Turkish re-rollers are sharply pivoting to focus on EU automotive manufacturers for their hot-dip galvanised (HDG) steel sales, prioritising more stable, long-term supply contracts as new regulatory pressures and market uncertainties weigh on traditional business models. The first quarter of 2026 is expected to be transformative, with protectionist measures such as the carbon border adjustment mechanism (CBAM) coming into force and shifts in post-safeguard regimes leading to significant reevaluation of export strategies. For Turkish mills and re-rollers, immediate spot sales to traders or service centres are becoming less attractive, and reliable automotive demand presents stronger profit margins and predictable order volumes, especially as the EU’s automotive production remains resilient in key markets.

According to industry sources, traditional export flows have become increasingly difficult to maintain due to rapidly changing quotas and uncertainty about future taxation under CBAM. This has compelled Turkish re-rollers to channel their sales efforts towards downstream manufacturers, notably within the automotive sector, which is less vulnerable to such short-term fluctuations. "Working with traders right now is not very profitable," remarked one producer, underscoring the shift toward direct relationships with OEMs and large suppliers. Meanwhile, EU-based customers are exercising greater caution, postponing orders as they await clarity on additional import duties and quota reductions coming in the next regulatory cycle.

Market participants anticipate that quota allocations for HDG 4B, a critical category for automotive applications, will become less restrictive following the removal of country-specific caps—a move that has already met with industry approval. The expectation is that these changes will benefit automotive manufacturing in countries like Spain and Germany, where production has either increased consecutively (January-September 2025 in Spain) or remains high due to significant installed capacity. Although Germany’s competitive landscape presents barriers to new suppliers, Spain and Romania are highlighted as steady growth areas for HDG supply, with Romania described as a "closed market" dominated by a handful of established re-rollers.

Within the EU, authorities are debating whether to introduce further mandates, such as price floors, mandatory sourcing, or strategic offtake agreements that would apply across multiple sectors including automotive and defence. The European Commission’s stance, according to deputy director-general Denis Redonnet, is that interventions in the free market may be considered but require a unified, tactical approach. Brussels is currently preparing the EU Resource Plan to identify alternative sources for critical minerals and raw materials, a measure that panellists suggest could alleviate sourcing pressures for automotive steel and aluminium in parallel.

Long-term, these regulatory and market realignments—especially the transition to CBAM and post-safeguard quotas—may establish a clearer framework for Turkish steel exports, but also necessitate closer technical and commercial integration with EU automotive producers. The shift signals a broader trend of supply chain recalibration in anticipation of stricter sustainability requirements and evolving market dynamics. For OEMs and Tier One suppliers operating in Europe, this presents both challenge and opportunity: developing secure relations with vetted Turkish vendors could support continuity, cost optimisation, and compliance, particularly as European car demand stays robust and sustainability standards climb. As these measures are finalised, EU stakeholders—regulatory agencies, manufacturers, and supply partners—will need to engage in continuous dialogue to reconcile market needs with strategic resource planning, ensuring competitiveness and resilience throughout the automotive steel supply chain.