey will be at a minimum level of $366 - $367 cif. Current offers are around $375 cif and I find that level aggressive under today’s Turkish market circumstances.

Short sea is also a problem. They had pushed their dockside levels to $300 - $320 range depending on the quality of scrap. A local mill is currently bidding $275/t for regular quality HMS. The current levels are beneficial for sub-suppliers so they are happy to sell to the bigger fish who has vessels to load.

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Now let’s look at the Turkish market.

Neither rebar nor HRC performance has improved for over 3 weeks now. Although decent discounts are available, market remains poor. As usual, lack of liquidity and weak cash situation is the primary reason for such a long time silence. I would not consider ‘’seasonal factors’’ as a prime variable for the current situation.

Well, as I had written above Turkish mills are already making two digit net losses. Inventories are already at very high levels with no size issues present. Some mills will decide to go under short term stoppages while some already did. There is no appetite in the market and for the moment I do not see any light at the end of the tunnel.

Basically, it is the Silence of the Lambs (great movie, I adore Anthony Hopkins) while we are heading into the month of Ramadan and that commences on 19th of February. Unless some sort of global improvement is seen within the next 10 - 12 days, things are not looking good for the entire month.

I have seen bad times for the Turkish market but this is one of the poorest times. Mills are under a difficult situation and it must be very difficult to manage operations at a time like this. At the moment, current import scrap prices do not correlate with Turkish reality and as a result, mills who decide to continue working focuses on domestic scrap collection. It is probably the only option apart from importing semis as current domestic scrap deals would be around $355 - $365 on average depending on the region.

Importing billet might be the only option unless import scrap prices somehow declines by $10/t (unlikely for now). However, lengthy delivery times would keep majority of the mills out of the market unless the price level falls below $460 - $465 cfr. That is the only way Turkish mills can remain competitive against North African and Asian suppliers. Mills are doing all they can with aggressive discounts and payment alternatives but it’s just not moving.

As I had expected, Turkey’s January inflation data was way above expectation and came at %4.84 (exp: %4.30). We had the signals of this when TCMB cut rates by 100bps below expectations last week. February is not going to be any different and TCMB is likely to miss its target level already before the 1stQuarter of the year is over. This scenario means further tightness on financials but private sector has barely any room left to breathe. Will TCMB reduce rates after high inflation rates of January or February? Can a pause happen? Or are we going to see them reducing the rates little by little by 100bps at each meeting? Anyways, whether you are a giant manufacturer or a small trader it does not matter. Everyone is having the same problems.

In my humble opinion, Turkish market will fail to improve until some export activity happens. Last year, Turkey managed to improve its exports by slightly over %20 which is a great improvement at a time like this but prices were upsetting. Turkish mills capacities are too big to depend on their domestic market so either Turkish government decides to lower interest rates at a faster pace and goes easy with the monetary policy or huge infrastructure projects are need to be operational. These are unlikely to happen in the near future so exports are required. It is just sad to see capacity utilization rates running below %60.

To conclude, Turkish market is still desperate. There is a lot of potential for the future if Russia – Ukraine war ends, Palestine & Syria rebuilding commences. Lets keep in mind, government supported housing projects will commence in spring so activity will certainly improve by then. The problem is more of a severe short term thing.

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India is doing alright. Particularly rebar activity gained a lot of strength. I am told that first-tier producers have increased their prices by around $25 - $30/t for the month of February. One colleague whom I met on twitter informed me that secondary coil market is also likely to see a similar hike within the next 15 days. Indian HRC exporters had benefited from strong sales to Vietnam during the past months. Prices were not good but they had the opportunity to at least sell significant volumes while domestic market was not moving.

Unfortunately, India still largely remains out of the import scrap market. Currency volatility was a reason. They had not been active while EU containerized shredded offers were even down to $345 cif so the current offers of $360 - $365 cif does not really catch their attention. Focusing on domestic market raw material procurement remains the primary option for now and that situation can only change if Indian activity continues the way it is for several more weeks. Domestic scrap, sponge, pig iron…etc… will move up due to the recent hikes on steel prices but let’s see to what extent before getting excited.

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CHINA

I do not really have a lot of things to write about China. My analysis for them are purely economic as steel market situation has been unchanged for almost 2 years. Steel prices are mostly stable lately, going up and down around the same range. Major producers kept domestic offers stable for the first weeks of February. Export offers are also stable and aggressive discounts have not been since the export regulation on VAT was introduced.

January PMI came at %49.3 a decline of %0.8 compared to December 2025. We are seeing no economy recovery yet. No surprises as minor government support will not change anything.

January Composite PMI (manufacturing & non-manufacturing combined) came at %49.8, a decline of %0.9 compared to December 2025.

Sub-Indexes are also terrible.

New Orders Index came at %49.2, a decline of %1.6 compared to December 2025.

New Export Orders Index came at %47.8, a decline of %1.2 compared to December 2025.

Purchasing Volume Index came at %48.7, a decline of %2.4 compared to December 2025.

Production Index came at %50.6, a decline of %1.1 compared to December 2025.

I have been reading a long article on a Chinese website (Lange) and the author Mr. Xin did a good job at summarizing the situation. I enjoyed reading it. According to the article;

Total profits of major Chinese mills reached Yuan 115.1 billion ($16.6 billion) which is 1.4 times more compared to 2024. this is mostly due to lower raw material costs. for example, iron ore declined by %8.6 compared to 2024 and coking coal also declined by %7.2 on year. mills benefited from the situation.

As of January 31, among the 25 listed steel companies that have disclosed their 2025 earnings forecasts, 12 have achieved positive results, including 6 companies expecting an increase in profits, 5 companies expecting to turn losses into profits, and 1 company expecting a slight increase, resulting in a high positive forecast rate.

There is the problem. While low Chinese steel prices continue to be a big problem for global steel industry, the problem is not as big for Chinese producers. Yes, China’s deflationary economic data means government interference is needed but may be they are just happy with how things are as they suffer way less compared to the Western world.

Anyways, we are going to see LPR and RRR cuts from China and we are likely to see some concrete measures from the authorities after their long break. In April, Xi – Trump meeting will also take place and we might see some positivity around that time because actually the two president do get along.

hoped you enjoyed reading and see you in a couple of weeks.

[Steel Dude @steelmarketnews]

Good evening folks. I have received so many questions for the first long ass flood of 2026. As usual, thank you for the interest and being a valued follower.

Unfortunately, many of your questions are about CBAM which I personally hate to my guts. lol. Regardless, I will try to be as honest as I can.

Lets start with my opinions about the following questions.

How likely are prices shocks in EU due to CBAM?

How likely are the price shocks due to looming reduction of quotas in EU from 2H?

Do you think CBAM impact is overrated?

How significant do you expect CBAM to be for European steel prices? Especially once full implementation kicks in.

Personally, I did not spend a lot of time thinking about it as there are still many things to watch and observe. I always trust the market finding its own way.

I do not think there will be a shock for the short term. 2026 shall be fine because only %2.5 of embedded emissions are the case for now (it will increase each year). Next few years I am not so sure because obligations will increase. We will have to see how things will work out as time passes and things become clearer. The Emission Trading System prices will continue to increase by each year and volatility can be seen. That can cause CBAM related costs to contribute to price volatility on steel. There are a lot of possibilities which we are yet to experience but short term should not be too much trouble.

Quotas will be certainly in favor of EU domestic mills. the combination of quota tightening and CBAM will give leverage to local EU mills and they will increase prices accordingly. Obviously, demand will be important but if you follow the futures markets you can see constant hikes for 2nd and 3rdquarter of the year over the past couple of weeks. They are actually €30 - €50/t above today’s tradeable spot market levels. CBAM and quotas are the reason for the increase. It is a premature theory of mine but we are likely to see improved trading volumes within the European Union and it is possible to see declines on exports outside the EU.

I have no personal experience on this matter yet but I think things will become clearer once data on emissions become verified. For now, importers are facing uncertainties and they are taking risks by trying to calculate costs using default values. Can they face higher than expected CBAM costs? Possible but we will have to ask them. Their experiences will help us to understand. Regardless, this shall be a short term problem and eventually as we get more data, things will settle. Market always finds its way.

I do not think CBAM impact is overrated. It is pretty much clear that steel imports will come with additional costs and market is already adding €85 - €100/t on top of today’s import offers. Majority of the suppliers do not want to take the risk and making offers excluding CBAM costs. Those who offer including CBAM are trying to play it safe. Therefore, calling it ‘overrated’ would not make sense. I find the current situation completely useless due to the devastating times steel industry is going through but whether I like it or not CBAM and quota reductions are the new reality. I like the idea but timing is shit. Regardless, we will all have to get used to it during the next few years.

To conclude, we are going to see real impact of CBAM as we approach towards 2030. Once it’s fully implemented it will change everything (ceteris paribus). It is not only related to import costs. It will change production methods, raw material usage, logistics…etc… That is why billions of dollars are being spent by market participants to reduce carbon emissions. The problem is, I believe the change is going to be much slower than anticipated because steel industry is not exactly having the time of its life. It is difficult to invest on transformation with current losses everyone is bearing.

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QUESTION: There are market rumors that President Trump has mentioned a potential 25% tariff on countries trading with Iran. Will Turkish steel market suffer as a result of this?

ANSWER: Personally, I do not think so but we can never for sure. Politics is a difficult game. If I am to look at facts; Turkey currently buys Iranian natural gas and that comes via pipelines. In terms of overall energy, Turkey does not depend on Iran and other alternatives can be sourced without problems. We don’t know the extent of Trump’s sub-sanction plans so far. However, we have seen him giving exemptions on energy related issues before. For example, Hungary was exempted for 1 year for using Russian oil and gas. Mr. Trump and Mr. Erdogan have good relations and Trump would not sanction Turkey unless both sides try to penetrate sanctions in a way which would really piss off Trump. I can also say that Iranian steel has not been hitting Turkish market as much as before Therefore, it should not be a problem.

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QUESTION: You have had bullseye predictions on scrap market in December. Are we going to see further increases on scrap prices to Turkey?

ANSWER: Thank you, yes I am pretty good at what I do. lol. Well, we would already test $380 cif levels from the US if Turkish rebar and HRC activity was a little better. Unfortunately, sales volumes are pretty much terrible in Turkey but despite that we continue to move up. Is there room for further upward movement? Yes. Can it be too sharp? No.

I want to answer this question by adding all other scrap related questions. It is going to be a long answer.

You have to look at the situation at scrap supplying countries in order to paint the perfect picture.

USA: Demand for scrap is solid and activity is good. local mills are demanding more scrap compared to December and capacity utilization rates are slowly moving up from an unhealthy level of %75. this will create some difficulty for dockside collection and bids are likely to increase. Domestic scrap availability is barely ample. In my opinion and according to my colleagues in the US, an upward movement of $20/gt can be seen for February. It is still too early to make definite statement but I think it is very likely. Also, several US cargoes were sold to Turkey for February shipment and considering the activity in the US domestic market, I don’t see prices going down for now.

Situation is also not that different in the EU. Compared to regular market conditions, number of cargoes getting traded from the region is low so far. You may wonder why that is the case. That is because EU mills are currently bidding levels which are more profitable compared to Turkish bids. I had told my clients almost 2 months ago that EU domestic market was going to become very attractive after new year’s. An increase of €15/t bids in the domestic market causes flows to dockyard decrease significantly. This derives exporters to increase their bids and at the moment, decent flows to dockyards can happen while those bids are around €275 – €280 delivered. That does put the breakeven to Turkey at around $365 - $366 cif (thanks to the € - $ exchange rate which got significantly lower lately) and rightfully exporters want to make a profit of at least $5/t from these sales. So most EU offers have been around $370 - $371 cif early this week but Turkish mills preferred to get Baltic material by paying $1 - $2/t premium as quality is better than most EU cargoes.

Another interesting development is Poland. Prices have gotten very strong this week. Seasonal factors play a part but in my opinion, Ukraine’s scrap export ban significantly caused flows to get lower. January had started with an increase of €14 - €15/t but now up to €25 - €30/t. This is important because it tells us that Baltic offers are likely to remain strong as well.

Finally, we have to look at short sea. I have clients and friends who does regular short sea business. Some are sub-suppliers, some are exporters… Usually these guys do not get along but for the moment they agree on the fact that ‘’selling any cargo below $360 cif is not a good deal’’. Scrap is a complex business but if you have given years to it, it is possible to say that when short sea suppliers seek $360 cif, a decent US origin 80:20 cargo can get traded at $380 cif. This is the normal situation.

To conclude Turkey part; mills will continue to procure more cargoes for February shipment. Buying spree is not over. I would not be surprised to see some EU origin deals at $370 - $371 cif as well but the cargo will need to contain decent quality & quantity material. Otherwise, chasing after Baltic cargoes make more sense. Unfortunately, Turkish rebar demand is the only thing that is pretty much scary for now but I have received several questions on that, I will write it separately.

Scrap has gained some sort of momentum in Asia as well. West Coast US bulk and containerized offers moved up by $3 - $5/t, Japanese exporters have pushed offers towards $290/t fob which is like an increase of $7 - $8/t since last week of December. Kanto Tender closed at a significantly higher rate than December as Yen hit another all-time low. Korean dudes have started paying up to $7/t for domestic scrap (although import activity is slim and for higher quality only). China’s largest EAF producer also pushed prices up by $7/t on the week. Bangladesh also got back into import market despite sluggish finished good steel demand. Despite China’s weakness and volatility, even seeing these small improvements probably caused scrap suppliers to take a fresh breath of air.

Unfortunately, the recent improvements we have seen in India were short lived. Market went up too much and too fast. Some of the gains we had seen over the past 12 days were erased. Despite the hike on semis and long prices, demand did not correlate at the same pace. This is something we see often in the Turkish market so no surprises. Regardless, some small upward movements are seen since Thursday but they are not enough to compensate the price idea difference between scrap buyers and sellers. Honestly speaking, I believe current containerized shredded offers to India are at a very reasonable level and not buying at the current levels is crazy to me. But again, India has different dynamics and alternative raw materials to scrap. It is all about confidence dudes. if buyers felt confident enough, they would start procuring several bulk cargoes as well but when exports are weak (in India’s case export prices are weak) no one is taking the risk.

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QUESTION: Dude, I am very sad about Turkish market. When are we going to laugh, when are we going to enjoy life? Market is failing to move up even with very high scrap deals? Do you expect better days for us?

ANSWER: I feel for you dude. However, as I always write Turkey’s main problem is its financial situation. There is no country in the world which can survive such high interest rates and monetary tightness for 2 years in a row. Honestly speaking, I believe Turkish market did better than it should normally do. Mills fought as well as they can against all odds but right now there is no cure, there is no solution except waiting. When demand does not provide any support, eventually you get stuck at one point and at that point you just start to come up with stupid pricing strategies which do not make any sense. Unfortunately, that dampens market sentiment even further if there was any left.

Anyways, although some might claim ‘’seasonal factors’’ influence Turkish steel demand, that is only a secondary variable. I have spoken to a lot of traders and they all tell me that they are not stocked up at all but they will not stock up significant volumes as they do not believe prices will increase by $10 - $15/t during the next 2 weeks. They will continue to buy what they need only which means mills will struggle to move out volumes. According to my trader clients, there is no reason to stock up rebar if the price of it can increase only by $5/t. I am told that financial costs already destroy the potential profit and they are right to think so. Unfortunately, traders are also desperate for cash and needed to offer levels below mills prices. It is difficult to anticipate a recovery when this is the situation. We will need a factor but I don’t see any in the short run.

Looking from the mills point of view, things remain tough. Exports are limited. Some cargoes were sold to Latin and Central America since December but European demand for future shipments are weak due to CBAM. With today’s scrap prices, Turkish rebar is also not competitive enough while Egyptian and Algerian prices are at least $15/t below. Those two are also struggling with exports and although they are mostly offering March shipment, they are doing significant discounts over official export prices. Basically, Turkey’s export options remain limited. Some opportunities might rise after an initial antidumping duty was applied on Algerian, Egyptian and Vietnamese rebar but working with the US is difficult.

I do not want to comment about scrap prices again but with today’s deals, it can easily be said that mills are making significant net losses if we compare it to their domestic rebar sales prices of $550 - $570/t exw. ame situation is seen with HRC producers. Unless they buy cheap Russian slabs at around $430 - $440 fob, losses are gigantic. Meanwhile, some activity is seen on imports with material getting traded into Turkey at around $500 cfr from China. Those who do not care about Russian sanctions are still able to buy material below $485 - $490 cfr. While there is a $50 - $60/t price difference between imported material and domestic offers, a broken market dynamics is very clear. Even increased scrap prices fail to improve the market confidence. Problem is too deep and it can only be fixed with looser economic policies.

