SteelOrbis spoke to Arın Demir, business affairs deputy director general at Turkish steelmaker Tatmetal, about the firm’s investments initiated in 2019 and its expectations for the coming period.
Firstly, could you tell us about the cold rolled coil rolling plant planned to be activated in the last quarter of the current year?
Our pickling line, which is the first part of our new investment for our PLTCM [pickling line tandem cold mill] was activated in May 2019. This line has provided a 1.5 million ton additional capacity with its ability to perform pickling activities on hot rolled coil up to 5 mm thick with width of 1,550 mm. The investment in the tandem line to be integrated with this pickling line is continuing with a planned launch date in the first quarter of 2020. With an annual capacity of 1.5 million tons, our new tandem cold mill unit’s product range will be 0.20-3.00 mm thick with a 1,550 mm coil width.
Have you completed your investments aimed at increasing your galvanizing and pickling capacities? Considering the current market conditions, do you believe that these investments are in line with your expectations?
Our second galvanizing line was commissioned in the second half of 2018 with an annual 450,000 ton capacity, aimed at producing materials applicable to the automotive and white appliance industries. On this line, we have started to produce deep drawing and HSLA grade products, while tests continue for the production of dual-phase steel and bake-hardening steel. We have successfully passed the approval processes of key and auxiliary automotive sectors for our deep drawing “MB” surface galvanized products. Our production tests to achieve a wider product range are also continuing. Our line can produce up to 600 Gr/m2 coated galvanized products, and we have started to supply materials for firms carrying out industrial applications. Again, we have successfully concluded several test production processes for the white appliances sector and have started to provide materials for mass production.
With our new galvanizing and PLTCM lines activated, we expect that we will achieve our goal to become an expert producer in the automotive and white appliances sectors for which expectations are high.
How do you view the trend of domestic demand and prices?
The developments in the global economy, the geopolitical and political risks, and the fluctuation of commodity prices as well as the protectionist policies of some countries against steel imports are still having an impact, and are naturally affecting our industry. Although demand in the local market has remained stable in the recent period, we can say that making a precise prediction about the future trend of prices is hard in the current global conjuncture since it is influenced by many factors.
What is the breakdown of your domestic and export sales?
Although it changes with the market conditions, we can say that our domestic sales equal 70 percent of the total and exports are at 30 percent.
What difficulties do you experience when procuring input materials?
Our priority is to procure raw materials from domestic plants, but naturally we also evaluate the price advantages in the global markets. However, the customs duties on import raw material and competition with our raw material suppliers in the finished steel market are the difficulties that we face.
How have your sales changed following the safeguard measures implemented by the EU in the wake of the US Section 232 duties?
Global trade has been disrupted by the trade wars and safeguard measures, particularly due to the uncertainties they cause. As a result, the measures taken in the steel market have an impact on our industry. At Tatmetal, we are availing of the opportunities that exist in other countries and regions, increasing our proficiencies and diversifying our targeted markets.
What are your expectations for the coming period?
Despite the downswing, sectoral competition and the new investments which are foreseen in the coming period, we believe Tatmetal will strengthen its position in the market with its increasing market share, qualified human resources and technological strength. To increase our market share with new investments will be the most important element in maintaining our success.