Gökhan Erdem, director of Sales and Marketing at Çolakoğlu Metalurji, assessed the current market outlook, global trade dynamics, and opportunities ahead for the sector.
How is the first half of 2026 shaping up for the flat products market?
Looking at the first half of 2026, there is no negative picture for the sector in terms of production and shipments. Domestic demand has been more balanced compared to last year, which has supported activity, particularly in the flat products segment. However, it must be noted that pressure on profitability continues.
In particular, intense global price competition, import pressure, and rising costs remain key issues for the sector. On the export front, the European Union’s protectionist trade policies and preparations for the Carbon Border Adjustment Mechanism (CBAM) process are being closely monitored by producers. At the same time, thanks to our electric arc furnace-based production infrastructure, we hold a significant advantage in low-carbon production. In this era of accelerating green transformation, we believe that our sustainability-focused investments and high-value-added production approach will positively contribute to our competitive strength.
What is the state of demand in the domestic market? How do you assess end-user sectors, particularly the automotive and home appliance industries?
We can say that demand in the domestic market followed a more balanced trend in the first half of 2026 compared to last year. The continued production activities in sectors with high flat steel consumption - such as the automotive, home appliance, pipe-profile, and general manufacturing industries - were among the key factors supporting demand.
The automotive sector maintains its strategic importance in steel consumption thanks to its production structure focused on both the domestic market and exports. The transition to electric vehicles and the increasing need for high-strength steel are also strengthening demand for value-added products within the sector. On the home appliance side, maintaining production continuity despite the slowdown in the European market can be viewed as a positive development.
However, financing costs, global economic uncertainties, and price pressures stemming from imported products are leading to a cautious purchasing approach, particularly in end-user sectors. Therefore, it would be more accurate to describe the market as characterized by controlled and needs-based activity rather than a strong and widespread demand environment. As Çolakoğlu Metalurji, we continue to strengthen our position in the domestic market with our high-quality and sustainable production approach, which enables us to respond quickly to our customers’ evolving needs.
How have fluctuations in input costs and energy prices impacted flat steel prices? How do you interpret the current price trends?
In the first half of 2026, fluctuations in energy costs, raw material prices, and global logistics expenses continued to be decisive factors in flat steel pricing. In particular, electricity prices and scrap costs were among the critical factors in cost management for facilities engaged in electric arc furnace-based production.
However, it was not always possible to pass on the full extent of these cost increases to final product prices. Due to the ongoing supply surplus in global markets, pressure from low-priced imported products, and an intensely competitive environment, producers were forced to adopt a cautious approach to pricing.
Although seasonal fluctuations were observed in flat steel prices during the first half of the year, the overall picture reveals a price trend that is more volatile yet under pressure. Even in an environment where demand is not entirely weak, the failure of margins to reach desired levels remains one of the sector’s key priorities.
As Çolakoğlu Metalurji, we are focusing on managing cost pressures more effectively through our efficiency-driven production approach, energy management investments, and value-added product portfolio. We believe that our sustainable and low-carbon production infrastructure will further strengthen our competitive advantage in the coming period.
The EU is preparing to significantly reduce quotas and raise the quota excess duty to 50 percent as of July 2026. How will this affect exports?
The European Union’s preparations to tighten quotas and raise the excess quota tax to 50 percent as of July 2026 are viewed as a significant development that will directly impact export dynamics for the Turkish steel sector. Particularly for producers with high dependence on the European market, these regulations are expected to increase cost pressures and make competitive conditions more challenging in the short term.
This process will lead to a reshaping of exports not only in terms of tonnage but also in terms of product quality, carbon footprint, customer proximity, and market diversification. When evaluated alongside CBAM applications, the importance of low-carbon and high-value-added production in the European market is increasing further.
The Turkish steel sector, however, holds a significant advantage in terms of carbon intensity, particularly due to its electric arc furnace-based production infrastructure. Nevertheless, market diversification, efficiency investments, and sustainable production practices are of critical importance to adapt to the changing trade policies in Europe.
At Çolakoğlu Metalurji, we are focused on maintaining our competitive edge in exports by adapting to changing global trade dynamics through our low-carbon production infrastructure, extensive product portfolio, and customer-centric approach.