TCMB will be having their first meeting of the year on next Thursday. We are likely to see a 150bps cut so interest rates will get down to %36.50. Market anticipates end of year interest rate to settle around %28 - %29 for the time being and I do agree. Regardless, current rate cuts are like for show. It does not have any impact on the market. Loan rates are still well above desired levels and more importantly, accessing loans is very challenging. That is the main reason market is playing dead. As liquidity has diminished, only a few strong steel related dudes have the cash to do business while most of the players had to reduce their workable volumes. There are also lay-offs.
By the way, I have read the news about Mr. Mehmet Simsek (economy minister) and Mr. Karahan (TCMB president) presenting to investors in London. Although they try to deliver positive messages about Turkish economy, it is very clear that they do anticipate high inflation for the months of January and February due to food, rent and school fees related factors along with increased wages. We can deduct that strict monetary policy and tight credit lines will continue to be the case for the next 3 months (at least) which is not good news. I think things will get looser towards summer but it is going to be a serious challenge trying to survive until then. I am hopeful about the housing projects which shall commence towards summer but again there are many months until that.

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QUESTION: I know china is unpredictable but do you see prices will rise next month considering Baosteel, CSC, Vietnamese all have raised their benchmark prices?

ANSWER: I would consider the current upward momentum as ‘’expectation based’’ rather than reality driven. It is vital that Asian prices increase for the sake of global markets but I am just not sure how long the hikes can remain if core problems are not solved. For example, Vietnamese mills are breaking records with their sales volumes but at the same time lots of HRC are hitting Vietnamese market from India. I never trust the market when imports are too high compared to regular times.

I really cant predict if prices in China can increase or not? That completely depends on the policies Beijing will announce. For example, China’s Central Bank Deputy Governor made some statements this week stating that ‘’Central Bank will slash key policy relending rates by %0.25 to %1.25’’. They will also lower minimum down payment for commercial property loans to %30. Technically, they continue take many small actions. Keep in mind that, this is not an interest rate cut. Policy relending rates are the interest rates at which China’s central bank lends funds to commercial banks under specific programs (often targeted at agriculture, green projects, tech, etc…) so, it is more beneficial for businesses instead of people. China’s problem is people’s purchasing power so measures are needed on those.

We can say that, China is currently preparing for the next few months. Beijing is working hard in order to apply some new measures which can improve domestic demand and reverse the deflationary situation. However, the measures they are planning to take are not a BAZOOKA STIMULUS (lol). As I always say, without a bazooka stimulus China’s steel exports will not be reduced as capacity will always surpass domestic demand despite output cuts.

We have closed the exports at around 119 million tonnes (I had predicted 117 – 118 million since February 2025) and this number is just a final nail on the coffin for global steel markets. Even after so many protectionist measures, they still managed to improve their export performance compared to last year. You can’t compete with this no matter what you do. There are loop holes and they will continue using them until their domestic market is ready to go. As I always say, China needs to stay around 80 million tonnes of exports if we are to talk about happy times. Now they are trying to limit exports by introducing new regulations but this will not have an impact on major producers. This is just a measure for those smaller producers and traders who try to avoid taxes.

Anyways, we will need to wait for LPR cuts. I do believe they are going to arrive within the 1st Quarter of the year. It can have the potential to change market’s momentum but it is impossible for me to know the impact on steel prices. Measures taken on real-estate industry are too soft for the time being and despite some sort of improvement on estate data things are still far from good; current situation is not going to impact steel demand. I think the most crucial part for now will be the China’s holiday period. They are going to be leaving for holidays on 13th of February until 23rd of February. The way they will return will be crucial. I hope they come back with action.

It has been a very long flood. Enjoy your weekend and hope I was able to help.

[Steel Dude @steelmarketnews]

Here is the last long ass flood of 2025. Merry Christmas folks and as this will be the last post of the year, I wish you all a happy new year.

2025 was a poor year for steel markets overall. I will briefly comment on regions which I have interest in.

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USA

US had a decent year due to Trump’s tariffs. HRC prices were as low as $700 - $720/st and rebar was as low as $740/st during the first week of February 2025. By March 2025, %25 tariffs were imposed on all countries and at the beginning of June they were increased to %50 for most. As a result, US domestic market had constant increase on steel prices. We are closing the year at around $910 - $930/st for HRC and $890 - $930/st for rebar.

We have to keep in mind that it is not like market is booming but it is healthy. Price increase was strong due to tariffs and controlled output. US market actually has a lot more capacity right now as they build many new Electric Arc Furnaces which can be operational. Yet, many of those do not work for now. By limiting output and resuming working at a capacity utilization rate of around %75 - %76, market continues to remain strong and demand & supply relation is balanced for the time being. The question is, what would happen if capacity utilization rates increase to a healthy level of above %80? We are yet to see.

Anyway, US has things to fix at home in terms of economy. There are still many questions which need to be answered. If you recall, after the last FED meeting market was expecting only one rate cut from the FED in 2025 and I had tweeted that ‘’market is stupid to expect only one cut’’. Well, we are already expecting 2 rate cuts at the moment but I think US needs something more aggressive than that. FED’s new chairman appointment will be critical.

Apart from that, US market expects more infrastructure and housing projects to commence during the 2nd half of 2026. It is too early to comment but if that actually does happen along with rate cuts, we can anticipate good days for the US.

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EUROPE

It was a very poor year overall and I do not have one client or a friend that speaks positive things.

Just to give some brief examples; many scrap yards in Northern Europe were sold or still waiting to be sold. Several plants have temporarily stopped production or will do so during the 1st Quarter of the year. There are also smaller European countries like Romania who are getting negatively impacted from Germany’s situation. There are many vehicle manufacturing plants who have stopped production due to weak economic performance and several workers were sent on leave.

I do not want to bore you with economic details but European Union needs to fix its economy if we are to talk about stronger steel performance in 2026. Sure, CBAM and import protection measures are going to help the domestic market. We have already seen prices increasing significantly as a result of expectations. For example, HRC spot levels were as low as €550 exw in early September but today we can talk about €620 - €640 exw depending on the region. It looks like producers will continue to push for higher levels once holidays are over.

However, the real issue will be demand. Technically, reduced imports will obviously mean increased demand for locally produced goods but the part that concerns me is economic situation. Without boosting domestic spending and improving people’s purchasing power, it is not easy to say that European steel market will perform much better than 2025. Let’s not forget rising costs from CBAM could feed through into input price inflation for steel intensive sectors such as car and house hold appliances which are also under demand pressure. There are a lot of unclear things and we will have to wait and see how those will play out.

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SCRAP

A quiet year overall for scrap in which profitability was at a minimum level. Some players left the business and were acquired by others. Some yards were bought by reputable steel manufactures.

We had begun 2025 with price levels to Turkey around $340 - $345 cif.

By March we had seen levels up to $380 cif which was short lived and by May we were back down to $340 cif again.

We have had long months of price stability and prices stayed within the range of $345 - $355 cif due to Turkey’s weakness. This is not very usual for scrap and is the best indicator of a very weak ferrous steel market. We are going to be closing the year within the range of $360 - $370 cif which is mostly an increase due to seasonal factors and expectations of a better domestic US and EU market in January. I do agree with these expectations.

Unfortunately, India has been absent from the market for a long time which also damaged a lot of suppliers who focus on containerized scrap exports. They barely had any margins for months. Luckily non-ferrous scrap performed well lately and they did manage to compensate a little. Other alternative target markets were also not very active and Turkey continued to be the market maker throughout the year. No surprise.

Asian scrap markets did not perform at all due to China’s weakness. Availability of cheaper semis caused reduced demand for scrap. Exporters like Japan struggled due to currency issues and due to poor domestic steel market performance for three consecutive quarter they did not have a nice year. Chinese steel prices are the main variable for Asian scrap markets and this will be the case for 2026 as well. We will have to follow China’s new steel export regulations and output cuts in order to see how things will work out but personally, I am not very hopeful until China manages to improve its domestic steel consumption.

My expectations for scrap prices for January remain positive. I do anticipate higher offers particularly for the 2nd half of January. Yes, Turkish steel demand has not recovered due to financial tightness but eventually, February shipment cargoes will need to be procured. At the moment, collection levels are barely satisfactory as a result of seasonal factors and once Turkish mills get back into the market, no scrap supplier will be easy with their offers. It is very likely that US domestic market will continue to move up and EU can follow the same trend. € - $ exchange rate being at 1.1780 is also likely to prevent a decline. Please note that many Europeans will not be back to work until the 2nd week of January which does technically mean that a lot deals will need to be concluded during the 2nd half of January. Lets see.

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TURKEY

I am almost always accurate with my predictions regarding to Turkish market and I had a successful year overall. Unfortunately, Turkey’s economic problems are not resolved. Central Bank’s current reduction on interest rates did not reflect on real market so far. Cost of borrowing is still very high and even so it is difficult to access money. This is the main reason for Turkish market’s delayed improvement. The thing is, everyone wants to do business but they lack the confidence and financial power to do so. It looks like we will need to wait until 2ndQuarter for a stabilized market but we are going to have ups and downs until then.

As in the case for Turkish mills things remain difficult. Export markets are not really active, they currently have no profit margins with their sales and CBAM creates uncertainties. It looks like they will need to keep focusing on domestic market sales and considering Turkey’s potential steel output, it is not enough to satisfy producers. Until we see some improvement on global markets, it looks like capacity utilization rates will continue to be low.

It is not all bad though. Turkey will commence a huge housing project towards spring which will include building of 500.000 new homes. Tenders for that have begun and shall be completed by the end of January. Turkey’s next political elections are going to be due in 2 years (expected May 2028) and ruling party is surely to make some moves which will comfort Turkish people after 2 years of severe financial suffering. It is not going to happen immediately but things should speed up by spring.

If you recall my old tweets, I had tweeted several times that geopolitical developments were going to be very important for Turkish steel. Market had high hopes for reconstruction of Syria but back then I said it was not going to be possible in the short run. On the other hand, Turkish market was also very hopeful for rebuilding of Gaza but there are no developments on that neither. So, there is some potential but timing of that is unclear like many other things.

Right now Turkish market is silent. Activity only happens if the price is attractive enough. Current rebar price levels of $548 - $555 exw (excluding Marmara region) are unsustainable for producers and they do not correlate with latest scrap deals. In my humble opinion, current levels are very attractive yet lack of confidence along with financial positions make things difficult. As in the case for HRC, order books are not bad but prices are sad. Difficult year for mills overall but at least they managed to increase exports by over %10 which is kind of a success at the current market circumstances despite sucky price levels.

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CHINA

it was a bad year for China but no surprise. I have been tweeting for years that unless China fix its domestic purchasing power and confidence, it will continue to cause trouble for entire global steel markets. They will end the year with an export number of around 117 million tonnes which is an increase of around 10% compared to last year.

Unfortunately, the threat of semis exports have materialized with a hike of more than %200 (no, you did not read wrong) on the year and that explains why other markets are performing very poorly. In case you need a number, Turkey imported near 850.000 tonnes of Chinese origin billets for the first 9 months of 2025 and that is an increase of %225 on the year. The numbers are not much different for others.

Market continues to expect some sort of bazooka stimulus from China due to domestic deflationary pressure but it is not likely to happen. Instead, China will continue to come up with small but directly focused solutions. For example, yesterday they have reduced the amount of down payment you need to make in order to buy a house in Beijing (for non-Beijing citizens). This measure did drive stock market higher today but can it really improve demand for housing? I guess not. Chinese people do not have the confidence to buy housing and crisis of companies such as Vanke certainly does not help.

Recent output cuts in China prevented steel prices from falling down further despite slow demand. Well, there is not really much room to go down anyway. Producers are barely able to breakeven so it is possible to say that ‘’we are probably near the bottom’’. I don’t remember how many times I have written the same thing this year. lol.

Anyways, we will need to continue observing the new export regulations in China. I am not excited about this. It is a measure to prevent tax evasion of smaller companies and would not have a significant influence on higher tier suppliers. Therefore, we are likely to see a decline on exports but would it be enough to cause global strength? I am not sure, too early to comment.

I will repeat myself but without more significant support from Beijing, China’s volatility will remain the case. Market always hope that Beijing and China’s central bank will provide some support sometime during the 1st Quarter of 2026 but looking at the tone of People’s Bank of China, I just don’t see them going with something aggressive. Some small LPR cut might be the case but how will it help us? We need way more than that. I hope they manage to surprise us all at some point.

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INDIA

It was a weird year for India and things were less normal compared to regular times.

During the first half of the year, country was negatively influence by finished goods imports flowing in from Asian suppliers. As a result, government introduced protectionist measures which managed to slowdown imports. During the 4th quarter, Indian producers managed to increase their export shares and significant volumes were sold to Vietnam. As you probably know, Vietnam has its own protectionist measures against Chinese flats except for certain sizes so India benefited from this and replaced Chinese goods.

Unfortunately, Europe was not a decent market for India lately as competing with Asian suppliers were difficult but also CBAM prevented European buyers procuring Indian origin goods.

India did suffer from currency depreciation which caused them to procure their raw material needs mostly from the local market. For the past 3 – 4 months imported scrap was not a choice due to price idea differences of about $15/t. Financial problems also continue to be a main variable and for 2026 government needs to improve its budget for infrastructure. Local demand has become better during the past month but considering the immense output, stronger activity is needed. Anticipation is a better for the next year.

Merry Christmas and a Happy New Year

Dude.

[Steel Dude @steelmarketnews]

As promised here is my long ass flood which consists of my views and opinions. This is going to be a very long one, so I suggest you read it when you actually have the time. I tried to cover everything which I believe is important. I hope you like it. Wishing you all a good week and see you in a couple of weeks.

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JAPAN

As you probably know things are really weird in Japan lately. Although it’s mostly monetary – fiscal policy related, it can impact global markets at some point so I am keeping an eye on it anyway.

in case you do not follow here is the brief summary.

1) Japan will be applying stimulus worth $136 billion to bring more activity to the economy because things are slow. Technically, it would be good for consumption and certain citizens would benefit from it.

HOWEVER

2) Now this is the weird part. They are also going to increase interest rates this month. Back in January 2025, Japan had risen its interest rates to the highest level in 17 years (from 0.25% to 0.50%). It has not been changed since then but it is now likely to move from %0.50 to %0.75.

These are very contradictory moves and applying both measures at the same time just don’t make any sense. Technically, how can you bring down inflation when you will need to print money? The answer is: You cant.

Well, that’s what Japan is exactly doing now. A Central Bank’s main purpose for raising interest rates is to pull back the money available out of circulation. This aims to slow down economy. So what the hell is the point of raising the interest rates while you are applying stimulus? I don’t think anyone can come up with a logical explanation for this matter. If you have any opinions, please do share.

Now the problem is, market sentiment looks shaken. Japan had been interest rate free since ages. Investors rightfully started to panic and they are confused. Japanese government had built up massive debts over ages but they were able to handle it while there was almost no interest. I remember rates being at 0% between 2001 - 2006 and at one point they had negative interest rates. Basically, if you had money in the bank, you would pay the bank interest rate instead of the bank paying you. lol. Money was free and particularly overseas dudes greatly benefited from Japan funding them. Now, this is about to disappear.

I don’t want to bore you anymore with economic comments but to simply summarize; Japan has a lot of debt which it could handle while they had almost %0 interest rates for a loooong time. Now that interest rates will rise and stimulus will be applied, the debt will grow faster. That is what printing money does, we have recently experienced it globally with Covid-19 and failed to fix it since then. Japan’s 30Y bond yields already risen to above %3.40 which is a reflection of market’s not liking the current policy. The future looks inflationary.

Anyways, Japanese steel market is likely to face high volatility during the next year. The volatility will mostly be currency related. At times the volatility helps domestic market as major mills are able to increase their exports due to currency support. This does drive those mills to procure more scrap from the domestic market. This has been pretty much the case since middle of October. According to a Japanese follower of mine who is directly involved in the scrap market, the expectation is to see stability until the end of the month but January and February might not be as strong as steel production is likely to decrease. At the moment, Vietnamese and Bangladesh are the only market receiving some Japanese scrap but I can tell you that Bangladesh demand have not been too strong either. In fact, mills over there had to halt production due to poor demand. Furthermore, Korean and Taiwanese interest for Japanese scrap is also lacking due to price idea differences.

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CHINA

stability for China remains the case in terms of steel markets. We have minor fluctuations lately because mills were operating at significant losses over the past month. There was not much room to go down and market has accepted it. Now, we are likely to see small ups and downs until the Politburo meeting is concluded. We will need to see concrete announcements or else things will fail to improve. Although some institutions expect China to become livelier in 2026, other such as Morgan Stanley believes deflationary pressure will continue throughout the 2026 and the earlies way out is probably in 2027. When it is China, I do not like to predict the future because it is still a closed box. My job is steel so I try to look at things which are directly related to steel.

Unfortunately, one of the things I look at is the real-estate market data. I have been writing about this to my clients for the past 2 years but now it looks like crisis are getting even bigger. One of the most respectable companies within the sector had asked for a 12 month extension on repayment last week. It is sad to see such a giant failing to pay $280 million. A board meeting will take place on the 10th of December but it is highly unlikely that the Bondholders will accept the delay request.

