"Prior to this announcement, our view of Turkish crude steel production was for a 6 percent decline in output this year. Our view that Turkish crude steel production will fall from 37 Mt in 2018 to 35 Mt this year now looks bullish," he says. "A slump in domestic steel demand in 2018 pushed Turkish steel producers into the export market. Export dependency of the Turkish steel industry exceeds 25 percent - a relatively high proportion.

"The Turkish steel industry is dangerously exposed to international markets and trade barriers. Key export markets, the US and the EU, have already tightened import policy. Turkish steel exports to the US are down 80 percent year-to-August and a further decline seems inevitable.

"It will be difficult for Turkish steelmakers to find alternative markets. At home, large infrastructure projects had been propping up steel demand but their future is less certain given government commitments elsewhere. Abroad, the EU has tightened import policy and Turkish steel exporters face competition in North Africa where a new steelmaking plant has started up in Algeria."