Turkey

The first quarter of 2026 was a period of acute turbulence for Turkey’s steel industry and, by extension, for the global recycled steel trade. Escalating geopolitical tensions, a tight domestic monetary policy and extreme volatility in raw material and energy costs combined to create a truly challenging operating environment. Although Turkey entered the year targeting GDP growth of approximately 3.4-3.8%, restrictive monetary conditions - with some private bank lending rates approaching 50% - severely constrained domestic demand and liquidity throughout the quarter.

For the global recycling industry, Turkey’s position as the world’s largest importer of recycled steel makes these developments critically important. Any shift in Turkish mill purchasing behaviour - whether driven by economics, geopolitics or feedstock substitution - sends immediate signals across recycled steel export markets. The first quarter delivered precisely such a shift, with a dramatic supply-origin realignment and a price rally in March.

Two overarching forces defined market conditions during the quarter. Firstly, the military conflict involving Iran, Israel and the USA led to the effective closure of the Strait of Hormuz, pushing Brent crude above US$ 100 per barrel and driving regional natural gas/LNG prices sharply higher - in some markets by more than 50% within weeks. Global logistics costs and cargo insurance premiums surged to record levels as shipping companies reassessed risk exposure through the Persian Gulf. The consequences for Turkish steel producers, already operating on compressed margins, were severe as energy represents one of the largest cost components in electric arc furnace steelmaking.

Secondly, the Central Bank of Turkey maintained its restrictive monetary policy stance throughout the first quarter, with the policy rate held at 37% and overnight rates at around 40%. Restricted credit availability squeezed working capital across the steel supply chain, while inflation exceeding 30% continued to erode real margins for both producers and traders. These conditions moderated domestic steel demand and complicated mills’ ability to finance large recycled steel procurement positions - a factor that shaped the cautious-then-aggressive buying pattern observed in March.

According to data from the Turkish Statistical Institute (TUIK), the country imported 4.7 million tonnes of recycled steel in the first quarter for a modest year-on-year increase of 0.9%. This masks a quarter of considerable internal volatility, with January showing strength, February contracting sharply and March, though not yet fully reflected in official monthly data, characterised by an aggressive purchasing wave.

Mills entered the new year with residual procurement momentum from late 2025, supported by an upward price trend. The benchmark HMS 1&2 (80:20) CFR Turkey price started the quarter at US$ 364 per tonne and averaged US$ 369 across January.

Crucially for recycled steel exporters, the composition of Turkey’s January imports signalled a shift in sourcing. The USA emerged as the dominant supplier on 358,153 tonnes for a year-on-year surge of 143.3%, followed by the Netherlands with 220,857 tonnes (down 13%) and the UK on 155,898 tonnes (down 24.2%). The sharp rise in US-origin material, driven by competitive FOB pricing and aggressive marketing from American exporters, came directly at the expense of traditional European suppliers. This sudden increase in supply was also driven by shipments from the US West Coast - an unusual shipping route for Turkey. This was primarily the result of favourable freight conditions in December and January, as well as weaker demand from regular West Coast buyers in Asia, such as Bangladesh.

February presented a more subdued picture. Imports fell 17.7% month on month and 9.4% year on year to 1.4 million tonnes. The pullback reflected a combination of factors: weak finished steel demand, cautious mill purchasing discipline amid high financing costs, and the continued availability of competitively-priced semi-finished alternatives from Asian and Russian origins. The recycled steel market remained broadly flat, averaging US$ 371 per tonne CFR, as sellers resisted further price concessions despite sluggish buying interest.

For January and February combined, Turkey imported 3.11 million tonnes of recycled steel (up 2.7% year on year); the USA maintained its leading position with a two-month aggregate of 736,076 tonnes (up 102.2% year on year), ahead of the Netherlands on 459,399 tonnes (down 24.6%) and the UK on 284,028 tonnes (down 8.9%).

The outbreak of active conflict involving Iran, the USA and Israel led to a surge in freight rates and insurance premiums, and effectively removed a competitive source of semi-finished steel from the supply chain in Asia. The closure of the Strait of Hormuz and the Middle East conflict pushed oil prices above US$ 100 per barrel and led to freight and war-risk insurance costs rising significantly, in some cases by more than 40%.

In the absence of low-cost billets from Iran and with Turkey’s traditional Asian billet suppliers extending lead times to as long as three months, recycled steel became the only viable short-cycle feedstock for producers needing to maintain output.

After a period of cautious restraint, Turkish mills entered the market aggressively. Within just three days at the end of March, more than 30 deep-sea cargoes were reported booked - an extraordinary concentration of purchasing activity that sent immediate price signals to suppliers in the USA and Europe. Deep-sea recycled steel prices surged to some US$ 396 per tonne CFR Turkey, up more than US$ 25 on the January average.

Another remarkable development in the Turkish market in March was the arrival of containerised recycled steel shipments. Two steel mills in the Iskenderun region received multiple cargoes from the UK, marking the emergence of a new supply method into a market that has traditionally relied exclusively on bulk recycled steel imports. The shipments highlight growing flexibility in Turkish procurement strategies amid evolving freight economics and regional supply dynamics.

The first quarter demonstrated how quickly the market can shift when geopolitical and supply-chain dynamics align. From a cautious January, through a hesitant February, to an explosive March purchasing wave, the quarter delivered both volatility and opportunity in equal measure.

For the recycling industry, the key structural takeaways are clear: the USA has reasserted itself as Turkey’s leading supplier; European-origin volumes face mounting pressure; and the elimination of billet as a competitive alternative, however temporary, showed the robustness of underlying Turkish recycled steel demand.

In the second quarter, geopolitical developments and the trajectory of Turkish domestic steel demand will be the two critical variables to watch.

Turkey remains the bellwether of the global recycled steel trade. Its market signals - from price to volume to origin mix - continue to set the tone for recyclers, traders and steelmakers across four continents.