I had sent my clients some statistics regarding to home sales and new projects. When you look at that figures, you see the real struggle. Everything that is related to real-estate (whether its for personal or commercial use) is contracting at a very fast pace. There were very sharp declines in November and it does not look like things will get better in the near future. Apparently, Chinese government asked statistic providers not to publish some of the housing data because of the negativity it causes on the markets. On top of that, I have read that they have started to apply censorship on social media. They do not want to see anything bad written regarding to real-estate which clearly tells us that the problem is much bigger than we realize.

This is not a surprise. I have been writing about these for more than 2 years now. Chinese real-estate cant be saved without very strong government support. They have created a bubble and now it will take massive measures to save it. There needs to be a ‘’real-estate focused plan’’ if things are going to get strong on that but personally, I don’t think it is likely. The toughest job of a government is to convince people on something they do not believe in. Currently, real-estate investment is just too scary for the people. You will need to restore the confidence. A LPR cut during 1st Quarter of the 2026 is likely but people will not be saying ‘’oh lets go buy a new home’’.

In terms of steel markets, China is just being China. Production will decline on the year but I am still sticking to my expectation of 116 – 117 million tonnes for exports. We will need to see if they will actually be stricter on capacity usage for next year. A couple of months ago we had "anti-involution" on our agendas but the fire burst out quickly, I don’t see anyone talking about it no more. That had the potential to bring some positivity for steel but no new development so far.

Honestly speaking, it looks difficult for Chinese steel consumption to rapidly improve without strong stimulus. We by now know that Mr. President Xi does not want to unleash a bazooka and without that bazooka we will probably continue to extensive volatility. I hope they surprise us though. At the moment, I prefer to wait for official announcement from the Politburo. Let’s see if they will prioritize something on their agenda for steel.

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TURKEY & SCRAP

My predictions for the Turkish market were absolutely bullseye lately and I have received lots of positive feedback from my clients which made me happy. Well, always happy to help a fellow steel dude. We are all on the same boat.

I had been telling my clients that an increase on rebar and scrap prices in November were very likely since the last day of October. Back then, US origin 80:20 levels were at $350 - $353 cif and Turkish domestic rebar was at $535 - $555 exw depending on the region. Within the first week of November things started to move a little and today we are where we are at. US origin scrap is at $368 - $370 cif and rebar is at $563 - $590 exw.

So what is happening now?

We are obviously having the usual seasonal things with scrap such as: cold weather, lack of vessels, holiday season, scarcity of obsolete/cut grades, quality issues…etc…. On top of that, because Turkish mills have lagged with their procurement over the past few months, their need had to continue. However, that is not it.

Since the beginning of November, I have been arguing that US domestic market scrap demand was going to improve in December and to me it was pretty much was inevitable. Although most of the market participants were anticipating a flat settlement, we are actually moving up. Therefore, with support from decent rebar demand and constantly increasing spot HRC prices, US scrap suppliers were not going to go easy with their offers. Knowing that Turkish steel mills need quality material, it was kind of obvious to me that higher scrap prices were going to be seen and we did. I don’t believe it is over either. Prices actually could go much higher if we had some support from India – Bangladesh – Pakistan but that is pretty much still dead.

On the other hand, Turkish steel capacity utilization rate has been one of the major variables during the past month. Those of you who are loyal readers of my long ass floods will remember that, many months ago I had written that ‘’strong output cut looks necessary while export markets will be suffering for the remainder of the year’’. Well, that is also exactly what happened. Due to poor domestic sales volumes and lack of exports particularly Marmara region producers cut output significantly. During the last restocking period 2 weeks ago, size shortage has been felt severely which drove Marmara prices sharply upwards. It saw a premium of $20 - $25/t compared to other regions but it was technically a mill driven bubble rather than strong market dynamics. Regardless, prices are still strong today as shortage continues. According to my experience, it shall take another 10 – 14 days until things normalize.

Many of you are sending me direct messages regarding to scrap and rebar but I do not reply to them. It is what I do for my clients so apologies for not responding. You will have to wait until I have free time to do a long as flood. However, several of you have asked me ‘’why are Turkish mills paying higher levels for scrap while rebar demand is not strong?’’. This is a good question but it has many reasons.

i) delayed procurement
ii) running on lower inventories compared to regular times
iii) sudden need for demand due to improved sales
iv) stronger competition on domestic scrap causing higher prices
v) urgent need of high quality scrap
vi) lack of short sea supply
vii) longer lead times for semis imports
viii) seasonal holidays
ix) stronger domestic markets in supplying countries

as you can see, there is not a single answer. It might be many factors and the situation might be different for everyone.

In my humble opinion, Turkish market will need to keep capacities low and some mills I believe will continue to do so. I am informed that several mills have laid-off workers either temporarily or permanently which kind of tells us that production will remain low until global sentiment improves. Capacities are gigantic and sales are not as strong. This leaves mills without much choice. We see the same scenario at many European plants as well. The confusions caused by CBAM regulations and quotas do not help anyone. It just slows things down further.

Anyways, if we are to talk about healthy market dynamics, export markets will need to be active. A couple of thousand tonnes here and there will not fix things and Turkish mills will continue to rely on domestic market. There is only a certain amount the domestic market can consume so unless we see a global improvement, volatility will also remain the case. As I always say, then the price of flat products are $20/t below long products, there is something clearly wrong and things are broken.

For now, scrap levels are strong enough to prevent a sharp decline though and there are many economic developments ahead. Keep in mind that end of year is near. Next week, TCMB is likely to be cutting rates by 150bps (I would not be surprised to see a 200bps cut) after November CPI came at %0.87. The country will close the year with an inflation rate around %30 - %32 which is higher than the initial predictions although they were revised several times over the year. The discussions for minimum wage will also commence next Friday. There are many predictions. Personally I anticipate minimum wage hike to be around %23 - %26. This is going to mean that Turkish mills will face higher employee costs within the next 2 months and we will have to see how the Unions will react.

To conclude, geopolitical developments will also play an important part for Turkish steel in 2026. So far, peace negotiations between Russia and Ukraine are not developing fast enough. Although efforts have intensified, it is clear that US – EU vs Russia – Ukraine have different interests. It is going to take a long time until we see solid progress. Regardless, any positive development on this can make things much better during the new year.

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USA

In my opinion things look solid for the US steel market although when we look at the manufacturing data expectations for November are not met. Although production numbers are showing some improvement and it came at 51.4, manufacturing activity contracted for the 9th consecutive month at 48.2 (prev: 48.7).

Although my expectations regarding to US domestic scrap and steel prices were accurate for the month of November, I have to admit that my prediction regarding to capacity utilization rate have failed. Personally, I was expecting capacity utilization rate moving above %78 which is kind of my personal level to say ‘’things are healthy’’. We are still stuck at %76 for many weeks now. It does basically tell us that new orders are healthy to push prices upwards but not healthy enough to go for a very strong increase. Therefore, mills are smartly optimizing their output according to demand they are receiving.

Regardless; since the last week of September we have seen spot market HRC prices seeing constant increases. It would not be wrong to say that (including this week), price have moved from $795/st to $900/st. A $100/ST increase in 2 months looks pretty good to me and major mills keep on increasing their prices at a small pace each week. Although winter has arrived at many regions, rebar demand is also fine and prices are stable.

As a result, December scrap settlements for several grades will be higher compared to past month. Technically, that will be the primary reason for US scrap exporters to demand higher levels from Turkish buyers. Situation is not really positive for West Coast US though. Due to China’s failure to recover, many scrap procuring countries such as Vietnam and Taiwan are taking things very slow. India and Bangladesh demand for bulk / containers have also slowed down significantly. As a result, past month we had seen some West Coast US suppliers selling their cargoes to Turkey and that is not a usual thing due to very high freight rates. We might continue to see more sales from there if Asia fails to recover in the short run.

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EUROPE

it is really difficult for me to comment about the European market lately and I don’t like commenting on things which are not clear to me.

Trading activity remains slow and mills attempts to push HRC prices over €640 - €650 exw is not successful so far. It is possible to say that for high volumes prices of €610 - €620 exw are still there. Although there are many attractive import offers to the region, CBAM and Quota issues prevents buyers from concluding deals as they do not want to get caught on the wrong foot. No one wants to face unexpected fees. Futures markets are also volatile and it looks like market has not found its direction just yet.

Germany’s economic situation is kind of scary for me. Many industrial leaders are now speaking out and they do not like the fact that efforts to fix things are developing very slowly. President of the Federation of German Industries, Mr. Peter Leibinger states that ‘’structural reforms are needed as soon as possible and the economy is experiencing its most severe crisis since post WW2’’. He is probably not wrong. There are also talks that a few steel mills are considering to halt production for a significant period as they can’t keep making losses.

I also wonder how the European Union wants to keep operating without Russian energy. As they are planning to cut Russian imports completely by 2027, that can technically bring only higher costs to an already suffering market. Yes, some are announcing energy price subsidies but will it be enough to fix the problems? I personally doubt it.

Anyways, I am regularly talking to many colleagues who are in the scrap business. They all pretty much say that not much scrap is available and particularly non-ferrous is problematic. I am told that some mills stocked up for December requirement during November which is usual behavior at this time of the season. In my opinion (also my colleagues opinion), European domestic scrap prices do not have much room to decline in December although steel demand might remain poor. In fact, if sales to Turkey continue happening close to $365 cif, attitude of EU mills might change.
It looks like mills will have two options.

i) do not increase scrap prices and reduce output during holiday season

ii) increase scrap bids a little €5 - €10/t and continue working.

We will find out which option is preferred by the end of next week.

As in the case for scrap exports, I believe offers will remain firm to Turkey.

Indian steel prices have increased this week but currency volatility keeps buyers from importing significant volumes of EU scrap. Instead they focus on cheaper alternative.

Wishing you a good day.

Dude

[Steel Dude @steelmarketnews]

As promised here are my thoughts and opinions about the current steel market situation. I still have 1 space available for a new client. I did not increase my fee during the past 2 years and will not do so in 2026, instead I take in 2 new clients each year to cover my expenses. I can guarantee that you will find what I do very useful if you are an active player in the steel market. If interested, please do send a private message.

Anyways, let’s begin.

TURKEY

Financial struggles still remain as the primary problem for the entire Turkish market. Whether you are trader, steel mill or an end user, it does not matter. Accessing money is difficult and banks have no intentions of easing their policy at least for another 2 – 3 months. Meanwhile, on going political uncertainties have caused Turkish Central Bank to decrease interest rates at a slower pace which is delaying a faster paced recovery. Deposit interest rates are high and major players prefer to hold majority of their savings at the banks rather than participating in physical trade. A similar problem India is also facing.

While analyzing the Turkish market, we will have to look at several things to have a deeper understanding.

Rebar market has shown some improvement over the past 2 weeks. It would not be correct to say that the improvement comes as a result of increasing consumption though. The recent price rise is due to higher scrap deals both for import and domestic material. Mills were operating at negative margins for the past 6 – 7 weeks and now rightfully, they are trying to balance the situation. Although scrap prices increase by around $4 - $7/t since the middle of October, tradeable rebar prices increased by around $10 - $15/t.

In terms of demand, although some improvement is seen movement is not fast enough. Unfortunately, lack of exports are a major concern. Turkey’s most important export market Europe is still unclear on many issues such as CBAM and quotas. Other target markets either procure volumes not significant enough or they are lost to Asian / Russian / African suppliers. Therefore, it is pretty clear that recent movement is ‘’cost driven’’ rather than demand.

Despite all the negatives, it is not all quiet when we look at rebar activity. Unfortunately, HRC’s situation looks way worse than rebar. When I look at my notes, I see the following:

August – September – October - November 2024 Rebar price is on average: $580 - $590 - $605
August – September – October - November 2025 Rebar price is on average: $535 - $535 - $545

VS

August – September – October 2024 HRC price is on average: $570 - $570 - $585
August – September – October 2025 HRC price is on average: $540 - $540 - $540

The situation is pretty much self-explanatory when we look at the previous years as well. There is a clear and deeper problem with HRC. Usually at a healthy global steel market dynamics, you would have seen HRC at least $50/t above rebar. It is costlier to producer as better quality scrap is needed and rolling is more precise. Obviously, global economic problems led to this problem. While demand of car manufacturers and household appliance manufactures shrank, dumped Chinese (and other Asian origin) material did not help.

The problems I have explained above are still there, none of these are solved. Global steel consumption can only improve with improved economies, lower interest rates and this comes through by stabilized geopolitical risks. I am not going to write the same thing over and over again but without building up investor confidence, things will remain tough.

So what can we expect from the Turkish market?

It is still a game of survival. All participants try to save the day and I think they are doing a good job under extremely difficult circumstances. Apparently, we will have to wait until interest rates are lowered. Until then, need based stocking activity will be the case and scrap prices will continue to drive the market. For the short term, I think we are hovering near to the top. Turkish Lira continues to depreciate, end of year inflation target will be missed and now that minimum wage revision will push the costs higher, we will need to keep our eyes on economic developments.

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ASIA

As I always write, China is the only main variable for the region’s negative performance. I personally liked the measures Beijing has announced at the Plenary last month but these are only plans for now. They will have to be approved in December and some of those will be applied by the 1st Quarter of 2026. What was announced last month could not help the spot market and it did not. As a result, it is not surprising to see the Chinese market performing poorly. Despite the output cuts, supply is still kicking demand’s ass and as I had anticipated, exports will reach to around 117 million tonnes which will be higher than last year. Basically, they continue to find many ways to export material despite so called ‘protective measures’.

It is difficult to expect a much better performance in other Asian countries while China dominates with exports. Japan, South Korea, Vietnam, Taiwan all feel the pressure.

For example, today’s Kanto Scrap Tender was settled with only $1/t higher compared to October despite a much better Japanese domestic scrap market activity compared to previous months. If Asian dynamics were healthy, today we would see a much higher price in Kanto Tender. In reality, Korean, Bangladeshi and Taiwanese buyers lowered their import scrap procurement levels due to unfavorable market conditions. Also, I am told by a fellow Japanese colleague that Japanese electric arc furnace mills are running on capacity utilization rates of around 40% which is just simply evil.

Each time we see Chinese prices go lower, we immediately start seeing pressure on semis offers as well. Traders start to become aggressive and it comes to a point that billet starts to get preferred over scrap. Price idea differences between buyers and sellers for containerized or bulk West Coast US origin scrap increases to over $10/t and eventually we keep on living the same scenario over and over.

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SCRAP & EU

This is my favorite topic lately. It has been fun making a lot of phone calls and exchanging opinions over the past 2 months. However, let me tell you something. Even major scrap dudes were not anticipating the recent increases we have seen and at best case scenario, they were happy not reducing their offers for the month of November due to costs.

India had been out for many months (still out), European domestic levels were unattractive, US capacity utilization rate was still below a healthy level (still below 78%) and scrap has settled flat during the past 2 months. More importantly, demand for Turkish steel was lacking. Basically, market was lacking a reason to go higher.

Yes, at this time of the year we usually have an increase due to seasonal factors but this time the increase was not caused by weather conditions. Instead, the increase was driven by lack of vessels available. Cost of freight have increased by around $7 - $12/t depending on the route and did not come down fast enough. A lot of vessel owners preferred to carry commodities rather than scrap due to faster loading / discharging rates to make more money at a faster pace. This has come to a point that even short sea scrap became unattractive (almost the same level as EU bulk), leaving Turkish mills without much option while Asian semis could not be shipped before end of December. Running on low inventories, they had to agree with higher scrap levels and we have seen the recent increase.

Please keep in mind that Turkish domestic scrap prices are also at a much higher level than it should normally be. However, when mills fail to procure cheaper scrap from short sea, than domestic competition gets fierce. On top of that, quality issues drive them to look for better compositions.

Well, we are where we are today. We have scrap suppliers asking as high as $360 cif which should technically not be workable. However, if Turkish rebar demand shows some sort of improvement, it would not be surprising to see higher levels because the need is still there. Therefore, we should focus on freight rates, Asian semis offers and domestic scrap situation in EU and US. Also, now snowfall is beginning and cold weather will take over. These are factors that usually keep scrap offers firm.

Apart from that, Europe is trying to push HRC and REBAR offers higher. There has been some success in terms of higher price levels for HRC and we can say that spot levels are slowly moving up to above €600 exw while several mills are pushing for prices above €610 exw. I do believe major mills will try to conclude deals for 1st Quarter of 2026 at levels around €650 exw but I am not sure to what extent the attempt will be successful. As my long term followers would recall, I am not a strong believer in futures markets but it is also showing some positivity mostly due to CBAM and quota impact. We are seeing December levels at €635 exw.

In reality though, demand has not been strong. Major consumers are either delaying procurement or procuring levels fewer than they usually do. That is not surprising. If we look at some economic data particularly for manufacturing, we see a clear slowdown. Although expectations are better for 2026, I highly doubt that we are leaving dark days behind for now.

Meanwhile, EU domestic scrap situation is showing little improvement this week. Northern EU mills are bidding €4 - €6/t higher for sheared scrap. One major mill is also bidding €10/t higher for the same grade. It is possible to say that Polish scrap market will find a similar increase shortly. The seasonal factors play a part in this situation. They will have to secure supplies before winter hits hard and holiday season begins.

