Steel makers eye West Africa in response to tariffs

TURKISH steel makers are looking to expand in West Africa and other emerging markets in response to tariffs and planned quotas which threaten their sales to the US and the EU, a senior sector official said.

Namık Ekinci, board chairman for the Turkish Steel Foreign Trade Association, said that Turkey was looking to boost its trade with West Africa and subSaharan countries, where there is demand for the less capital-intensive steel products that Turkey mainly exports.

“Looking at the product types these countries consume, it’s products that we have the capability to produce like rebar and pipes. Therefore, these countries are markets where we have a chance,” Mr Ekinci said.

“This is why the market we are working with in the first stage is West Africa,” he said, adding that the Caribbean, South America and South-East Asia were the next targets. The world’s eighth biggest steel producer, Turkey ranks second in global exports of rebar, figures from the World Steel Association show.

In a move that ignited fears of a global trade war, US President Donald Trump in March imposed a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports, leading to a 56 per cent slump in Turkey’s exports to the US between January and May.

In early July EU countries also voted in favour of a combination of quota and tariffs to prevent a surge of steel imports into the bloc that could follow the US levies.

In order to tackle the US tariffs and protectionist measures, Mr Ekinci said Turkey wanted to increase its effectiveness in other emerging markets “as the US and the EU adopt measures to make trade harder”.

He said a union of Turkish exporters would jointly start a new firm to penetrate the target markets through time charter shipments, aiming to increase Turkey’s market share in West Africa from below 5 per cent to 15 per cent by cutting shipping costs.

The project is expected to cut transport costs of steel exported to West Africa to around $30 per tonne, from nearly $100, making it significantly more competitve, Mr Ekinci said.