Turkish exporters see $1 bln boost as EU bans Russian steel

The Turkish steel industry, the European Union’s top supplier, expects an additional $1 billion in exports to EU countries after the bloc banned steel imports from Russia and distributed its quotas to other countries.

Top industry figures said they had seen new demand in recent weeks, especially from Baltic states whose main source was Russia. But they also said Turkey’s local steel market may face imbalances and rising prices following the sudden demand increase.

The EU sets country-specific quotas each quarter for non-EU countries to protect its domestic steel industry.

On Tuesday, the EU approved new sanctions against Russia over its invasion of Ukraine, including a ban on steel product imports.

The bloc also imposed an import ban on steel from Belarus, and, to avoid a supply shortage, will redistribute the quotas previously allotted to Russia and Belarus.

“Turkey’s quota for this year was around 6.2 million tonnes. Reallocation of quotas means approximately an additional 1 million tonnes for Turkish steel,” Ugur Dalbeler, vice chairman of Colakoglu Metalurji, a leading Turkish steel exporter, said.

He added that meant around $1 billion in additional export revenue for Turkish exporters.

According to the Turkish Steel Exporters’ Association, the EU was Turkey’s top market in 2021 with 7.4 million tonnes of steel exports. The EU takes 31% of Turkey’s steel exports.

Eurofer’s (European Steel Association) latest 2021 report found Turkey was the top source of finished steel product imports into the EU in 2020, with a 19% share.

Adnan Aslan, head of the Turkish Exporters’ Association, said that even before the EU ban, demand for Turkish steel had risen following Russia’s invasion of Ukraine that began on Feb. 24.

“For the last 15-20 days, we have been receiving completely new demand from countries which were previously importing from Russia, Ukraine and Belarus,” Aslan said, singling out Estonia, Finland, Latvia, Lithuania and Norway.

Turkish Steel Producers’ Association general secretary Veysel Yayan said rising demand was seen from European customers trying to compensate for supplies from Russia, adding that this could have negative consequences for the local market.

“The industry’s capacity utilisation ratio was 75% in 2021. So we still have room for additional orders. But a sudden rise in demand may hurt Turkey’s local market by raising prices and creating some imbalances for Turkish steel consumers.”
Source: Reuters (Writing by Ceyda Caglayan Editing by Daren Butler and Barbara Lewis)