Turkey has implemented an immediate restriction on the export of 54 product groups to Israel, including steel items, according to an announcement by the country's Ministry of Trade.

The statement says that the decision will persist until Israel complies with its international law obligations by declaring an immediate ceasefire in Gaza and ensuring unimpeded humanitarian aid flow to the Gaza Strip.

Products for which exports to Israel are restricted include steel pipes and fittings, steel wire rod, steel containers and warehouses, steel bridge components, all construction materials made of iron and steel, all wires of iron and steel, rebar, and flat steel products. It also covers 46 other categories across metals, materials and equipment sectors.

Israel traditionally represents a significant market for Turkish steel exports, Kallanish notes. Market participants believe that Russian-origin steel could step in to take Turkey's market share in Israel.

Turkey exported nearly 91,000 tonnes of steel to Israel over January-February, down 53.3% year-on-year. Over 2023, it exported 1.15 million tonnes, down 32.1% year-on-year.

Israel ranked as Turkey's second largest market for reinforcing bar exports and fourth largest market for wire rod exports, according to the International Rebar Exporters and Producers Association (Irepas). During January-February, Turkey shipped 49,990 tonnes of rebar and 11,387 tonnes of wire rod to Israel.

The restriction on steel exports to Israel is a significant move by Turkey, reflecting the ongoing tensions between the two countries. This decision is likely to have a substantial impact on the Turkish steel industry, which has relied on the Israeli market as an important export destination. Market participants will be closely monitoring the situation to see how it unfolds and whether Russian-origin steel can effectively replace Turkish supplies in the Israeli market.