Turkey has initiated an antidumping investigation into the imports of certain steel products from China and South Korea. The inquiry, which will examine the period from July 2023 to June 2024, focuses on cold-rolled coils (CRC), galvanized, and pre-painted steel coils.
Turkish authorities may implement provisional measures during this period, and there is also the possibility of retroactively applying final measures.
The investigation is part of a broader trend towards the ‘regionalization’ of steel trade flows, according to Morgan Stanley (NYSE:MS).
The firm observed that South Korea and China are significant exporters of steel to Turkey, with South Korea accounting for approximately 33% and China for about 31% of Turkey’s total CRC imports from January to October 2024.
Similarly, during the same timeframe, South Korea and China were responsible for about 36% and 25%, respectively, of Turkey’s total galvanized steel imports.
This new probe complements other recent actions by Turkey targeting hot-rolled coil imports from China, Russia, India, and Japan.
Morgan Stanley notes that these measures, if implemented, could bolster the domestic industry, particularly benefiting Erdemir, a major Turkish steel producer. Flat steel products, including roughly 20% CRC, make up about 90% of Erdemir’s shipping volumes, which could enhance the company’s pricing power.
Despite these potential benefits for Erdemir, market consensus has already incorporated a substantial recovery in the company’s EBITDA for 2025. Morgan Stanley’s forecast for Erdemir’s 2025 adjusted EBITDA is $0.96 billion, compared to the Visible Alpha consensus of $1.15 billion, with an estimate of approximately $0.7 billion for 2024.
The firm maintains its Underweight rating on Erdemir shares, emphasizing the need for evidence of the market impact of these measures.
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