While the effects of the winter season have been felt slowly, most of the steel sector has started to see a slowdown trend as expected. This slowdown and the decline in flat rolled prices have been reflected in the
pipe sector. The Turkish
pipe sector, currently renovating itself, has also seen difficulties. Bookings have been already concluded based on the
construction sector's annual projects. Taking into consideration these bookings and the general situation, next year is expected to be similar to 2006. If the reasons backing this expectation continue to have influence, then they will also affect the
pipe sector in 2008.
The dominance of Chinese pipes in the US, along with the slow European market, has caused Turkish producers to focus on their domestic market. Although there is uncertainty in the Turkish domestic market and stagnation in the
construction sector, the revival and upward trend expected in the flat rolled market in a few weeks may lead to an improvement in the
pipe sector.
The slowness in implementing the mortgage system in
Turkey and the delays in carrying out natural gas and fuel projects have hampered domestic purchases. In addition, other factors will also create difficulties for the Turkish market. The increase in the current account deficit, the approaching elections, and the relations with the European Union will mean that a difficult period lies ahead for the economy. There are rumors even that a crisis situation could be seen. Even though there will be no crisis, the economic indications are that it will be a difficult year. It is very important for all sectors, not only the
pipe sector, to get through this depressed period with minimum losses.
It is almost impossible for
Turkey in the upcoming years to have a place in the
pipe sector with a weak economy and with only low value-added
pipe as its main focus.
Turkey has to produce high value-added materials and must distinguish itself from
China and
India in terms of
pipe quality. Otherwise, it will be very difficult for
Turkey to compete with these countries, where labor costs are very cheap. If we add the expected decline in flat rolled prices to all these conditions, the picture becomes more and more gloomy.