Output cuts by steel and aluminum producers in the EU could generate advantages for Turkish mills looking to boost exports to the region, the head of the Istanbul Ferrous and Non-Ferrous Metals Exporters’ Association, or IDDMIB, told S&P Global Commodities Insights.
The European energy crisis and associated spiraling costs that are forcing European producers across the region to drastically cut back output could put Turkish mills in a strong position to address any subsequent availability issues, with Turkey not expected to face energy shortages, IDDMIB CEO Cetin Tecdelioglu said in a statement sent to S&P Global Sept. 10.
“As Turkey isn’t expected to face any energy shortage in the coming period, Turkey could find some opportunities to raise its export volumes to the EU region with its logistical advantage,” Tecdelioglu said.
European steel industry association Eurofer was among a few associations to send a joint letter to European Commission President Ursula von der Leyen Sept. 7 urging decisive EU-wide action on gas and electricity prices.
Recent weeks have seen a significant number of industrial plants suspending operations or reducing production in Europe, with further curtailments expected in the weeks to come, Eurofer said.
In the first eight months of 2022, the Turkish ferrous and nonferrous metals sector raised its export volumes by 30.4% year on year to $10.1 billion, according to IDDMIB data, with the EU becoming the top export region.
The US and EU have imposed sanctions on Russia following its invasion of Ukraine, but Turkey has so far adopted a neutral approach.
Gas flows from Russia to Turkey are expected to continue as normal in the coming months, although input costs at Turkish mills have also jumped due to a 50% increase in electricity and natural gas prices for industrial use announced Aug. 31.
This and low demand have resulted in some steelmakers reducing output in recent weeks, while others have paused output temporarily.
Platts assessed Turkish domestic HRC at $680/mt ex-works Sept. 9, up $40/mt week on week, according to S&P Global data.
— Cenk Can