The Turkish flat steel sector adapts to EU quotas and geopolitical crises, as discussed at the SteelOrbis meeting with industry leaders.
The Turkish flat steel sector can gain an advantage with its flexibility under the shadow of the EU quota regime and geopolitical crises.
On Thursday, November 12, the SteelOrbis Market Talks meeting, sponsored by Atakaş Çelik, took place at the Anemon İskenderun Hotel with over 400 participants. The meeting addressed the outlook for demand in the Turkish flat steel market, the European Union's quota regulations, and the effects of regional conflicts on trade. Other sponsors of the meeting included ONT Steel, Seçkin Metal, Yatırım Finansman, Keskin Nakliyat, and SMC Metal.
The new EU quota regime offers a competitive advantage to Turkey.
Following the opening speech by SteelOrbis General Manager Murat Eryılmaz, Atakaş Çelik Export Manager Haydar Küpeli stated that Turkey closed the year 2025 with a crude steel production of 38.1 million tons, and in the first nine months of 2026, it increased its production by 6% compared to the same period last year, reaching 29.8 million tons. Noting that Germany remained at 26.5 million tons during the same period, Küpeli emphasized that Turkey solidified its title as Europe's number one steel producer and strengthened its position as the 7th largest in the world. He pointed out that the capacity utilization rate rose to 64% and that the share of electric arc furnaces in total production reached a historic record of 72.2%, stating that this structure provided a strategic advantage in terms of both imported semi-finished product substitution and low-carbon production.
Küpeli reminded that in the new quota regime implemented by the EU as of July 1, 2026, the total duty-free quota was reduced by 47% to 18.3 million tons, and the out-of-quota taxes were increased to 50%. He expressed that Turkey has a total market access of 2.19 million tons, including a guaranteed country quota of 1.29 million tons and a joint free trade pool of 902,000 tons in four main flat steel groups. Emphasizing that Turkey would stand out at the beginning of quarters with its short transit advantage of 4-5 days compared to Asian competitors, who face transit times of up to 40 days in the joint pool excluding China and Taiwan, Küpeli also noted that the requirement to declare the origin of the steel melted and cast, which became mandatory on October 1, 2026, disqualified competitors like Vietnam that use hot rolled steel of Chinese origin. Regarding the Carbon Border Adjustment Mechanism (CBAM), Küpeli stated that despite carbon certificate prices reaching €82.32/ton in the third quarter of 2026, Turkey would achieve cost leadership thanks to its low-emission arc furnace production and the offsets from the Turkish Emission Trading System, adding that domestic steel demand is expected to reach 40.4 million tons in 2026 and 41.6 million tons in 2027.
Flexibility is the key word in the face of geopolitical shocks.
During the panel titled 'Demand, Trade, and Export Outlook in the Turkish Flat Steel Market,' moderated by SteelOrbis General Manager Murat Eryılmaz, Atakaş Çelik General Manager Cem Üstün stated that the growth in Turkey's steel consumption in 2026 would primarily stem from flat steel derivatives such as white goods, air conditioning, windows, and panel radiators, which would come into play after the completion of housing in the earthquake zone. Üstün noted that the war that broke out at the beginning of the year transformed Iran, which was in a net exporter position, into an importer, leading to unexpected demand for materials from Turkey in markets like Iraq, North Africa, and Turkic Republics where Iran could not supply goods. He emphasized that the Black Sea crisis in August brought the flow of raw materials and semi-finished products to a standstill, stating that in this environment of reduced predictability, companies needed to focus on short-term and flexible structures instead of long-term capacity plans.
Üstün reported that the new quotas in the EU created seasonality in exports, with rolling mills planning the October-November period for exports and December for the domestic market. He pointed out that the origin declaration rule necessitated Turkish rolling mills, which had been sourcing cheap hot rolled steel from China and exporting value-added products to Europe, to find new hot rolled sources.
While industrial investments support demand, logistics costs trigger on-site production.
Teknopanel Commercial Affairs Director Hakan Tanrıverdi stated that the annual production of sandwich panels in Turkey, which amounts to 65-70 million square meters, creates a consumption of approximately 490,000 tons of qualified flat steel, with Teknopanel consuming 100,000-110,000 tons of steel annually through its production of 16 million square meters. Despite the slowdown in residential construction, he expressed that investments in cold storage facilities, logistics warehouses, data centers, and factory renovations in over 430 organized industrial zones kept demand alive. Tanrıverdi emphasized that they prioritize sustainable quality and long-term cooperation with domestic producers over daily price fluctuations in supply. He noted that logistics costs have surpassed product costs, stating that the sharp rise in truck freight rates from Turkey to the Balkans has made on-site production strategies unavoidable in target markets.
Alternative export markets highlight Ukraine, the USA, and Canada.
ONT Steel Trade Co. Managing Partner Orçun Günay indicated that the narrowing of quotas in the EU has directed exporters towards more planned shipments, with quarterly tonnages in hot rolled steel exports exceeding 350,000 tons and potentially approaching 500,000 tons at the beginning of 2027. He stated that in alternative markets, Ukraine has risen to become Turkey's primary export market in the first nine months of 2026 and will maintain this position during the post-war reconstruction process. In the US market, where prices are nearing the $1,000/ton threshold, Turkish cold and galvanized steel shipments have reached a monthly level of 85,000 tons, and he predicted that the US and Canada, where Stelco has ceased production, will be star markets in the first half of 2027. Günay noted that the 2.5 million tons of supply pressure created by Indonesia, Malaysia, and Algeria, which have had their EU quotas eliminated, has not caused lasting damage to Turkey as these countries have redirected to the US and Brazil markets. He emphasized that any anti-dumping measures to be applied in the domestic market should not cover niche products that do not have local production.
The crises in the Black Sea and the Middle East have created bottlenecks in the supply chain.
Esna International Transportation Managing Partner Naci Tacikayan stated that due to the conflict environment in the Black Sea, shipowners have avoided going to regional ports, and freight rates on existing voyages have climbed to the $100-150/ton band, causing disruptions in the supply of logs and raw materials that have brought long product manufacturers to a standstill. He expressed that even if the war were to end today, it would take at least a year for port infrastructures to recover, noting that land and rail alternatives are far from meeting the current tonnage needs. Tacikayan pointed out that tensions in the Red Sea and the Strait of Hormuz have also affected Mediterranean ports, stating that despite container freight rates from Dubai rising from $500 to $6,000, shipments to the Middle East continue. He added that for the İskenderun ports to become a regional logistics hub, regular shipping services, equipment positioning, and strengthening the integration of rail and road transport are necessary.
Following the panels, the meeting concluded with an interview by Dr. Barış Esen, Corporate Communication Director of Yatırım Finansman, and Financial Consultant Ali Ağaoğlu, summarizing how the conflicts in neighboring geographies affect trade and the industrial sector in Turkey and worldwide.
Source: SeaNews Türkiye
