Investing in the Essential Inputs Behind Steel Production
SECTOR-FOCUSED · NO COMPANY-SPECIFIC DATA
The Investment Thesis
Türkiye’s large electric-arc-furnace steel base creates recurring demand for imported consumables and alloying inputs. The opportunity is built around a balanced portfolio of high-volume products, higher-margin technical products and selectively held emergency inventory.
Türkiye’nin büyük elektrik ark ocaklı çelik üretim tabanı, ithal sarf malzemeleri ve alaşım girdilerinde sürekli talep yaratır. Fırsat; yüksek hacimli ürünler, daha yüksek marjlı teknik ürünler ve seçici acil stoklardan oluşan dengeli portföye dayanır.
Why This Market Is Investable
Mandatory consumption
Ferroalloys and electrodes are production inputs, not discretionary purchases.
Import dependence
Domestic output does not fully cover consumption, supporting recurring sourcing demand.
Urgency premium
Short lead-time inventory can command higher spreads during mill shortages.
Fast capital rotation
Illustrative 30–50 day inventory cycles can recycle capital several times per year.
Technical barriers
Grade, chemistry, geometry and inspection expertise protect margins.
Portfolio diversification
Volume, technical and back-to-back products offer different risk-return profiles.
Target Product Portfolio
| Product | Demand profile | Preferred model | Return role |
|---|---|---|---|
| FeSiMn | Large recurring mill demand | Framework contracts + selective stock | Volume and turnover |
| FeSi | Steel and foundry demand | Direct sales + independent analysis | Balanced margin / volume |
| HC FeMn | Frequent spot demand | Controlled local inventory | Urgency premium |
| HC / LC FeCr | Stainless and special steel | Tender / commission + selective stock | Specialist pricing margin |
| Graphite Electrodes | EAF consumable; technical approval required | Technical sales, trials, limited inventory | High unit margin |
| Pig Iron | Very large repeat-volume market | Back-to-back contracts | Scale and freight optimisation |
| Anthracite | Carbon input / recarburiser | Specification-led contracts | Portfolio expansion |
| Steel Billet | High-value semi-finished steel | Back-to-back / secured offtake | Large transaction value |
Current Market Price Snapshot
| Product | July 2026 indication | Delivery |
|---|---|---|
| LC FeCr | USD 1.93/lb Cr | CIF Gebze |
| HC FeCr | USD 1.20/lb Cr | CIF Gebze |
| FeSiMn 65/15 | USD 1,050–1,090/t | CIF Gebze |
| HC FeMn 75 | USD 1,070–1,090/t | CIF Gebze |
| Pig Iron | USD 410/t | CIF Gebze |
| UHP 600 mm GE | USD 2,900–3,100/t | CIF Gebze |
| HP 350 mm GE | USD 2,400–2,500/t | CIF Gebze |
| FeSi 70–72 | USD 1,160–1,225/t | DDP Gebze |
Recurring Import Demand
| Product | 2022 | 2023 | 2024 | 2022–24 |
|---|---|---|---|---|
| FeSi | 110,420 t | 90,358 t | 107,641 t | -2.5% |
| FeSiMn | 230,725 t | 227,970 t | 220,471 t | -4.4% |
| HC FeCr | 17,097 t | 21,087 t | 7,746 t | -54.7% |
| Graphite Electrodes | 47,910 t | 30,297 t | 43,464 t | -9.3% |
| Pig Iron | 1,355,155 t | 1,392,208 t | 1,498,993 t | +10.6% |
Graphite Electrodes: The Higher-Margin Technical Segment
Margin defence
Customer qualification, diameter, grade, nipple design and consumption performance create technical barriers.
Capital discipline
Hold only approved sizes and grades; use mill trials before scaling inventory.
Pig Iron: Scale Rather Than Margin
Pig iron is best approached through secured offtake and back-to-back contracts. Its role is to add scale and freight leverage—not to carry speculative inventory.
