Pandemic hits Turkey HRC exports to EU, quotas could deepen decline

Due to the COVID-19 pandemic Turkish mills’ hot-rolled coil exports to their traditional main HRC export market, Europe, declined notably in the first seven months of the year. This decline could deepen in the coming months due to the EU’s imposition a country-specific quota on HRC imports as of July 1, instead of a global quota.

According to the Platts calculations from the latest Turkish Statistical Instute (TUIK) data, Turkish mills shipped 1.3 million mt of HRC to the EU region in January-July 2020, amid the pandemic, annualized to 2.2 million mt.

Turkey shipped more than 3 million mt of HRC to the EU region during the 12-month period to July 2019, as reported. But, with the new quota system, Turkish mills can only ship 1.37 million mt of HRC to the EU during the July 2020 to July 2021 period, a sharp on-year decline in export volumes.

Turkey can export 344,890 mt of HRC to the EU region in the quarter starting July 1; 344,890 mt in the quarter starting Oct. 1; 337,393 mt in the quarter starting Jan. 1, 2021, and 341,141 mt in the quarter starting April 1, 2021.

Turkey’s quarterly EU quota, which started on July 1, meanwhile was already exhausted as of this month, which could put pressure on mills’ HRC export quotations in the coming weeks.

Turkish mills’ HRC offers to the domestic market reached as high as $435-$445/mt ex-works, while their HRC export offers reached $425-$435/mt FOB, depending on tonnage and producer, as reported.

According to the latest Turkish Statistical Institute (TUIK) data, Turkish mills shipped 1.81 million mt of HRC to global markets in January-July, lower than the 2.17 million mt exported in the same period the previous year, amid trade barriers and the COVID-19 pandemic.

Despite a roughly 100,000 mt decline, Italy remained Turkey’s main HRC export market in January-July at 578,700 mt, while exports to Spain totaled 276,300 mt, lower than 333,300 mt exported in the same period the previous year.

Turkish mills shipped 88,400 mt of HRC to Belgium in the seven-month period, 18.5% lower on year, while exports to Bulgaria totaled 84,100 mt, 6% higher year on year.

Turkey’s HRC exports to Greece totaled 68,000 mt in January-July, relatively flat on year, while exports to Portugal totaled 63,200 mt, sharply lower than the 138,200 mt exported in the same period the previous year.

Turkish mills’ HRC exports to other European countries also remained low on year in the seven-month period, amid the pandemic, while demand from Egypt supported Turkish mills’ HRC exports in January-July at 321,200 mt, more than double year on year, the latest data showed.

— Cenk Can