SteelOrbis talked to Fatih Köksal, secretary general of Turkey-based Stainless Steel Association (PASDER), regarding the latest situation in the stainless steel industry and expectations for the future.
Could you provide an update on the current situation in the stainless steel sector?
Turkey's flat stainless steel consumption reached 703,000 mt percent year in 2024, and, based on the statistics for the first six months of 2025, total consumption for the year is expected to be approximately 670,000 mt per year. Therefore, a five percent decrease is projected on an annual basis. The main reason for this situation is the decline in demand in sectors with high stainless steel consumption, particularly the white goods sector. However, despite this decline, our country ranks third in Europe in flat stainless steel consumption after Germany and Italy.
Currently, there is a cold rolling mill with a capacity of 200,000 mt per year in our country, and, due to the limited ability to meet total demand, flat stainless steel products are primarily imported. However, in recent years, Sarıtaş, a leading and pioneering company in the sector, announced an integrated stainless steel investment with a capacity of 800,000 mt per year to be carried out in Yalova Machine Specialized Industrial Zone. This development is considered to be a highly beneficial investment for our country. Stainless steel holds strategic importance due to national and geopolitical reasons. With the implementation of this investment, our country will significantly reduce its dependence on imports for stainless steel consumption. In line with Sarıtaş' announced investment plan, the cold rolling mill facility will be completed by the fourth quarter of 2027, the hot rolling mill by the fourth quarter of 2028, and the steel melting plant by 2030. Upon completion of the investment, it is projected to contribute to reducing the country's trade deficit by $2 billion in import substitution and by $800 million in exports, as well as creating a total of 1,200 jobs. Therefore, this investment goes beyond national significance and has a global impact. Given its strategic importance, the fact that this domestic and national investment is being brought to our country by Sarıtaş is highly meaningful and significant.
In the first quarter of this year, the European Commission prepared a new action plan to enhance the competitiveness of the steel and metal sectors, announcing that the plan would promote the metal industry capacity in Europe and tighten existing steel sector protection measures in line with recent market developments. Within this framework, access to EU funds for the steel and metal sectors will be increased, investments aimed at reducing carbon emissions in the metal sector will be supported, and €150 million from the Coal and Steel Research Fund and €600 million from the Horizon Europe program will be allocated to clean production initiatives in this field. In light of these developments, protecting and developing iron and steel production, including stainless steel, is of vital importance in our country. Considering the strategic importance of such investments, shaping incentive mechanisms in favor of the sector in our country will pave the way for investments and contribute to the development of production infrastructure in these critical products on behalf of our country.
How would you describe the trends in demand and prices?
High capacity in China, which accounts for 65 percent of global stainless steel production, as well as weak domestic demand in China and in global markets, continue to put pressure on prices. This is negatively affecting the profitability of manufacturing companies. This situation is also affecting the actors in our country's stainless steel sector. It is anticipated that this trend will remain flat throughout the year in our country.
Globally, the stainless steel market is stagnant due to weak economic growth, high interest rates, and fragile consumer demand. Prices are in particular declining in the European and US markets. Demand and price trends for flat stainless steel products indicate a clear slowdown trend in Turkey and globally in 2025. Domestic demand in Turkey is weak, and factories are struggling to secure orders, creating an environment that is pushing producers to lower prices. In Europe and the US, orders are declining in both the construction and automotive sectors, while inventories remain at high levels and demand is failing to recover.
How do you assess the competition from imports?
In order to establish a sustainable stainless steel industry, a strategy that turns the competition caused by imports into an advantage and reduces dependence on foreign countries must be followed. The competition caused by imports in the stainless steel sector is a two-sided situation that presents both opportunities and serious threats. Especially in high-value-added segments such as flat stainless steel, import competition directly affects the investment and sustainability strategies of domestic producers in Turkey. Turkey's current heavy reliance on imports in flat stainless steel production leads to disruptions in the external supply chain and price fluctuations. This dependence on foreign imports poses economic and strategic risks, particularly in sectors such as defense, automotive, and white goods.
The ongoing antidumping duty investigation against imports from China and Indonesia is expected to be concluded soon. What will be the impact on the market?
The customs duty rate for cold rolled stainless steel products under tariff codes 7219 and 7220 was increased from 2 percent to 8 percent on October 30, 2013, from 8 percent to 10 percent on December 31, 2015, and from 10 percent to 12 percent on December 31, 2019. Additionally, during the pandemic period, from April 18, 2020, to December 31, 2020, this rate was increased from 12 percent to 17 percent, and as of December 31, 2021, it was reduced from 12 percent to 8 percent. The reduction of this rate to 8 percent was a decision in line with the sector's expectations, contributing to the relief of sectoral companies and enhancing their competitive strength, particularly in international markets. However, with the decision dated December 31, 2023, numbered 32416, the customs duty rate for the aforementioned stainless steel products has been increased again from 8 percent to 12 percent. This development has created an unexpected shock effect for our sector, which is already struggling under current global economic conditions, while the initiation of an antidumping investigation regarding stainless steel products as of June 28, 2024, is considered to be a development that will further exacerbate the challenges faced by the entire sector.
