EU significantly reduced quotas for the supply of valves to Turkey

Turkish rebar exports to the EU could be cut by 60% as a result of protective quotas, according to Namik Ekinci, chairman of Turkey's Steel Federation.

Turkish factories have reduced the utilization of their valve production facilities due to reduced demand in the Middle East and the United States in recent months. According to Ekinci, when the EU introduces import quotas, their production may decrease.

Turkish consumption of finished steel fell -15% year-on-year in 2018 to 30.6 million tonnes, down 5.4 million tonnes, according to the Turkish Steel Association or TCUD (see Kallanish passim ). Finished steel production fell by just -1.1% to 38.6 million tonnes. The smallest drop in production occurred when steel exports from Turkey rose 20.5% in 2018 to 22.1 million tonnes.

Turkey's most exported rolled steel, rebar, posted a 9% increase in exports in 2018 to 5.95 million tonnes thanks to a very strong second half after shipments in the first half fell by -15% year-on-year.

Turkey's exports have been hit by a combination of increased regional production in the Middle East, one of Turkey's traditional key markets, disruptions in global steel trade and political turmoil, Ekinci said. Moreover, the US has imposed a "... unfair" 50% tariff on steel imports of Turkish origin, he added.

Turkish rebar exports to the EU in 2018 reached 821,178 thousand tons. The EU guarantee quota provided Turkey with 117,231 thousand tons in the period from February to June 2019, 301,537 tons in July 2019-June 2020 and 316,614 tons in July 2020-June 2021.

According to the official data of the European Customs, all or most of the Turkish quota for rebar and wire rod has already been exhausted, materials are at the docks, awaiting permission. The situation is such that the preliminary quotas until the end of January 2019 were exhausted long before the end of 2018.

TCUD said Turkey will have to increase domestic consumption in early 2019, as well as take measures to reduce the share of imports in consumption, as exports are likely to suffer this year.