Speaking at SteelOrbis Market Talks Meeting held in Istanbul on May 22, Turkey director of Belgian Scrap Terminal NV, Sukru Celik, discussed the Turkish steel industry and in particular its scrap imports in relation to Turkey's current account deficit which had hit a record level of $77 billion in 2011. Noting that the steel industry is one of the most important industrial sectors in Turkey, Mr. Celik stated that Turkish producers have to import scrap for their arc furnace steel production. Disagreeing with the idea that the country's steel industry increases Turkey's current account deficit, he said that steel scrap imports ultimately have a positive effect on the current account deficit as opposed to having to import finished steel products which would lead to a greater deficit.
In his speech which included an evaluation of steel scrap production and scrap consumption of steel producing countries in 2012, Sukru Celik mentioned that total crude steel production in the world amounted to 1.55 billion metric tons in 2012, totaling 711 million metric tons if China's production is excluded. According to Çelik, in 2012 scrap consumption of the major consuming countries was as follows: 100 million metric tons in the EU, 80 million metric tons in China, 60 million metric tons in the United States, 32.4 million metric tons in Turkey and 22 million metric tons in Russia.
Pointing to the US, EU, Russia and African countries as Turkey's main sources of scrap, Celik said that Turkish scrap imports in 2012 amounted to 22 million metric tons. He added that Turkey is a crucial destination for scrap exporting countries in general, and particularly for the EU due to its proximity to Turkey.
One of the issues discussed by Mr. Celik was whether the DRI production facilities established in the United States would affect the place of Turkey in the scrap market. Explaining that DRI is not efficient in arc furnace production, Celik said that it therefore cannot replace steel scrap. While iron ore prices can indicate the future course of scrap prices, he said that DRI production will not lead to a decrease in the price of scrap.
Finally, Celik said that scrap prices will be influenced by prices of finished steel and mostly by rebar prices, while scrap prices will not be determined by the prices of rebar.
