US Steel Tariffs Affect Turkey's Rolled Metal Trade to Malaysia

Tariff increases designed to protect the US steel industry are starting to have international repercussions in unexpected places as Malaysia launches an anti-dumping investigation on steel imported from Turkey, a country that has been hit hard by changed US import regulations.

What upset the steel industry in Malaysia was the flow of cheap steel from Turkey, which previously found a market in the US, leading to a request from the Malaysian Steel Association for a government investigation into whether steel is being dumped from Turkey and Singapore at a price lower than the domestic price. in exporting countries.

The facts will take time to investigate the dumping, but a few days before the Malaysian request to examine the flow of steel products from Turkey, an investment bank report identified part of the problem as a worldwide surplus of scrap steel.

Excess steel scrap

Turkey is the world's largest importer of scrap used in electric arc furnaces for the production of exported products such as rebar (rebar) used in construction projects.

The United States was one of the largest markets for Turkish steel, but with the increase in tariffs, Turkish steel mills needed to find new markets.

The end result is a curious case of what could happen when there is a fundamental change in the way the industry operates, and the root cause of the problem facing the steel industry in Malaysia is a surplus of Turkish steel blamed for raising tariffs in the US.

According to Macquarie Bank's analysis of the steel market, the 50% import tariff imposed by the US on Turkish steel caused significant changes in the global market for some steel products and scrap, because Turkey is the world's largest importer of scrap.

Scrap prices are falling

The end result of this difficult situation is that the price of scrap goes down even when the price of the primary material used to make steel, iron ore, goes up.

Since the end of January, mainly due to a decrease in exports from Brazil after the closure of a number of mines, the price of iron ore has risen by about 25%.

However, scrap prices fell 7% as demand in Turkey, where the steel industry relies heavily on scrap metal to power electric arc furnaces.

Turkey in trouble

“The reason scrap prices are breaking down is simple, the world's largest importer, Turkey, is in big trouble,” Macquarie said.

"Anti-dumping duties and 50 percent import tariff imposed by the United States on Turkish steel, cut off