One of Russia’s biggest steel producers, MMK, has decided to put the launch of a lucrative project in Turkey on hold due to the uncertainty created by global trade wars, Andrey Eremin, the company’s director for economics, told Reuters in an interview.
The company was supposed to re-launch hot-rolled steel production at its Turkish site and the project was expected to add between $90 million and $100 million to MMK’s core earnings, Eremin said. A sudden surge in global trade barriers caught the company off guard, forcing it to delay, the official said.
“We had completely restored equipment at the plant to working condition, had figured out all the contracts for supplying energy and raw materials,” Eremin said.
“Unfortunately, we made this decision before the U.S. introduced tariffs against metallurgical companies. We did not know that this would happen.”
The $2 billion MMK Metalurji complex, located near Iskenderun on Turkey’s Mediterranean coast in Istanbul, was built between 2007 and 2010.
Hot-rolled steel production at the site was put on hold in 2012 amid a global slump in steel prices but was due to restart this summer as the market recovered. Now MMK has put the re-launch on hold and plans to decide its fate in November when the dust has settled on a wave of protectionist measures introduced by the United States and Europe in recent months.
“We hope that by that point, the transformation on global markets will have ended and there will be clarity,” Eremin said.
U.S. President Donald Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum in March in a move mainly aimed at curbing imports from China.
Last week, the European Union introduced a quota and tariff policy in response, fearing the impact on its own producers of a surge of steel imports following Trump’s decision.
MMK is not affected directly by these measures as it does not export steel to the U.S. and EU markets, but 30 percent of production at its Turkish plant was intended for the European market and neighboring countries.