Speaking at the second session of the 18th SteelOrbis Steel Conference “New Horizons in Steel Markets” held today, November 28, in Istanbul, Anna Voloshenko, SteelOrbis market intelligence division head for Turkey, MENA and Europe, gave a presentation on the challenges and opportunities facing the global raw materials market and the Turkish HRC market and shared her expectations.
Noting that Turkish crude steel output showed little recovery in October amid limited availability resulting from maintenance works of several mills, she pointed out that crude steel production costs in the country increased in November. In November, EAF-based steel raw material costs were recorded at $427/mt, while BOF-based steel raw material costs came to $475/mt, according to SteelOrbis’ evaluation.
Looking at raw material prices, coking coal prices have been supported by India’s demand in 2023 and will retreat in 2024, while ex-Australia coking coal supply will show an improvement from 2024 and will put pressure on prices. SteelOrbis expects ex-Australia coking coal prices to decrease by $50/mt next year. Stating that iron ore prices increased beyond expectations this year, Voloshenko, said that in December prices will remain strong at over $120-125/mt CFR due to low inventories. However, investment banks’ long-term forecasts for 2024 are negative. In addition, she stated that SteelOrbis forecasts that scrap prices will not collapse in the near term as finished steel consumption in Turkey has improved recently, while Turkish mills will not be able to accept higher scrap prices. According to SteelOrbis’ calculations, import HMS I/II 80:20 scrap prices in Turkey will stand at $395/mt CFR in December in the positive scenario, while in the pessimistic scenario the prices will be at $380/mt CFR.
Meanwhile, flat steel production in Turkey has been relatively stable in recent months, while consumption decreased in October from September. Voloshenko pointed out that Turkey’s import flat steel market is mostly dominated by China, as it is still the most affordable source for Turkey.
Noting that Ukraine has lost over 50 percent of its steelmaking capacity due to Russia’s occupation, she said that Russia did not lose any of its steelmaking capacity. Ukraine is still able to export, but not steadily, while both sanctioned and non-sanctioned Russian HRC producers now have better demand in the local market and from Central Asia, and so they prefer to stay away from exporting to distant markets, but may return when the market conditions are favorable.