We spoke with Mahir Yılmaz, owner of Akpen Metal, about the challenges in the industry and the changes brought about by geopolitical developments.
Could you tell us about your company and its operations?
Our company operates as a steel service center. We produce products in the dimensions and shapes requested by our customers using 11 slitting lines, four cross-cutting lines, a trapezoidal line, three open profile lines, and two welded profile lines.
What is your product range, and which sectors do you serve?
Our product range consists of flat steel products, including galvanized sheet, DKP sheet, black sheet, HRP, painted sheet, and silicon-coated sheet. The sectors we serve include automotive, home appliances, construction, furniture, ventilation, and heating and cooling systems, among others.
How do you assess the current situation in the flat steel market?
In the iron and steel market, prices fluctuate continuously in cycles of about 2–3 months, but over the past two years, prices have dropped almost every month at an unprecedented rate.
Over the past two years, the cycle of buying high and selling low has put steel service centers in a very difficult position. As a result, quite a few companies couldn’t withstand this and have disappeared from the market. Having to pay bank loan interest while operating in a “buy high, sell low” cycle was truly challenging. Prices have risen slightly now, but I’m skeptical about whether this increase will be sustained. Once the wars end and energy and logistics costs return to normal, will prices be able to maintain this level? There is a global oversupply of steel. In markets with oversupply, prices don’t rise. That’s why we need to be cautious when purchasing goods.
What can you say about the trend in demand and prices?
Demand is falling worldwide. As all countries implement protectionist measures, exporting nations like ours are struggling. With both the domestic and international markets weakening, competition has intensified significantly. Despite our general expenses rising significantly, we couldn’t pass this on to our prices, so we’ve ended up selling goods at nearly cost price. Business is slow, and our general expenses are high. Additionally, our customers’ financial difficulties have increased significantly. The number of companies filing for bankruptcy protection in the market is very high. In January and February alone, 2,000 companies filed for bankruptcy protection. Most of our sales are on credit, so we’re at a loss as to whom to sell our goods to.
How do you interpret the competition caused by imports?
With the tariffs imposed on imports, this is no longer a major issue. Imports may continue in certain niche markets, but they won’t persist at excessive levels in the general merchandise sector.
What is the impact of protectionist measures from both the US and the EU on the markets?
Protectionist measures are severely disrupting markets, and since we are an exporting nation, they are causing difficulties for us as well. I believe this situation will persist for some time. Everyone will have to find new markets for exports. The quotas allocated to us in Europe are filling up immediately. The U.S., with its tariff decisions, is particularly putting the global steel sector in a very difficult position. Since investments were made as if exports to the U.S. would never change, the sudden, sharp cut in exports under Trump - which had been a long-standing norm - has left the world reeling from the shock. South Korea and Japan, which had benefited from preferential treatment, are particularly reeling. Now, production cuts and factory closures are on the agenda worldwide.
How have geopolitical developments led to changes in trade?
Power is now shifting eastward; both financial and industrial power in the East are growing stronger by the day. Everyone needs to adjust their plans accordingly. Turkey’s position is strong in every respect - provided we do not lose our industrial capacity, that is, provided we do not deindustrialize. Otherwise, we will become a country that merely imports. Turkey is situated right at the center of Europe, Africa, and the Middle East. Logistical challenges and logistics costs have become increasingly critical. The war in the Middle East has significantly heightened Turkey’s importance. Place an order with Turkey, and it will arrive at your doorstep in 15 to 30 days - no other country can do this. As long as we do not lose our production capacity, we must support industrialists and producers. Additionally, Turkey has adopted an excellent strategy in these conflicts, maintaining open communication with all parties involved, keeping an equal distance from everyone, and continuing to foster friendships with all. Ultimately, the wars will end eventually, and trade will revive. By maintaining friendships with everyone, our trade will continue to grow.
How is the current economic situation affecting your business?
The economic situation is challenging, and even more so for companies relying on bank loans. Our customers cannot find enough work; even when they do, they sell goods at very low profit margins just to make ends meet. They cannot collect payments and cannot access financing. Even if they can, it is extremely expensive. As a result, there is an unprecedented crisis in collections and payments in the market. Everyone has scaled back and is just trying to survive.
Which areas will take center stage in your growth strategy moving forward?
I think it would be more prudent to focus on stabilizing our current situation rather than pursuing growth.
Finally, is there anything else you’d like to say?
It’s a difficult time for everyone; I hope things get easier for everyone.