Turkish Rebar on the Rise
Producing steel bars and high alloy steels since 1970, ICDAS is the biggest “private sector” steel producer in Turkey based on production capacity. According to the Istanbul Chamber of Industry assessment, it ranked 9th place among Turkey’s top 500 enterprises in 2010. Also, ICDAS ranked 11th place in 2009 among the “Leading exporters of Turkey.” ICDAS has nearly 7,000 employees, when the Group’s affiliated companies are taken into consideration. The company is currently pursuing its production activities in the Canakkale Province in Turkey.
What is your opinion on the expansion of Turkey’s construction sector in recent years and the subsequent uptrend in steel demand? What do you think about the recent concerns of some Turkish construction companies regarding rebar prices?
NA: Construction in Turkey has had an extremely important share of Turkey’s successful economical performance in recent years. Assuming that Turkey will maintain its growth rate in the following years, we can say that construction (and thus steel demand) will also continue to grow.
However, I do not share construction companies’ concerns over rebar prices. When we look at the process of rebar prices, the most accurate determination would be the fact that price movements depend totally on global market conditions and are parallel with the changes in raw material prices. As a very important country in rebar exports and scrap imports, it is not possible for Turkey to behave independently from the global rebar and raw material markets. Moreover, if we consider the fact that the competition among Turkish rebar companies has been strong, there is no room for arbitrary execution in the sector.
According to the press release by the Turkish Iron and Steel Producers’ Association (DCUD) on October 17, 2011, the strength of the US dollar was reported as one of the reasons for the uptrend in price movements. How does the strong US dollar against Turkish lira affect the sector?
NA: When we consider the fact that Turkey produced 29.1 million tons of crude steel and imported 19.2 million tons of scrap last year, it would not be difficult to perceive that steel price movements are parallel to import scrap prices. When most of the input is on a US dollar basis, an increase in the US dollar against the Turkish lira will likely have the same reflection on costs, and accordingly, on finished products on the Turkish lira basis. Moreover, according to the Turkish Competition Authority’s latest inquisition, it has been determined that the Turkish rebar prices are in a parallel movement with global rebar prices.
We know that ICDAS has won an important law process regarding antidumping duties in the US, which opened this export market for Turkish rebar. How do you see Turkish rebar exports to the US in light of the current economic situation in North America?
NA: As a result of our legal struggle, it has been proved that ICDAS is determining its prices totally dependent on its costs, global and local market conditions and proved that there is no dumping pricing. After this positive result, both ICDAS’ and Turkish steel exports to US in general have improved dramatically and this region became one of the most important rebar export markets both for us and our country.
Considering that economic recovery signals are gaining strength in US, I have a strong opinion that Turkish steel exporters will maintain their strength with their market- and customer-focused approaches, which keep quality up.
Regarding Turkish long steel products, which export markets will be highlighted in 2012?
NA: I think Southern Asia, Latin America, North Africa and sub-Saharan African markets will be important in 2012. However, for our company, when we consider that North Africa and European markets experienced growth in 2010 despite all global financial problems, I also think that the growth process in these markets will remain strong in 2012, when we see some economic recovery.
According to figures for the first three quarters in 2011, we decreased our semi-finished exports in line with the increasing local demand and increased the quantity of our finished steel sales. As a result of the stable finished steel prices throughout 2011, our sales profits saw a significant uptrend as well. I think the Turkish construction sector will maintain its success in 2012 in line with economic growth; also, assuming the global economy will experience its own recovery, 2012 will be much more positive compared to 2011 for the Turkish steel sector.
You have a very important investment in Canakkale. Could you elaborate on ICDAS’ thermal power station investment, which is on coal basis, and total electricity production capacity?
NA: Our total power is 405 MW until late 2011. Thanks to the first phase of the investment, the figure will be 1005 MW as of early 2012. With our new power station, which has a capacity of 1200 MW, our total energy will be 1,605 MW in 2013.
Also, we have a wind energy project in the same region with 60 MW capacity. After this project is completed I can say that our total amount of energy will be around 1665 MW at the end of 2013.