Unfortunately, I do not have much to write about India this time. I do believe containerized shredded offers given to the region are very reasonable in terms of price when we compare them with bulk offers to Turkey but due to weak local and export finished good demand, activity is happening within the country as India has the opportunity procure their needs from the domestic market with alternative sources. Some movement has begun but things still do not look good enough. Rainy season is over and hoping things get better over there. it would help.

Wishing you a good week.

[Steel Dude @steelmarketnews]

so as promised here are brief opinions of mine. 3 pages are not very brief but I love you guys so I try to write what comes on to my mind as much as possible. Comments are welcome as usual.

CHINA & ASIA

As expected, post-holiday period remains weak for now and market is waiting for the ‘’4th Plenum’’ which is to be held between next Monday to Thursday. Some kind of new stimulus will be announced to boost domestic consumption but so far there are no concrete talks or rumors. It would not make much sense to expect a huge bounce until we see what they will actually come up with.

Trump’s threats over the weekend were a clear indicator for a softer market this week and the slump we had seen over the past 2 days is no surprise. That is now going to spread the negativity to entire steel market, particularly for Asian markets. Despite the recent price increase to Turkey, Taiwan & India & Bangladesh & Pakistan was not influenced. Obviously the dynamics are different as there is clear difference between bulk vs containerized shipments but again current scrap levels are too low if we compare it to historical figures. Unfortunately, steel demand & consumption remains weak and this week Taiwanese longs had another decline of $10 - $14/t.

Now that China has seen significant declines during the past 2 days, once again semis offers will see discounts and that will put pressure on scrap. Until Trump’s tariff threats, market was somewhat stable waiting for the 4th Plenum but things are negative for now. Therefore, we will get a clearer picture by next Tuesday but risk is there. It is difficult to talk about nice things when Chinese exports will be around 117 million tonnes by the end of the year.

Meanwhile, I am seeing that India’s current scrap prices are near Covid time lows. Unfortunately, expectations did not materialize. As there is no confidence in the market and Monsoon lasted longer than usual, players who has the money avoid investing in steel and focus on alternative fields such as gold, silver, stock market. Market was very hopeful for the 2nd half of October but personally, I think that ship has sailed and October is gone. It is a pity because India has been expanding its steel capacity throughout the year but when you look at their steel prices both for domestic and exports, things are very sucky sucky.

Japanese market was also hopeful for next scrap deals, We had the Kanto Tender closing higher levels mostly because of currency depreciation but suppliers were remaining firm with their next offers and they were about to try increases. Now, I don’t know if they can manage to push their quotes higher while Chinese levels are declining and buyers such as Bangladesh are kind of passive. Seems like Vietnam is the only meaningful target market but they are certainly not going to accept a price increase for now.

To conclude, all eyes will be on China’s 4th Plenary. We need to see some positivity on that otherwise things do not look optimistic.

TURKEY & SCRAP

As I had anticipated, Turkish market did accept significant price increases on scrap over the past 10 days. They did not really have any other choice as they lack alternative resources and semis would take a long time to arrive. If you look at the official customs data, you are going to see that Turkish buyers significantly increased their semis imports compared to 2024 by almost 60% during the first 8 months of the year. However, after the recently introduced changes for semis & flats imports and because of the lengthy delivery periods from Asia, more scrap deals needed to be concluded. It is important to note that Turkey gets only around 30% of its current scrap needs from domestic market so reliance on imports will be the case.

Anyways, scrap suppliers managed to remain firm. Although they have failed to achieve their target prices, they still did conclude profitable sales after months of suffering. There other variables in play such as higher freight costs, improvement of Egyptian demand (due to import measures taken) and strong competition in the Turkish domestic scrap market.

Now the question many ask: ‘’Can we see higher levels’’. imho, we are going to remain where we are at for the time being. Direction will depend on China’s performance so it is a good idea to just sit and observe the next 7 days. US domestic market’s capacity utilization rate has been declining due to the planned maintenances which mean fewer scrap consumption. As anticipated, prices did decline by $10 - $20/gt depending on the grade and region. Therefore it is not like there will be a shortage of scrap although prompt cargoes are unlikely to be available.

Europe is a little bit more complex lately due to quota reductions and CBAM confusions. If you look at the HRC features, we have seen significant upward movement for the months after November. This is obviously sentiment driven but eventually, spot market will also need to move up. Reduced quotas and higher costs due to CBAM will end up with European mills increasing their finished good prices. They have been struggling big time since late spring. I am looking forward to how the scrap market will start to shape up for the next 2 months. October did see domestic declines of about €8 - €12/t depending on the region.

I have received at least 8 direct messages regarding to Turkish rebar market. That is my favorite market to write analysis and predictions. I have received many compliments from my clients lately because of my accuracy of latest developments. I have many friends, colleagues and clients over there so it is always nice to useful for them.

Anyways, Turkish market’s activity will be there but the action is likely to be limited. TCMB will be meeting on 23rd of October. Market is in desperate need for cuts because financial burdens really did grab everyone by the throat. However, Turkish inflation target will be missed and recently published data makes a rate reduction less likely. Regardless, TCMB is trying to keep a balance so they might continue cutting rates but it is going to be a minor cut. Major financial institutions are also favoring this thought. Some are now expecting cuts as little as 150bps which would not really help market sentiment.

On the other hand, Turkish mills are facing high production costs. They have paid significant levels for scrap deals and it is difficult for them to lower the average inventory costs as domestic market scrap prices also remain elevated. Therefore, unless some of them manage to conclude dumped Asian semis shortly, expectation of a significant price reduction on rebar is not very likely. Obviously we can see minor corrections but a collapse shall not happen under today’s circumstance. Lets look at how the Chinese market will develop after the 4th Plenary, than we can talk again.

Finally, both HRC and REBAR export activity remains weak. I do expect some activity to begin shortly before European measures go active but in terms of prices I am not satisfied. Technically, it is possible to say that Turkish mills are quoting very attractive levels. In a regular market, they are always $10 - $15/t above what competitors such as Algeria and Egypt offers but today, the difference is very teeny tiny. It is just that global economic problems are too serious to anticipate a major movement.

The ceasefire and peace negotiations between Israel – Palestine is hopeful. First of all, I am very happy as a human being because it is just a tragedy to see thousands of people dying because of mediocre politicians. On the other hand, reconstruction of Gaza shall improve steel demand but things like that take several months. First of all, they have to share the pie and that we will see how things will work out. Regardless, Russian – Ukrainian war needs to end as well. Unless we see something positive on that, we are always going to see extensive volatility.

To conclude; steel wants to move up but it is unable to do so. It is heavily dependent on China due to tremendous exports and political uncertainties keep those who have the money away from our lovely market. I have this crazy theory that ‘’stock markets should perform poorly and gold should collapse’’ but I don’t want you guys to stone me to my death so I will not get into detail. lol. Political and economic stability is needed for better days.

Wishing you a good day.

[Steel Dude @steelmarketnews]

Good day dude lovers (not literally). As promised here I am with another long ass flood which will express my thoughts and opinions about the market. I have tried answering to the questions received as well, thank you for you cooperation. I hope you find it useful.

Meanwhile, I did not accept any new clients during the past 4 months as I am satisfied with the number I have but I will take in 1 additional client in November. About half of my clients are Turkish and I do love my dudes but for diversity my preference would be having my new client outside of Turkey. Therefore, if you are thinking of receiving my services please do notify me in advance. I am sure that you will find what I do very useful for your work.

Thank you for the interest.

Lets begin.

Well, steel market has been sucky sucky for almost entire 3rd quarter of the year and the past 2 months have not been fun at all. As we are heading to the final quarter of year, expectations are mostly stable to negative but it is a volatile market which can be full of surprises. We have had a hike on scrap prices yesterday which I was not expecting until next week so may be some movement can occur but lets look at where we are in detail first before jumping to any premature conclusions.

EU & US DOMESTIC STEEL AND SCRAP

It would not be wrong to say that domestic performances both in the US and EU have been struggling.

Particularly Europe has been suffering significantly and had a very poor summer. According to my notes, domestic scrap prices have declined between €20 to €30/t depending on the scrap grade since June and expectations for September (post-holiday improvement) were not met. That was not a surprise to me because mills price increase on both HRC and REBAR were too aggressive in an environment in which demand could not follow. Therefore, HRC offers of €580 - €610 exw did not work and recently prices both on spot markets and futures declined significantly. Eventually, it is always about demand. Order books need to get filled and when demand does not follow, a producer has no choice but to discount.

Europe’s situation will remain chaotic for the next few weeks. First of all, none of the people who I talk to precisely knows the procedure with CBAM. They are uncertain about the costs they will face while making an offer to the region. Obviously, that will raise many questions for importers and that part needs to become clear as soon as possible. Furthermore, the possibility of quota reductions makes things even cloudier. Business is already weak enough and market cant waste more time with bureaucratic procedures.

Meanwhile, many European steel dudes also struggle with financial problems. Some scrap yards are having a very difficult time operating as their costs are higher than what they make. A lot of sub-suppliers were already having high priced material in their inventories since early summer so last couple of months made things even worse.

Furthermore, poor steel demand led to temporary and permanent closure of several steel mills located throughout Europe. This situation also builds up pressure for smaller countries. Many important automobile industry participants are located at these countries and because the industry is performing like shit, turnover of waste have declined significantly. For example, in Romania many factories worked for German automobile companies and vast majority either closed or laid off significant number of workers. Local steel mills have also stopped operations as they could not keep up with the losses they were making so problems are deeper than we read.

I don’t know how Europe will manage to improve its performance in the short run but they will need to do something. Well, EUROFER supports protectionist measures and ban on scrap exports as a part of the solution which I can not fully agree. That would just be temporary solution. Europe needs to fix its economy in order to fix its steel industry. I am seeing nothing positive on that front.

Anyways, US domestic steel market is also not doing great. It would not be wrong to say that the market is stuck for a while in terms of demand. As a result, we have had a decline on HRC prices. After hitting $900/st during the first week of July, as of this week we are down to $800 - $810/st on the spot market which is a decline of $100/st in 3 months. Although mills tried to keep offers at a minimum of $875/st over the past few weeks, market resisted.

General expectation for the month of October is not very positive either. There are still planned maintenances by several mills in October and November which technically means that scrap demand will have a tough time improving. On top of that, because of the HRC price declines, biggest consumers of scrap are not having great profit margins to keep paying higher levels while procuring. As a result, scrap flows are not a problem, there is plenty of supply. My colleagues anticipate a decline of $10 - $20/gt decline both for prime and shredded grades while they anticipate obsolete grades to remain flat. Apparently, market is a little tight on HMS and P&S grades.

We will have to keep following economic data from the US. For now, data is mixed. Inflation is kind of hot but job market data creeped FED so we are going to see further cuts. Market currently expects 2 more cuts before the year ends. We will not have a November meeting so October – December is where the cuts are likely. However, I have my concerns. In my humble opinion, 50bps cut might be a little aggressive and all data should be taken under serious consideration.

To conclude, both Europe and US domestic steel markets are not very optimistic about the current situation. As I always say, without a catalyst markets are unable to get excited. People were looking forward to peace negotiations, briefly settled efficient trade deals, fewer political disputes but none of them are the case. in fact, world looks more divided than ever.

TURKEY & INDIA & SCRAP

Turkish market has been suffering from negative margins for some time now but financial needs do not leave market participants any choice but to discount.

Regardless, I have been telling my clients that ‘’we are at a bottom both for scrap and rebar’’ for these past few weeks so seeing yesterday’s higher priced scrap deals is a good thing for market sentiment. However, I was not expecting this price increase for another 7 to 10 days due to very poor steel sales performance. Yes, an upward movement was inevitable particularly for EU exporters because past deals were below their breakeven levels. Also, freight costs raised a little but on the other hand € - $ exchange rate has softened. We are going to see attempts to push prices upward even further and it is possible to see next EU scrap deals at $335 cif and may be a little above. Technically, we should also move towards $342 - $343 cif for US origin material.

In reality there is not really a strong reason for the increase we are seeing right now. I think scrap suppliers are being very smart at this point by resisting selling at lower levels. I understand the fact that mills with huge capacities need to buy a lot of scrap cargoes as short sea or domestic procurement will be nowhere near enough to satisfy their monthly requirement. So they don’t really have a choice to pay a little extra at this point while suppliers are remaining firm. Also, those who were importing semis will cut their volumes as a result of the new regulations.

we needed a reason for Turkish mills to push their rebar / hrc prices upwards in October so scrap is likely to give them that reason. Sometimes even an unreasonable increase is good for the market sentiment. We are at one of those times. But please keep in mind that, US domestic scrap market will not improve in October and EU will continue to struggle. EU rebar and HRC prices slid by another €5/t this week so far. US domestic HRC and REBAR prices remain stable with no sign of an improvement as well; in fact small declines are seen to boost sales. On top of that, we don’t really know how the Chinese will come back from their holidays on 8th of October neither. Therefore, I have the right to be concerned.

I see no need for scrap suppliers to change their strategies after successfully completing deals at higher levels though. Who cares if their domestic market remains poor? Sometimes that even enables them to collect more material at the docks at lower levels enabling better margins. It is probably one of those times combined with softer exchange rate. They are also aware of the fact that Turkish mills will soon have to start procuring November shipment material (a few did) and now that the rules of Inward Processing Regimes have changed, more scrap will be consumed instead of billet. Furthermore, Egyptians will buy more cargoes than they usually procure so it does give scrap suppliers a little leverage (shouldn’t really have a significant impact but any excuse is reasonable at dark times like this).

Looking from Turkish mills point of view, things can still go both ways due to global weakness. Eventually, they will need to pass on the increased price levels to their customers. If we consider an average scrap inventory level at $335, a breakeven for rebar will not be less than $545 - $555 exw depending on the mills capacity utilization rate and other variables. Recently, high volume rebar trades mostly happened between $525 - $540 exw depending on the region so a price hike attempt seems inevitable. Mills will need to push their prices upwards by at least $10/t in the short run unless they are satisfied with making losses. Lets not forget that Turkish Lira’s depreciation also continues which should technically lead to higher TL levels.

Even with such low rebar and HRC price levels, sales are still not very strong due to liquidity problems. Europe’s weakness and concerns with CBAM / Quotas has caused a long pause on exports too. In reality, Turkish mills have been offering very reasonable prices for exports in order to compete with Algerian and Egyptian suppliers. It is just that economies suck big time and entire world is having consumption problems.

Anyways, I anticipate hearing more scrap deals shortly. All US, EU and Baltic suppliers will be active. There is no reason for a US supplier not to sell its cargo around $342 - $345 cif at such a market. Regardless, I personally like to observe a little while before writing a lot of positive things. Obviously we are going to have a better movement in Turkey after such a weak month but as always, I have my concerns about the length of the movement.

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Unfortunately, India has not started performing efficiently so far and favorable tax revisions obviously do not have an immediate positive impact. Now that the heavy rain season will end (it is not over yet, in fact a lot of rain is to arrive shortly), people still expect local steel activity and consumption to improve.

In my opinion, India has exactly the same problem as Turkey with fewer inflation rate. People who made good money over the past few years diverted their earning into other places like gold, silver, stock market, mutual funds, estate…etc… Now that returns of investment at these are much better than steel trading, money is kind of stuck.

As a result, steel players including scrap importers are suffering and market lacks a story to start booming.

For now, bids of Indian buyers are at most $360 cif for containerized shredded material. Pakistani buyers also reduced their bids by $5/t to $370 cif this week. Bangladesh goes after cheaper origin material. Therefore, we can say that Turkey will remain the main target for European exporters. Regardless, now that two major Turkish mills bought scrap at higher levels, offers to South Asian countries will no longer get lower. Containerized suppliers shall also increase their offers shortly. In case you are wondering, I think EU’s containerized shredded offers at $365 cif to India are reasonable. According to my estimate, while selling 80:20 to Turkey at $330 - $335 cif, containerized offers to India should not be below $372 - $375 cif. Well, unlike Turkish mills, Indian mills can procure domestic scrap and sponge at very cheap levels so they have the opportunity not to import. They are not extremely dependent which enables them to reduce their production costs during the very difficult times.

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CHINA

I still refuse to write anything about the Chinese market. They will be back during the 2nd week of October and there will be a lot of developments by then. Apparently, we are going to see new stimulus packages along with a potential LPR cut but I am not buying these stories until I actually see or hear them from credible sources. Production cuts are going to be weigh in at some point but honestly speaking it is too little to create an impact. Just look at the export numbers and you will understand what I mean.

As usual, I would like to say that without a price improvement of $40 – $60/t on Chinese steel products, we will continue to have a lot of ups and downs.

China’s stable situation continues to impact regional players negatively. Most of the scrap trading is just not moving. Prices are flat, demand is negative to stable, nothing exciting is happening. Hard to see a boom before China takes some action.

Wishing you a good week and see you by middle of October.

