Turkish steel exports to MENA hit by conflict, Chinese exports: sources

Turkish mills' steel shipments to the Middle East and North Africa have been hit by intensifying conflict in the Middle East and low-priced Chinese exports to Turkey and its main export destination, leading to lower volumes and prices, sources said.

Noting that Turkey halted in May all trade with Israel, one of its top long steel product export markets, Veysel Yayan, general secretary of the Turkish Steel Producers' Association (TCUD) told S&P Global Oct. 7 that exports to Yemen, Turkey's other top export market in the MENA region, had also declined in recent months amid Iran-backed Houthi attacks on cargo ships.

The Turkish trade ministry in April restricted 54 product groups to Israel, including steel and aluminium, accusing Israel of violating international laws with its attacks on Gaza. It then completely halted all trade with Israel in May.

Turkish mills' rebar shipments to Israel declined to as low as 78,200 mt in the first eight months of 2024 from 486,700 mt exported in the same period of the previous year, according to the latest Turkish Statistical Institute data.

Turkish mills' rebar shipments to Yemen declined only slightly by 10,000 mt on the year to 423,200 mt, while steel trade with Iran remained negligible, the data showed.

"The increased tension in the region has been affecting the overall outlook," Yayan said, adding that if conflict ramps up further, the increase in freight rates may affect steel trade even more.

"If the crisis in the Middle East deepens with Israel's expected response, it will have an upward effect on freight rates and commodity prices, as well as steel," a manager of a steel service center said.

However, he added that the Turkish flat steel market was currently focused more on developments in China.

"If the rise in Chinese steel prices continues following the Golden Week holiday that lasted until Oct. 7, it will also support Turkish mills' steel pricing," he said, adding that Turkish mills' hot-rolled coil offer prices could easily exceed $600 per metric ton in that case and could even touch $650/t EXW.

Platts, part of S&P Global Commodity Insights, last assessed Turkish domestic HRC at $600/mt EXW Sept. 27, up $25 on the week.

The TCUD general secretary also said Oct. 7 that the Turkish trade ministry is expected to announce the final antidumping duty rates following its HRC dumping investigation in the coming months.

The ministry determined initial dumping margins on imports of HRC from China, India, Japan and Russia ranging between 11.65%-57.75% on Aug. 7.

After receiving the opinion of relevant parties, the final antidumping report will be submitted to the Board of Evaluation of Unfair Competition for a final decision. Then the final dumping margins will be announced, he said.