Turkish steel exporters to earn extra billion dollars from war in Ukraine
The Turkish steel industry, the main supplier of the European Union, expects an additional $1 billion in exports to EU countries after the block banned steel imports from Russia and distributed its quotas among other countries.
Turkish steel producers have registered growing demand in recent weeks, especially from the Baltic countries, the main source of which was previously Russia. But they also said that Turkey's local steel market could face imbalances and rising prices after a sudden increase in demand.
On Tuesday, the EU approved new sanctions against Russia in connection with its invasion of Ukraine, including a ban on the import of steel products, zeroing out previously granted quotas by Russia and Belarus.
“Turkey's quota for this year is about 6.2 million tons. The redistribution of quotas means approximately 1 million additional tons for Turkish steel,” said Ugur Dalbeler, vice chairman of Colakoglu Metalurji, a leading Turkish steel exporter.
He added that this means about $1 billion in additional export income for Turkish exporters.
In 2021, the EU was Turkey's top market with steel exports of 7.4 million tons, according to the Turkish Steel Exporters Association. The EU accounts for 31% of Turkey's steel exports.
According to the latest Eurofer (European Steel Association) 2021 report, Turkey was the main source of imports of finished steel products to the EU in 2020 with a share of 19%.
Turkish Steel Association Secretary General Veysel Yayan said there is growing demand from European customers trying to offset supplies from Russia, adding that this could have a negative impact on the local market.
“The capacity utilization rate of the industry in 2021 was 75%. So we still have room for additional orders. But a sudden increase in demand could hurt the local Turkish market by raising prices and creating some imbalance for Turkish steel consumers.”