LETTER FROM TURKIE - Russian War Push Turkish Mills Towards US Market
Rapidly Rising Costs Create Havoc for Turkish Mills
September 28, 2022
Baris Coskun
ISTANBUL—"Due to the Russian-Ukrainian war, the Turkish mill business with Europe has almost halved,” according to Baris Coskun, principal of BSAB Sourcing, a well-known agent for Turkish mills.
“Therefore, Turkish mills are more and more interested in selling to the US market,” he adds.
In addition to the effects of the Russian-Ukrainian war, “there are incredibly serious hikes in electricity and natural gas prices,” says Coskun, making matters for Turkish mills that much worse.
“This year Turkish mills received 15-20% hikes from the dying plants for the third time just last week (October 20.) “They cannot forward those cost increases to their clients, who don’t expect or want any more price increases this year yet again.”
The increased costs for Turkish mills and the loss of the Russian market which was so important to their business is further compounded by the rapidly dropping Turkish Lira, now 18 to the US$.
“The dropping Turkish lira is especially hurting the Turkish mills, which have substantial amounts of business domestically,” Coskun says. To compete, “they must be selling with a minimum of three-month terms to be in the domestic market, but when the time comes to collect the funds, funds are not as valuable as they were at the time of sales.”
“Therefore, Turkish mills are more and more interested in selling to the US market,” he adds.
In addition to the effects of the Russian-Ukrainian war, “there are incredibly serious hikes in electricity and natural gas prices,” says Coskun, making matters for Turkish mills that much worse.
“This year Turkish mills received 15-20% hikes from the dying plants for the third time just last week (October 20.) “They cannot forward those cost increases to their clients, who don’t expect or want any more price increases this year yet again.”
The increased costs for Turkish mills and the loss of the Russian market which was so important to their business is further compounded by the rapidly dropping Turkish Lira, now 18 to the US$.
“The dropping Turkish lira is especially hurting the Turkish mills, which have substantial amounts of business domestically,” Coskun says. To compete, “they must be selling with a minimum of three-month terms to be in the domestic market, but when the time comes to collect the funds, funds are not as valuable as they were at the time of sales.”
