Manufacturing

Turkey hits major Asian steel exporters with tariffs

October 14, 2024, 11:02 AM

Steel workers in Karabuk, Turkey. The Turkish Steel Producers’ Association has welcomed the tariffs

Taxes on China, India, Japan and Russia
Cheap imports hurt home trade
Tariffs apply to 4m tonnes of imports

Turkey’s decision to introduce tariffs on cheap foreign imports of steel has been welcomed by domestic industry experts.

Ankara last week moved to protect its domestic steel industry against cheap imports from Asia by imposing taxes on hot rolled steel (HRS) produced in China, India, Japan and the Russian Federation.

The tariffs range from 6 percent to 43.3 percent of the cost, insurance and freight value of HRS products from the four countries. The move was announced on October 11.

The highest duties have been imposed on Chinese producers, with lesser imposts on the other three countries.

Three days before the taxes were imposed on Chinese steel, Beijing launched a case against Turkey at the World Trade Organization claiming increased tariffs on imported electric vehicles made in China were in breach of fair trade practices.

The Turkish Steel Producers’ Association (TÇÜD) had previously called for the Turkish government to impose protective measures against the dumping of far eastern steel onto the domestic market.

According to the association, the new tariffs will be applied to around 4 million tonnes of steel imports, with a total value of between $2 billion and $2.2 billion annually.

Turkey has also been struggling in recent years to maintain its share of export markets, with cheap steel produced by countries such as China making inroads on its traditional markets in the European Union.

Turkey’s exports to the EU have fallen from 7.5 million tonnes a decade ago to just 2.5 million tonnes, according to data provided to AGBI by TÇÜD.

The anti-dumping measures will strengthen the position of local producers, especially market leaders Erdemir and Isdemir, both of which saw their share prices rise on the Istanbul Exchange after the new tariffs were announced.

However, they will add to the costs of HRS importers who will have to contend with higher prices, though there has been a general tapering of rolled steel costs worldwide as demand has eased.

It is inevitable that there will be an increase in costs passed on to industries such as automotive manufacturers – a significant end user of HRS – according to Anıl Şentürk, the chair of the Istanbul Chamber of Commerce’s automotive sector committee.

“However, I do not see a major problem. It will push prices up a bit, while there could be some supply-demand issues due to the decision,” he told AGBI.

The bigger question will be whether the taxed countries will respond with measures of their own targeting Turkey, Şentürk said.