Turkey Import Dynamics: Credit, Rates, and Mill Restarts – Market Trends, Economics & Actionable Insights for the Metals Industry

Table of Contents

1. Executive Summary
2. Market Drivers: The Turkish Import Landscape
3. Credit & Interest Rate Dynamics in 2024
4. Mill Restarts: Capacity, Competition, and Global Supply
5. Scenario Analysis: Outlook for Metals & Scrap Flows
6. Actionable Takeaways for Buyers and Sellers
7. Key Trends to Watch
8. Conclusion

1. Executive Summary

Turkey's strategic role as both a top global ferrous scrap importer and steel producer renders it a pivotal force in shaping international metals pricing, supply-and-demand equilibrium, and sustainability progress. In 2024, Turkey operates at the intersection of intensifying macroeconomic pressures, including rapid interest rate hikes, a persistently weak currency, uncertainty in energy pricing, and profound credit constraints.

The nation's steel sector—highly reliant on electric arc furnace (EAF) technology and imported raw materials—faces heightened volatility. Turkish steel mills must navigate a complex environment characterized by:

- Disrupted global supply chains resulting from geopolitical tensions and shifting trade flows,
- Ongoing regulatory adjustments, notably the EU's Carbon Border Adjustment Mechanism (CBAM),
- Intensifying competition for scrap metal,
- Fluctuating end-user demand resulting from stalled construction activity and variable export orders.

For market participants—scrap suppliers, steel buyers, traders, and policy stakeholders—understanding the interplay among credit availability, cost of capital, and the timing of mill restarts is critical for building resilient procurement, hedging, and sales strategies. Factors such as short-term liquidity, credit risk, currency exposure, and market confidence jointly dictate the sector's stability and growth trajectory.

By integrating scenario analysis, the latest statistics, and actionable takeaways, this article equips you to make informed, agile decisions in the volatile Turkish metals marketplace.

2. Market Drivers: The Turkish Import Landscape

Turkey's Strategic Role in the Ferrous Supply Chain

As of 2023, Turkey sustained its status as the world's single largest importer of ferrous scrap, with annual imports surpassing 22 million tonnes, according to World Steel Association data. The country's EAF-centric production means Turkish mills are dependent on regular, large-scale inflows of high-quality scrap.

Core Drivers of Turkish Scrap Import Demand

- Currency Trends: The Turkish Lira's ongoing depreciation (dropping nearly 30% against the USD in 2023 alone) directly impacts the cost of imported scrap and finished steel inputs, influencing procurement strategies and supply contracts.

- Construction Sector Volatility: Construction accounts for more than 60% of Turkey's finished steel demand. The recent slowdown in domestic housing starts, partially offset by government infrastructure spending, creates a cyclical push-and-pull for scrap demand.

- Global Export Linkages: Turkish mills exported over 7 million tonnes of rebar in 2023, primarily to the EU, MENA, and West Africa. Export order volume not only guides production planning, but also magnifies Turkey's influence on global price benchmarks like the Platts Turkey CFR index.

- Regulatory Changes & CBAM: Ongoing EU policy evolution, such as carbon taxes and anti-dumping investigations, directly shape Turkish trade flows and competitive positioning versus domestic European producers.

- Evolving Trade Agreements: Shifting quotas and Free Trade Agreements (FTAs) impact sourcing decisions, as Turkish mills pivot between traditional primary suppliers (e.g., US, EU) and emerging markets.

Shifts in Scrap Sourcing Patterns

- Diversification of Suppliers: Amid rising freight costs and supply chain disruptions, Turkish buyers are forging new partnerships with South American, Baltic, and domestic collectors to mitigate concentration risk.
- Increased Competition for Cargo: With Indian, Bangladeshi, and Southeast Asian buyers stepping up in the bulk scrap market, competition for US and EU-origin material intensifies, driving more aggressive spot-market bidding and creative logistics solutions.

- Shipping and Logistics Bottlenecks: Persistent port congestion (especially in Marmara and Mediterranean gateways) and rising freight rates—up 15–20% year-over-year—compel mills to invest in forward booking and multi-modal delivery models to secure timely arrivals.

Scrap Import Pricing Tactics

- Spot vs. Long-Term Contracts: Turkish buyers are increasingly favoring short-term contracts or floating index-linked purchases over long-term fixed deals. Currency-linked settlement mechanisms and expanded use of hedging instruments become standard to provide cost certainty.