[Steel Dude @steelmarketnews]

HERE WE GO

Well, it has been about 3 weeks since my last long ass flood so as promised; here I am with a new one. I will try to be as brief as I can, please do ask your questions by mentions or a direct message. As usual, I will do my best to answer to each one of them. Meanwhile, my client list remains full right now and I will need another couple of months to accept a new client.

CHINA

I am not going to write a long analysis on China. it is pretty much the same old story.

After intense volatility we have seen during the past 2 weeks, things have started to go a little crazy all around the globe. I personally hate this type of situation because major market players tend to stop and observe what the hell is going on at times like this and they are absolutely spot on to do so. When you have an increase of $25/t in a week and a $20/t decline the other week, it is time to chill.

The volatility is not over yet. Fortunately, coke futures are about to close today with a limit up again and steel features showing stronger momentum after last week’s losses. Please note that, once again the movement is based on expectations and talks of production cuts. It is not like we are seeing the improvement due to better consumption. Real estate market continues to perform poorly compared to last year although a little improvement is seen in July for major cities. Furthermore, the extent of output cuts is not strong and is debatable. Mills margins have improved during the last price increase so they rightfully want to benefit from the situation while they can.

Trade talks with the US area taken positively by the market but I do not believe the outcome will be very efficient. So far, we are just having pause after pause and this might be the case for the next few months. A win-win situation for both parties looks unlikely to me and one of the sides will have to compromise. I also have concerns about the next measures Trump will take against Russia as it can indirectly cause further problems with China. Whatever the outcome is, in my opinion Beijing intervention is still independently needed in order to boost domestic consumption. Lately, they have started to take measures such as child support money and small business support but these will not be enough. I think we are approaching to the time of LPR cuts and stronger stimulus looks likely by October, that is when the next 5-year plan will be announced but the date is unclear for now.

One positive development for the steel market is that after deciding to go up from an 8 year low, recent $20 - $25/t increase on Chinese export prices has made Chinese offers become unattractive for many regions and that did cause market sentiment to be a little positive for some markets. Regardless, global steel market fundamentals are not strong for now and the first half of August should be pretty weak. I have better thoughts about September and October though. As you know, I have been anticipating a strong last quarter for some time now and I am still holding on to that view of mine.

INDIA

This is a complex market right now due to many factors. Recent trade situation with the US is not helping at all. Rupee’s depreciation against the USD is to an extent which the Central Bank will need to intervene. Thankfully, India has strong reserves and can cope with the economic impact but the longer the trade dispute goes, market confidence will struggle to improve. Right now, confidence is the main problem of all global steel markets and it is important if we are to see improved demand.

Anyways, recent hikes on domestic raw material in India such as sponge iron had an influence on domestic scrap prices as well. As a result, production costs have increased. Although monsoon season is not over and heavy rains are still seen in many cities, major steel mills increased their longs and flats prices by $10 - $30/t for the month of August. I personally want to see how India will perform over the next 3 weeks because I am not really sure about current situation.

First of all, July steel imports are very strong again. According to data I have seen (Source: BigMint) almost 485.000 tonnes (+%50 compared to June) of HRC was imported while exports were only at 128.000 tonnes. This does technically make India a net steel importer despite all the newly imposed ‘’import regulations’’. They are clearly not working.

Furthermore, Indian EAF and IF furnaces continue to stay out of import scrap market due to price idea differences of $10 - $15/t. However, usually this time of the year would be ideal for them to start procuring and prepare for the next couple of months. I am still not seeing them back to the market and now that Rupee has depreciated, imports are going to be costlier.

Unfortunately, India and Turkey shares a similar faith. Now that European Union has been struggling with HRC prices during the past couple of months (started to move up since the middle of last week) exports to the region have been weaker compared to regular times. In India’s case, they have also lost their GCC market share to Asian imports. Tough times.

In my opinion, Indian market will have to get more active whether they want it or not sometime in September. With the end of seasonal factors and higher steel prices in the EU, along with possibly stronger scrap levels, India will need to say ‘’fuck it, I am back’’. This looks like the only possible scenario for me because when you are the world’s 2nd largest steel producer, you cant play dead for 6 months. You are running on low scrap stocks and cant continue relying on domestic material because a sudden spike on demand will leave your hands tied. You have to take some action anticipating a recovery before the recovery actually happens. This is how things are looking at from a production point of view. The only thing which scares me is Trump’s potential actions towards India. The guy is unpredictable.

SCRAP

This is another tough cookie lately.

Well, we are summer time and Europeans will go on their lovely vacation. Collection shall be lower for the month of August. Scrap suppliers are comfortable with their stocks and there are cargoes available for export while domestic market has not been doing very well.

Many EU mills will start pressuring domestic scrap prices downwards during this first week of August and it shall be around €5 - €15/t decline on bids depending on the grade. Regardless, it is possible that suppliers may resist this push because of improved expectations for September and October.

I am not a believer in features markets but the expectation is to see a €15 - €40/t hike on HRC levels from now on to end of October. It does sound realistic and is probable. Major EU mills have already announced several price hikes for October delivery material as well. However, as I always say it is the demand which matters. We have seen many attempts last year to increase prices but they have mostly failed. The positive thing right now is that the gaps between Asian origin and domestic material have narrowed down. Also, now that quotas are going to be problematic, it is possible for buyers to have stronger appetite for domestic material. Regardless, economic and tariff related developments will need to be positive if these expectations are to be realized.

Anyways, if I were a European scrap supplier who does not have any financial concerns; I would not hurry too much to get rid of my stock. Obviously, holding to inventory costs serious money under today’s market circumstances but I also do not see any reason to off-load my material at a cheap level.

my reasoning is simple:

US domestic scrap market will remain strong and US exporters will have no reason to reduce their offers
€ - $ exchange rate remains strong at around 1.1550 which puts breakeven to around $340 cif TR
features expectations for September – October look positive for now
alternative target market appearance (India and Egypt) is quite likely
Turkish mills will need to keep procuring scrap while semis cant be acceptable at today’s rates.
domestic mills are likely to have improved scrap demand in a few weeks’ time and shall bid higher

Basically, we will have to follow all these variables on weekly basis but I do agree that first half of August will be challenging.

Regarding to short sea scrap situation, it is not having a good time. Sellers are trying to increase their offers to Turkey as they had to increase their dockside bids on Friday and even today. Romanian market is trying to measure new effects of the recently increased tax rate on any waste including scrap. Now that sellers will be directly taxed at %12, some observation might be needed. For most short sea suppliers though, selling to regional mills have been more profitable during the last 2 months.

To conclude, as the world’s top ferrous scrap buyer; Turkey will need keep buying scrap because semis prices increased significantly, lead times are too long and Turkey’s domestic scrap supply is not enough to cover its needs, also bids are similar to EU origin anyway.

As in the case for Asian scrap markets, it is a similar situation. As weather conditions improve countries like Taiwan will start preparing for the January and February which means they will have to improve their scrap intake. This week major producers have increased their bids for both domestic and import scrap. Obviously, cheaper semis supplied within Asia and East of Russia built a lot of pressure on Asian scrap as buyers preferred to replace their scrap needs with semis but now scrap is the primary option again. As long as China does not have a collapse, we shall see some improvement. Well, at least West Coast US offers should see some hikes, current levels are sucky sucky.

TURKEY

Turkish market had a decent bounce which was directly related to China’s improvement 2 weeks ago. Many buyers decided to restock as they were on low supply and prices have improved by $12 - $20/t in one week. Last week’s poor performance in China did not cause prices to decline as mills were already on negative margins.

Turkish market will continue to have a tough time in terms of finances. Although TCMB will continue to reduce rates in September – October – December (unless a surprising political and economic development occurs), it takes time for rates to come down as banks take their time revising their interest rates. Meanwhile, strict policies on loans continue to be the case and it is remains difficult to access money. Cash remains very precious.

In my honest opinion, I think Turkish steel market is about to leave the darkest times behind but challenging times will not be over. Market still heavily depends on improvement of global markets as mills capacities are far too large to be satisfied with only supplying to domestic market. Turkey will need to export material if we are to talk about a much stronger performance. Otherwise, capacities will continue to be operated at a low level and in terms of costs its just not sustainable.

I do not expect Turkish rebar or HRC prices to decline significantly unless a Chinese crash occurs. Record numbers of imports have been seen lately with semis reaching over 500.000 tonnes a month and the first half of 2025 has been just too poor and damaged a lot. There is nothing which can hurt a steel market more than a lot of cheap imports. It is surprising that Turkish authorities do not act on this problem. Anyways, now that prices in Asia have increased and imports from Asian suppliers will clearly decrease, mills will not feel the pressure as much. It shall give them hope of some recovery although in terms of margins, they are still not out of the danger zone.

Meanwhile, mills would obviously love to procure European origin scrap at $330 - $335 cif and US origin at $340 cif but that is unlikely to happen. I think they will have to accept $342 - $350 cif range for the time being and hope that domestic demand will be active. Europe’s potential improvement in September can be crucial for the Turkish market though. I am looking forward to next month because I don’t expect much from this one.

Wishing you a good week.

[Steel Dude @steelmarketnews]

Hello there dude lovers (not literally). As promised here are my answers to the questions received from those of you who have bothered to ask. As I said earlier, I will not be taking in new clients until December but as early as December, I will be able to add additional 3 clients. Please do still show interest when the time comes. lol.

Lets begin.

QUESTION: HOW DO YOU SEE THE CURRENT BIG GAP BETWEEN SCRAP PURCHASING PRICES IN THE EXPORT PORTS AND THE DOMESTIC STEEL MILLS IN EUROPE? PORT PRICES ARE NOT COMPETITIVE NOWADAYS.

ANSWER: Completely normal situation, nothing surprising. Market was actually anticipating a stronger decline for EU domestic market for July but I told my clients 2 weeks ago that the decline would most likely to be limited by €10/t at most regions (depending on the grade).

To understand current EU scrap dynamics better you have to look at 3 things;

I) Domestic HRC and REBAR sales volumes

II) Situation of the Turkish market as the largest buyer

III) Situation of containerized shredded buyers such as India, Pakistan and Bangladesh

Well, domestic HRC and REBAR sales in Europe are currently terrible. I don’t even recall the last time seeing HRC getting traded below €530 exw.

Turkish market is actually still paying decent prices for EU origin scrap considering how terrifying their current local rebar sales prices are. Exports are non-existent and those who need to export offer disgusting numbers.

India is getting what they need from the domestic market due to price idea difference of about $10/t. sponge and local shit scrap is the primary choice. People care about the cost more than quality right now. Pakistan is basically running at half of their potential capacity utilization rate and Bangladesh is struggling with usual issues.

All of the above factors, create a surplus of scrap within the EU and we are having an usual summer. At this time of the year, EU suppliers would use several excuses to push prices upward such as holidays, heat, low water levels, problems with transportation…etc… now excess supply is not allowing that. particularly, demand for shredded is very low.

My colleagues from Germany tell me that they have started receiving offers from other EU countries which is not good for internal dynamics and show clear weakness.

To conclude; a dockside bid of €250 delivered is a reasonable level if we are talking about exports. Current international scrap dynamics do not support higher levels. If the € - $ exchange rate was not as high as 1.1750, we would see much lower numbers. I actually think EU mills are overpaying right now but they don’t really have a choice. They are trying to get their order books filled for the remaining 2 months of the summer and they do accept the net losses they will make. Current scrap levels would be lower if mills would have regular inventory at their yards but as you know nobody works with old quantities any more, instead a FIFO kind of strategy is being applied. So in order to produce, you have to buy. to receive flows you have to pay decent money for decent grade scrap. its about current needs. That is why EU domestic trades at a premium compared to exports. At least, it is my logical explanation.

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QUESTION: WHAT ARE YOUR EXPECTATIONS FOR TURKISH STEEL DURING JULY 2025?

ANSWER: My expectations are not strong at least until the end of the month. Unfortunately, Turkey’s internal political and financial situation would not allow market to see a significant increase. Any time a potential recovery is about to happen, a negative development such as arrest of mayors occur. This does shake market confidence. On top of that, I am unable to write several things publicly but let’s say that contractors are facing delays with their payments and budget is a problem.

Basically, cash remains an issue and ongoing bankruptcy declarations are keeping steel buyers alert. Obviously, they do not feel like taking long term positions under the current circumstances and ‘need based trading’ is the preferred method right now.

As a result of the above factors, Turkish rebar currently trades at very low levels domestically. Sales do happen under list prices and most occur below the $540 exw mark even with decent payment terms. Continues need for money will remain the case. Although exports have reduced significantly over the past 3 weeks, some are still happening around $530 fob. These are levels which will end up in significant losses on balance sheets. Therefore, some mills are trying to cut costs by either cutting down workforce or reducing production capacities. Regardless, supply still outweighs demand and that ends up bigger mills offering discounted levels. It is not smart to anticipate a movement on prices while this is the case.

If you recall, during my previous floods I had written that ‘’it is not a normal market anymore’’ several times. Many factors prove my point now. We have $1 = TL 40.00, we are not seeing any decline on scrap levels, we have a hike on production costs but rebar is not moving up because, it is always about demand…

Can this situation change? It will depend on several factors.

I) TCMB’s decision is due on 24th of July. I do anticipate a 300bps cut. It will not have an immediate impact but it’s a good start.

II) European market needs to improve. Current rebar import quotas of Turkey are immediately filled but buyers might decide to go for some new material in August anticipating a recovery for the months of September – October. HRC situation is fucked up though. One of the worst times I am experiencing.

III) Turkish domestic political tensions need to ease. No sign of that for now.

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QUESTION: COULD YOU PLEASE BRIEFLY COMMENT ON THE CHINESE MARKET, YOU HAVE NOT DONE IN A LONG TIME.

ANSWER: I do not comment on China lately because there is nothing to comment about. It is the same old story for the past 2 years.

Last week we have had a hike of $10 - $14/t purely based on psychology. The talks of production cuts happening in one of the most polluted areas triggered the increase. However, now that it is off-season and Chinese domestic consumption is not strong, it was obvious that the positivity could not remain for this week. It did not.

China has a choice to make. Either they will really cut those capacities and shut down the outdated mils or they will apply stronger stimulus. Personally, I do not think any of these can happen in the short run.

I) I don’t think they can shut down the old mills immediately because it would create severe unemployment at many regions. that’s what local people do at these areas. they work at steel mills, it is their life. Regional authorities cant afford to take such an action plan. If anything will happen, it needs to happen directly by Beijing.

II) Until the trade war situation is clear, I do not anticipate Beijing to take any significant action which has been their strategy for a very long time right now. It is not going to change.

As a result, China continues to dump its steel all around the world. At the moment, their exports will beat 2024 figures. Vietnam has extended its duties on Chinese material for the next 5 years and the US will continue to put pressure on Chinese exports which are re-routed via other countries. Regardless, so far measures were not really effective in terms of steel.

As I always say, if we are to see stronger steel prices, it needs to start from China. Obviously, ending the wars and easing sanctions would be the better option rather than waiting for Chinese steel to go up but it seems like nobody wants that.

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QUESTION: WHAT WILL HAPPEN TO THE HRC PRICES DURING THE NEXT YEAR?

ANSWER: I am not a magician, no one can know that. However, looking at the current situation it is not easy to write about many positive things.

Once again, I will have to exclude the US market because its prices are driven by Trump’s tariffs. For example, we had spot levels back down to $840/st just before the first week of June but as soon as additional tariffs on steel and aluminum was announced, we are back up to $900 - $910/st levels in a month. US dynamics are different than the rest of the world.

If we are to look at China we are still at the multiyear lows. Their current export levels have been around $440 - $445 fob lately which is actually very attractive but even that is struggling to find demand over the past 10 days. It is a clear indicator of global demand problem.

Europe’s HRC levels are down to €530 - €540 exw and apparently lower levels can be achievable as well. These levels are pretty much disgusting but reflect the weakness of the entire EU. I am not someone who believes in the features markets very much but expectations seem more positive for months of September and October but its probably psychological rather than any solid expectation. If US and EU can agree on a reasonable tariffs rate it might change the sentiment though. Regardless, EU continues to receive import offers €40 - €50/t below local prices. That does cause more local pressure.

As a result of the above factors, I anticipate a weak 2 month period but eventually European mills will try to find some leverage to push prices higher by September. They need to survive this summer; it is the primary goal for now. It is not a market in which we can try to make long term predictions.

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QUESTION: DO YOU ANTICIPATE A GLOBAL RECOVERY BEFORE THE YEAR IS OVER OR ARE YOU STILL PESSIMISTIC?

ANSWER: I am pessimistic. I do not have a reason to feel optimistic. US announced tariff rates will create problems and they are trying to hurt China by applying pressure on other countries. Furthermore, we are not seeing any tension easing between Russia – Ukraine. Europe will continue to suffer without a peaceful conclusion to that story. Unfortunately, military spending will be the primary option for many countries which does technically mean less spending on housing and infrastructure. It is not possible to anticipate higher steel consumption with the current scenario. We will need a mentality change if we are to hope for a better steel market in the short to mid run.

Wishing you all a good week.

