The ousting of Syrian president Bashar al-Assad is likely to open up export opportunities for Turkish steelmakers, but this hinges on the political stabilisation of the country.
The fall of the al-Assad regime came after opposition forces led by militant group Hayat Tahrir Al-Sham (HTS) launched a sudden military offensive in late November, seizing some of the country's biggest cities over the past week.
A former al-Qaeda affiliate, HTS is thought to maintain close ties with Turkey, along with the Syrian National Army (SNA), while the outgoing Assad regime was a close ally of Iran and Russia.
Iran not only sold rebar and wire-rod products on occasion to Syria, but also used the country as a transit route for its business into Lebanon and Turkey.
With the toppling of the al-Assad regime, steel trade from Iran to Syria has been halted as sellers wait for further developments.
Turkish steel mills are expected to benefit from the regime overthrow, and to fill the potential gap left by Iran, market participants said.
In a response to this, various construction and iron and steel companies listed on the Istanbul stock exchange appreciated significantly when the markets opened on Monday morning.
Rebuilding efforts are likely to present sales opportunities for Turkish longs producers, located in the southern Iskenderun region of the country, market participants said.
Turkey exported 17,900t of rebar to Syria in October, an annual increase of 80pc. Industry sources noted the considerable potential for Turkish suppliers to ramp up sales, depending on the developments in Syria. In addition to the political instability, airstrikes were carried by Israel on military assets in Syria in the past couple of days.
Market sources expressed a consensus that the rise in stock prices since 9 December in Turkey is speculative. Domestic rebar prices in the Iskenderun region in southern Turkey picked up today and could pick up across the country tomorrow. The Syrian regime change was cited as a smaller factor, alongside the signs of a recovery in global steel prices owing to favourable policies signalled by the Chinese government. Turkish domestic rebar buyers have delayed restocking this winter until signs of a price recovery emerged.
"People need to see finance first for construction, the country has no cash so if some other country covers the finance, then demand might increase," one market participant said.
HTS is currently designated as a terrorist organisation by the US and various European countries. At the time of writing the UK is reviewing its prescription of HTS as a terrorist group.
