Navigating Protectionism and Geopolitical Challenges in Maritime Steel Trade

The SteelOrbis 2026 Autumn Conference & 95th IREPAS Meeting, held in Belgrade from September 27-29 under the platinum sponsorship of İÇDAŞ, took place with 302 registered participants. The conference saw the participation of 96 delegates representing 36 steel producers from 15 countries and 75 delegates from 43 raw material suppliers. Other sponsors of the event included Belgian Scrap Terminal NV, Ege Çelik, Link Inspection Expertise Services Co. Ltd., and Metalfer Group.

In his opening speech, IREPAS President Ioannis Manessis stated that the global steel sector operates in a more challenging environment influenced by geopolitical conflicts, changing trade flows, high costs, and relatively weak demand. Manessis also drew attention to safeguard measures, customs duties, and restrictions on scrap trade, stating that under current conditions, the direction of the market is determined by costs rather than demand, which is why steel prices have risen in almost all markets despite weak demand.

While long product consumption is declining, protectionism is increasing the importance of regional markets.

Speaking at the conference, CELSA Group Export Director Alex Gordienko noted that despite relatively strong expectations for the global economy, the steel sector is under pressure from oversupply and weakening long product consumption. Gordienko shared that global long product consumption declined by 2% year-on-year in the first half of 2026, and a decline is also expected for both total long products and rebar and wire rod consumption for the entirety of 2026. He expressed that trade measures have changed both the direction and product distribution of exports. As an example of this situation, he pointed out that while the export of finished products from China has decreased, the export of semi-finished products has increased. He stated that due to increasing trade barriers and demand concentrating in certain regions, the traditional global steel cycle is increasingly dividing into regional cycles.

Metalfer Group President Branko Zecevic indicated that increasing protectionism forces producers to focus more on local and nearby markets. Zecevic stated that in non-EU Balkan countries, producers are exposed to negative impacts from low-priced imports due to small and fragmented markets and inadequate protection measures. He also shared that after the implementation of import quotas in Serbia, the total share of imports in visible consumption decreased from 56% to 40%.

Decarbonization efforts are increasing DRI demand; verified data in SKDM is gaining importance.

Vincent Chevrier, General Manager and Technical Sales Director of Midrex Technologies, stated that decarbonization efforts, the increase in electric arc furnace-based production, and constraints in the supply of high-quality scrap are expected to increase global direct reduced iron (DRI) demand. Chevrier shared that global DRI demand is projected to reach 260 million mt by 2035 and 500 million mt by 2050, with more than half of the demand expected to come from Europe and the MENA region by 2035. He identified high-quality iron ore supply, energy costs, and access to financing as major challenges to growth.

Jerónimo Casas, Global Product Manager of SGS Climate Change and Sustainability Solutions, who presented on SKDM, emphasized that businesses need to prepare early for emission monitoring and verification processes. He stated that using verified emission data for both the facility and the inputs used in production can provide the lowest SKDM costs, while relying solely on assumed values results in the highest costs. He announced that the deadline for submitting verified reports and delivering certificates under SKDM will be September 30, 2027, urging companies to contact verification bodies and suppliers early.

Geopolitical risks are increasingly affecting market access and freight rates.

Velina Tchakarova, Founder of the geopolitical consultancy FACE, noted that in addition to production costs and prices, market access, supply chain reliability, and regulatory compliance have become more important competitive factors in the steel sector. Tchakarova stated that while protective measures can support profit margins in certain markets, they do not eliminate capacity excess or create additional demand, indicating that oversupply is directed towards markets that remain accessible.

Maria Bertzeletou, Senior Market Analyst at The Signal Group, stated that geopolitical developments are increasingly impacting steel trade flows, shipping distances, and freight rates. She noted the increased risk of war in the Black Sea and rising insurance costs, reporting that Russia's steel shipments from some Black Sea and Sea of Azov ports decreased by approximately 79% year-on-year during July-August. Bertzeletou also expressed that steel shipments passing through the Strait of Hormuz fell to 3.8 million mt, down about 65% from January to August, adding that high bunker fuel prices are increasing pressure on freight rates.

Raw material suppliers committee: High costs and trade barriers are complicating raw material flows.

Jens Björkman, chairman of the raw material suppliers committee from Stena Metal International, stated that high freight, energy, and financing costs, along with potential restrictions on scrap exports, are exerting pressure on raw material trade. He mentioned that low water levels in the Rhine River have disrupted scrap and steel shipments in Europe, causing some materials to remain in stock and sales to be postponed. He indicated that the steel capacity utilization rate in Europe is around 65%, which is unsustainable. Björkman emphasized that changes affecting waste shipments from the EU to non-OECD countries could impact both buyers in North Africa and South Asia and recycling activities in Europe, asserting that Europe has sufficient scrap for its own steel producers and opposing additional export restrictions.

Producers committee: Commercial protection should be supported by appropriate energy and investment conditions.

Speaking on behalf of the producers committee, Alex Gordienko stated that despite challenging international trade conditions, producers remain cautiously optimistic, but energy and raw material costs are expected to continue exerting pressure at least until the end of winter. He noted significant potential demand arising from investments in housing, electricity generation, data centers, defense, and infrastructure renewal in Europe, but bureaucratic obstacles make it difficult for this to translate into actual investments. Gordienko expressed that while the EU is becoming increasingly effective in protecting its market, it has not been equally successful in creating conditions that make production and investment attractive, emphasizing that protective measures and SKDM cannot compensate for expensive or inadequate energy supply.

Traders committee: Freight risks and additional liabilities are regionalizing steel trade.

F.D. Baysal, Chairman and CEO of SEBA Group of Companies and head of the traders committee, stated that customs duties, freight risks, and additional liabilities related to imports are making steel trade more regional. He noted that despite China reducing its production, it continues high-tonnage exports, and changes in export licenses and VAT are altering the export structure and increasing the share of long products. Baysal expressed that finding ships for shipments to and from the Middle East has become more difficult, emphasizing that traders need to account for steel prices and freight, as well as insurance costs, changing transit times, and delivery uncertainties.

Source: SeaNews Türkiye