[Steel Dude @steelmarketnews]

Good afternoon my dear followers and dude lovers (not literally). Unfortunately, recent geopolitical and economic developments cause extreme volatility. It does not make sense to write in depth analysis and predict the future while anything can happen at any time. Therefore, my focus remains on daily basis. I was not going to write anything but I promised earlier in the week so I will just briefly share my thoughts.

Meanwhile, I still have one space available for the remainder of the year. You can send a DM if interested. Please write only if you are serious, I am not desperate for a new client.

Let’s begin;

Yesterday’s strike on Iran by Israel will cause market sentiment to even weaken further. Well, you probably ask yourself ‘’How much worst can it get?’’ but in reality, there is no bottom while Mr. Trump makes such immature statements. During the good old times when steel market was doing fine; I could look at raw material costs, logistic costs, employee costs, energy costs, finance costs and then talk with a few people. Knowing the market dynamics well enough, it was very easy for me to predict the time when prices was going to decline or increase. Right now, above variables are not really important. Now, it’s about unexpected tariff statements, cancelled trade deals, countries bombing each other or randomly detaining opposition candidates. It has become very difficult to make short and efficient analysis. Now, analyses are long and include things which are not supposed to be related to steel. Well, what to do? it is what it is.

The most important thing right now is: ‘’How long the Israeli – Iranian situation will last’’. We immediately have petrol prices hitting $75. Although we are down around %5.50 on the year, as long as the conflict is not resolved, we are going to see higher numbers which will mean cost of everything will increase. The impact of that might not be felt immediately for steel but eventually petrol, natural gas and anything which is related to energy will be precious. It is something to observe.

I don’t believe steel demand can be crucially hurt by the recent events because we are already pretty much fucked up. Global trade is already as slow as a turtle. Iranian exports might be disrupted but their export volumes had shrunk during the last couple of months so their absence will not be of great importance. However, war means risk and risk is never good for commodity. If we have any chance of recovery until the end of the year, we need all wars to be stopped because no one with significant amount of money will risk his cash on steel trading unless he or she is pretty much crazy. Rich dudes will keep their money on cash and gold while stock markets and commodities are highly volatile.

During my last long ass flood, I had told you that I was not expecting any improvement and I regret to be right. Market has not been moving at all and trading is kept at minimal level. Country’s struggles with poor finances are the primary reason for the slowdown. I still think TCMB needs to cut interest rates as soon as possible. Decision will be due next Thursday. A rate cut can provide some sort of excitement but I do not think it can boost demand significantly. Obviously, trading activity can improve but should be short lived. I had been writing to you dudes for the past 3 years that Turkey’s problems are greater than steel demand. There are many companies (both steel and not steel related) who are declaring for bankruptcies and eventually they do create some sort of chain reaction. Money is being vaporized from the market and as long as that is the case, it is having a direct negative effect on steel consumption. Basically, Turkey will need to sort out its financial problems while global steel demand is also not helping out. One should also focus on TL – USD exchange rate closely because it looks like TCMB is letting some depreciation happen.

After having declines of €20 - €40/in May, we have seen many EU regions improving by about €10 - €15/t. However, I am told just a couple of hours ago that particularly excess shredded material and poor steel demand caused local mills to reduce their offers again. It is not really possible to talk about nice things about scrap while EU domestic HRC and REBAR prices are failing to recover. In fact, rebar demand has been so weak that we had seen significant price reductions in many European countries, some even up to €40 - €50/t within a 3-4 week period.

In my opinion, we could see much lower prices on 80:20 cargoes this week if it wasn’t for the € - $ exchange rate. Now that we are slightly above $1 - €1.15, any EU supplier will try to keep their offers at a minimum of $340 cif which should technically put US offers above $345 cif. However, once again we are back to the question of ‘’who can afford to buy at these levels?’’. The answer is; probably no one. We have to understand the fact that Turkish mills are struggling to sell rebar at $540 - $550 exw even though these levels are not giving them any margins. They also do not have much going on exports and any level sold on FOB basis are at a loss. Once again, it’s the semis from Asia which helps out a little but let’s keep in mind not everyone goes for that as it does carry some risks such as late delivery. Therefore, to me it does not make much sense to anticipate an improvement on the market next week while Iranian – Israeli conflict adds another volatile variable to the equation.

US steel market’s volatility will continue. It only operates on psychological basis and prices take a shape according to what Mr. Trump decides to do. Additional %25 tariffs on steel obviously shifted sentiment and immediately we have seen mills raising prices significantly. I consider this move as an ambitious one because local demand will lag behind. My reasoning is simple: it is all about confidence and trust. In the next few weeks, Mr. Trump probably will announce some quotas on Mexican steel imports and that can have a negative impact on the market. For now, US steel capacity utilization rates are decent at around 79% which means scrap consumption is not bad. However, it is important to foresee the direction for the month of July. After May’s declines, we pretty much had a stable market. I don’t think US current scrap consumption will be enough to prevent exports. Eventually, we shall be seeing more US exporters on the market within the next 10 days. They will not be happy with what Turkish mills want but sometimes you just have to go with it.

I do not really have anything to write about the Chinese market lately. I believe my predictions on them are perfectly accurate. I was expecting no improvement on steel prices after their trade talks and I was not wrong. China will keep on exporting, they cant stop, they cant afford to stop. It is very likely that they are going to beat last year’s export figures despite the talks of production cuts. I do not find market’s point of view on this topic realistic. As long as Chinese domestic market remains weak and Beijing delays intervention, global steel prices will remain weak. Clearly protectionist measures are not working and China has a lot of ways to find a way to export despite taken measures.

I have received some questions from followers so let me briefly answer them.

Do I still think FED will cut rates? Yes, but as you know I always anticipated less cuts than the market. I am still going after 2 rate cuts until the end of the year. Petrol prices might change things though if that continues to climb. Need to observe.

Do I think TCMB will cut rates and by how much? Yes, I anticipate a cut. For me, it should be 250 bps. I don’t think it will have an enormous impact on steel demand but will be better than the current situation.

Freight costs are rising, could it be problematic for Turkish mills? I don’t think so. Turkish mills are under no position to pay higher levels for scrap. It is possible 2-3 mills might be okay with that but majority of them would refuse to bare logistic costs.

Is it a good time to buy rebar from Turkey? If you are planning to buy within the next 15 days, yes. I don’t think scrap can decline sharply and at worst case scenario, we can see $320 cif as a bottom (I would not even mention this if it wasn’t for the Iranian – Israeli situation). Turkey already offers very competitive prices because of weak local demand. It is basically same as Egypt and Algeria. It doesn’t get any lower than that, lol.

Do I expect a recovery on steel prices? I do not. We need something which will cause excitement in the market. I just don’t see anything like that so we need a magical surprise. Stocks are down, wars are going on, and trade talks are progressing slowly. On top of that we have very attractive and low priced Asian export offers.

I tried to keep it brief this time. Wishing you all a good week.

[Steel Dude @steelmarketnews]

Good day dude lovers (not literally). Thank you for the interest and attention to my posts. Received many messages about how much you guys miss my posts and I really appreciate it. Apologies for lagging behind a little lately but I am very busy and trust me with the little free time I have, I am writing these brief steel market opinions of mine. Let’s begin.

USA

Pretty much all my expectations for the month of May happened over there. We had significant declines on domestic scrap prices, dockside bids were reduced. This did enable exporters to move more comfortably. Finished good demand situation does not look very bright. rebar demand failed to improve. HRC prices which increased too aggressively as a result of tariffs had to come back down and we are seeing some downward corrections on that right now. In reality, US market looks weak and it is possible to say that order books are not looking very strong for the time being.

US have economic problems and I believe next 3 months are going to be too volatile. I don’t have time to write a very long economic analysis at the moment but when you have huge debt and you need to refinance $9 trillion of it asap, you need lower interest rates and high bond yields are your enemy. On top of that, markets were being an idiot expecting 4 cuts in 2025 a couple of weeks ago and now we are down to 2 cuts again. Mr. Trump obviously will continue to harass Mr. Powell during the meetings of June and July (August is a pass). Another concern of mine are still the tariff rates. Market has this crazy idea of %10 - %15 not being too much and lowering the previous rates solves everything but it does not. Obviously impact will not be as strong but we are going to see prices increasing which will technically prevent FED to reach their inflation target. We need to keep looking at data but all these developments are negative for steel demand. I would not be surprised to see talks of recession reappearing.

EUROPE

Pretty much similar situation with the US again. These two are correlating positively during the past year. HRC prices have seen softening during the past weeks and continued this week as well. That was unavoidable while demand remains bleak and unsatisfactory. Rebar demand is also not very strong and many EU countries immediately filled up import quotas while Turkish levels were $10/t below the current levels.

The first half of May was a massacre for the European scrap market. We had huge declines in Poland, Germany, Austria, Slovakia, Italia…etc… This week, market sentiment started to improve a little for scrap because supply side got tighter due to price declines. Many mills were lacking required inventory and so they had to start procuring. It is possible to say that after seeing a slump of €30/t, we are back up by €10 – €20/t. The problem here is: Will mills continue to procure once they get the quantity they need? I am not really optimistic on this because finished good sales are not supporting but lets wait another 10 days to get a clear answer. It is just not very wise to anticipate a very strong momentum while EU HRC prices are largely below €630 exw and rebar is not moving at all.

INDIA

Nothing good is happening either. Mills and domestic players tried to raise prices earlier in May but once again it did not work. It is a similar scenario for most regions. Anyways, now hot weather has arrived, heavy rains will fall and during this time of the year labor shortage occurs as well. We cant really anticipate Indian market to recover while they are failing to export their material. Their HRC is not attractive for GCC in terms of price. European market can only take in limited volumes. Domestic market long demand will slow down. Therefore, things shall remain slow for now. Oh, India also continues to import significant amount of HRC at least $50/t below their current prices. You cant expect good things when that is the case.

In terms of scrap, a couple of bulk deals were done at attractive levels but many players are staying away from the containerized shredded market because prices are at least $10/t above their target levels. In my opinion, now that weather conditions are unfavorable and European scrap offers are high, India will continue to use local alternative raw materials and they will get what they can get from cheaper exporters.

TURKEY & SCRAP

The recent surge on prices did not turn into demand but as I always tell you, without fixing financial problems and liquidity issues, market confidence will not be strong enough for things to accelerate. To understand and predict Turkish market, one must focus on politics and economy rather than steel. For now, the most important variable will be the direction of interest rates. Turkish Central Bank has given a clear message yesterday and stated that they will keep tight with their monetary policy. However, I do not think the business world can survive another couple of months with the current interest rates. It is not sustainable. Although market does not anticipate a reduction on interest rates, I think they will have to. We will see on 19th of June. Apart from that, internal dynamics within Turkey do not like very healthy to me. No wonder why market lacks confidence.

I do not expect a serious movement for the Turkish market until TCMB’s decision. First of all, Eid al Adha is near, domestic players will avoid staying on high volume inventory. Cash is too precious while deposit rates are attractive. On top of that, Turkish mills bought required amount of scrap cargoes, both of their domestic and export sales volumes do not require buying scrap at least for the next 2 weeks and furthermore, softening Chinese levels are causing doubts. The situation can be weird again if Chinese export levels decline by another $5 - $10/t.

All that being said, I also do not anticipate a major movement on scrap prices. We might see tiny corrections for now but nothing more than that. We will need an outside factor or a major development to change the current situation. At this time of the year scrap suppliers have many excuses to keep prices firm. It is either hot weather, lack of employees, low water levels or high freight rates. So, I would not expect a sharp decline despite poor rebar demand but this situation can change.

Rebar levels are likely to stay range bound but as usual discounted offers will continue to remain the case. That is what happens when borrowing is difficult and costly.

CHINA

I don’t really have much to write about. We are struggling to rebound from multi year lows. That is obviously due to poor domestic demand. Recent rate cuts were too small to change market momentum. Stimulus is still being delayed. Despite top level government officials’ statement of ‘applying necessary measures before June is over’, it seems like market is not buying it. Well, features and paper trading is one thing but it is always physical steel demand that keeps us going. Right now, monsoon season will further delay any potential progress but the months of April – May were weak anyway. Usually these are good months for steel consumption but nothing concrete has happened. Only saw artificial upward movement after a trade deal was reached with the US and the positivity only lasted for a week.

Keep in mind that China’s output cuts did not happen so far. Market is being stupid again. Those cuts will not occur before 3rd or 4thquarter so China will continue to produce. Official data also shows that both output and exports are at similar levels compared to last year. Therefore, measures taken against Chinese goods are not really effective.

CONCLUSION

Market continues to look for a spark which will create some global momentum. For me; the only possibility of that comes from a potential truce between Russian and Ukraine. I have been tweeting this for the past 1.5 years and have not changed my mind. Regardless, EU is being too dumb, still trying to introduce new sanctions instead of solving the problem. They introduced 17 packages of sanctions and still think those will be useful. No it will not be useful. It will only delay Europe’s own recovery.

Economic data and central bank’s decisions in June will continue to shape steel market. For now, things look calm and quiet. sometimes silence is a good thing but I don’t think it is in this case.

wishing you all a good week.

[ahmet can pehlivan @seyircilidefter]

@steelmarketnews 🙋‍♂️🙋‍♂️

[Steel Dude @steelmarketnews]

as promised, here are my views on the recent steel market and economic developments.

Well, as anticipated this week has started off with a massacre. Unfortunately, this situation is driven by poor choices and ego centric decision. None of these had to happen, it was possible to avoid but we are where we are and I don’t believe dynamics can be fixed in the short run.

We will continue to see the effects of tariffs and response of other nations. Particularly, China’s and Europe’s retaliation will be vital. I have written a lot about my economic point of view during these past 2 weeks so I will not write all those again. Instead I will briefly focus on the impact of all these on steel. Just know that stock markets are having one of the worst performances of history, many markets are seeing declines of above 6%, many corporations have lost tremendous amount of money, petrol declined below $65 and any little confidence remaining has been destroyed.

Now we will continue to feel the effects of the recent developments on the steel markets. Obviously, everyone will be very confused right now. Traders are changing their minds on daily basis. The yare now starting to price in urgent emergency cuts and the probability of 4 cuts before the end of year has increased. FED chairman Powell has made a press conference and stated pretty much what I have been telling you guys (inflation risk is higher, need more time before taking premature actions, market is confused…etc…). Basically, most of the things he said are not positive for commodity markets. As a result, JP Morgan increased the probability of a recession to %60 (prev: %40) and other financial institutions are also quite pessimistic.

In my opinion, US domestic steel and particularly scrap prices will start feeling real pressure this week. I am almost absolutely certain that many domestic mills will lower their scrap intake and they will bid significantly less compared to March deliveries. As a result, we are going to see more scrap flowing to docks which will increase the availability of supply. You can expect more US scrap exporters in the market this week.

Please keep in mind that the recent energy and natural gas hike in Turkey will increase mills production costs significantly. Now, mills will have no option to reduce their prices anymore and the low priced sales that occurred last Thursday and Friday are unlikely to happen. That leaves Turkish mills with only one option and it is to pressurize scrap suppliers. as you know, my expectation for scrap prices were seeing a decline of $3 - $5/t at best case scenario since pre Eid but now due to harsher than anticipated tariffs and energy price hike, along with poor market sentiment and low demand; my expectations also got weaker. Easter is nearing and scrap suppliers will want to conclude some sales before then and it might be the right time to do so before prices decline any further. We should keep in mind that the volatility was fierce and it is going to be very difficult for everyone to reorganize their financial positions. At times like these, some can panic and sell. Some might take risks. Therefore, observation is needed.

Turkish rebar activity for the next couple of days will be crucial. As it is too early in the morning, I have not received prices from my colleagues so far but I am pretty sure we will not see lower offers. my experience also tells me that no trader will rush to stock up because of the recent energy price hikes and it is unlikely to be a valid excuse for the time being. they will wait for markets to settle before taking action. basically, if we dont see an improvement on trading activity today, we better be prepared for a decline on scrap levels. the decline shall start with US offers because € - $ exchange rate is still high at 1.10. Apart from that, it would be a smart idea for Turkish and GCC mills to focus on semis deals. Asian prices are crushing today. It might create opportunities for them and scrap will be further pressured.

Finally, we will need to see European steel market’s performance before making concrete assumptions. Yesterday, EU agreed on a first set of countermeasures targeting $28 billion worth of US imports. I need to see how steel market will react today. Today, there will be urgent meetings and they will try to apply some counter measures on US tariffs. EU is not playing, they have rightfully called Trump’s bluff. In my humble opinion, the current situation is no longer controllable. Leaders need to make some sense and start negotiating like clever businessman instead of acting like stubborn children. Last week, EU market was moving upwards in terms of HRC and rebar prices but scrap suppliers were pessimistic as local mills bids failed to improve. However, sentiment was not that bad until reciprocal tariffs were announced. Now, it is a different story. It is also possible that Asian suppliers could provide better offers due to today’s slump.

