We spoke with Fuat Tosyalı, chairman of Tosyalı Holding, about the growing protectionist trends in global trade, the EU’s new quota regulations, and the impact of the Carbon Border Adjustment Mechanism (CBAM) on the Turkish steel industry.
The global economy has entered a period of permanent transformation. Traditional trade structures are losing influence, and a new global order is emerging. Protectionist policies, tariffs, quotas, and wars are reversing the globalization trend. Export ratios, which once reached around 45 percent in many countries, have fallen toward pre-globalization levels of approximately 25 percent. As these global developments make export markets increasingly challenging, we need to improve our competitiveness, overcome cost disadvantages in order to compete with countries that enjoy energy cost advantages, increase our capacity utilization rates, and focus on value-added products and alternative financing solutions.
In this period of reshaped industry dynamics, the first half of 2026 can be described as a period of cautious stabilization. However, high financing and energy costs, together with geopolitical developments, continue to create pressure on both producers and consumers.
Developments in the Middle East, in particular, are affecting not only energy costs but also raw material and logistics costs. The shutdown of steel facilities in Iran, sharp increases in freight rates, longer transportation routes, and disruptions in supply chains are changing the direction of trade flows.
While Turkey has emerged as a secure logistics corridor thanks to its geopolitical position and recorded an increase in steel exports as of April 2026, its geographic proximity to Europe and quality advantages could make Turkish steel more visible in the European market. However, the negative impact of the European Union’s protectionist policies will be a decisive factor.
In this context, the European Union’s newly adopted import restrictions have become one of the sector’s most important agenda items. With a population of approximately 450 million, the EU introduced extremely strict measures, citing low capacity utilization rates similar to those in Turkey, and nearly halved its import quota volumes. Under the new framework, the EU’s steel import quotas have been reduced by 47 percent to 18.3 million mt, while the out-of-quota tariff has been increased from 25 percent to 50 percent. In addition, a new “melted and poured” rule has been introduced, under which the origin of steel is determined based on where it was first melted and poured. Through these measures, the EU aims to increase its current steel industry capacity utilization rate from approximately 65 percent to 80 percent.
The new regulation has also resulted in significant reductions in quotas allocated to Turkey. Overall, the EU’s new quota framework substantially narrows Turkey’s export space and indicates that access to the EU market will become increasingly difficult.
Turkey’s production capacity is sufficient to meet domestic demand. However, the main issue lies in implementing measures against imports of products that can already be produced domestically. High levels of imports in these product categories not only lead to significant foreign exchange losses but also negatively affect the capacity utilization rates of Turkey’s industrial sector.
Current economic conditions are creating both challenges and opportunities for transformation within the Turkish steel industry. In 2025, steel exports increased by 2.5 percent to approximately $17 billion, maintaining a significant share of Turkey’s total exports. However, crude steel production remained in the 33-34 million mt range following contractions in previous years.
In Turkey, a significant portion of flat steel consumption comes from the automotive and white goods industries. Due to slowing European markets and import pressure, demand from these sectors has entered a period of cautious stabilization in 2026.
The automotive sector accounts for approximately 13% of the flat steel market and primarily consumes galvanized flat steel. While exports remain strong, domestic demand has been relatively flat.
The white goods sector, which consumes cold rolled, pre-painted, and galvanized flat steel, remains the largest domestic buyer of these products. Although replacement cycles and household appliance consumption in Turkey remain relatively healthy, recessionary pressures in Europe continue to weigh on exports. As a result, flat steel demand from the white goods industry is progressing at a more controlled pace compared to previous years.
The steel industry must continue investing in the future and focusing on sustainable production methods in order to adapt to rapidly changing economic and trade conditions. Green transformation is no longer solely an environmental issue; it has become a strategic factor determining competitiveness. One of the most critical mechanisms in this transition is the Carbon Border Adjustment Mechanism (CBAM), which aims to prevent carbon leakage and reduce competitive distortions arising from carbon-intensive production.
With CBAM, carbon intensity is becoming a new competitive parameter in supply chains. European importers are now focusing not only on price and quality but also on the carbon footprint of the products they purchase. As a result, carbon data is no longer merely part of sustainability reporting - it has become a direct component of commercial negotiations. Going forward, competition in the steel industry will be shaped not only by production costs but also by carbon costs.
In this environment, the companies that gain a competitive advantage will be those capable of measuring, verifying, and effectively managing the carbon emissions associated with their steel production.