Turkish scrap demand could fall as Section 232 shifts trade patterns, BDSV says

Demand for imported scrap in Turkey could suffer as a result of the United States applying tariffs on shipments of Turkish steel, a spokeswoman for German steel recycling association BDSV told Metal Bulletin on Monday March 12.

Lower demand for Turkish steel in the US under tariffs could lead to a drop in steel production in Turkey and lower scrap demand from the country, the spokeswoman said.

Although Turkish import scrap prices would then probably come under pressure, this would not push German scrap prices downward if domestic demand in the European country were to remain strong, she added.

Turkey is the principal export destination for German ferrous scrap, according to the BSDV, with 12 million tonnes sold in 2017. Meanwhile, Germany exports around 1 million tonnes per year of finished steel to the US.

“With punitive US tariffs on steel, the sales market in Turkey could weaken [if] cheap imported steel floods the [global] market,” the BDSV said in a separate statement on Thursday March 8.

US President Donald Trump signed into effect import duties of 25% on US steel imports on March 8, implementing them into official trade policy.

Turkish import scrap prices have remained largely stable since the announcement on March 1 that tariffs would be applied, but Chinese futures prices have fallen sharply since the order was signed.

Metal Bulletin’s daily index for Northern European HMS 1&2 (80:20) was $367.69 per tonne cfr on March 9, down by $1.20 per tonne day-on-day. It retained that value on March 12.

The Turkish Steel Exporters Assn (ÇIB) said on Friday that the 25% tariff on US steel imports will not affect Turkish exports as long as the tariff is applied equally to all countries.

Since then, however, exemptions from the tariffs have been confirmed for North American Free Trade Agreement nations Mexico and Canada, along with Australia.

ÇIB chairman Namik Ekinci has said that “the exemptions of Mexico and Canada will cause several new problems and are not right.”

And the chairman of the American Institute for International Steel (AIIS), John Foster, has written to Trump asking him to exempt Turkish steel from any tariffs or quotas to be applied under Section 232.

Lee Allen



Lee Allen

March 12, 2018

15:50 GMT