Turkey is well placed to provide steel to the EU in the absence from the market of mills in the Commonwealth of Independent States due to Russia’s invasion of Ukraine, according to Ugur Dalbeler, vice president of the Turkish Steel Exporters’ Association and CEO of major steelmaker Colakoglu.
However, Dalbeler also underlined that the conflict was pushing up Turkey’s input costs, with CIS mills typically providing a good deal of raw material and semi-products to Turkey. Rising energy prices have also contributed to higher input costs, Dalbeler added.
“Turkey imports around 7 million mt of raw materials from the CIS every year, which is around 20% of Turkey’s total raw materials imports. We are also importing 7 million mt of semi and finished products from that region, around 50% of Turkey’s total imports of these products,” Dalbeler said.
Although the US and EU have imposed sanctions on Russia following the invasion, Turkey has so far adopted a neutral approach.
S&P Global Commodity Insights assessed the Platts price for Turkish imports of premium heavy melting scrap 1/2 (80:20) at $655/mt CFR March 14, stable on the day at its highest ever level since the assessment began in early 2010.
The assessment has jumped $148/mt from $507/mt CFR on Feb. 23.
Billet prices in Turkey have also surged to over $900/mt ex-works in the same period, while the Platts assessed CIS export billet was at $836.50/mt FOB Black Sea March 14, up $5/mt from March 11.
“Even if Turkey doesn’t impose sanctions against Russia, Turkey’s slab costs will also be affected negatively due to EU and US’ precautions,” Dalbeler said.
Highlighting that Turkey had been importing around 250,000 mt of HRC from CIS mills, Dalbeler predicted some short-term supply issues, adding that alternative supply sources — including China, South Korea, Japan, India and Vietnam — could emerge.
“However, in line with the additional 6 million mt HRC capacities to come online in the mid-term, all of these [steel input] tonnages could be met with domestic sources,” Dalbeler said.
“The EU may remove, suspend quotas in this sentiment or may change country quotas to a global quota, as Turkey becomes the only alternative that Russia was exporting in the nearby geography,” Dalbeler said.
— Cenk Can
