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The fall of lira will cause ripple effects in the global steel industry.
As per data from the World Steel Association, Turkey was the top importer of ferrous scrap both in 2016 (17.7 million tonnes) and 2017 (21 million tonnes). It was followed by South Korea with imports standing at 5.8 million tonnes and 6.2 million tonnes, respectively. The wide gap between the top two ferrous scrap-importing countries indicates the significance of Turkey’s import.
Due to the fall in the Turkish currency, imports into the country will now become costlier. As a result, if the country reduces its imports, there could be excess stocks in the countries exporting to Turkey, which, in turn, could have a global impact. The data also indicate that the European Union and the US are the top scrap-exporting regions in the world.
Depreciation of currency also means attractive exports from that country. This could impact other steel-exporting countries which could lose their competitiveness. Turkey is ranked ninth in steel exports globally, with 16.6 million tonnes exported in 2017.
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