Earthquake in Turkey May Impact Overseas Steel Scrap and Steel Prices

SHANGHAI, Feb 9 (SMM) - On February 6, Turkey was hit by earthquakes of magnitude, which was catastrophic to the safety of local residents and the construction of infrastructure.

In terms of the steel industry, SMM holds the view that this strong earthquake will primarily affect international trades of steel scrap and steel.

In 2022, the crude steel output of Turkey totalled 35.1 million mt, a year-on-year decrease of 12.9%. As an important player in the international steel trade, Turkey exported 22.1 million mt of steel in 2021, ranking seventh in the world. The country imported 16.2 million mt of steel in 2021, taking up the sixth slot in the world. There is no doubt that the catastrophic earthquakes will affect local import and export trades. According to local steel mills, they had to cancel part of orders due to “force majeure”.

In addition, Turkey is the world's largest importer of steel scrap, with an import volume of 25 million mt in 2021, accounting for 23% of the global total trading volume.

SMM learns that many steel mills in Turkey decided to halt the production for at a week, and the imports of steel scrap will also be suspended. In the short term, the steel scrap prices in Europe will hold still, but in the medium and long run, the overseas steel scrap price will face negative impacts with stagnate demand.

Given that Turkey's imports of steel scrap from China are extremely low, China's steel scrap prices will be mainly subject to domestic fundamentals.