MMK Metalürji: Growth expected to normalize in next two years

Tuesday, 21 January 2020 17:49:38 (GMT+3)   |   Istanbul

Assessment of 2019

Despite trade wars targeting the steel industry and, as a result, duties and quotas, 2019 will be remembered for producers leaning towards alternative markets and increasing export volumes.

In recent years, production capacities in the Turkish coated steel industry increased, while Turkish steel producers focused on export markets due to the decrease in steel consumption in the domestic market resulting from the contraction of the construction and industrial sectors. With global economic growth at its lowest levels, producers had difficulties in concluding sales. Although Turkish producers’ export volumes decreased beginning from the middle of the second half of the year, prices and export volumes increased rapidly in the last period of the year as a result of sentiments becoming positive, rises in scrap prices, and the tightening of supplies.

Expectations for 2020

Improved demand both in domestic and export markets is necessary to maintain the positive acceleration achieved as of the end of 2019. Forecasts expect a normalization of growth in the next two years. The anticipated US-China trade deal, the disappearance of the uncertainties regarding Brexit, the decisions of the US Federal Reserve, the improvement in EU economies, monetary expansion and China’s incentives are the main factors that can make a direct global impact. Specific to our country, our growth performance and the increase in our capacity utilization rates in line with growth will be the topics we will keep track of, with the duties and quotas in export markets being in the first rank. We still expect a continuation of the improvement in the sector in the first quarter of 2020, as we also anticipate higher demand.