Turkish hot-dip galvanized coil suppliers will have to search for new markets as shipments to top two destinations Spain and Italy are blocked by safeguard measures. So says Borcelik export manager Ersun Özdemirel. Despite large domestic capacity investments, meanwhile, Turkey still needs to import galv.

In 2014 Turkey shipped large tonnages of HDG to Russia before the latter invested into its own production capacity and become self-sufficient. In 2017 the US became Turkey’s largest export market before Section 232 tariffs were introduced in 2018. Year-to-date in 2019 the EU has been Turkey’s largest market, specifically Spain and Italy. However, safeguard measures are threatening to stop this trend.

Turkey still needs to import 600,000 tonnes/year of certain grades of coated flat steel for the automotive industry despite raising production capacity to 5 million t/y and having consumption of 3m t/y.

Turkish coated coil capacities added in recent years are currently underutilised due to the economic slowdown in Europe and safeguards measures. “The mills are having trouble to fill their orderbooks, so we have to make a decision: either to make a loss or, let’s say, to stop buying (hot rolled coil feedstock),” Özdemirel said at Thursday’s Kallanish Euro-Turkey-CIS Flat Steel Conference in Istanbul. Stopping purchases will cut demand, he added.

The separation by the EU of galvanized into 4a for commercial use and 4b for automotive use was beneficial for Turkish mills. However, revising the hot rolled coil safeguard quota for Turkey to 30% of the rest of the world quota was not good for integrated producers.

Lower Turkish domestic demand and instability in the Middle East is also hampering Turkish mills’ business, Özdemirel added.

Borcelik expects a recovery in domestic demand and export markets pending the resolution of trade wars and cancellation of safeguard measures, possible automotive investments in Turkey, and improved Ukraine and Iraq demand. Moreover, Russia filed a complaint against Chinese HDG recently, which could be to the benefit of Turkish suppliers.