Overview of Turkish steel exports and global markets - Kocturk

Friday, 23 May 2008 18:03:01 (GMT+2)

Chairman of the Istanbul Iron and Steel Exporters' Association, Serdar Kocturk, stated in his address at the 3rd SteelOrbis Turkish Steel Market Conference held in Istanbul on Friday that steel consumption statistics and steel prices are moving in accordance with expansions in gross national product growth rates across the world.

According to the statistics for 2007, 67 percent of Turkish steel exports were made up of long products with 10.9 million mt, billet accounted for 10 percent with 1.568 million mt, pipe constituted 10 percent with 1.563 million mt, while flat products represented seven percent of exports with 1.210 million mt.

Flat products accounted for 60 percent of Turkey's iron and steel imports in 2007 with 7.897 million mt while billet exports were observed to constitute 19 percent at 2.484 million mt. In the same year, long products accounted for around seven percent of imports with 949,000 mt, special steel products stood at over seven percent with 972,000 mt and slab accounted for under seven percent with 907,000 mt.

The UAE stands out as the most important export market for Turkey. Indeed, for 2008 Turkey's rebar  exports to this destination are forecasted to reach 7-7.2 million mt.

In the context of the growth in the world economy, if the expectation for growth increase in 2008 and 2009 is fulfilled, it is not possible to detect any factors capable of triggering a downward movement in steel prices.

Mr. Kocturk stated that it is impossible to see a softening in iron ore prices (one of the most important factors in steel production), especially assuming that deep sea iron ore demand from China in particular will maintain its strong tendency. Koçtürk stressed the important influence iron ore can have on steel costs by remarking that after the 2.5 percent reduction observed in iron ore supply in Q1 this year iron ore prices registered an increase of 65 percent. He also pointed out that no halt in the upward movement of raw materials like ferrochromium and ferromanganese has been forecasted from 2006 to the present.

 The capital accumulation in oil producing countries is a major incentive for investment. The investments in question keep the construction sector alive and create strong steel demand. Mr. Koçtürk also, however, signalled the existence of some risks. Along with expectations for oil prices moving in a range of $100-130 per barrel, there also exists the possibility of oil prices increasing to over $200 and decreasing down to $75. Although the general tendency in markets like the US is to keep inventory levels low and to buy predominantly from the spot market, it is also observed that the approach of taking positions is being adopted.

According to Mr. Kocturk  in the context of position-taking it is possible that the market may be jeopardized by the sudden injection of accummulated supplies.

Mr. Kocturk also stated that the prices should be assessed in the framework of soaring parity and inflation.

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