The Turkish government has asked electric arc furnace-based steel producers to stop production until 25 December due to problems in the supply of natural gas, Kallanish notes.

The government has told steelmakers it will not be able to supply energy to high energy-consuming industries due to the gas flow issues.

It has also been heard that the application of production restrictions may differ according to region, with mills in the south less restricted.

Some mills in the south have already announced they will not open sales due to the production halt.

EAF production accounts for 70% of Turkey's total steel production. Higher gas input prices have been eating away at Turkish mill margins in recent months. This, coupled with stubbornly high scrap prices and decreasing steel prices offered by competitors in India and the Middle East, has seen Turkish mills unable to compete in the rebar export market recently. The production restriction could result in lower steel supply in Turkey, supporting higher prices and eroding export competitiveness further.

In Italy, meanwhile, steelmakers have asked Prime Minister Mario Draghi for an urgent meeting to address the issue of rising energy costs, arguing that the domestic industry is close to being forced to cease production (see separate story).