Turkey/Middle East reversed billet supply roles could continue

Turkey imported 259,777 tonnes of billet from the Middle East and North Africa (MENA) in January-April, representing a reversal of the traditional role of Turkey as billet exporter to this region.

This tonnage was compared to 20,806t in the same period of 2020, according to Turkish Statistical Institute (TUIK) data monitored by Kallanish. Although the latter was affected by the Covid-19 pandemic outbreak, the 2021 tonnage is also much higher than in the years prior to 2020.

Qatar and Oman supplied 97,019t and 92,319t of billet respectively to Turkey in January-April versus zero a year earlier. Qatar has returned to the export market after taking a break for most of 2020 due to unfavourable international competition and pricing, while Oman has seen an increase in steelmaking capacity coupled with subdued demand. Algeria meanwhile supplied 69,208t of the semi-finished product.

Suppliers seen in previous years, such as Libya and United Arab Emirates, were not active in Turkey.

In the opposite direction, Turkey supplied 137,882t of billet to MENA in January-April, down from 223,950t a year earlier.

In full-year 2020 shipments to MENA ended up being 498,632t, similar to those in 2018 and 2017. In 2019 these shipments surged to 983,816t, but were still down from levels exceeding 1 million tonnes seen prior to 2014, with shipments peaking at 3.07mt in 2010.

This all points to traditional net-importer MENA becoming self-sufficient in billet supply following years of large capacity investments. Scrap prices reaching ten-year highs this year have meanwhile encouraged Turkish mills to search for alternative feedstock.

Global scrap supply is expected to remain tight, with China returning to the import market and decarbonisation encouraging the use of the feedstock. Overcapacity meanwhile remains an issue in MENA, barring any mega investments to spur steel demand, currently only envisaged in Saudi Arabia. The reversed roles could therefore continue.

Adam Smith Germany