We spoke with Gökhan Erdem, sales and marketing director at Çolakoğlu Metalurji, about the potential impact of the EU's new steel import quotas on Turkey's exports and European steel consumers.
As is known, the EU has revised its steel import regime, reducing the steel import quota allocated to Türkiye in the HRC 1A category by 60 percent. Ultimately, the greatest cost and risk arising from this measure will be borne by steel consumers within the EU. European consumers will have to assess the additional costs they will need to bear in order to continue their operations in the future and assume increasing risks to maintain their activities under these conditions.
As domestic steel prices in the EU continue to rise, the resulting cost burden on steel consumers may also lead to uneven cost impacts among EU member states depending on their respective steel production capacities. Turkey's steel exports to the EU will continue, albeit at lower levels, but the majority of the additional costs will ultimately be borne by steel consumers based in the EU.
Another factor is that, as the impact of CBAM becomes increasingly pronounced over time, the advantages offered by Turkish production in terms of carbon footprint, geographical proximity, quality, clean steel and reliable imports will create additional pressure on EU steel consumers.
Following these developments, the Turkish steel industry has the ability to adapt in steel export markets thanks to its experience with such measures and its capacity to respond rapidly and flexibly under changing conditions. As the impact of the new measures becomes increasingly apparent over time, higher costs in the EU will continue to put pressure on EU labor markets. In addition, more significant structural shifts, such as EU-based steel consumers relocating their operations outside the region, could also be among the potential consequences of this process.