What is the state of competition in domestic and international markets? Do you anticipate any changes in HRC imports from China?
Competition in domestic and international markets is expected to be quite intense and multifaceted by 2026. While the European market is experiencing a decline in competitiveness due to high energy costs, strict environmental regulations, and cost pressures stemming from CBAM, the US market is demonstrating a more protected structure thanks to protectionist trade policies. Conversely, the global supply surplus and the redirection of high-capacity production from certain countries to different markets are increasing price pressure on open and competitive markets like Turkey.
In particular, low-cost imports from China and Russia are among the key factors complicating competitive conditions in the flat steel market. Rather than expecting a sharp, immediate change in HRC imports from China, we anticipate periodic fluctuations depending on the global demand outlook, trade policy measures, and freight costs. However, we believe that effective and timely trade policy measures to protect domestic producers are of critical importance for sectoral balance.
In the long term, we assess that competitive strength will be shaped not only by price-focused strategies but also by low-carbon production, high-value-added products, sustainability investments, and customer-focused solutions.
To what extent will the CBAM, which will impose financial obligations starting in 2026, be a decisive factor for flat steel exporters? What is the Turkish steel sector’s preparedness in this regard?
The CBAM, which begins imposing financial obligations as of 2026, has become a significant competitive factor for flat steel exporters. As the European Union begins applying carbon costs to imported products as well, the embedded emissions values of products will be decisive in terms of cost and competitive strength in exports. For this reason, we view the CBAM not merely as a regulation but as a strategic transformation that reshapes competitive conditions within the sector.
Turkish steel sector, however, holds a significant advantage in this process. Thanks to its electric arc furnace-based production infrastructure, Turkey is able to achieve production with a lower carbon intensity compared to the global average. This stands out as a key factor that could create a competitive advantage in the European market.
However, to ensure this advantage remains sustainable, verified emissions calculations, a traceable data infrastructure, energy efficiency investments, and low-carbon production technologies are of critical importance. As Çolakoğlu Metalurji, we have been preparing for this transformation for some time through our sustainability-focused investments, efficiency-driven approach, and low-carbon production infrastructure; we are focused on maintaining our competitive strength by adapting to changing global trade dynamics.
How are economic conditions affecting your business?
In 2026, global economic uncertainties, high financing costs, and volatile demand conditions continue to be decisive factors for industrial production. In particular, the high-interest-rate environment and credit access conditions are leading to a more cautious approach in investment and purchasing decisions, especially in end-user sectors.
However, it would not be accurate to say that demand for flat steel has completely weakened. The continued production activities in key consumer sectors such as the automotive, home appliance, pipe-profile, and general manufacturing industries are supporting market activity. Nevertheless, pressure on profitability across the sector persists due to price pressures, rising costs, and intense global competition.
At Çolakoğlu Metalurji, we are prioritizing operational efficiency, cost management, sustainable production, and our ability to respond quickly to customer needs during this period. Thanks to our strong production infrastructure, broad product portfolio, and flexible supply approach, we are focused on maintaining our competitive strength in both the domestic market and exports by adapting to changing market conditions.
How has the war in the Middle East impacted steel trade? What can you say about logistics issues and freight rates?
Geopolitical developments and the conflict environment in the Middle East have directly impacted global steel trade, particularly in terms of logistics, delivery times, and cost management. Security issues along the Red Sea route, in particular, have led to changes in some shipping routes, resulting in extended delivery times and periodic increases in freight costs.
This situation has not only affected countries in the region but has also impacted the Europe-Asia trade route, increasing planning pressures within supply chains. The shift toward alternative routes has extended transit times, while inventory management and delivery reliability have become even more critical for producers.
In the flat steel sector, fluctuations in logistics and freight costs have created additional pressure on import and export pricing. While cost increases have been observed in sourcing from distant regions, producers with access to nearby markets have gained a certain competitive advantage.
As Çolakoğlu Metalurji, we have continued to provide our customers with uninterrupted and reliable supply thanks to our strong logistics planning capabilities, strategic location, and flexible supply structure. We anticipate that the effects of geopolitical developments on global trade will persist for some time to come.