Turkish re-rollers are increasingly prioritising automotive clients in the EU for hot-dip galvanised (HDG) sales in the first quarter of 2026, as they seek more stable, long-term orders, with protectionist measures weighing on demand from traders and steel service centres.
Mills are struggling to maintain traditional export flows ahead of the carbon border adjustment mechanism (CBAM) coming into force in January and the post-safeguard regime expected next year. These changes have made short-term spot sales less attractive and re-rollers are focusing on long-term automotive contracts that offer more predictable demand and stronger profit margins. Mills are now targeting downstream manufacturers rather than traders and steelmakers. "Working with traders right now is not very profitable," a producer said.
Turkish steel exports to the EU are sluggish for the time being because of uncertainty over when the post-safeguard mechanism will be implemented next year. Market participants expect quotas to be sharply reduced, while CBAM-related taxes will raise offers. Exporters said they are challenged by weak buying interest as most customers remain in wait-and-see mode. "Even our regular clients have stopped placing orders because they do not want to purchase without knowing how much tax they are going to pay on top," a re-roller said.
This situation has prompted re-rollers to secure automotive contracts in the EU, which offer stronger demand compared with other sectors. The removal of country specific quota caps for HDG 4B under EU safeguard rules has also raised expectations among Turkish market participants that allocations for this category will be less restrictive. "When the country caps were introduced for 4B, it gathered a lot of backlash and they removed it eventually. I think it's going to be somewhat less affected than the others," a re-roller said.
Automotive demand in Spain is currently strong, with passenger car production recording consecutive monthly increases in January-September, according to European Automobile Manufacturers Association data. Germany also provides substantial demand because of its higher production capacity, but "it is a difficult market to penetrate", a seller said. Romania has created steady demand for HDG 4B, but some Turkish re-rollers said only a few suppliers dominate that area, leaving little room for others.
In the domestic market, automotive and automotive parts producers are generating higher steel demand than other downstream industries. Demand is particularly strong as automotive buyers rush to place orders before January to avoid price increases. "It would be wrong to say the Turkish automotive industry is booming, but it is still doing better than other industries, especially the white goods sector," a re-roller said. "Auto sales are where most of our profit is coming from right now," a steel service centre added.
