Turkey

The second quarter of 2026 was a volatile period for the Turkish steel sector and global recycled steel trade, characterised by deepening geopolitical risks and intensifying macro-economic pressures. The aggressive recycled steel purchases initiated in March, followed by a price peak in May and a subsequent downward correction in June, created significant volatility throughout the quarter. During this period, geopolitical tensions involving Iran and uncertainties surrounding the Strait of Hormuz amplified market instability by driving up global logistics and energy costs.

On the macro front, the Turkish economy remained under pressure owing to a weakening growth outlook and tight monetary policy conditions. Turkish Statistical Institute (TUIK) data have revealed that annual growth slowed to 2.5% in the first quarter of 2026, signalling a clear deceleration in industrial activity, while the decline in the PMI index pointed to a sustained contraction in the manufacturing sector. The International Monetary Fund’s downward revision of Turkey’s growth forecast further supported this outlook.

The Central Bank of the Republic of Türkiye maintained its tight monetary policy stance as high interest rates and restrictive credit conditions limited domestic demand. Concurrently, the Turkish lira followed a trend of depreciation and neared new historic lows, while rising energy costs - particularly for natural gas - exerted additional pressure on producer costs.

Nevertheless, a limited recovery in PMI data and improvements in export orders towards the end of the quarter provided signals of a partial stabilisation. Overall, however, the second quarter brought a volatile and cautious market environment, shaped by geopolitical uncertainties and weak industrial demand.

A clear correlation between import volumes and prices was maintained throughout the second quarter. Following the volume-driven recovery in April, imported recycled steel prices climbed to US$ 410 per tonne CFR in May, intensifying cost pressures. By June, however, prices were revised towards the US$ 388 per tonne level owing to global market softening and domestic demand resistance. In summary, the second quarter began with a strong restocking phase in April and concluded with a cautious stabilisation in June, influenced by high energy costs and geopolitical uncertainties.

In the final week of March, Turkish steel producers undertook an aggressive restocking move with over 30 deep-sea cargo purchases, leading to relatively high inventory levels entering April. This limited the appetite for additional purchasing in the short term, causing prices to move within a more cautious range. Recycled steel prices, which rose to US$ 396 per tonne CFR at the end of the first quarter, maintained a generally horizontal-to-upward trend in April owing to sustained high global energy costs and supply-side uncertainties.

According to TUIK data, Turkey’s recycled steel imports recorded a strong month-on-month increase of 14.7% in April to 1.86 million tonnes, although this represented a year-on-year decline of 0.8%. Cumulative data for the first four months of 2026 showed a total import volume of 6.59 million tonnes, representing a small year-on-year increase of 0.4%.

The USA increased its exports to Turkey by 34% year on year to 1.41 million tonnes and thus solidified its position as the country’s top supplier. Imports from the Netherlands - last year’s leader - fell by 26.6% to 861,000 tonnes while the UK maintained third place with a 4.4% increase. A stand-out statistic was the steep 65.6% jump in imports from Romania, bringing its total to 528,000 tonnes. Conversely, declines in imports from Belgium (-28.1%) and Germany (-24.4%) were the primary factors limiting the overall growth rate.

A general upward price trend prevailed in the global recycled steel market in May. Turkey’s imported recycled steel prices increased by 1.4% month on month to US$ 408.50 per tonne CFR, nearing their highest levels since January 2024. As noted, average prices for the month settled around US$ 410 per tonne CFR.

Supply constraints originating from Europe were the decisive factor in this price surge. High collection and logistics costs in Europe led suppliers to revise their offers upwards, while a strong Euro and limited recycled steel availability served as core supporting factors. On the other hand, potential diplomatic developments regarding the conflict in Iran and volatility in energy markets exerted downward pressure at certain points during the month.

At the start of the month, imported recycled steel prices traded in the US$ 406-413 per tonne CFR range, facing limited pressure mid-month owing to weak demand and the resistant buying behavior of Turkish mills. By the end of the month, prices for European- and Baltic-origin transactions softened below US$ 410 per tonne CFR. The cautious approach of Turkish steel producers towards high price levels limited market momentum. Consequently, the average imported recycled steel price in May increased by approximately US$ 11 per tonne compared to the previous month to settle at US$ 410 per tonne CFR in a balance between supply-driven upward pressure and demand-driven resistance.

In June, global recycled steel prices exhibited a general downward correction, with the Turkish market experiencing this pull-back more prominently. Throughout the month, HMS 1&2 (80:20) deep-sea prices declined by approximately 5.4% to around US$ 388 per tonne CFR. This decline was driven by a slower-than-expected recovery in domestic steel demand following the Ramadan holiday and rebar prices receding to the US$ 570-600 per tonne ex-works band. Additionally, the cautious approach of Turkish steel producers towards new purchases - owing to high inventory levels and intensive buying in previous months - suppressed the demand side of the market. This led to a temporary slowdown in recycled steel acquisitions and a downward revision of prices.

From a steel supply and steel sector perspective, Turkey’s steel exports in the January-May period decreased by 3.2% year on year. On the import side, the share of intermediate and semi-finished products remained high.

While large-scale producers maintained their end product’s sales volume targets in anticipation of continued project-based deliveries throughout the second quarter, overall market conditions balanced between weak demand and cost pressures.

The second quarter of 2026 concluded with a correction process in which the market returned to “real demand” conditions following the peak price levels seen in May. Downside risks towards the US$ 380-385 per tonne CFR range persist for recycled steel prices in Turkey in the short term. However, the slowdown in collection activities in Europe owing to the summer holiday period could tighten supply if Turkey returns to the market in late August or early September. Such a scenario, however, remains largely dependent on the trajectory of finished steel demand.