- Case Study: Q1 2024 Price Volatility: In January–March 2024, Turkish scrap import prices swung by over $50/tonne as shipping disruptions in the Suez Canal and Red Sea forced buyers to pay premiums for alternate routes, exemplifying the need for dynamic sourcing and risk management.

In summary: The Turkish steel sector's global significance relies on both macroeconomic and microeconomic agility—requiring a nuanced understanding of trade flows, regulatory triggers, and dynamic sourcing models.

3. Credit & Interest Rate Dynamics in 2024

Turkish Monetary Policy and Its Metals Sector Reverberations

Turkey's monetary authorities, grappling with persistent inflation (averaging above 55% in early 2024 per official TUIK data), responded by raising policy rates to upwards of 45%—the highest in over two decades. This tightening cycle aimed to defend the lira and restore investor confidence but has imposed heavy burdens on the industrial sector.

How Interest Rates Reshape Market Behavior

- Corporate Credit Access: Over 60% of Turkish steel enterprises surveyed by the Turkish Steel Producers' Association now cite "restricted access to affordable credit" as their top challenge. Top-tier companies can still raise capital (albeit at higher spreads), but midsize and smaller mills face markedly reduced financing options or are diverted to informal lending channels.

- Working Capital Strains: As policy rates climb, working capital loans become prohibitively expensive. Average monthly interest costs on inventory positions have more than tripled since early 2022, pressuring mills to minimize raw material holdings and shorten procurement cycles.

- Foreign-Exchange Risk Management: Mills are substantially increasing usage of FX forwards and currency swaps. However, the Turkish derivatives market remains relatively illiquid, and bid-ask spreads have widened in periods of stress, impacting the effectiveness of hedging.

- Credit Terms and Counterparty Risk: Global scrap suppliers now routinely demand USD- or EUR-denominated payments, often requesting confirmed letters of credit (LCs) prior to vessel loading. Average payment terms have contracted from 90 days to as little as 30 days since mid-2023.

- Delayed Capex and Modernization: High cost of capital discourages mills from executing planned capacity expansion, furnace upgrades, or energy-efficiency retrofits, slowing the sector's decarbonization trajectory.

Market Data & Case Study

- Data Point: In Q1 2024, Turkish steel output fell by 7% year-over-year (source: World Steel), largely attributed to credit-driven production cuts and idle capacity.

- Case Study: SME Mill Response: An EAF-based SME in central Turkey reported pausing purchases in February 2024 due to a spike in benchmark overnight lending rates to 48%, opting to run down inventories until financing conditions improved, highlighting sectoral fragmentation.

Downstream Ripple Effects

Credit constraints don't merely affect mills—they radiate through the metals value chain. Construction contractors, automakers, and appliance manufacturers equally report difficulty rolling over working capital or securing project finance. This suppresses end-user demand and perpetuates caution among upstream suppliers.

Takeaway: Credit and rate management are now as vital to procurement strategy as material quality or logistics agility for all players in Turkey's metals ecosystem.

4. Mill Restarts: Capacity, Competition, and Global Supply

Mill restarts in Turkey now sit at the center of the global recycled steel story. When Turkish furnaces go from low utilization to higher run rates, scrap flows and prices shift for yards from Baltimore to the Baltic in a matter of weeks. The country has a large and flexible EAF base, with 27 electric arc furnace plants, 11 induction furnace plants, and only 3 basic oxygen plants. That mix keeps scrap in the spotlight for marginal tonnage and export pricing. Turkish Steel

After a difficult 2022 and 2023, Turkish crude steel output turned a corner in 2024. Production climbed to about 36.9 million tonnes, a 9.4 percent increase compared with 2023, which lifted Turkey back into the top tier of global producers and kept it in eighth place worldwide. ГМК+1 That recovery did not come from a single big restart. It came from a series of stepwise production increases as mills tested order books, credit lines, and margin windows. Coastal long-product mills feeding rebar and wire rod exports to the EU, MENA, and West Africa were usually first to raise utilization. Inland flats producers, exposed to construction and manufacturing inside Turkey, moved more carefully and often lagged by one or two quarters.

Scrap imports followed the same pattern. Turkey remained the world's largest recycled steel importer, and ferrous scrap purchases reached about 20.1 million tonnes in 2024, up 6.7 percent year on year. ГМК In the first half of 2024 alone, overseas scrap arrivals were just under 10 million tonnes, 3.6 percent higher than the same period in 2023. bir.org By December 2024, monthly imports reached 1.85 million tonnes, with an average transaction price near 395 dollars per tonne on a CFR basis, up from 385 dollars a year earlier. ronscosteel.com These numbers show that whenever mills restart and push utilization higher, they do it through imported scrap first, not through ore-based growth.

