Turkey’s political turmoil may disrupt the U.S. recycled steel market, raising concerns for scrap processors and shippers. As the largest buyer of U.S. recycled steel, any instability in Turkey could have far-reaching effects on the global steel market.
Political Unrest in Turkey Affects Steel Trade
Turkey has been the leading importer of U.S. ferrous scrap, consistently maintaining this position since President Recep Erdoğan’s tenure began in 2014. However, recent political events, such as the arrest of Istanbul’s mayor Ekrem Imamoglu, have triggered market instability. Imamoglu, seen as a potential opponent to Erdoğan, has fueled protests, contributing to further economic uncertainty in Turkey.
When such political tensions arise, they often affect trade agreements and buying behaviors. Turkey’s scrap-fed electric arc furnace (EAF) steelmaking is concentrated in regions away from Istanbul, but the ongoing unrest could ripple through the entire steel production sector. Even a brief disruption in purchases from Turkey can significantly impact the U.S. recycled steel market.
Economic Fallout and the Recycled Steel Market
The political unrest has already caused a 7% drop in Turkey’s benchmark stock index. Additionally, the Turkish lira has depreciated against the U.S. dollar. The protestors, calling Erdoğan a dictator, may cause additional volatility. For the U.S. market, this poses a substantial risk, especially for companies in the eastern U.S. that rely heavily on Turkish demand for scrap steel.
The timing of these events is particularly concerning. Recycled steel trade faces complications from global tariffs, which already work against steel rebar producers in Turkey. Any internal turmoil could exacerbate this situation, potentially straining the international scrap steel market even further.
Scrapping Politics and Global Trade Dynamics
Labor unrest has been a growing concern in Turkey, with labor strikes becoming more prevalent under Erdoğan’s regime. These strikes have historically impacted industries, including steel production. Although legal strikes have declined since the mid-1990s, industrial actions, particularly in the automotive sector, have disrupted various markets.
As Turkish politics evolve, so too do trade conditions, with implications for U.S. scrap exporters. A continued decline in political stability in Turkey may undermine its role as a leading importer of U.S. scrap steel, leaving exporters scrambling for alternative markets or facing potential price volatility.
Conclusion
Turkey’s internal political unrest poses a serious threat to the U.S. recycled steel market. As the country remains the largest buyer of U.S. scrap, any prolonged political instability could result in supply chain disruptions, particularly in the eastern U.S. region. The global steel industry must monitor developments in Turkey closely as the political climate continues to evolve.
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