India has been performing negatively since last Thursday and the upward movement we had seen prior to that time no longer exists. The decline on domestic scrap market is up to $8/t since than and it does mean that scrap suppliers do not really have much opportunities rather than selling to Turkey in the short run. My Indian colleagues are not really negative on ferrous scrap so far but they are very worried about non-ferrous scrap as the decline is much larger compared to ferrous. Regardless, steel will obviously get affected from all these because India’s potential recovery will slow down unless an U-Turn is seen.

Unfortunately, Asian stock markets are down significantly as of this morning. While I started writing these early in the morning; China was down %7, Hong Kong %8, and Japan % 7. Now these figure got worst. Chinese officials are apparently preparing urgent action plans to stop the downside movement.

having exported strong quantities in January - February 2025 (+%8 compared to last year), China currently has no other choice to keep on doing that while domestic market remains shitty. The fact that construction season is arriving shall provide some support to domestic consumption but according to my experience, prices needed to get much higher by now. it did not happen so i dont really have big expectations while things are globally crashing.

I would like to state that China hasnt got many options.

they will either need to devaluate their currency and push for even greater export quantities, meaning shit loads of dumping. that would not be good for us. we already experiencing this immensely for the past 2 years.

or they will need to go ape shit and announce a gigantic stimulus policy. we know that they are still acting very cautious but personally i dont think they have got much time. they need to do whatever they need to do right now. a LPR cut with looser spending policy seems like the only cure for now.

anything except the above will jeopardize the future few years for china.

Anyways, so far today, we are getting crushed. Iron ore is once again below $100 cfr. features are seeing declines of above $10/t and spot market is no different. now the danger is; if this continues to be the case another couple of days, we know what will happen. It will be a shit show.

Rest of Asia will completely depend on China’s movement. Countries like Japan and Korea were already struggling with steel and I don’t see how things can improve for them in the short run. It is difficult to anticipate stronger steel prices in Asia while semis and finished good levels are showing weakness.

TO CONCLUDE;

This is not going to be a nice week. We need leaders to be sensible and fair. I am not saying that Trump administration is wrong with their statements but that is not the way to follow. You can not fight with the market. Crashing the entire global system cant bring any good because things were already pretty much terrible since pandemic. Steel’s future will depend on politics and economic developments. For now, it looks like shit.

Wishing you a good week.

[Steel Dude @steelmarketnews]

Well dudes. As promised here are my PERSONAL VIEWS and THOUGHTS on the recent global steel market situation. I will try to make it as brief as possible and I did try to answer more than 20 questions asked within this post. If I have missed anything you have asked me, you can always send a message and I will answer.

By the way, I do not take in new clients for now but will probably accept 1 or 2 additional clients in May or June. I will post it when the time comes.

lets begin.

TURKEY

unfortunately, another hit taken when the steel market was just about to stabilize a little after months of suffering. People of Turkey are not convinced with the authoritarian measures taken over the past 5 days and they are using their democratic right to protest. I do not like sharing political thoughts publicly because this account is dedicated to steel markets so I will try to stick to the impact of all the recent developments on the economy and our lovely steel business.

Right now, TCMB is successfully intervening to stabilize the market volatility. Well, you can argue against the methods used but they are managing to hold the $ - TL at 38.00. It is crucial that the exchange rate actually holds around this level for the steel markets because if it we see any more volatility, business activity will be close to null. They also held a surprise meeting on a Sunday with top management of banks which shows they are taking things seriously and pro- active. Stock market has started the week positively as well but we will need to see if it is a temporary reaction or not.

In developing countries such as Turkey, investors need to feel confident. When such huge disputes rise unexpectedly, the following tends to happen;

1) your country's market stability gets wrecked leaving investors confused. They prefer to hold on to their money physically

2) foreign capital flees to other developing countries leaving you cashless

3) local investors transfer their wealth outside of the country which means further problems with cash flows

4) governments fail to create funding for large infrastructure and housing projects and that means slower economic activity as well

5) currency positions deteriorate and your central bank's liquidity power erodes rapidly.

All of the above factors are negative for steel market.

Anyways, I have received so many messages from Turkish followers about my opinion on the direction of the steel markets. Honestly speaking, I think market always finds some balance as soon as the chaos does not extent any further. Most importantly, there should be no new surprises. Turkish economy (mostly citizens) has been suffering under a strict financial policy over the past 2 years and their purchasing power has shrunk. If these protests and authoritarian moves by the government continue, Turkish economy cant handle such volatility. Therefore, lets hope that, things get calmer as soon as possible.

For now, I believe that steel prices will continue to be adjusted according to the USD – TL exchange rate. Domestic demand shall remain calm as Eid is approaching and also no trader would take a exchange rate risk until things settle successfully. I do not think current export levels of Turkish mills will be workable. Obviously there will be buyers but prices of $580 and above should not be interesting for buyers who tend to procure large volumes. Also, geopolitical developments are kind of negative for exports. US attacks on Yemen should negatively impact sales to Yemen which is an important market.

I have been asked a lot about scrap prices. Mills got what they need prior to the developments and they should not need material urgently but they will have to keep on buying for May shipment. I do believe most negotiations will have to start after the holiday period. Both sellers and buyers will have the time. Mills are in a difficult position though because local demand and prices need to support them. It is not an easy thing to see rapid market movement when the exchange rate jumps from TL 36.70 to TL 38.00. Market does not show positive correlation right away. It needs to be slowly digested. Construction season is about to commence and domestic consumption should theoretically increase within the next 2 weeks so despite all the negativity of the past 5 days, I do believe things will normalize within the next 10 – 14 days.

Meanwhile, financial difficulties will continue to be the case. Accessing money will be costly and difficult. Most importantly, we will have to figure out if the strategy of the TCMB regarding to the interest rates will change or not. It is possible the some banks will continue to pay high rates for deposits to keep Lira attractive. Major institutions have revised their predictions on interest rates and expected inflation rate straight after the protests so there are many unknowns. Therefore, I think we do not have much choice rather than sit and wait for next Wednesday / Thursday.

I like to analyze the market, that is why I do what I do but unfortunately, the job was all about steel until Covid. After that, the world has changed. Politics, global affairs, economy, trade wars and actual wars took over and commodity market and making analysis have never been the same again.

CHINA

For the past 2 years nothing has changed. We have a week full of weakening and then either a government division or People’s Bank of China makes a statement which immediately changes the psychology to positive. Basically, the volatility remains the case. we go up by $5 - $10/t in one week and go down by $5 - $10/t the other week.

As I tweet often, the measures taken by Chinese authorities to boost domestic consumption might look good on paper but except for trade-in programs you cant really find anything to actually have a direct influence on steel. Therefore, steel prices can only show a solid improvement when LPR is cut and that cut needs to be significant. Also, we will need more direct measures on real-estate policies, a couple of development programs on urban areas will not do it.

Regardless, authorities continue to deliver positive messages even though most of them are mostly ‘’will do, shall do’’. Even while I was writing this message Ministry of Finance is making some statements.

China’s 2 month steel exports are still very strong, it has not slowed down and 166.3 million tonnes are already exported. Domestic market has not picked up for the entire March so we can anticipate export numbers to be high for the month of March too and basically we will have the Chinese dominating export markets for the 1st Quarter of 2025 as well. Those of you who have been following me from the beginning know my attitude towards Chinese exports. Back when they were at 80 million, I had warned you these days would come. Now that many countries were very late at introducing anti-dumping measures, things cant be fixed easily. We can only hope that they fix their domestic market as soon as possible. To be more frank; in any scenario China exports above 80 million tonnes, steel markets will always continue to struggle. Ideally, this number should not exceed 70 million but I am being more generous.

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USA

As I had tweeted during my past posts, most of the increase in the US markets came as a result of the protective measures of the Trump administration. Tariffs had caused markets to sky rocket. We had seen domestic HRC as low as $670/st back in December and now we have seen $950/st. You don’t get to see that increase without seeing a drastic change on a variable and in this case tariffs on Mexico and Canada did it.

Well, the pace of the increase has been slowing down over the past 2 weeks and now it looks like the appetite is gone. Obviously, US mills can try to push prices a little higher but I think they should not. Demand has not been as strong as participants were hoping but you cant blame the market for that. It is difficult to make bold moves when an administration says one thing but does completely the opposite next day. Also, rebar prices failed to follow the trend of HRC which does actually tell us another story .

Anyways, I like the fact that the US steel producers keep their capacities low. Personally, after seeing such high prices, many countries (particularly China) would immediately accelerate their output leading to an immediate surplus and that would put pressure on prices. US utilization rates did not exceed %75 - %76 and this did lead prices being more stable. However, I am starting to have my doubts for the month of April.

It is a clear thing that domestic scrap movement in the US is unlikely to see a strong upward movement any more. I believe the most appropriate event that supports my theory is the recent US cargo sales to Turkey. Suppliers probably know that, they have reached almost to the maximum level and it was a good time to close some deals. Therefore, I do anticipate April to be a calmer month in the US compared to what we had during the past 6 weeks.

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INDIA

After a long time of silence, it looks like we can start to say some positive things.

Now that Indian financial year is ending, business activity for the months of April and May should pick up significantly. Like China, India also gets hit by the Monsoon season from June to July and heavy rain fall makes things difficult so technically domestic market shall before then and those who need to procure scrap need to take action before. Repo rate has been cut as well so we might see some action over there within the next 2 weeks.

Between January and February 2025, exports saw a decline of %40 compared to same period last year and obviously improvement is needed on that. Thankfully, an anti-dumping measure of 12% will kick in shortly and that will cause Indian steel prices to see a rise up to $20/t in the short run. Domestic market scrap prices have seen a decent increase lately and if that remains the case a little while longer, we should see more import activity as well but for now paying above $390 cif for containerized shredded is kind of scary for most buyers. Basically, most will depend on domestic steel sales but situation looks optimistic compared to what we had during the past months.

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ASIA

China continues to influence the market significantly. We had seen some improvement on scrap prices after recent hikes to Turkey but many Asian countries limit their imports due to cheaper semi opportunities from regional suppliers but also from Iran and Russia. Therefore, the appetite for scrap is still there when the price is workable.

Vietnam’s anti-dumping on most of the Chinese HRC was a decent move and prices did see a decent hike but eventually they are still getting influenced by a China’s weak performance. That did lead to some local price reductions last week.

As a result, we can still say that Asian market’s recovery is heavily dependent on China’s performance.

CONCLUSION

Steel market is still trying to find its way. Unfortunately, it is not possible to make long term predictions while there are many conflicts going on. We shall continue to observe all developments precisely and make our judgement according to given day’s market circumstances.

Wishing you all a good week.

[Steel Dude @steelmarketnews]

As promised, here are my brief thoughts on the current steel market situation after all the recent developments including tariffs. By the way, some of you are complaining on the fact that I don’t tweet as much as I used to but you should understand that I have increased the number of my clients by a few and the analysis I write for them every day keeps me very busy, barely finding the time to tweet. I will always love you dudes and appreciate the time we have spent here, so trust me; when I have the time, I will continue to keep sharing my views. I am not disappearing for now (at least not yet, lol).

Anyways, let’s begin.

USA & IMPACT OF TARIFFS & POLITICAL DEVELOPMENTS

This is the first time I am beginning a public long ass tweet with the US domestic market so you can understand how important the US steel market is for global steel market situation for the time being.

Unsurprisingly, the newly introduced tariffs and sharp statements by Mr. Trump have encouraged US domestic steel market positively. After many weeks of stability, US mills started increasing their HRC offers sharply this week, features markets also moved much higher, domestic scrap prices are settling at least $30/gt higher depending on the region. When the weather gets better, rebar will also trend at a higher rate but the pace of the increase for that is slow for now.

Some might consider the current rise premature. Personally, I would prefer to observe the markets direction throughout February because things are capable of changing very fast under Trump administration. However, we shall understand that US steel market has been suffering for many months now and capacity utilization rates were below %75. Therefore, I cant say if the targeted prices of $850/st will be workable or not in the long run but I can tell you that an upward movement was inevitable.

Unless Trump administration reverses a decision or goes easy on some of the countries, I do believe US steel market capacity utilization rates will increase significantly, sales volumes will improve, and scrap demand will be much higher. However, market needs to have the confidence and believe in all of these. That’s actually why I think a couple of week’s observation is the smart thing to do. Lets keep in mind that Trump wants domestic mills to keep on working, he wants to provide more jobs in manufacturing and he wants USA not to depend on other countries. When your president wants that, steel shall do well.

All of the things I have written above will have its ups and downs. On the negative side, we cant really say that US economy is safe and it is far from being strong. Those of you who are interested in economics will know that these tariffs will push finished good prices higher and it will not only affect steel. Eventually, the longer the tariffs are applied, it will mean higher prices on appliances, cars, electronics…etc… As a result, this will be threatening the FED against their fight on inflation. It is highly likely that we will have several months without rate cuts. I don’t want to repeat myself for the 98th time but market confidence of large investors will not be fully restored until interest rates drop to a reasonable point. We cant keep a blind eye on the risk of these tariffs increasing inflation. In 6 months, situation could be weird but it is a long time and we are not fortune tellers.

Anyways, all the above will impact global markets. There are many countries who can consider US as an attractive target market for steel such as Canada, Mexico, Brazil, Korea, EU members, Turkey, India, Egypt…etc… I am not going to get into a lot of detail but some of these countries will get hurt significantly. The volumes they used to export to the USA will now need to be diverted to somewhere else unless domestic performances significantly improve (unlikely). This will cause some of these countries to be very aggressive on exports and the world has been already having this problem for the last couple of years. It does not bring any good and I DID NOT EVEN MENTION CHINA YET. lol.

US domestic improvement will also have an impact on global scrap prices. USA is a major exporter of scrap and particularly Turkey (the largest importer of scrap) is kind of dependent on it. Keep in mind that particularly West Coast US is also an important supplier of scrap to regions such as Taiwan, Bangladesh, Vietnam, India..etc (although workable levels this year was kind of poor due to Chinese effect). Now that steel prices and capacity utilization rates are likely to increase, US scrap dudes are likely to benefit from this situation and I just don’t see a reason for them to start selling their material at cheaper levels for exports. Technically, desire for prime quality scrap shall increase in the domestic market and prices will stay higher than exports. Basically, unless the circumstances do not change, I believe US origin export scrap will either trade at high levels or US might cut export volumes. This is a live and see situation, I am just writing the possibilities but it is a likely scenario if the tariffs remain the case.

Basically, Turkish dudes and other scrap procuring dudes might need to shift their focus on other suppliers from the EU, Baltic, short sea and even new players might come into play. Unfortunately, under today’s market circumstances the positivity and excitement seen in the USA is not being seen anywhere else. So, I am cutting the US part short and hoping their positivity might spread around to other regions.

Last but not least, Trump administrations comment regarding to Gaza does not seem reasonable to me and that is the type of attitude which will only delay peace negotiations. Driving Palestinians out of their country and becoming the ruler of Gaza will only cause further chaos in the Middle East. For the sake of steel markets, rebuilding of Gaza is critical but unless stability is seen, its not going to happen in the short run. Many countries who can host Palestinians will refuse to let such population in their country due to demographical issues. I will not get into politics but for Egypt that would be chaotic.

I would also like to see the result of the meeting between Mr Vance and Mr. Zelensky which is supposedly due on Friday. We are reading some rumors about a potential exchange of land between Russia and Ukraine (Russia made it clear that they dont have an interest in exchanging territory unless its very favorable for them) as a start to the peace negotiations but on the other hand we have Ukrainian side blaming Russia for preparing to invade Poland and Baltic states. Lets see what the US – Ukrainian meeting will bring, maybe we can see some clarity. However, i am pretty sure that Mr. Trump will not be able to end it as quickly as he said which was one of the critical promises he had given during his election campaign.

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TURKEY & INDIA & SCRAP

I don’t usually like to comment on these two simultaneously but there are many similarities between them lately. Both markets fail to improve due to economic problems and they are heavily dependent on the actions of their governments and most importantly they urgently need a recovery on global steel prices so their domestic markets feel some confidence and some movement can start.

India had its budget announced and after having read it, it can be said that it is a supportive one for the market. They are taking many measures such as reducing taxes, charging less to businesses, reducing import duties on some critical minerals and they trying to improve people’s purchasing power. Unfortunately, these things take time and the situation of Indian Rupee has not been helping. Mr. Trump’s actions create a lot of volatility on currencies of developing countries. Rupee’s latest slide had a very negative influence on steel trade and market technically stopped for a while figuring out what to do. Demand for imported scrap was already low and despite attractive offers from the suppliers, buyers largely stood out due to financial volatility.

Turkey has been trying to find its direction as well but inflation continues to be a buzz killer. TCMB is likely to cut rates again by another 250bps in March but in reality it is possible to say that business world is not really feeling anything favorable despite these cuts. Tight monetary policy is still the case and loan rates are still high. In my opinion, a financial recovery for the Turkish market in which market participants can actually feel positivity is unlikely at least until the early months of summer.