Competition for scrap cargoes has intensified in parallel. The United States, the Netherlands, and the United Kingdom remained the three largest suppliers into Turkey in early 2024, all showing strong growth in volumes compared with the previous year. bir.org At the same time, yards in those regions now have credible alternative buyers in India, Bangladesh, and Southeast Asia, which means Turkey has to bid more aggressively during restart phases. When policy rates spike and credit tightens, Turkish buyers pull back, and those same cargoes pivot east. When rates stabilize and export orders return, Turkish mills re-enter the market in force and pull material away from Asia again.

Mill restarts now also sit inside a tighter regulatory box. Exports to the EU, which still absorb a large share of Turkish flats and longs, face growing compliance costs under the EU Carbon Border Adjustment Mechanism. Iron and steel, aluminum, and cement together account for about 10 to 40 percent of Turkey's exports to the EU, depending on how you count direct and indirect flows, and Turkey is one of the top two non-EU suppliers in iron and steel by value. Eliamep+1 CBAM phases in monitoring and then paid certificates, tied to the carbon intensity gap between Turkish plants and EU benchmarks. That pulls mill restart decisions away from a simple scrap-versus-billet cost comparison and toward a wider question: which furnaces, and which product routes, will keep export margins positive once CBAM charges are fully active.

Turkey has started to respond with its own emissions trading system and plans for more low-carbon projects, but financing remains expensive, and investment cycles are slow. IETA In the short to medium term, mill restarts are likely to favor assets that combine three traits. First, access to deepwater ports and scale in bulk scrap intake. Second, product mixes that can clear in CBAM-exposed markets at a premium, or switch toward MENA and West Africa when EU conditions tighten. Third, relationships with banks and trade financiers strong enough to support import letters of credit at today's high interest rates.

5. Scenario Analysis: Outlook for Metals and Scrap Flows

Scenario work for Turkey now has to join three storylines. One is the interest rate and credit path. The second is export demand, especially in the EU and MENA. The third is the pace of the green transition and related policy triggers, including CBAM and domestic carbon pricing.

In a first scenario, policy rates remain high for longer, and inflation proves sticky. Through 2024, the policy rate reached 50 percent in March and then stayed in the mid-40s, with a cut to 47.5 percent in December that marked the start of an easing cycle. global-rates.com+2Reuters+2 In early 2025, further cuts brought the rate down toward the low 40s as inflation slowed from the extreme levels seen in 2022 and 2023. Central Bank of the Republic of Turkey+3AP News+3Financial Times+3 Under a "high rates for longer" path, banks remain cautious, and credit growth stays weak. In that world, Turkish mills struggle to fund working capital and capex, and restart decisions become tactical and short-lived. Imports of scrap hover near 19 to 20 million tonnes a year, but with sharp month-to-month swings as mills pause and resume buying. CFR Turkey scrap becomes a volatile but range-bound benchmark where price spikes are quickly sold into by global suppliers and dips attract opportunistic restocking. Suppliers face frequent shipment rescheduling and higher counterparty risk, while buyers run very lean inventories and rely on fast information rather than long-term contracts.

In a second scenario, rates step down faster, and export demand improves at the same time. World crude steel use has been roughly flat since 2020, but forecasts for 2025 and 2026 show a modest recovery in construction and manufacturing, especially in energy, automotive, and infrastructure segments. worldsteel.org+1 In this path, Turkish steel consumption could rise toward 40 million tonnes by 2024–2025, as some earlier projections suggested. Consulting for CBAM - EXPERTISE FOR CBAM EU imports of finished steel totaled around 26 million tonnes in 2023, with more than 7 million tonnes coming from Turkey and other nearby suppliers, and Turkey has remained a key origin for rebar and flats. Eurofer+1 If EU activity stabilizes and MENA construction recovers on the back of energy and infrastructure spending, Turkish export orders can grow again. Combined with easier credit, that allows mills to restart idled furnaces and push utilization much closer to nameplate capacity. Scrap imports move into the 21 to 23 million tonne range, and the country again acts as a strong global price setter for bulk HMS and shredded cargoes. In this setting, CFR Turkey prices are more likely to sit at or above levels needed to attract US and EU yards, while Asian buyers accept a residual position. Suppliers with strong Turkish relationships enjoy high vessel fill rates, and traders can structure more index-linked contracts instead of pure spot.

