Turkey could strengthen its position as an export hub for low-carbon steel – expert

Despite a number of challenges, Turkey may strengthen its position as one of the powerful export centers in the global low-carbon steel supply chain in the medium term. This is stated in a column by Yasin Kanbur, Middle East Regional Manager at Hangzhou CIEC Group, for the Turkish newspaper Dunya.

The country’s total steel production capacity, Kanbur notes, is approximately 55-60 million tons. Actual production in recent years has fluctuated between 33 and 35 million tons. A significant portion of this production is related to exports, so external market conditions continue to shape the overall direction of the sector’s development.

Production based on electric arc furnaces gives Turkey a significant competitive advantage in export markets, especially given the new European emission standards. However, periodic increases in energy prices could lead to an increase in the final cost of metal products to an average of $25-40/t, which would reduce the price competitiveness of Turkish steelmakers. On the other hand, the predictability of these prices and the flexible production structure could once again create export advantages.

Yasin Kanbur also points out that competition in the global scrap market is becoming increasingly fierce. In particular, the EU has designated scrap as a strategic raw material and increased investment in EAFs in various regions. This could lead to periodic price fluctuations of 10-15%. Turkish producers, the expert notes, have adopted a more flexible supply strategy in the “scrap-billet-slab” triangle to optimize raw material costs.

The closure of the US market to Turkish steel due to customs barriers and European import quotas is naturally directing Turkey towards new regional centres. As a result, the geographical distribution of Turkish rolled and semi-finished product exports, which currently stands at around 12-14 million tons per year, has diversified significantly in recent years.

The European CBAM, the expert notes, creates a new challenge for export-oriented manufacturers in terms of both technical compliance and operational discipline. Turkish manufacturers have made significant progress in standardizing MRV processes, ensuring the verifiability of carbon footprint measurements, increasing the use of renewable energy, and so on. However, low-carbon technological transformation under CBAM requires large-scale financing, which affects the sector’s medium-term planning.

It should be noted that Turkey exported over 16 million tons of steel in January-October. The largest growth in supplies was in sheet metal and profiles, with Romania and Italy being the main markets.