Turkey’s pipe producers do not expect major impact from UK quotas

The UK has recently announced import quotas for a wide range of steel products for the first two quarters of 2021, including welded pipes. However, Turkish exporters are not much concerned by the trade measure and for now do not expect any major negative impact on their business. Based on the trade volumes recorded in 2020, the Q1 and Q2 quota volumes for Turkish welded pipe imports seem sufficient. (https://www.steelorbis.com/steel-news/latest-news/uk-to-apply-own-steel-import-quotas-after-brexit-1166455.htm) For the category numbers 21 and 26, Turkey exported around 45,000 mt to the UK in the first five months of 2020, while the quota has been determined as approximately 80,000 mt for Q1 and Q2 2021. For the category numbers 25A and 25B, Turkey exported approximately 1,300 mt to the UK  in the first five months of 2020, while the quota has been determined only for 25B as approximately 3,300 mt for Q1 and Q2 2021. Category number 25A has only a general quota volume of around 32,000 mt for Q1 and Q2 2021. "It was expected in the market for a long time because local producers in the UK were not satisfied with the market conditions for quite a while. Covid-19 has also caused too many restrictions and financial losses worldwide. But we think it will not hurt trade at least in the pipe segment between the UK and Turkey," an exporter told SteelOrbis.

Exporters also underline that the EU quotas have not caused significant damage to Turkish pipe exports, but instead they saw better profits after the quota implementations. "With the quotas, buyers must be careful and they need trustworthy sources for their imports. Turkish producers are reliable, their delivery times are acceptable. Instead of unstable and far away partners, they have chosen us. We believe export volumes would be higher than last year, if we did not have to face Covid-19," another exporter told SteelOrbis. Also, prices have been stable since last week and are at $560-580/mt FOB.

In the local market, demand has remained at moderate levels and the mills are still offering for November production. Prices have been stable since last week at $590-600/mt ex-works. It is possible to hear $580/mt ex-works levels, but the sellers comment that such offers are rare. "Lower levels mean that one has to convert into cash quickly and, because of the fluctuations in the Turkish lira-US dollar rate, many people want to be on the safe side these days," a producer told SteelOrbis.