In a third scenario, climate policy and CBAM drive the story more than rates or short-term demand. Here, carbon pricing and certificate costs raise the bar for exports into the EU, and Turkish mills that cannot meet emissions benchmarks lose share. CBAM-covered products already represent more than 10 percent of Turkey's exports to the EU and a much higher share within iron and steel itself. Eliamep+23pmetrics.com+2 Over time, mills invest in more scrap-intensive EAF routes, low-carbon power, and possibly DRI and HBI projects tied to cleaner gas or hydrogen. Mills that can certify lower emissions keep and increase their EU exposure. Others reorient toward markets that do not impose carbon border charges, such as parts of Africa, the Middle East, and domestic customers. Scrap trade patterns also split. High-quality grades with strong traceability and low contamination flow toward exporters with strict carbon reporting. Lower quality material, or material without strong documentation, trades at a discount into markets that are slower to impose carbon rules.

These three scenarios are not mutually exclusive. In practice, the market will pass through combinations of them over the next five years. The rate path will shift several times. Export demand will rise and fall in cycles. CBAM and domestic carbon rules will tighten step by step. For buyers and sellers, the value lies in treating Turkey as a bellwether. When Turkish mills restart, scrap prices and freight patterns across the Atlantic, Black Sea, and Indian Ocean respond. When they cut, cargoes that would have discharged at Iskenderun or Izmir may head to Chattogram, Kandla, or Gdansk instead.

6. Actionable Takeaways for Buyers and Sellers

For global scrap suppliers, Turkey offers both opportunity and risk. The country can absorb large, repeat volumes, but its demand is extremely sensitive to credit and export orders. Suppliers who treat Turkey only as a spot outlet during price spikes will always face uncertainty. The stronger position belongs to those who segment Turkish mills by credit quality, product mix, and market orientation, then align their own offers and payment terms accordingly. Large export-oriented mills with long track records, fixed port access, and hard-currency revenue can still support traditional LC structures, multi-cargo plans, and even index-linked contracts. Smaller and mid-sized mills may require smaller parcels, tighter payment schedules, and stronger trade credit insurance covers.

Pricing needs to reflect this segmentation. December 2024 scrap imports at about 1.85 million tonnes and 395 dollars per tonne show that Turkey can still pay international prices when margins allow. ronscosteel.com However, high interest costs and volatile export orders can erode that headroom quickly. Suppliers can reduce risk by combining price and credit decisions. For example, offering a small discount in exchange for faster payment, confirmed LCs, or partial pre-payment, rather than fixing a headline price and then negotiating credit separately. In parallel, banks and trade-finance providers will reward suppliers who can show better visibility on the underlying end-use and carbon performance of the scrap they sell.

For Turkish mills and buyers, the priority is to integrate credit, currency, and scrap procurement in a single decision process. When policy rates hover near 40 to 50 percent, the monthly interest cost on inventory becomes a material line item. global-rates.com+1 For a mill holding 50,000 tonnes of imported scrap at 400 dollars per tonne, even a few months of stock can tie up tens of millions of dollars. In that environment, classical procurement rules based on calendar scheduling or simple price dips are no longer enough. Mills benefit from clear internal price bands, preferred inventory ranges, and trigger points that account for FX, interest cost, and export margin in one calculation.

The best placed mills are also widening their raw material menus. When imported scrap becomes too expensive or too hard to finance, alternative feeds such as HBI, pig iron, or higher shares of domestic scrap can help keep furnaces running. This is already visible in Turkish trade statistics, which show shifts in semi-finished imports and scrap intake across different quarters. SteelOrbis+2ГМК+2 The objective is not to replace scrap. It is to keep options open so that production can continue even when one material or route becomes uneconomic.

Both sides can also make more consistent use of hedging instruments. LME scrap and rebar futures, as well as regional physical indices linked to Turkish CFR levels, allow mills and suppliers to separate price risk from physical flows. That way, a supplier can fix a margin over an index and then manage outright price risk in derivatives markets, while the mill can do the same on the buy side. Adoption remains uneven, especially among smaller firms, but the interest-rate shock of 2023–2025 has pushed many risk managers to rethink the cost of unhedged positions.

