Despite completing the first quarter of the year with gains, TR-METALINDEX reversed its course in April due to growing global uncertainty triggered by new U.S. tariffs and a slowdown in European markets.
April brought intensified concerns over a potential global recession and a decline in trade, following shock announcements of new tariffs by the United States. Although news of potential negotiations emerged shortly after, it failed to spark significant optimism in the markets. As demand expectations weakened, global metal prices dropped notably, the U.S. dollar depreciated significantly, and asset prices across financial markets declined.
Value and Volume Decreased, But Unit Prices Rose
Domestically, in response to the financial shock experienced in March, the Central Bank of Türkiye implemented additional tightening measures in April, raising the policy interest rate to 46% and the overnight lending rate to 49%. These actions, aimed at curbing FX demand and preventing depreciation of the Turkish lira (TRY), led to higher TRY interest rates—commercial loan rates exceeded an annual compound of 60%.
Amid these domestic and global developments, TR-METALINDEX closed April with declines in both volume and value.
In this volatile environment, the export volume index, which reached 134.95 points in March, dropped to 125.3 in April. Similarly, the export value index for the metal industry fell from 168.94 to 160.5 points. However, despite falling global metal prices and persistent price reduction pressures in export markets, the unit export value index of the metal industry increased from 125.19 in March to 128.08 in April. The average export unit price rose from $4.68/kg in March to $4.79/kg in April.
Tariff Negotiations Will Shape Export Markets
According to evaluations by IDDMIB (Istanbul Ferrous and Non-Ferrous Metals Exporters’ Association), the main determining factor in Q2 will be the U.S. tariffs and the outcome of tariff negotiations with other countries. The tariff conflict between the U.S. and China remains unresolved, while major central banks continue to balance between recession and inflation risks. Metal prices are expected to remain volatile throughout the second quarter. In Türkiye, a lasting recovery in export indices is not yet anticipated.
PMI Data Signals Contraction
April’s economic, commercial, and geopolitical developments signaled stagnation in the global metal industry. The global manufacturing PMI dropped from 50.3 to 49.8 in April, entering contraction territory. Manufacturing PMIs in China, the U.S., and the EU were all lower than in March.
The global metal industry production PMI fell from 48.0 to 47.6, reflecting continued contraction, while the new orders PMI declined from 48.9 to 46.1.
In Europe, where the metal industry was attempting a Q1 rebound, April saw renewed weakness. The European metal production PMI decreased from 47.8 to 46.0, and the new orders PMI stood at 46.4—indicating sustained contraction.
In Türkiye, industrial production remained weak, with the Istanbul Chamber of Industry’s manufacturing PMI unchanged at 47.3 in April, still in contraction territory.
Expectation Index Reflects Domestic and Global Risks
The April results of the monthly Expectation Index highlight ongoing domestic and global risks. There is still no clear sign of recovery in export demand, while the domestic market is starting to reflect the impact of recent tightening measures following the March financial shock.
According to the April expectation index, although market stagnation and protectionist measures persisted, export orders showed a very modest increase. Price pressure and discount demands from buyers continued, and metal prices dropped significantly. Consequently, the unit prices of export orders declined.
While the overall decline in the number of customers receiving orders continued, it did so at a slower pace. Profit margins on export orders remained under pressure due to intensifying global competition.
Domestic orders slightly increased in April, following the financial shock and prolonged holiday in March. This slight uptick supported a limited rise in production. However, Turkish lira-denominated production costs continued to increase during the month.
Raw material and input inventories grew only marginally compared to the previous month, in line with the modest increase in domestic and export order-driven demand.
Source: Foreks/ Prepared by: İlayda Gök