Turkey's Steel Product Exports Climb in H1, but Rising Imports Pressure Domestic Market

Turkey's steel product exports strengthened during the first half of the year, although a sharp rise in imports and weaker domestic crude steel production continued to weigh on the country's steel sector, according to data released by the Turkish Steel Producers' Association (TÇÜD). Turkey's crude steel production fell 3.5% year on year to 2.9 million tonnes in June. For the January-June period, output declined 1.7% to 18.3 million tonnes. In contrast, apparent finished steel consumption recovered in June, rising 8.8% year on year to 3.1 million tonnes, although first-half consumption remained 2.6% lower at 18.6 million tonnes.

The country's export performance improved during the month. Steel product exports climbed 21.5% year on year to 1.4 million tonnes in June, while export value increased 13.5% to $931.3 million. During the first six months of the year, exports reached 7.7 million tonnes, up 18.6% from a year earlier, with export revenue rising 8.8% to $5.2 billion. Imports, however, accelerated at an even faster pace in June. Steel product imports rose 52.4% year on year to 1.8 million tonnes, while import value increased 28.7% to $1.2 billion. Over January-June, imports totalled 9.3 million tonnes, up 12.6% year on year, although their value edged 0.3% lower to $6.5 billion amid softer international prices. As a result, Turkey's steel export-to-import ratio improved to 80.2% during the first half from 73.5% a year earlier but retreated from the 83.4% recorded during the January-April period because of the sharp increase in June imports.

TÇÜD Secretary General Veysel Yayan said the rapid increase in imports, particularly shipments entering under Turkey's inward processing regime (IPR), has become a growing concern for domestic producers. He argued that imports of products already manufactured in Turkey, especially from China, Russia and other Far Eastern suppliers, are increasingly competing with domestic production rather than supporting export-oriented processing, contrary to the original objective of the scheme.

The association also highlighted widening trade imbalances with major supplying regions. During the first half, imports from the Far East increased 9.9% to 4.7 million tonnes while exports to the region fell 29% to just 59,200 tonnes. Imports from Russia jumped 74.5% to 2.2 million tonnes, whereas exports declined 73.6% to 11,100 tonnes. By contrast, shipments to the European Union increased 38.6% to 3.4 million tonnes, underpinning the overall growth in Turkish steel exports. TÇÜD noted that the European Commission has announced additional support measures for energy-intensive industries under its Clean Industrial Deal, adding to existing financial assistance for the European steel sector. Against that backdrop, the association urged Turkish authorities to reassess the inward processing regime and strengthen measures to prevent trade diversion into the Turkish market following tighter trade protection measures in the United States and the European Union.