During his speech at the SteelOrbis Market Talks Meeting held in Ankara on April 27 with the participation of more than 200 representative from 107 companies, Turkish Iron and Steel Producers Association (DCUD) general secretary Dr. Veysel Yayan said that the Turkish steel industry is rapidly expanding, with
Turkey's GDP growing by eight percent in 2011, while domestic steel
production increased by 17 percent, both year on year.
Mr. Yayan pointed out that in 2011domestic steel
consumption per capita increased to 384 kg from 350 kg in 2010, stating that the Turkish iron and steel industry is expected to continue growing depending on the increase in domestic
consumption.
Mr. Yayan said that
Turkey ranks seventh worldwide in terms of steel exports and that in 2011 its iron and steel exports were equivalent to 141 percent of its iron and steel product imports, adding that - when the export of steel containing products such as automotive, white goods and machinery are included after being calculated with coefficients defined by worldsteel -
Turkey exported 121 percent more than its imports, turning out to be a net exporter. Mr. Yayan underlined that
Turkey's steel exports rose significantly last year and in the first quarter of the current year, while imports decreased with the increase in domestic output of flat steel products thanks to new investments.
Mr. Yayan said that
Turkey's steel exports decreased by 20 percent in April, adding that the fall in European
consumption due to the economic crisis prevailing in the region caused a decline in
Turkey's flat steel exports which are mostly destined for Europe. Nevertheless, it is still expected that the industry will close the year with positive results.
Asked whether
Turkey's rapid growth poses a threat, Mr. Yayan drew a parallel between
Turkey and China, explaining that China which was expected to overrun the global markets at some point with its increasing output but eventually turned towards its domestic market, and he pointed out that
Turkey is going through a similar situation. He stated that
Turkey's increasing flat steel
production will trigger
consumption, encouraging investors in industries such as pipe, white goods and automotive, adding that, thanks to banking legislation and infrastructure investments, the economic crisis in Europe has not really hit
Turkey.
Regarding
Turkey's new incentive package for the iron and steel industry revealed in early April, Mr. Yayan emphasized that the incentive package will only contribute to mining investments due to the agreement between
Turkey and the EU prohibiting direct subsidies for the iron and steel industry, adding that negotiations are expected to be carried out with the EU to pave the way for incentives for structural, stainless and special steel investments as well. The DCUD official said that they were also looking forward to incentives for R&D and environmental investments.
Commenting on how the energy price increases announced in
Turkey in early March will affect the steel industry, Yayan stressed that energy costs account for 8-10 percent of total steel
production costs. He underscored that this means a $5-10 per metric ton additional cost, on top of already tight profit margins. He also criticized the way the price increases are delayed and piled up, remarking that it had been expected that, instead of price increases, night tariffs would be applied on energy used at weekends.
Mr. Yayan underscored that idle capacities are included in the surplus capacity of 500,000 mt in the global steel industry, stating that most of the capacities in Europe are idle, and so the above figure does not indicate the real surplus capacity. He pointed out that surplus capacity does not necessarily pose an oversupply threat, and that such capacity can also be used to respond to urgent needs.