Turkish factories may suspend production of valves

According to the International Association of Exporters and Manufacturers of Fittings (Irepas), Turkish factories may suspend production in the coming months due to reduced export opportunities and the "... disappearance" of domestic consumption.

The US Congress is not going to vote for a new USMCA until Democrats take control of the House of Representatives. This means that US steel import tariffs will remain at 25% and Turkish steel tariffs are likely to remain at 50%. With the end of the year approaching, US sellers are trying to cut inventories, pushing prices up. Further prices, on the other hand, are now below the cost of production for Turkish producers.

The steel and scrap market, which has deteriorated due to economic slowdown in Turkey, will be "... forced to accept" the impact of lower Turkish demand, Irepas says in its December short-term forecast. Iranian exports to Turkey are increasing pressure on Turkish factories and could lead Turkey to implement trade measures.

Asian steel prices fell $ 50 /t in less than two months. An available offer cannot be sold profitably. As scrap and iron ore prices are also adjusting, the final impact on spreads will be seen in the coming weeks. Chinese demand remains a key issue. If it remains good enough to prevent the export of Chinese enterprises, then the spreads will be balanced at reasonable levels, Irepas said. “The situation in China still gives us ample reason to be optimistic for 2019,” the association adds.

"A ceasefire in the China-US trade war could help stabilize nerves and reduce volatility in international markets," for at least the next 90 days, Irepas says.

The global economy is doing better than expected. In developed countries, a dramatic rise in interest rates seems likely, while oil prices are now lower - these factors are also positive indicators for the steel market.

The Association concludes: "The market can be defined as volatile at the current stage with a less than satisfactory outlook due to uncertainty and extreme volatility."