The high customs duty and potential additional tax increases will negatively impact thousands of local businesses that have created tens of thousands of jobs and made investments across the country over the years. This is because stainless steel products are used as raw materials/intermediate goods in the production of value-added products in many sectors, including the white goods, machinery, automotive, and defense industries. Therefore, in addition to the diversity of supply sources for these products, cost is a critical factor in order to compete, especially in global markets. In light of these realities, a potential antidumping duty on stainless steel products imported from China and Indonesia would increase production costs in sectors using stainless steel and lead to higher final product prices, thereby causing negative effects for both final consumers and producers. This situation would not only reduce the competitive advantage in exports but also have negative effects on production and employment. The current 12 percent customs duty applied to cold rolled stainless steel products provides sufficient protection. Therefore, the sector's expectation is that the dumping investigation be closed without any measures.
How do you interpret the protectionist policies spreading worldwide?
The protectionist policies spreading across the world are a sign of a major transformation in the global economy, particularly in the last 10–15 years. The reasons behind these policies, their effects, and their results in specific sectors are evaluated below:
- China's global production power: the need has emerged to take measures against China, which is disrupting markets with its cheap, subsidized, and high-volume production.
- Post-Covid-19 supply chain disruptions: logistical crises during the pandemic prompted countries to act in a self-sufficient manner.
- Geopolitical tensions and energy crises: developments such as the US-China trade war and the Russia-Ukraine war have led to an increase in protectionist policies in strategic sectors.
- Increased investment in high value-added products,
- Ensuring supply security and continuity in strategic products through integrated investments,
- Investing in green production and digital transformation,
- Diversifying export markets is of critical importance.
The European Green Deal and sustainability: environmental factors such as carbon footprints are now becoming prerequisites for trade, affecting prices (e.g., CBAM - Carbon Border Adjustment Mechanism). Protectionism has become an inevitable global trend; countries are now acting with the goal of “strategic autonomy”.
For Turkey to succeed in this environment:
How are current economic conditions affecting the market?
The slowdown in global markets is also affecting our country. However, as PASDER, we believe that this process will return to normal, that interest rates will fall and credit will be loosened, paving the way for investment, and that the global slowdown affecting our country will come to an end. We believe that Turkey will once again stand out positively during this process and demonstrate strong growth. This is confirmed by the IMF's upward revision of its growth forecasts for the Turkish economy for 2025 and 2026, with the 2025 forecast raised from 2.7 percent to 3.0 percent and the 2026 forecast from 3.2 percent to 3.3 percent. Growth expectations for 2025 have been announced as 1.9 percent for the US, 1.0 percent for the euro zone, 0.1 percent for Germany, and 0.6 percent for France. According to IMF and World Bank projections, global growth will remain low at 2.4–2.8 percent in 2025. In particular, sluggish industrial production in Europe, China, and the US is weakening export demand for stainless steel. The tight monetary policies of the US and EU central banks are also slowing foreign capital inflows to developing countries while increasing financing costs for industrial investments. In addition, while prices of minerals critical to stainless steel production, such as nickel, chromium, and molybdenum, remain volatile, energy prices (natural gas, electricity) are still high in some regions. This is triggering cost inflation.
How is 2025 shaping up, and what are your expectations for the rest of the year?
Turkey's stainless steel consumption is expected to be slightly below 2024 levels in 2025. Prices are expected to remain flat for some time. However, price increases may be observed after a certain period, in line with positive market trends.
2025 will be a turbulent and challenging period for the stainless steel sector both in Turkey and worldwide. Based on current data and market observations, the general outlook for the first half of the year and expectations for the remainder of the year are summarized below:
Demand in Turkey and across Europe has remained below expected levels, particularly in the first half of the year. The slowdown in the construction, automotive, and white goods sectors has reduced stainless steel consumption. Industrialists have tended to consume from their stocks due to high interest rates and financing difficulties.
Global stainless steel prices have experienced a significant decline, with prices in Europe and the US falling by 7–12 percent. This situation has also affected our country, with companies in the sector facing pressure to reduce prices and declining profitability.
Although there is a possibility of a gradual recovery in the domestic market, no major leap is expected. In particular, some movement is expected towards the last quarter of the year. Prices may stabilize at low levels. As long as the stagnation in the EU continues, this situation is not expected to change. However, opportunities may arise in North Africa, the Middle East, Central Asia, and Africa. Global economic stagnation, energy costs, and currency fluctuations may continue to challenge the sector. The EU market will become more selective due to carbon regulations.