As United States’ latest customs duty and trade tariffs decision became finalized; exports to USA, Iraq, and Singapore experienced sharp declines. Additional tariffs shocked the markets during 4-month period pushing local Turkish steel exporters to balance the market by shifting their attention to demand from South American countries such as Chile, Ecuador and Panama, and significantly increasing the exports to European Union countries lead by Italy, and Spain. According to Turkish Statistical Institute’s data, Turkey exported $13.8 billion in steel and finished steel goods, while 9% exports were made to the United States in 2017.
The tariff slashed Turkey’s exports to the United States by 56%, below half a million tons between January – May 2018 period, as the United States was Turkey’s biggest export market before steel tariff was implemented.
Germany’s steel association told Reuters that reaction to steel and aluminum tariffs resulted in an increase in volumes on Europe’s steel market while some manufacturers switch their production to European Union.
In an interview published on Reuters, Neue Osnabruecker Zeitung quoted Hans Juergen Kerkhoff “In the first three months (of 2018), imports from Russia rose by 139 percent from a year earlier, those from Turkey by 76 percent.”
Turkey’s Steel Exports United States May Bounce Back
As 25% tariffs on all countries affected other markets’ pricing, Adnan Aslan, head of Turkish steel exporters association, believes Turkey is at a great advantage in terms of lower production costs; adding that there had been substantial increase in steel orders for June and July. As a result, Turkish steel exports were slightly up from 17.8 million tons last year. Mr. Aslan also said “exports would hit $15 billion in 2018, rising 30% compared with last year.”
Local Finished Steel Output & Consumption Grew
In January – May period, finished steel output was up 10.5% and local consumption grew. With 10.7 million tons flat steel output increased 26.4% and long steel production totaled 10.7 million tons with 2.4% increase. In the same period local steel consumption totaled 15.4 million tons, pointing out to 15.2% year-over-year increase.
As a result of latest tariffs, Turkey implemented retaliatory Tariffs Worth $266.5 million against the United States, fifth largest country where Turkey exports its goods and trade volumes totaled $20.6 billion.