The 65th IREPAS Meeting was held in St. Petersburg, Russia on September 25-27, 2011.

Ioannis Meimaroglu, the chairman of the Raw Material Suppliers Committee, explained that scrap prices continue to remain firm based on four reasons. First of all steel production has been increasing globally since 2006, despite the interruption in 2008, driving scrap demand up. Secondly, not only producers are keeping their scrap inventories low, but also inventories in scrap yards are lean. The third reason is that scrap suppliers find it easy to find alternative markets. As an example, if Turkish mills are not purchasing scrap, the Chinese market appears as an alternative. Finally, scrap collection costs cannot be reduced. Mr. Meimaroglu told attendees that the raw materials committee agreed on the importance of stability both in supplies and in prices.

F.D. Baysal representing the Traders Committee, stated that the steel market situation is positive except for financially and demand-wise depressed Europe and the US. Mr. Baysal said that domestic demand in southern Europe, including Spain, Italy and Greece, is very low. He also said that good reports are coming from Africa, Latin America and Southeast Asia, while the Middle Eastern market is healthy. About the situation in the US, Baysal said that traders are expecting a significant fund injection in the US market in the next two years, once the American Jobs Act passes. Finally, Mr. Baysal said that there is light at the end of the tunnel and so traders remain optimistic.

Kim Marti Subirana, the Chairman of the Rebar and Wire Rod Suppliers Committee, said that at the beginning of the event the general mood was pessimistic, due to the depression observed in the European economy. However, the mood rapidly changed as the market players found opportunity to share their ideas during the event. Mr. Marti stated that rebar and wire rod suppliers have learned to adjust their production levels in line with demand, to remain sustainably profitable. According to Marti, the market for construction steel in eastern and northern Europe is strong; however, the situation in southern Europe remains negative.

In the meantime, there is no trouble for the rebar and wire rod markets outside Europe, according to the committee chairman’s statement. Emerging markets, such as South America and Africa, show strong growth, with continuous demand, he added. Marti also underlined that inventory levels are low, and so demand is foreseen to materialize. Finally, Mr. Marti predicted that, on the back on firm raw material prices, rebar and wire rod prices will remain on a rising trend next month.

Uğur Dalbeler, IREPAS chairman and also chairman of the Billet Suppliers and Producers Committees, said that in the three main steel billet supplier markets, namely Ukraine, Russia and Turkey, tonnages available for exports have declined in the last three years, due to increased domestic consumption in the domestic markets in Russia and Ukraine. Dalbeler stated that the market situation for steel billet is firm, and prices are unlikely to decrease in the short run. The IREPAS chairman stressed that firm raw material prices provide support for the firmness in steel billet prices, adding that inventory levels are low in general.

Notes to Editors:

IREPAS is a global association of producers and exporters of long steel products. It was founded by CELSA and GERDAU almost 28 years ago to develop understanding between producers, traders and consumers around the world. Today, IREPAS unites producers, traders, consumers of steel and professionals from the shipping and finance industries.