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 |
Global Market Intelligence Snapshot
A consolidated investor view of the five supplied Fastmarkets daily publications covering ferro-alloys, ores, steel raw materials, ferrous markets and broader metals news.
Middle East tensions kept energy and freight volatile, while shipping through the Strait of Hormuz remained below pre-war levels.
Physical steel buyers remained selective amid soft finished-steel demand, seasonal weakness and longer or less reliable lead times.
Volatile freight and disrupted routes reinforce the value of selective local inventory for fast-moving, approved specifications.
Ferro-alloy & Ore Benchmark Appendix
Selected and consolidated from the supplied Ores & alloys prices & news and Ferro-alloys markets publications. The tables preserve assessment basis, unit and delivery location because these are essential for price comparison.
Chrome ore & ferro-chrome
| Symbol | Assessment | Date | Price | Change | June average |
|---|---|---|---|---|---|
| MB-CHO-0002 | Turkish lumpy chrome ore 40-42%, CFR main Chinese ports | 14 Jul | $320-330/t | +3.17% | $309-319/t |
| MB-CHO-0003 | South Africa UG2/MG concentrates, CIF China | 14 Jul | $280/t | 0.00% | $284.60/t |
| MB-FEC-0021 | HC FeCr 65-70% Cr, max 1.5% Si, delivered Europe | 14 Jul | $1.69-1.84/lb Cr | +0.57% | $1.72-1.83 |
| MB-FEC-0020 | HC FeCr 60-64.9% Cr, max 3% Si, CIF Europe | 14 Jul | $1.22-1.50/lb Cr | +2.26% | $1.18-1.51 |
| MB-FEC-0024 | Ferro-chrome 50% Cr, delivered Europe | 14 Jul | $1.25-1.29/lb Cr | -2.31% | $1.28-1.37 |
| MB-FEC-0003 | LC FeCr 0.10% C, 65-70% Cr, delivered Europe | 14 Jul | $2.50-2.85/lb Cr | -3.25% | $2.66-2.84 |
| MB-FEC-0002 | LC FeCr 65% Cr, max 0.06% C, delivered Europe | 14 Jul | $2.80-3.10/lb Cr | -6.65% | $3.00-3.21 |
| MB-FEC-0001 | Low-phosphorus FeCr, min 65% Cr, delivered Europe | 14 Jul | $2.70-3.05/lb | 0.00% | $2.70-3.05 |
| MB-FEC-0018 | HC FeCr 57-65% Cr, CIF South Korea | 9 Jul | $1.04-1.10/lb | +0.94% | $1.02-1.09 |
| MB-FEC-0017 | HC FeCr 57-65% Cr, CIF Japan | 9 Jul | $1.06-1.12/lb | +0.93% | $1.05-1.10 |
Manganese ore, ferro-manganese & silico-manganese
| Symbol | Assessment | Date | Price | Change | June average |
|---|---|---|---|---|---|
| MB-FEM-0006 | HC FeMn 78% Mn, delivered Europe | 10 Jul | €1,130-1,140/t | 0.00% | €1,102.5-1,155 |
| MB-FEM-0007 | FeMn 65% Mn, in-warehouse China | 10 Jul | ¥5,000-5,300/t | -3.74% | ¥5,300-5,462.5 |
| MB-FEM-0001 | HC FeMn 78% Mn, in-warehouse Pittsburgh | 9 Jul | $1,280-1,500/long ton | -0.71% | $1,300-1,500 |
| MB-FEM-0002 | LC FeMn 80% Mn, max 0.80% C, Pittsburgh | 9 Jul | 115-122 cents/lb | +2.16% | 115-117 |
| MB-FEM-0003 | MC FeMn 80% Mn, max 1.50% C, Pittsburgh | 9 Jul | 94-96 cents/lb | 0.00% | 94-96 |
| MB-SIM-0004 | SiMn 65% Mn min, 16% Si min, FOB India | 10 Jul | $910-920/t | 0.00% | $892.5-912.5 |
| MB-SIM-0002 | SiMn lumpy 65-75% Mn, major European destinations | 10 Jul | €1,180-1,240/t | 0.00% | €1,175-1,232.5 |
| MB-SIM-0001 | SiMn 65% Mn, in-warehouse China | 10 Jul | ¥5,550-5,600/t | +0.91% | ¥5,632.5-5,675 |
| MB-MNO-0001 | High-grade manganese ore, CIF Tianjin | 10 Jul | $5.07/dmtu | +1.00% | $5.13 |
| MB-MNO-0003 | 36.5% Mn semi-carbonate ore, CIF Tianjin | 10 Jul | $4.58/dmtu | -1.08% | $4.70 |
| MB-MNO-0002 | 36.5% Mn semi-carbonate ore, FOB Port Elizabeth | 10 Jul | $3.71/dmtu | -1.59% | $3.76 |
Ferrosilicon, molybdenum, vanadium, tungsten & specialty alloys
