Çolakoğlu Metalürji: 2020 will be better than 2019

Friday, 17 January 2020 13:48:30 (GMT+3)   |   Istanbul

SteelOrbis talked to Gökhan Erdem, director at Çolakoğlu Metalurji about what happened in 2019 and what is expected in 2020.

Ahead of 2019, we had anticipated an increase in protectionist policies and trade barriers all over the world. Indeed, 2019 was a year in which the “fair trade” concept in the global steel market was damaged further with each passing month. Meanwhile, the reduced production and consumption rates particularly in the European automotive and manufacturing sectors in 2019 negatively impacted steel demand in terms of volume and trade. In 2019, Turkey became one of the countries that recorded the biggest decreases in steel production. Turkey’s steel consumption - primarily in the automotive and white appliances sectors - declined in 2019 as compared to previous years. As a result, although Turkey’s steel imports decreased year on year, Turkish producers managed to increase their exports in the first eight months of 2019. As steel trade changed due to new global rules, Turkish mills continued to swiftly ship their products to new export markets.

Another remarkable point in 2019 was that we talked less about China, though it had been the top topic of conversations in previous years. Having continued to increase its production rates in the first ten months of 2019, China produced more steel by itself than all other countries together. Along with China, India, Vietnam and Iran also increased their production volumes year on year. In the last quarter of 2019, Europe and South American countries were forced to cut capacity utilization rates. The first quarter of 2020 is expected to be better than the last quarter of 2019. One of the most important topics which will have an impact on the Turkish steel sector is whether China will manage to maintain lively domestic demand in 2020 as it did in 2019.

In 2020, in addition to all these factors, the extra protectionist measures in the US market - even its various practices for different countries - will have an important effect on the Turkish steel industry’s performance.

We consider that the shrinkage of the Turkish market has finally touched bottom, and so we expect 2020 to show better indicators on average as compared to 2019.

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