Day: 4 November 2020

Turkish steel mills face a further contraction in steel exports following the EU’s new safeguard quota adjustment to account for Brexit from 1 January 2021. Turkish steel producers believe the EU has deducted too large a volume from Turkey’s quota.

Turkish Steel Producers Association (TCUD) general secretary Dr Veysel Yayan tells Kallanish: “By putting Brexit at the forefront, the EU took the opportunity to further cut quotas. New quotas are not determined on the basis of our export volumes to the UK. The cut amount has nothing to do with our export volumes to the UK, specifically for HRC and rebar. Our exports to the UK are much lower.”

“We are concerned that the EU’s restrictive approach will continue. Since they are limiting the quotas so much, it means the EU is disregarding free and fair trade. It means they have entered a closed economy period,” Yayan adds.

The EU has reduced Turkey’s first-quarter-2021 rebar quota of 75,000 tonnes to 58,926t, and the second-quarter quota of 75,000t to 59,480t.

Turkish steel exports to the bloc will therefore be further restricted in 2021. According to Eurofer, Turkey took first place in the EU’s finished steel imports in 2018, providing 6.2 million tonnes. Of Turkey’s exports that year, 33% went to the EU, but this decreased to 25% following the implementation of quotas.

Yayan also recalls that, while the EU has protected itself from imports, there has been a significant increase in Turkey’s steel imports from the EU.

Last week the European Commission said it has recalculated the volume of Tariff Rate Quotas (TRQs) as part of its steel safeguard measures effective 1 January 2021 to consider the UK a third country following Brexit.

Klöckner & Co has recovered from the deep net loss of €111 million ($130m) it saw in the second quarter, to almost break even with a net loss of €5m in Q3.

Shipments rose from 1.07 million tonnes in Q2 to 1.242mt in Q3. This is -13% less than in Q3 2019, but “…so-to-speak good news after the drop of far more than -20% in Q3,” says chief financial officer Guido Kerkhoff, who will soon become chief executive.

During a conference call attended by Kallanish, outgoing ceo Gisbert Rühl noted that the distribution group benefited from positive price effects during Q3, especially in the USA. In Q2, material special effects had cost the group €72m, but this cost was only €2m in Q3. Revenue came to €1.279 billion, down -18% on the corresponding 2019 period.

Rühl noted that the quarter was also characterised by a shortage of material after many blast furnaces were temporarily idled. Commenting on further price developments, he remained vague, saying that “…we have already seen a big surge.”

On e-commerce activities, he said that revenue from the group’s own online platform, klöckner.i, will reach €300m in the full year, and is bound to reach €1 billion in 2021. Klöckner’s open e-market, Xom, which by now gathers 55 supplier companies, is expected to reach €130m in revenue this year, and some €600m next year.