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Potential Impacts of Turkish Earthquake

February 6, 2022

By Qvintin Koister & Myst Metals Team


On Monday February 6th, central Turkey and northwest Syria were rocked by a 7.8 magnitude earthquake. Entire city-blocks of residential apartments have collapsed, impacting thousands of lives in the region. Infrastructure has also been damaged including reports of a fire breaking out at the main port in Iskenderun.

Turkey is a significant economy and plays an important role in the commodity markets. Perhaps their most significant role is in the global steel-scrap markets as they are the largest importer of steel-scrap in the world and a major exporter of finished steel products.

Below is a brief in graphics and data of Turkey's role in the steel markets.

The relevant product spreads [Turkish Finished Steel Futures – Turkish Steel Scrap Futures] rallied 7.2% today in wake of the tragedy.

Reports of damage to ports and pipelines have trickled in, however, we are still awaiting updates from most of the major steel makers in the region. A large amount of Turkey's capacity is in Iskenderun, which is near the epicenter of the quake. It may take several days for clear operating reports from facilities in that area. It is worth noting that the Electric Arc Furnaces use steel scrap as an input.

 

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