With Turkey’s steel industry already reeling from high costs and low finished steel demand, it has been further hit by natural gas usage restrictions, Kallanish observes.

In the middle of winter, as consumption of natural gas approaches record levels, gas supply problems have emerged. Turkish gas supplier Botas says the amount of gas purchased from Iran decreased by two thirds as of 17 January, and it was reset to zero as of 20 January. Iran informed Botas there was a "technical failure" and that gas flow would not be available for ten days.

Botas subsequently sent a letter to industrial plants and gas-cycle power plants that produce electricity saying it will cut natural gas flow by 40%.

The letter sent was sent to businesses with a daily consumption of more than 300 thousand cubic meters of natural gas. It reads: “Due to the increase in natural gas consumption related with seasonal conditions and the natural gas cut from foreign supply sources, some difficulties are being encountered in maintaining the supply-demand balance in our country. In order to eliminate the difficulties encountered in maintaining the natural gas supply-demand balance in our country, it has become necessary to take and implement the necessary additional measures.”

“As of 08:00 on 21 January until further notice, therefore, gas intake by enterprises is limited to an amount corresponding to 60% of its average daily gas intake amount,” it continues.

Kallanish learns that this situation will hit electric arc furnace-based steel producers rather than blast furnaces.

A Turkish EAF mill comments: “We now face the risk of not fulfilling our contractual obligations. This will cause delays to out shipments. It is not good considering we were already struggling to sell.”