The outlook for global long products depends largely on Asian intra-regional trade, as lower Chinese exports have led Asian buyers to look elsewhere and opened up the region’s market for Turkish suppliers. So says the International Rebar Exporters and Producers Association (Irepas).

Turkish mills’ difficulties in selling rebar – domestically due to weak demand and to the US due to the antidumping investigation – have been offset by demand from Singapore and Hong Kong. “These markets are open again for Turkish suppliers,” Irepas says in its February short-range outlook seen by Kallanish.

Lower Chinese exports continue to give a tailwind to regional markets. “Where no dumping barriers exist, or where demand really exceeds supply (as for billets in Asia), buyers are constantly looking for other alternatives to China which has been setting the price,” Irepas opines.

“Chinese producers are now facing real competition which is not self-inflicted,” Irepas continues. “We can now conclude that Turkish trade is driving both the international scrap market as well as the international reinforcing bar market.”

Last month’s crash in scrap prices was driven by a few US scrap export deals due to cash flow issues and overstocking, according to Irepas. “Indeed, scrap accumulation was stronger than demand during the past quarter,” the association observes. “These build-ups were then sold off, which pressured pricing.” Moreover, the weak lira and slowing investment in Turkey have pressured steel demand and therefore scrap imports.

A new uptrend is likely to start soon, Irepas adds, but prices are still being majorly driven by antidumping cases, safeguard measures and import taxes.

Economic growth in major steel-consuming regions is supporting positive sentiment, despite difficulties in Turkey and Brazil. US President Donald Trump’s aggressive growth policy is also contributing to this sentiment.

“If such sentiment is supported by Chinese exporters, 2017 might be a very good year,” Irepas says. “There seems to be no export rush on the Chinese mills’ side immediately after the Lunar New Year holiday and, as such, the trend of stable prices seems to be holding.”