Erdemir's Home-Market Pivot Shields It From the EU's Trade Storm
Turkish steelmaker guides Q3 EBITDA/ton higher despite falling spot prices, betting on a domestic demand surge, a full order book, and a strategic export pullback.
EREGL.IS · Earnings Call · 2026-08-07
A Tale of Two Markets
When Erdemir's management sat down with analysts on August 7, 2026, the message was clear: the Turkish steelmaker is no longer looking to the EU for salvation. With domestic demand running strong and trade protections improving at home, the company is deliberately shrinking its export footprint. As IR Director Idil Onay put it, “domestic demand is strong, but there is no specific project that helps to being strong in this year... Actually, our main customer group is pipeline profile and rolling, and we mainly sell HRC to this group customer group.” — Idil Onay, Investor Relations or Executive · 2026-08-07 The demand is broad-based, not a one-off infrastructure push, and it's been helped by a wave of trade ministry actions — antidumping duties, revised import regimes, and a 25% local-content obligation for the inward processing system. The numbers tell the story. Erdemir generated $281 million EBITDA in H1 2026 on 4.2 million tonnes of sales, with an EBITDA per ton of $75 in Q2. The export share fell to 14% from an exceptional 19.9% last year, deliberately moving back toward the company's historical 10–15% range. “So mainly, we are focusing to the local market -- to the domestic market. So intentionally, we are decreasing our export level when you compare to last year.” — Idil Onay, Investor Relations or Executive · 2026-08-07 This pivot is not a reaction to weakness abroad but a strategic choice — domestic prices and volumes are simply better right now.The EU Regime: A Limited Blow
The European Union's new steel import regime, which replaced the safeguard system on July 1, 2026, cut duty-free quotas by ~47% and raised out-of-quota duties from 25% to 50%. CBAM also entered its definitive phase on January 1. Analysts asked whether this would hurt Turkish producers. Erdemir pushed back, pointing to its position as the EU's largest quota holder and the wide price gap. “When we compare the European Union's local prices with our import prices, there was a huge gap between these prices. So Türkiye has the highest quota... Türkiye is the leading importer for European Union right now.” — Idil Onay, Investor Relations or Executive · 2026-08-07 The company argued it isn't dumping, so the new regime is aimed at China and other aggressive exporters, not Turkey. That view is reinforced by the fact that Erdemir is intentionally limiting its export share anyway. Last year's 20% share was an anomaly forced by weak domestic demand; now the home market is thriving. “So when you look at the export in Q4, so you will see a slight decrease. But actually, it's intentional. It's intended to be like that because obviously, the local market is more strong right now.” — Idil Onay, CFO · 2026-02-18 The company expects the EU regime's impact to be limited because it doesn't need European customers to sell its steel.An Order Book That Defies Gravity
The most striking moment came when an analyst pointed to falling Turkish HRC spot prices — Platts below $600/tonne — and questioned how Q3 EBITDA could rise. The answer is a full order book. “So our order book is full for 2.5 months. So it's a long period. So yes, we also see the decrease in local HRC and other steel prices in the domestic market. But the impact of this decrease is the subject of fourth quarter sales.” — Idil Onay, Investor Relations or Executive · 2026-08-07 Erdemir has effectively locked in Q3 sales volumes at prices before the spot decline, so the guidance of higher EBITDA per ton holds for Q3, with the risk pushed into Q4. This is a company that has learned to manage the cycle through order-book discipline and investment-driven cost savings. The new blast furnaces and coke batteries are now fully ramped, delivering a $40/tonne cost and efficiency benefit. Combined with lower CapEx ($600M in 2026 vs $775M in 2025) and net debt/EBITDA of 1.45x, the balance sheet is solid. What hasn't changed? The gold mine remains a promised side-story with no new developments — import regime and CBAM are the hot topics, but the company is confident it can navigate them. As Idil concluded,For investors, the takeaway is that Erdemir is riding a domestic demand wave that shows no sign of breaking, and its order book gives it near-term protection from global steel price turmoil. The real test will come in Q4, when the spot price decline starts to bite. For now, the company's narrative is one of control and confidence — a rare combination in a sector beset by tariffs and trade wars.So we do not dump the prices... And we have a huge price gap between European Union prices and Turkish prices.