[SMM Steel] Iranian Flat Steel Exports Chill: Plunging Rial and Shipping Snarls Stall Slab Trades as HRC Mutes

[Turkey] The Turkish steel market operated under broad downward pressure last week. In the long products segment, aggressive discounting by traders liquidating stock for cash forced domestic mills to follow suit, pushing rebar ex-works prices down by 5 USD/tonne to 620 USD/tonne EXW (excluding VAT). By region, traders in Izmir cut offers to 610–615 USD/tonne EXW, prompting a major local producer to track the drop by cutting 10 USD/tonne to 615 USD/tonne EXW; mills across Iskenderun and Marmara similarly marked down offers by 5–10 USD/tonne. While low-cost positions built earlier allow traders to remain profitable despite price cuts, rising construction project costs and the simmering domestic investment fund crisis have heightened market anxieties over an accelerated seasonal demand slowdown. On the export side, rebar FOB export prices held flat at 615 USD/tonne FOB amid sluggish liquidity. In the flat steel sector, following waves of concentrated order bookings over the preceding two to three weeks, domestic procurement ground to a halt, fueling market expectations that hot-rolled coil (HRC) may follow longs into a downward cycle. Although domestic HRC ex-works prices held nominally flat at 620 USD/tonne EXW, actual transactions were essentially frozen. On the export front, the market remained tightly focused on the reopening of the EU's Q4 import safeguard quotas; with 271,000 tonnes of Turkish HRC currently awaiting clearance, quota exhaustion risks pressured export prices down by 5 USD/tonne to 610 USD/tonne FOB. Meanwhile, imported HRC held steady at 555 USD/tonne CFR, seeing negligible transaction activity amid Chinese holiday closures and alternative origins being either sidelined or aggressively priced.

[Europe] Persistently low downstream finished steel prices continue to exert downward pressure on the EU hot-rolled coil (HRC) market, capping mills' ability to push offers higher; consequently, ex-works prices across both Northwest Europe and Italy held flat. EU steel service centers frankly noted that the meager profits generated from procuring high-priced HRC fail entirely to cover their processing and daily operating costs. Downstream pipe manufacturers also reported sluggish trading, stating that weak end-user demand cannot support finished product price hikes, with their target buying prices for fresh HRC bookings sitting well below current mill quotes. On the import front, while Turkish quotas are trending toward exhaustion, carryover volumes could still provide some clearance room. HRC import prices currently hover around 705 USD/tonne CIF; however, quota restrictions, CBAM compliance costs, and fierce competition among Turkish suppliers have cast considerable uncertainty over forward orders for 2027. On the supply side, Italy's ADI is currently fulfilling existing contracts only and has paused accepting new orders. Notably, the recent retreat of the euro against the dollar has inflated the USD-denominated cost of imported material, indirectly providing a level of support for domestic European steel prices.

Kobe Steel reduced carbon emissions from its production processes by 23% in fiscal year 2025 compared with fiscal 2013, according to its ESG Data Book 2026, as it targets a 30% reduction by fiscal 2030 and carbon neutrality by 2050. Scope 1 and Scope 2 emissions totaled 14.9 million mt of CO2 in fiscal 2025, down from 15.4 million mt in fiscal 2024, with more than 90% originating from steelmaking. Production-based CO2 intensity remained stable at about 2.4 mt of CO2 per mt of production. The company has demonstrated an approximately 25% cut in blast furnace emissions by charging large volumes of hot briquetted iron (HBI) produced via the MIDREX process, and plans to combine HBI with biomass to meet its 2030 target, while scrap-melting furnaces and EAF capacity are under consideration for the longer term.