Turkish stainless steel sector remains sluggish

Wednesday, 16 September 2009 17:22:56 (GMT+3)   |  
       

It is essential to observe the sectors that use stainless steel and their manufacturing rates in order to have a better understanding of the situation in the Turkish stainless steel sector. The capacity utilization rates that have been announced for August indicate why Turkey's stainless steel sector is currently moving on a sluggish trend. Due to the effects of the contraction of the sector, stainless steel demand has shown a decrease.

The capacity utilization rate in Turkish manufacturing industry stood at 69.7 percent in August, down 6.5 percentage points as compared to the same month of last year and marking a decrease of 2.6 percent compared with the previous month, according to the Turkish Statistics Institute (TUIK). The production based-capacity utilization rate, which stood at 76.2 percent in August 2008, declined to 69.7 percent in August this year, compared to 72.3 percent in July. In Turkey's manufacturing industry, the sector which registered the lowest production based-capacity utilization rate in August according to the classification of the main industrial groupings is the manufacture of office accounting-computing equipment at 42.7 percent. This was followed by the manufacture of vehicles and car bodies at 51.2 percent and by the manufacture of furniture at 64.3 percent.

Looking at the capacity utilization rates in August this year of industrial sectors in Turkey which widely use stainless steel, the manufacture of food products and beverages posted a 70.8 percent capacity utilization rate, the manufacture of textile products stood at 73.7 percent, the manufacture of chemical materials was at 74 percent, the metal goods sector was at 68.1 percent, the manufacture of machinery and appliances stood at 68.8 percent and the manufacture of other transportation vehicles was at 73.5 percent. Among the main reasons given by Turkish manufacturing companies for not reaching full capacity in August this year, shortage of demand in the local market was at the top of the list at 52.2 percent, with shortage of foreign demand at 29.8 percent.  

It can be said that the low demand mentioned above has been seen all over the world. In these tough times, the developments observed in China, the world's leading steel market, have created an uncertain environment in the Far East. However, this situation has yet to reach very critical levels. With a minimum positive influence, the market may switch to an increasing trend; on the other hand, an even more negative situation could be observed. To sum up, uncertainty has continued to prevail in the market. The more rapidly the economies of the leading regions in stainless steel sector, i.e., Europe and the US, show improvements, the more rapidly the worldwide stainless steel sector will grow. At the time of writing, the high levels of nickel prices, which have reached $16,500/mt, can be thought of as evidence of a threat coming from China. The weak recovery in the world in general and most countries' heavy dependence on countries such as China and India may cause a systemic crisis in the coming period. In addition to the above, confidence levels on the whole have not yet recovered, which has led banks to offer credit to the markets at high rates. This has also negatively affected individual consumption as well as projects and investments - which are essential for economic recovery.

Unless the contraction in the Turkish economy comes to an end, it will be difficult for the Turkish stainless steel sector to show a recovery.


Similar articles

Flat steel prices in local Taiwanese market - week 13, 2024

28 Mar | Flats and Slab

Local Chinese stainless steel prices mostly decrease

28 Mar | Flats and Slab

Ex-China stainless steel prices edge down

26 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 12, 2024

21 Mar | Flats and Slab

Local Chinese stainless steel prices move down slightly

20 Mar | Flats and Slab

Ex-China stainless steel prices move sideways

19 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 11, 2024

14 Mar | Flats and Slab

Local Chinese stainless steel prices mostly move down slightly

13 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 10, 2024

07 Mar | Flats and Slab

Local Chinese stainless steel prices mostly stable, some slight downticks also

07 Mar | Flats and Slab