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The Turkish steel industry has been navigating a complex landscape of fluctuations in global scrap prices, U.S. tariff policies, and domestic market trends. Recently, the delayed publication of Turkish steel scrap import indices by Fastmarkets added another layer of uncertainty to this already volatile market. This development comes as Turkish steel producers strive to balance production costs amidst shifting global dynamics.
Turkey ranks as one of the significant players in the global steel production sector, with a notable increase in steel output in recent years. However, this growth is heavily dependent on imported scrap, making the industry vulnerable to changes in global scrap markets. In 2024, Turkey recorded a significant rise in steel production, reaching 36.89 million tons, but this was accompanied by concerns over the reliance on imported raw materials.
Scrap Prices and Market Volatility
Scrap prices have experienced fluctuations globally, impacting Turkish steel production costs. As of early 2025, scrap prices in Turkey have seen a marginal increase, reaching around $355 per ton for HMS 1/2 80:20 grades by February[2]. This follows a volatile start to the year, marked by a price recovery after initial declines.
The delayed publication of Turkish steel scrap import indices by Fastmarkets on April 2, 2025, due to a technical fault, affects the critical pricing data for the industry[3]. This delay impacts several key indices, including those for HMS 1&2 scrap from North Europe and the U.S., as well as the month-to-date deal-weighted average for North Europe origin. These indices are essential for Turkish steel producers in making informed decisions about raw material purchases.
Experts suggest that Turkey should diversify its raw material base to reduce dependence on imported scrap. This includes developing local scrap generation and investing in value-added steel products[5]. A new scrappage incentive law could help increase domestic scrap availability, though its impact might be limited[5].
Fluctuations in the EUR/USD exchange rate can influence scrap prices and the overall competitiveness of Turkish steel producers in international markets. A stronger euro can make European scrap more expensive for Turkish buyers, potentially affecting import decisions[2].
U.S. tariffs on steel imports continue to impact global steel prices, pushing up scrap costs and affecting Turkish mills' pricing strategies[1]. These tariffs have made domestic steel more competitive in the U.S. market but have also raised production costs for Turkish producers reliant on imported scrap[1].
Monetary policies by the Turkish Central Bank, particularly those affecting lending to the steel sector, play a crucial role in determining the industry's financial health and production capacity. Easy credit policies can support increased production but also create risks if market conditions deteriorate[2].
The delayed publication of Turkish steel scrap import indices highlights the ongoing challenges faced by the Turkish steel industry. This incident, coupled with global scrap price fluctuations and U.S. tariff policies, underscores the need for Turkish steel producers to adapt and diversify their raw material sources. As the industry navigates these complexities, it must also focus on reducing reliance on imported scrap and investing in more value-added steel production to ensure long-term sustainability. The path forward for Turkish steel involves balancing immediate production needs with strategic investments for future growth in a rapidly changing global market landscape.