Adjacent Expansion: Anthracite & Steel Billet
Anthracite
Investment screening should focus on fixed carbon, ash, sulphur, volatile matter, sizing and moisture.
Steel Billet
Best suited to secured offtake, letters of credit and strict quality documentation.
Margin Architecture
| Channel | Economic driver | Capital use | Risk |
|---|---|---|---|
| Commission / agency | Producer–buyer matching | Low | Low–medium |
| Back-to-back trading | Buyer secured before purchase | Medium | Medium |
| Framework trading | Recurring mill demand | Medium | Medium |
| Spot inventory | Urgent delivery premium | High | High |
| Technical products | Qualification and performance expertise | Medium | Medium |
Illustrative ROI & Capital Payback
| Product | Illustrative cycle | Annual ROI | Simple payback | Basis |
|---|---|---|---|---|
| FeSi | 45 days | 66.0% | ~18 months | 2026 stock model |
| FeSiMn | 45 days | 33.7% | ~36 months | 2026 stock model |
| HC FeMn | 50 days | 38.5% | ~31 months | 2026 stock model |
| Pig Iron | Contracted / high-turn | Historical 60%* | ~20 months* | Older one-month-cycle model |
| Graphite Electrodes | Technical / selective | Historical 156%* | ~8 months* | Older one-month-cycle model |
| Ferrochrome | Tender / selective | Historical 72%* | ~17 months* | Older one-month-cycle model |
Capital Deployment Scenarios
| Scenario | Strategy | Indicative capital | Target profile |
|---|---|---|---|
| Defensive | Commission + back-to-back + limited approved inventory | $0.5–1.0m | Lower exposure |
| Balanced | Framework trading + 2–3 spot products + electrodes | $2–4m | Balanced turnover and spread |
| Scale | Regional stock hub + broader portfolio + trade finance | $5–10m | Higher scale, stronger controls required |
Operating Model
1. Source
At least three approved sources per product.
2. Verify
Independent inspection and sealed samples.
3. Contract
Secured offtake, LC/CAD and written payment conditions.
4. Hold selectively
Inventory only for proven fast-moving specifications.
5. Rotate capital
Product-specific maximum stock-day limits.
6. Measure
Track contribution per tonne, cash conversion and realised ROI.
Risk Controls That Protect Investor Capital
| Risk | Potential loss | Control |
|---|---|---|
| Price volatility | Inventory devaluation | Back-to-back sales, stock-day limits, staggered purchasing |
| Quality mismatch | Penalty, rejection | Independent analysis, sealed samples, tolerance clauses |
| Counterparty default | Cash-flow loss | LC/CAD, insurance, limits and deposits |
| Freight / transit | Delay and cost escalation | Multiple routes and validity clauses |
| Origin / sanctions | Payment or customs blockage | KYC, screening and alternative origins |
| Concentration | Supply interruption | Minimum three approved suppliers per key product |
18-Month Investment Roadmap
| Period | Priorities | Investor milestones |
|---|---|---|
| 0–3 months | Product P&Ls, approvals, buyer pipeline, finance limits | 3 products with approved sources; stock policy |
| 3–6 months | Electrode trials, HC FeMn pilot stock, first back-to-back flows | Successful trials; stock turn below 45–50 days |
| 6–12 months | Annual FeSi / FeSiMn contracts and repeat programmes | Repeat orders above 60%; proven realised ROI |
| 12–18 months | Add anthracite and billet after verified datasets | Diversified portfolio with disciplined working capital |
Data Basis & Methodology
- Türkiye import reports for FeSi, FeSiMn, HC FeCr, graphite electrodes and pig iron, 2022–2025 YTD.
- Türkiye Ministry of Industry and Technology, Iron and Steel Sector Report 2024.
- Historical ferroalloy, pig iron, freight, price and margin presentations supplied in the project files.
- Management-supplied CIF / DDP Gebze price indications dated 24 July 2026.
- Historical and 2026 illustrative stock models used only for scenario analysis.