| Symbol | Assessment | Date | Price | Change | June average |
|---|---|---|---|---|---|
| MB-FES-0004 | FeSi 75% Si min export, FOB China | 15 Jul | $1,200-1,250/t | +0.41% | $1,211.25-1,247.5 |
| MB-FES-0006 | FeSi 75% Si min, CIF Japan | 15 Jul | $1,220-1,260/t | +0.40% | $1,230-1,257.5 |
| MB-FES-0005 | FeSi lumpy 75% basis, delivered Europe | 10 Jul | €1,240-1,305/t | -0.20% | €1,242.5-1,285 |
| MB-FEO-0001 | FeMo 65% Mo min, in-warehouse Rotterdam | 15 Jul | $73.60-74.00/kg Mo | +0.37% | $70.94-71.80 |
| MB-FEV-0001 | FeV 78% V min, DDP Western Europe | 15 Jul | $26.50-27.40/kg V | -1.17% | $26.95-27.84 |
| MB-FN-0001 | FeNb 63-67%, delivered European consumer works | 15 Jul | $49.90-50.65/kg Nb | -2.33% | $50.46-51.18 |
| MB-FEU-0001 | FeW 75% W, in-warehouse Rotterdam | 15 Jul | $195-210/kg W | -1.22% | $197.5-235 |
| MB-FEU-0003 | FeW export 75% min, FOB China | 15 Jul | $160-220/kg W | -11.63% | $200-257.5 |
| MB-FET-0001 | FeTi 70% Ti, DDP Europe | 15 Jul | $5.65-6.20/kg Ti | 0.00% | $5.63-6.15 |
Steel Raw Materials Dashboard
| Market | Assessment / transaction | Value | Investor reading |
|---|---|---|---|
| Iron ore | DCE Sep futures | ¥762/t ($113) | Supply remained ample; strike concerns gave limited support. |
| Iron ore | Pilbara Blend fines, China ports | ¥710-720/wmt (~$96-97/dmt) | Portside pricing remained stable while seaborne premiums weakened. |
| Iron ore | China June imports | 112.69 Mt; +15.3% MoM | Ample availability capped upside; H1 imports reached 628.87 Mt. |
| Coking coal | Goonyella PHCC trade, FOB Australia | $229/wmt | Indian monsoon and falling steel prices limited spot demand. |
| Türkiye scrap | HMS 1&2 80:20 CFR | $373/t (3 Jul sale) | Weak rebar pricing reduced buying incentive; later bids around $365/t were rejected. |
| US export scrap | HMS 1&2 FOB New York | $328/t | Flat week-on-week amid absence of fresh Türkiye sales. |
| Saudi scrap | HMS 1&2 domestic composite | SAR 1,805.14/t ($473) | Regional pellet disruption increased reliance on scrap. |
| China billet | Domestic EXW Tangshan | ¥2,970/t | Stable despite improved rebar futures and raw-material cost concerns. |
Market Signals & Strategic Interpretation
Middle East freight risk
Energy and freight volatility, reduced Hormuz traffic and delayed vessels create a stronger economic case for diversified origins and limited emergency inventory.
Türkiye scrap caution
Weak finished-steel demand kept deep-sea scrap buying muted. This signals disciplined stock sizing rather than broad speculative exposure.
India alloy sourcing
FOB India SiMn held at $910-920/t while its June average was lower, indicating firm export pricing despite cautious global steel demand.
Chrome divergence
Turkish lumpy ore rose 3.17%, while European delivered FeCr and LC FeCr assessments declined. Ore and alloy pricing can diverge materially across regions and grades.
Specialty alloy resilience
FeMo strengthened above its June average, while FeV, FeNb and tungsten weakened, supporting a diversified specialist-product approach rather than a single-alloy bet.
High-grade iron ore growth
Simandou was targeting 5-10 Mt of sales in 2026 and about 120 Mtpy at full ramp-up, potentially reshaping long-term high-grade seaborne supply.
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.
- Fastmarkets daily publications dated 16 July 2026: Ores & alloys prices & news; Ferro-alloys markets; Steel raw materials prices & news; All metals news; AMM prices & news.