Lets keep in mind that both India and Turkey have also been suffering from large volumes of imports from Asian countries. Indian players were expecting a duty on China during budget announcements but expectations did not turn into reality yet. That will have a major positive impact on the market whenever its announced. In the case for Turkey, the amount of semis that entered the country during the past year (still is the case) made a domestic improvement impossible but I had warned you guys about this two years ago, no surprises. Turkey might be an exporter of HRC itself but just looking at the amount of slab and HRC imports from Asia & Russia makes my eyes bleed. As long as these imports continue, Turkish market will not improve. I understand the fact that they do not have much choice though. How can you export HRC at $515 - $525 fob while scrap is at $350- $360 cif? You do what you need to do to survive.

Well, you can see my point; this is a broken market dynamic for both India and Turkey. The only thing that can fix it is strong global steel demand recovery which can be influenced by China or improved world economies. Does it look possible? Well, looking at the European situation and threats of Mr. Trump, I am not really optimistic for now. However, lets see what will happen in China during the first week of March.

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I have received more than 30 direct messages regarding to my thoughts on scrap. I am sorry but I was not able to answer it all.

I still think scrap is way undervalued but I also think current steel demand is too weak to support higher scrap prices. This goes both for the Eastern or Western parts of the world. Turkish mills situation is complex. Local demand for rebar is very weak but decent amount of HRC exports were concluded with mills having only a little allocation left for April. As soon as some demand for rebar appears, I do believe scrap negotiations will get busier but we don’t have any movement on that and prices actually dropped significantly again this week. I don’t like to mention my predicted figures publicly but I can say that I do not anticipate a major decline on scrap prices despite the sluggish situation in Turkey and India. I suggest you watch out the € - $ exchange rate to make a healthy prediction because that is bouncing up and down like a stripper right now. The situation is, mills will go for cheaper cargoes but production is not easy with low quality cargoes only. Therefore, those who need quality scrap will pay higher. So, don’t get surprised if you see different prices.

short sea scrap situation will remain tight for now and prices are high as there is competition for collection. Domestic mills are also paying higher levels which shall help prices to remain reasonable.

With regards to Asian scrap situation. That is heavily dependent on China and semis situation. We have had a $15/t increase on domestic prices at certain countries but that was largely because of better expectations. So far this week, we have had declines in China and if cheap semis are offered within the region, buyers will go for that instead of scrap and the recent recovery will stop its pace. Today, we had the Kanto Tender (Japan) settling successfully and the price remained stable at around $282 fas for the 3rd month in a row (Yen level declined sharply though). Basically, Asian scrap situation does not look as hopeful as the West and is largely dependent on China.

I don’t expect Bangladesh and Pakistan to be very active on imports as financial struggles are limiting their activity and also Ramadan is coming. Next week may be some restocking can be seen but nothing which can cause a shift in sentiment.

Meanwhile, iron ore prices are staying strong despite Chinese slump as some ports in Australia facing weather problems. This is a common thing, we need to see the movement once the seasonal threats are gone.

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Europe’s situation does not look very bright for now. After natural gas prices hitting a 24-month high, it is certain that European mills will continue to increase their prices. We have seen spot market prices both for rebar and HRC increase recently but majority of the deals are still way below what mills are targeting. Tariffs will have an impact of EU’s exports too considering about %14 - %16 of EU’s steel exports were destined to the US. I would like to see how the EU will respond against the US.

For now though, with heavy production costs and economic problems it does not look like EU will have a good time. I have seen Italy’s industrial production slipping way over expectation at %3.1 and sometimes numbers are just self-explanatory.

We will also need to see the revised quotas as EUROFER has been demanding import measures for some time now. Particularly Turkish mills can enjoy exports to EU in the short run but the extent of Europe’s recovery will be crucial for countries such as Turkey and India. The thing is with all the protectionism and trade wars, export potential is diminishing. Until all these threats and gibberish come to an end, it will be difficult to make long term predictions. That is why, daily steel analysis based on geopolitical and economic developments are very important. It helps to consider everything instead of focusing a few variables. World has changed, we now have to follow many things and try to figure out what will happen. Knowing your competitors price does not cut it any more.

Wishing all a good week.

[Steel Dude @steelmarketnews]

Alright guys, as promised here are my views on steel markets lately. By the way, I would like to apologize for not being as active lately but I barely have the time to focus on my own job and it takes a couple of hours to write daily analysis for my clients.

CHINA

2025 has begun pretty much just like I had expected and volatility continues to be the case. Prices had hit rock bottom as early as the 9th of January due to lack of domestic demand but since than we have managed to see an increase of Yuan 160 ($21.80/t) on average.

There are several reasons behind the recent increase but once again it’s driven by psychological factors and expectations. The only difference is that we have some favorable data such as official GDP growth hitting the expected target level of %5.0. Furthermore, we are seeing some decent increase on amount of home sales at key cities; it looks like market is slowly rebounding but the pace of it needs to accelerate if we are going to have a better year.

Chinese Congress will be held within the first week of March and at that time we are likely to hear kind of satisfying stimulus announcements which will include actual financial figures and specific time periods instead of a bunch of ‘’will do this, going to do that, planning to do...’’. It is actually be the most crucial meeting which will influence steel prices for the 2nd Quarter of the year.

As I had expected and predicted back at as early as March, Chinese exports hit an 8-year high while production declined by %1.7. This did support the argument which I was trying to tell you guys during the past 2 years. I am pretty sure most of you recall my tweets since 2023, saying that China’s potential dumping was going to cause a massive problem for other regions and unfortunately it turned out that I was right.

Now, China has one option remaining and it is to support domestic consumption which can be only done by providing financial improvement to those whose purchasing power is low. I am pretty sure that Beijing will become much more active in 2025 with their policies. They will have to increase government spending significantly and with all the fiscal / monetary policies being promised, we can prepare ourselves for further RRR and LPR cuts as well and those are also critical. As a result, we can expect a real bounce on Chinese steel prices within the next few months. Unfortunately, I cant comment on the extent of this increase without seeing the end results of the Chinese National People’s Congress. It is all about how much they are willing to do and to what extent they will keep their promises.

We must by now realize that a lot of China’s decisions are based on their relation with Mr Trump. We can say that things kicked off pretty well for the both countries and both Mr Xi and Trump have been saying nice things about each other. Regardless, when it comes to Trade Wars, we can never be certain. We will have to see first actions Trump will take. He claims to have 100 executive orders ready and let’s see if any of these orders can have an immediate impact on the steel markets.

China will remain the major variable for the direction of steel prices in 2025. The anti-dumping measures, tariffs & quotas are all good and even though they will be successful to a certain extent, lets be honest and just accept the fact that many governments will like to control steel prices at their own markets in order to prevent prices from rising. At an environment in which inflation and currency depreciations still play an huge role, for the sake of politics ‘’total protectionism’’ will not occur. Basically, we will have to keep our eyes on China for the next few months. They did also conclude significant amount of export sales until the middle of last week so we cant say that the threat is gone.

INDIA

Also a very poor start to the New Year. Market remains dull with minimum activity. Importers have been suffering as Rupee weakened to a 17-month low and foreign exchange reserves declined by $8.7 billion as the Reserve Bank of India tried to prevent Rupee from sliding even further against the USD. I am told that the new budget announcement will be announced within the first week of February and after seeing that we can see if the government is actually going to spend more money on new infrastructure projects. A lot of new investments were promised before India’s elections but none of these were turned into reality so far due to high inflation, unstable currency but most importantly weak global economic performance.

Unfortunately, India has been suffering from weakening exports. Although exports did decline by only %6 (Source: Big Mint), prices being too low means losses for the steel mills. This situation has reflected on domestic steel performance. For example, scrap imports were reduced significantly over the past couple of months, local scrap prices declined, alternatives such as sponge and DRI also continue to decline. Well, the only thing producers can do at this kind of market is to put pressure on raw materials. They really don’t have any other option in order to prevent their margins from shrinking further and minimize losses.

For India to improve, 2025 budget needs to be in favor of steel because domestic market needs to pick up strongly. With all the new capacities, India can’t afford to wait for an improvement global performance. With the EU about to apply safeguard tariffs on Indian goods; India is already considering a $1.1 billion retaliation against the EU so another Trade War situation which we will need to watch out. The potential of a temporary %25 steel import duty is also currently being reviewed on Chinese products and if that becomes a reality, I think local producers will benefit immensely from this situation. Well, when imports from China rises over %35 in 1 year, you have got to do something. Currently, India’s steel imports hit a 7-year high and when this is the case how is the domestic steel prices supposed to improve?

TURKEY

Another suffering nation whose future is heavily dependent on domestic economic policies and geopolitical developments.

The year began with severe competition in the domestic market due to lack of export sales. To simply prove my point, I can simply say that now there is no price difference amongst regions within Turkey. Major producers are trying their best to achieve sales whether it is at a loss or not. It is about keeping your market share and not losing your customers to competitors. This shall remain the case until global improvement is seen and weather conditions get better.

Apart from that, Turkey will needs new housing projects and investment on infrastructure. I am told that many tenders have been held and closed successfully but contractors are delaying the projects due to uncertainty of the economic developments and weak demand. However, things shall get better towards spring.

TCMB will be having its interest rate decision on Thursday and anticipation is a 250bps cut which would bring the rate down to %45. According to surveys, the expected rate by the end of the year can get down to %30 which would actually be very positive for those involved in manufacturing and trade. However, there is always the other side of the story. Obviously, the business world needs cuts urgently but the question is: Is the Turkish economy ready for consecutive cuts? Personally, I think inflation rate in Turkey particularly on goods, services and basic human needs are too high. Inflation target level is most likely will not be reached as well. so, we will have to wait and see how successful authorities will perform their tasks and keep prices rising further during rate cuts.

Lets keep in mind that, Turkey’s minimum wage have risen by %30 for the year of 2025 and majority of the private sector is going to have a very difficult time rising their wages at a similar rate. Regardless, with the upcoming energy price hikes, we can say that production costs of the mills will certainly increase quite soon enough. That is a problem at an atmosphere in which demand is severely lacking whether its for HRC or rebar.

On the positive side, Turkish mills have the ability to export to EU and Trump’s tariffs should not have an impact on Turkish steel very much. Therefore, we can expect Turkish mills to perform better as soon as Europe sees some positivity but to be honest; despite the recent price increases EU market does not look healthy and political uncertainties does not make things easier.

A lot of market participants were excited that the development in Syria would be beneficial for Turkish mills but things like that takes its time and premature expectations would be heartbreaking. Obviously, Syria will be a potential market for Turkey but Syria’s new administration have a lot of things to handle first and I think re-building efforts will take many months to commence. Once all the political dialogues are completed we can think about investment in the region.

I am very curious about new Trump’s administration dialogues with Turkey as well. They had some bitter moments during Trump’s last term and Turkish Lira’s crisis had begun due to serious disputes back in the day. Unfortunately, Mr. Trump never hesitates to threaten a nation by using economy as a weapon so US –Turkish relations will be vital.

On the other hand, Trump is coming to power with many promises. He has stated several times that his administration was going to take necessary measures to end the ward of Russia – Ukraine and Israel – Palestine. So far, a hostage negotiation and ceasefire deal has been successfully agreed between Israel and Palestine and further developments on that have a serious potential for Turkey. Yes, Israeli – Turkish relations are at the lowest point for now but politics is a weird game. Israel – Palestine need Turkish steel for rebuilding and a potential solution on this can have a very positive influence.

More importantly, Russia – Ukraine situation needs to be solved if we are to talk about a better performing EU and Turkey. I believe under Trump administration, Turkey will serve as an important figure and its diplomatic efforts can bring peace before the year is over. I think once the Israeli – Palestine situation cools down, the world will focus on Russia – Ukraine situation. No European country can financially improve itself while sanctioning Russia severely. Europe needs energy and how they are trying to address the problem during the past 2 years is not sustainable.

Anyways, Turkish steel market is largely dependent on the factors which I have listed above. Market has suffered due to cheap imports long enough and despite some new measures on certain goods; the inward processing procedure (import / re-roll / export) will not stop imports as long as price is at least $40/t cheaper than domestic markets and provides significant advantage over scrap. Therefore, as long as new target markets appear or domestic consumption shows an improvement, Turkey will continue to run below targeted capacity utilization rates.

In case you are wondering, I think this week is not going to get any better for the Turkish market but I am expecting things to turn positive in a couple of weeks. I think we have reached the bottom after last week’s deals.

US & EU

US market has been showing some sort of improvement lately but most of it is based on expectations. Capacity utilization rates are still below a healthy level of %78 - %80 and spot market HRC prices are hovering between $680 - $700/st since September. We have major producers increasing rebar prices for February – March shipment material but due to seasonal factors I am curious about how much of the price rise spot market will accept. I also think that US market will have a positive time in 2025 mostly due to Trump’s protectionist measures. We have already seen Canada taking measures against many Chinese products and Mexico will also need to go along. This shall drive steel prices stronger in the US by spring.

However, economic data will play an important role for the US particularly for the first 6 months of the year. To be honest, current data is too volatile and markets opinion on amount of rate cuts are constantly changing. A week ago, 0 rate cuts were being projected but I believe we will be having at least 2 cuts. We all know that Mr. Trump find the current interest rates ‘’too high’’ but eventually it will be the inflation data for the upcoming months which will shape FED’s decision. In simple economics, the protectionism Trump administration willing to do would drive local prices significantly upwards so we have to actually see the laws they will pass.

Regardless, higher steel production shall be seen within the US. They have new EAF capacities added and more will become operational. Technically, you would expect scrap consumption to increase which would have an influence on export levels. Too early to talk but US should be doing better in 2025.

For the EU, I am not as optimistic due to political problems. Just like I had anticipated in December, mills aggressively pushed prices upwards due to rising costs and spot prices did increase (not as much as mills wanted but under given circumstances any increase is a win). We will need to see the outcome of German elections as well. Things are just not good in Germany, shrinking for the 2ndyear in a row and in my humble opinion, a weak Germany means a weaker EU. Construction prices in the nation remains high and interest rates are also challenging for those who are planning to invest in big projects. We have several steel plants running at low capacities or considering to idle furnaces as well. More importantly, many major companies are either stopping production or cutting costs by laying-off workers.

The problem within the EU is; there are lots of minority problems which create sociological disputes. Geopolitical issues prevent governments from prioritizing economic problems. On top of that you have growth slowing down. European Central Bank is unable to make a clear prediction. Energy problems are being felt more severely and manufacturing sector is weakening. All these factors are making me cautious and we need a turnaround.

I talk to several people who are involved in steel business in the EU and so far I have not managed to get many positives from them. They are all working to save the day and most of them are fed up with how things are.

My expectation for the EU remains negative but that does not mean prices will not rise. Sometimes, prices rise because of costs and we are in one of those times. Europe needs to do something but honestly I don’t know how they will reverse the current situation. Their expectation for growth in 2025 is just a little above %1 and this is nowhere near enough to influence steel markets significantly without any external factor. Lets not forget, Trumps potential tariffs on EU can also create further problems.

SCRAP

As you guys know, I had written many times that scrap was going to have a bad year and it did. As I always say, if Turkish mills have a difficult time, scrap will have a difficult time while India & Egypt & Bangladesh & Pakistan are largely absent. So we had no surprises on that front.

After 1 month of silence and strong resistance, many suppliers have given up and sold at lower levels with the support of € - $ exchange rate. Some of the sales were at a loss, some were positional sales, some were unable to sell due to sucky price.

I still think scrap is way undervalued right now but we have to understand a few things before predicting future price movements.

I) How will the US steel market respond to Trump administration in February and March?

II) Are we going to see improvement from China after the Chinese New Year and Early March Congress?

III) To what extent European steelmaker’s price increases are to be accepted?

IV) Will the Turkish steel market see any improvement post TCMB interest rate decision or the week after?

V) Will the Indian market start to see some demand after the budget announcement?

The answers to the above questions will shape the prices during next round of deals.

The past year has been incredibly hard of scrap due to the availability of cheap semi-finished steel products from China & Asia. Scrap procurement levels dropped significantly as a result of these imports. This is not only a problem that concerns Turkey. Same can be said about many scrap procuring countries such as UAE, Saudi Arabia, Taiwan, Egypt, Vietnam…etc… Therefore, export price levels in Asia will be decisive for the faith of scrap for all regions.

Furthermore, we shall keep in mind that it is not like mills do not need scrap. Scrap is needed and nowadays finding quality scrap is largely problematic. Semi-finished imports do not cover all needs during production processes and it is not good to reduce EAF capacity utilization rates for production cost purposes. As soon as markets show improvement in finished good steel demand, we are likely to see a sellers’ market because these last couple of months has been problematic due to the holiday period, collection terms and yard delivery prices. Flows were not great yet sales had to be made for liquidity purposes. Therefore, may be it’s a premature guess but I do anticipate to see a decent correction sometime in February.

Wishing you a good week.

[ahmet can pehlivan @seyircilidefter]

@drcemiltugay İzmir'de kentsel dönüşüm sözü veren belediye eliyle kooperatif kuran İzmir halkına ev sözü veren ama B.B başkanı değişti diye İzbeton ile sözleşmesini iptal eden kooperatifi arsasız bırakan ekip fotoğrafta. Kendi halkını evsiz bırakmanın gururu ile Şenol Aslanoğlu orada duruyor.