We spoke with Gökhan Erdem, sales and marketing director at Çolakoğlu Metalurji, about the current state of the steel sector, the increasing protectionist measures in the global market, and the expectations for the coming period.
Could you tell us about your company's activities?
Founded in 1945 by Mehmet Rüştü Çolakoğlu with a steel trading house in Karaköy, Çolakoğlu Metalurji is one of Turkey's leading steel producers. This journey, which began with the production of wire rod in 1985, saw the expansion of our product range in 1990 with the addition of ribbed construction steel. We further strengthened our leading position in the sector with the steel mill and hot rolled sheet production investments we initiated in 2005 and the sheet rolling mill we commissioned in 2010.
Thanks to our modern facilities and technologies, we produce a wide range of products, from ultra-low carbon steels to complex phase steels. With the flat steel we produce, we make significant contributions to many sectors, including automotive, wheels, machine manufacturing, oil and pipe drilling, construction, and agricultural equipment. We also supply construction steel to the construction sector.
Could you describe the current trends in demand and prices?
Demand and prices are following a flat trend in line with the general stagnation in the market. Economic uncertainties and weak demand are limiting price movements. During this period, as Çolakoğlu Metalurji, we continue to adapt quickly to market conditions with our flexible production structure and customer-focused approach.
In terms of costs, looking at scrap and billets, what are your plans for raw material usage in the coming period?
At Çolakoğlu Metalurji, we are focusing on increasing our scrap usage rate in the coming period, in line with our sustainability and cost-efficiency goals. In this context, we aim to increase our production efficiency and reduce our carbon footprint by prioritizing the supply of high-quality scrap. At the same time, we plan to diversify our raw material strategy by evaluating alternative sources and low-carbon raw material solutions. By digitizing our processes and deepening efficiency analyses with AI-supported modeling, we aim to use our resources more effectively. In this way, we are developing a raw material management strategy that will enable us to achieve both cost advantages and reduce our environmental impact.
How do you interpret the situation in export markets? What can you say about competition, particularly with North Africa?
As one of the cornerstones of industrialization and economic development, the iron and steel sector is one of the strategic areas that determine Turkey's global competitiveness. Our country has achieved an important position in this field thanks to its flexible production structure and dynamic workforce, which can adapt to rapid global changes. At Çolakoğlu Metalurji, we act with the responsibility of being one of the pioneers of this transformation and develop multi-faceted strategies to remain competitive in exports.
Our technological infrastructure in green steel production, our digitalization-focused processes, and our responsible production approach aimed at minimizing environmental impacts enable us to meet the expectations of international markets and thus gain a significant advantage. We have become a preferred brand not only through our product quality but also through our holistic sustainability approach, which is based on operational efficiency, business continuity, data security, digital transformation, and risk management. Thanks to our effective project management capabilities, we add value to many large-scale projects both locally and globally. Our products are used in many critical areas, from renewable energy infrastructure to residential and commercial construction, from drinking water and gas distribution lines to energy transmission systems, and from port and dam projects to natural gas and oil pipelines. This positions us as a reliable solution partner on both a global and local scale.
We build our competitive strength on four key strategic elements. The first is our strategic sales and marketing approach. By conducting in-depth analysis in target markets, we deliver the right products at the right time and develop customized solutions for our customers' needs. Second, thanks to our wide and high-quality product range and our culture of continuous improvement, we are becoming more competitive every day. Third, we place great importance on customer relationship management and establish long-term partnerships through our high-quality after-sales service. Finally, through our local and international partnerships, we increase our effectiveness in the market and create synergy on a global scale. These strategies form the basis of our brand strength and reliability.
In short, as a company, we offer not only products but also trust, sustainability, and solutions. With this approach, we continue to gain a strong and lasting competitive advantage.
The US currently imposes a 50 percent tariff on all countries, and antidumping duties have also been revised. Do you expect any changes in sales to the US under these circumstances?
The tariff applications that began in 2018 under Section 232 prevented Turkish steel from being competitive in the US market. Today, an equal approach to tariffs for all countries will end the negative differentiation against Turkey in the US market. However, this situation is causing countries with large production capacities, such as China, India, South Korea and Japan, to seek new markets. We are closely monitoring developments in the US market and continue to position it as an important export market. We continue to manage this process with our product diversity, our ability to produce high value-added steel, and our customer-focused flexible approach.
What changes is the increasing protectionism around the world bringing to markets?
The year 2025 is shaping up to be a period in which countries increase protectionist measures and economic uncertainties come to the fore. At Çolakoğlu Metalurji, we continue to offer our customers sustainable solutions during this challenging period by maintaining our long-term strategies and leveraging our agile production structure and export strength. We see these market fluctuations as an opportunity to increase our operational efficiency, evaluate new market opportunities, and accelerate our transition to low-carbon production.
As you know, Turkey did not have its own quota for angles and profile steel within the EU import quotas, but as of August 1 a country-specific quota was introduced and the tonnage that Turkey can export has increased. What do you think the effects of this will be?
It is possible to view this development in the EU positively. Any positive development regarding the issues hindering free trade in a region where we have long-standing partnerships will contribute positively to the Turkish steel industry. As Çolakoğlu Metalurji, together with our long-term business partners, we will continue to offer the advantages of our sustainable production route to our European partners.
How is the current economic situation affecting construction activities and your business?
Global economic fluctuations, uncertainties in raw material prices, and supply chain issues significantly affect steel production costs and prices. This situation increases the cost structure of construction projects and complicates budget planning.
High steel prices, in particular, cause cost increases in the construction sector and can lead to the postponement or downsizing of some projects. On the other hand, economic recovery and increased infrastructure investments are reviving steel demand and creating movement in the market.
As a result, current economic conditions require companies operating in the construction sector to be more careful in their production planning and cost management. Businesses that can quickly adapt to fluctuations in the steel market can gain a competitive advantage and continue their projects without interruption.
How is 2025 shaping up and what are your expectations for the remainder of the year?
2024 has been a period in which the effects of fluctuations in global markets have been strongly felt by the Turkish steel sector. In particular, China and other East Asian countries targeting Turkey as a market has created unfair pressure on local producers, leading to supply-demand imbalances and price volatility in the domestic market.