Speaking to local Turkish news channel Bloomberg HT, Fuat Tosyalı, chairman of the executive board of Turkish steel producer Tosyalı Holding commented on the effects of the coronavirus on global trade, stating that there have been no disruptions of the Turkish steel supply chain, adding that it is capable of responding to demand with full capacity.
Mr. Tosyalı said that, given the current situation in the EU, the Italian steel market has its own equilibrium as both production and consumption decline; however, countries such as the UK, Germany and the Netherlands may provide an opportunity for the Turkish steel industry. He stated that Turkey has always had the potential to supply to these markets even though the EU implemented import quotas last year. “Maybe this will lead the EU to review these quotas. If their production is disrupted, Turkey will be the EU’s first choice as it is the closest market,” Fuat Tosyalı said.
The Tosyalı official pointed out that steel production has declined in China, while there have also been port closures and problems in ship availability, and said he believes that there will be no exports from China for a while and this might give Turkey an advantage in China’s export markets. According to Tosyalı, Africa also provides an opportunity for the Turkish steel market as it is already a target market with its proximity and is out of reach of coronavirus concerns.
Commenting on how steel prices will be affected by the outbreak, Mr. Tosyalı said the sharp fall in oil prices was unexpected. “Energy is a significant input in steel production, though it is out of the question that we will reflect these decreases in our prices anytime soon. The main factor is supply and demand. If demand continues to trend down, prices will see some declines,” he stated.
Regarding raw material supplies, Mr. Tosyalı said that scrap collection has faced significant disruption in Italy and the EU due to lockdown measures and this will likely create a shortage of raw material supply.