Turkish rebar mills will likely lose a substantial sales tonnage in 2019 that will partly be offset by increased billet exports, but US Section 232 duties are not likely to last long term. This was the conclusion of panellists at Tuesday’s International Rebar Exporters and Producers Association (Irepas) meeting in Barcelona.

Irepas chairman and producers committee chairman Murat Cebecioglu said Section 232 has set off a chain reaction that has shut Turkish rebar out of multiple markets. “Where is left to trade?” he asked, adding that South America, Africa and the Middle East minus GCC are the only remaining options. “The cage is getting smaller and the competition is getting tougher,” he lamented at the meeting attended by Kallanish.

Irepas raw materials suppliers committee chairman Jens Björkman said 232 has achieved its goal of boosting US steelmakers’ market share and financial strength. However, Irepas traders committee chairman F.D. Baysal pointed out that a large portion of these mills are owned by non-American companies, meaning profits leave the US. Moreover, tariffs harm the US downstream industry.

“We used to have the World Trade Organization, we used to have certain rules in trade,” Baysal continued. “I think that all went out of the window now.” The US will not reduce Turkish steel tariffs back to 25% because they are tying them to political conditions, he added.

Cebecioglu said the EU is pushing back strongly against 232 tariffs and that he does not expect them to be long term. Baysal added that Wall Street clearly does not believe the tariffs will last. US mills’ stock value has not grown significantly despite 232, while the mills themselves also are not convinced because they have not invested much into new capacity, he said.

The only solution to markets closing doors to Turkish rebar is for mills to reduce capacity utilisation, added Baysal.

When asked what security Turkish mills can offer EU buyers that they will sell only within the quota, Cebecioglu said the risk is unfortunately on the importers. “We need to sell today,” he commented. “Of course, we need to remain responsible doing so, but at the end we need to sell.” 

Once the new EU quota allocation becomes available from July, “…I’m afraid that most of the traders and buyers will buy more than what they need,” he continued. No one knows how many tonnes are already on the way or what quantity is in the ports, he said, making the situation difficult to manage.

Baysal said Turkey, like China has done, is likely to eventually focus on producing steel-consuming downstream products and export these to the EU instead of steel products blocked by safeguards.

Colakoglu chief executive Ugur Dalbeler argued that reduced consumption in Turkey’s domestic rebar market is more pressing than the loss of export markets. By his calculations, Turkish rebar production may be 5-6 million tonnes down on-year in 2019 due to both of these factors.

Cebecioglu suggested Turkish billet will find demand in South America, the Far East and North Africa as a way to partially offset reduced rebar exports. While Egypt has placed restrictions on billet imports, increased melting capacity there will lead to increased scrap imports into Egypt, Björkman concluded.