Finally, all parties in the chain need to treat CBAM and domestic climate policy as real commercial constraints rather than distant policy debates. Mills that invest early in emissions tracking, low-carbon power, and certified scrap inputs can protect EU access even if CBAM prices move higher. Suppliers that can document the origin, processing route, and contamination profile of their scrap will find it easier to sell into those compliant mills at fair prices rather than being pushed into purely price-driven markets. Eliamep+23pmetrics.com+2

7. Key Trends to Watch

Several structural trends deserve close monitoring over the next three to five years. The first is the path of Turkish steel exports. In 2023, steel exports from Turkey fell by more than 30 percent in volume and more than 40 percent in value, reflecting weak global demand, trade measures, and domestic cost pressure. ГМК In 2024, crude steel production recovered, and exports began to stabilize, but Turkey still has not fully regained the momentum of earlier years. Whether exports move back above 15 million tonnes or remain closer to 10 to 11 million tonnes will shape how often mills restart idled capacity and how much scrap they pull in from the global market. SteelOrbis+1

The second trend is the evolution of EU trade policy. EU imports of finished steel reached about 26 million tonnes in 2023, and Turkey sits among the top suppliers in several key product categories. Eurofer+2Eurometal+2 Future changes in safeguard measures, quotas, and CBAM implementation details will have direct effects on Turkish export margins. Higher CBAM certificate costs or tighter benchmarks could reduce Turkish competitiveness unless mills reduce emissions faster. Any loosening of safeguards, on the other hand, would allow Turkish long and flat products to regain share more easily and support higher utilization at home.

The third trend sits in monetary policy. The period from late 2023 to late 2025 already shows that Turkey can move from sharp hikes to sizable cuts in less than a year. Policy rates went from about 42.5 percent in December 2023 to 50 percent in March 2024, then fell to 47.5 percent in December 2024 and toward the low 40s in early 2025 as inflation cooled. Financial Times+4global-rates.com+4countryeconomy.com+4 Short credit cycles of this kind strain planning processes for mills, suppliers, and contractors alike. A period of more stable monetary policy will help mills plan restarts on a multi-year view rather than quarter by quarter. The opposite, a return to policy volatility, will keep inventories low and push more risk back into the spot market.

The fourth important trend is the gradual shift toward lower-carbon steelmaking. Global pressure on emissions has already encouraged Turkey to consider a national emissions trading system and align more closely with EU climate policy. IETA+2Eliamep+2 Given its EAF-heavy base, Turkey is well placed to increase the share of recycled steel in total production and reduce emissions intensity compared with blast furnace routes. However, this requires steady investment in energy efficiency, renewable power, and better scrap sorting and certification. Mills that cannot secure lower-carbon scrap and power may face higher effective costs under CBAM and similar rules elsewhere. Those that can will enjoy a measurable advantage in export markets that reward lower emissions.

A final trend concerns logistics and trade corridors. The last few years have shown how quickly disruptions in the Black Sea, Suez Canal, or Red Sea can change freight rates and shipping times. In early 2024, attacks and disruptions in the Red Sea pushed many shipping lines to reroute vessels around the Cape of Good Hope, increasing voyage times and costs. That had direct effects on scrap and steel flows between Europe, the Middle East, and Asia and reinforced the value of flexible ports and multi-modal solutions in Turkey itself. ГМК+2ronscosteel.com+2 Any future disruption in these corridors, or new investment in alternative routes such as expanded Black Sea capacity, will again influence Turkish import timing and cost.

8. Conclusion

Turkey's import dynamics now link local credit conditions to global scrap prices in a very direct way. High but shifting policy rates affect how much working capital banks can extend. That in turn decides how many furnaces restart, how much scrap is imported, and which export orders mills are willing to accept. At the same time, EU climate policy and CBAM are reshaping the value of low-carbon routes and high-quality scrap. Mills that invest in clean power, better scrap, and transparent emissions reporting will keep access to EU markets and premium customers. Mills that do not move in that direction will depend more on markets with weaker carbon constraints and sharper price competition.

For scrap suppliers, traders, and steel buyers, the lesson is simple but demanding. You cannot treat Turkey as just another market. It is one of the clearest signals of where global recycled steel is heading. When you monitor Turkish credit conditions, mill restarts, export orders, and CBAM policy together, you gain a clearer view of supply and demand balances from North America to South Asia. If you then combine that view with disciplined pricing, careful credit decisions, and realistic carbon strategies, you can trade with Turkey in a way that is both profitable and resilient through the next cycle of rates, restarts, and regulatory change.