War in Ukraine Disrupts Trade Patterns - Irepas

The war in Ukraine is changing trade patterns and creating new opportunities for other steel-producing countries besides Russia and Ukraine, participants in a meeting of the International Association of Exporters and Rebar Manufacturers (Irepas) this week in Istanbul said.

For example, the war led to a shortage of nails in the EU, as Russia and Ukraine are the leading suppliers of nails with a combined market share of 90%.

India's new export duties on steel and steel raw materials, lockdowns in China and sanctions on Russian steel due to its incursion into Ukraine have serious implications for steel trade flows. The patterns have changed and if the sixth package of EU sanctions on Russia is implemented, it will have an even more unprecedented impact on the steel industry.

“A significant price spike came from panic buying as the war created a vacuum in the supply of semi-finished and finished steel. However, prices are returning to the pre-war period, and scrap prices are on the lower curve,” President Seba International FD. Baisal said at the event.

“Certainly, the gradual decline in prices for Russian billets to the nearest market, Turkey, has lowered the level of purchase prices for scrap from Turkish mills, as the latest round of sales has leveled off at around $440/t cfr [Turkey] for HMS 80:20 grade scrap,” noted high-ranking official of the Turkish factory.

“Russian warfare has resulted in raw material shortages, supply chain disruptions, rising prices and high energy costs,” said Jens Bjorkman of Stena Metal International. — Some steel producers have suspended their activities, and demand has become negative due to rising inflation. in the EU. The lack of funding for raw materials and the unwillingness of credit insurance companies to avoid risk reduce demand for steel and metallurgical raw materials. He added that India's export duty on iron ore would have little impact on prices as India is a minor global supplier of raw materials.

“The amount of money is a major factor in a country’s wealth and independence,” explains Ozgur Demirtas, professor of Turkish economics at Sabancı University in Istanbul. “Because the US is the largest economy in the world, its currency plays a crucial role. worldwide. As USD liquidity increases, wealth will be felt. Based on the experience of previous years, we are likely to see an increase in liquidity and relief in the global economy within six and nine months. Then commodity prices will rise, including steel."

“Most of all, the market is afraid of uncertainty. A more important huge food crisis is coming, as Russia and Ukraine are the world's leading grain suppliers,” Demirtas concluded.