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The Kallanish Scrap & Iron Ore Markets webinar was held on Wednesday 15th July at 13:00 BST.
You can download the webinar presentation from the Global Steel Markets Webinar - July edition by clicking here.
Watch the recording below on our youtube channel.
These are the questions which were asked during the live showing of the July Scrap and Iron Ore webinar. Some of these questions were answered live, but we didn't have time to answer them all. Please see the Kallanish editorial teams answers below.
Q: Will the potential Turkish TRQ for EU imports be applicable for rebar or coils as well? It is definitive that a tariff will be applied?
A: Most probably it will cover all products. Turkey already notified WTO and now waiting for the duties (ranging 9-17%) to come into force now.
Q: Can we expect a rise of prices in Indian market in the coming days?
Yes, prices have already started increasing in Asia in-line with Turkey. We have started facing price increases in India as well. Although Indian buyers’ scrap demand is low, global price increases and high Pakistani demand are boosting prices in India.
Q: Turkey rebar cost is shown around 415-423 USD pmt. Does this include employee cost? At this cost level and selling price around 430 USD Ex-Works, are Turkish mills making enough money to stay afloat?
A: It is a very rough calculation and includes all costs. However, we can easily say that this cost increases as capacity utilization rate decreases. I would say that Turkish mills are struggling to stay afloat.
Q: On the scrap presentation you said steel scrap is not banned but in the iron ore presentation you are saying scrap imports are banned. Which is the correct?
A: China will ban the imports of solid waste as of 2021 for environmental protection reasons The new waste import policy does not cover ferrous scrap. It remains uncertain, however, whether this means only the ban on ferrous scrap imports will be lifted or if the licencing restrictions will also be lifted. In either case, imports are expected to be significantly higher in 2021.
Q. Are scrap imports into China banned or not?
A. Almost all ferrous scrap imports to China are currently banned. A quota is available for imports but quotas issued this year amount to a few thousand tonnes and so are effectively irrelevant. A number of people are lobbying for imports to be opened up however. This includes the China Association of MetalScrap Utilisation (CAMU), the China Iron and Steel Association (CISA) and others. Kallanish understands that opening up is being seriously considered, and may well occur in the first half of 2021. Unless international scrap prices become stronger relative to iron ore, this is likely to mean Chinese importing and significant disruption to scrap markets.
Q: How come Iron ore is around 110 USD when the steel industry (other than in China) is in disarray? What is the forecast when situation improves in other regions?
A: The contradiction between high iron ore prices and an industry in disarray is down to the role China plays in the market. It is not only the largest consumer of iron ore, it an even bigger player in the seaborne iron ore market. As such, the marginal tonne, which sets the price, is still sold into China, where mills are willing to pay higher prices for iron ore. Assuming China remains strong, an improvement in demand in other regions should mean other regions are able to better compete with China in purchasing iron ore. Increased supply could still mean prices fall, but that fall will be limited as global iron ore demand recovers.
Q: What explains the clear dip in the BF demand in End of April- Beginning of May specifically?
A: This dip in blast furnace activity is widespread. It occurs in India, Europe, the Americas and elsewhere. This is really the moment that global markets realised that Covid-19 would not be contained in China and would have a strong impact on the global economy. Different markets reacted in slightly different ways. Some, for example, imposed lockdowns and production restrictions. Others, such as Japan, did not impose restrictions but steelmakers nevertheless decided to cut production to match demand.
Q: Do you see political impact on iron ore- say China not buying from Australia? And if so, can we quantity such political impact?
A: It would be very difficult for China to not buy iron ore from Australia. It would cause an unprecedented disruption to its steel industry which would have knock-on effects across the economy. It is possible that short-term measures would be imposed for political reasons, but as China would ultimately bear the cost of this it is unlikely to be their first option in a political dispute. Politics has always been an issue between China and Australia and this has flared up from time to time, such as during and after the financial crisis. These political disputes rarely overcome economic fundamentals however. A dispute between China and Australia would have a very marginal impact relative to China’s domestic policies to stimulate demand.
Burcak brings 15 years experience in covering global long products and scrap pricing. She is responsible for the Kallanish daily scrap assessment in Turkey, as well as European shredded and US domestic and export pricing . She is based in Istanbul, prior to joining Kallanish she worked in SteelOrbis as director of Research.
Tomas is the Managing Editor Asia for Kallanish and produces editorial content on the region, with a focus on China, as well as overseeing Kallanish's operations in East Asia. He is based in Shanghai, where he has lived and worked for the last six years. Tomas speaks Mandarin as well as English and Spanish. He has also spent three years in Beijing studying and working. Previously, Tomas worked at Steel Business Briefing, where he joined shortly after graduating with a masters degree in Asian politics from SOAS in London.
Having graduated from university in England's steel city of Sheffield, Adam was destined to end up in a career related to the steel industry. He has worked at Kallanish since 2014 as an editor for The Middle East and Turkey, as well as CIS and Eastern Europe, contributing his experience gained from five years in Dubai of the vibrant and fast-growing Middle Eastern and Turkish markets. Adam regularly attends events in the Middle East and Europe, moderating and speaking at some of them. He was previously steel editor at Platts in Dubai and before that Central and Eastern European reporter for Steel Business Briefing in London. Adam prides himself on providing friendly, informative and accurate journalism. He is currently based in Frankfurt and speaks fluent Polish and intermediate German.
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