After a week-long Eid holiday in Turkey, and similar break in the Middle East and North Africa, market participants have re-entered the market to find a changed landscape. Heightened geopolitical tensions between Iran and Israel are amplifying overall uncertainty, market participants inform Kallanish.

Sources will continue assessing the risks, with no immediate impact on prices at the time of publication.

The industry gatherings in Düsseldorf and Lisbon this week were expected to boost international business activity, with a price trend consensus expected to be reached and encourage delayed purchases during the events.

On 10 April, Turkey restricted the export of 54 product categories to Israel, including various steel items. The measure will remain in effect until Israel fulfils its international obligations, including an immediate ceasefire in Gaza and facilitating humanitarian aid to the Gaza Strip, Turkish authorities said.

Israel traditionally serves as a significant market for Turkish steel exports. In 2023, Turkey exported 1.15 million tonnes of steel to Israel, marking a 32.1% decline year-on-year. Israel ranked as Turkey's second-largest market for rebar exports and fourth-largest for wire rod. During January-February 2024, Turkey exported 49,990 tonnes of rebar and 11,387t of wire rod to Israel.

Some market participants suggest that Russian steel could replace Turkish exports in the Israeli market. However, this was uncertain, as some believe Russia’s increased cooperation with Iran may deter Israeli buyers from sourcing from there.

Other market participants note Russian producers are enjoying better domestic market prices, giving them no advantage to export. One producer estimates domestic prices in Russia at around $140/t higher than export in the case of rebar.

Some sources suggest Turkish steel could potentially reach Israel under a different label, with Russian origin being considered as an option for relabelling.

“There is a chance that Russian mills will increase their presence [in Israel to substitute for Turkish steel imports], but it is expected that traders who want to buy Turkish rebar and wire rod, for example for Egypt, will ship it to Israel,” one market participant opines. “Soon, the Turks will be relabelling documents from Turkish to Russian,” he adds.

Some even say Turkey’s position in Israel can be taken by a European supplier.

“Definitely, Turkey’s restriction on exports to Israel is affecting us in a negative way. I do believe some of the Europeans can get some advantage out of the restrictions, such as Spain, Italy, Greece, etc. But Russian prices are not competitive now for exports, apparently. Russia’s local market is quite strong,” a Turkish trader says.

"Russia can now cater [to the Israeli steel market] without competition. Maybe some Chinese [suppliers] will step in. But look at the sailing distance – compare an Italian rebar price to a Russian price. Or a Chinese. The Europeans have high prices and are too busy around decarbonisation to be able to do business,” another international trader opines.