Colakoglu CEO demands EU steel quota response

Turkey should respond to the EU steel quota system, Turkish long and flat products producer Colakoglu Metalurji's chief executive Ugur Dalbeler said on the sidelines of the World Steel Dynamics conference in Milan.

"The decision to impose a quota system contravenes the agreement signed by the European Coal and Steel Community in 1996," Dalbeler said. Steel exports to Turkey from the EU rose to 46.7mn t in 2017 from 36.4mn t in 2008, trade data show. And 2018 was the first year Turkey was a net exporter to the EU, rather than a net importer."The agreement worked as long as Turkey was a market for the EU," Dalbeler continued. "When the trade balance inverted, the EU was no longer happy."

Turkey officially exhausted its quota for rebar sales to the EU market on 11 October, just over three months after they opened. The original quota allowance of 301,537t will only be renewed on 1 July 2020. Turkish rebar is generally more price competitive for EU buyers and is Cares-approved, meaning it can be used in the UK. Yesterday's Turkey rebar assessment stood at $408.80/t fob.

Turkey has no individual country quota for hot rolled coil (HRC) sales and can access the 2.7mn t quota that renews every quarter. But it cannot send any more than 30pc of this amount, or around 810,036t. Turkey exported 264,874t of HRC in July and August, trade data show, indicating it will not exceed its quota allowance for HRC if it continues to export at this rate. The Argus weekly Turkey HRC assessment stood at $395/t fob today, while the Argus daily Northwest Europe HRC assessment reached $464.66/t ex-works today.

Turkey also exports cold rolled coils (CRC) to the EU under the "other countries" quota, which currently stands at 163,279t. Out of the original 434,253t, Turkey can sell a maximum 130,275t per quarter into the EU market. Turkey shipped 48,575t of CRC to Europe in July, which fell to 13,794t in August. Average CRC sales in 2018 were around 25,000 t/month, meaning Turkey will not exceed its quota allowance if it continues selling at the same rate to the EU.