The Turkish Steel Exporters’ Association (CIS), which visited Warsaw, Poland, with a trade delegation on October 11-13, has stated that the Turkish steel industry has started to lose its export markets due to new competitors and that investments should be made in high added-value products.
Chairing the delegation, Ahmet Kamil Erciyas, board member of CIS, stated, “Iran, which has never been ranked on the global steel production list, has surpassed us. We, who had even surpassed Germany previously, have now fallen below Germany again.” Regarding scrap and energy, the most important inputs for the steel industry, Mr. Erciyas said that the Turkish steel industry wants energy prices and input costs compatible with those in the global markets.
Stating that the recent investments made in the Gulf countries have transformed these countries from importers to exporters and that the countries there have begun to compete with Turkish steel, Erciyas noted that Turkey has lost its markets due to the advantages that the Gulf countries have in terms of energy and labor.
Commenting on rising scrap prices, the CIS board member stated that 35 percent of the Turkish steel industry produces from ore and 65 percent from scrap. Stating that the given raw materials are imported, he said that, due to the decrease in sales, the Turkish steel industry is having difficulty meeting its fixed expenses, let alone making a profit.
Stating that factories should be shut down or focus on high value-added products in the face of increasing input prices, Erciyas stressed that investment incentives are needed for high value-added products, but the financial situation in Turkey is not suitable for this. “We are going through a very difficult time. In addition to all our problems, we also continue to face problems regarding quotas. In the US, producers operate with a profit margin of at least 25 percent. We are dealing with production from scrap dust. Of course, our profit margin is low. There is no 25 percent profit margin in the Turkish steel industry,” the CIB official added.
Meanwhile, noting that China, which dominates 60 percent of the global market, can determine prices as it wishes, Erciyas said that China, the world’s largest steel producer, has a great advantage over the Turkish steel industry, with protection measures against Turkey which can be called unfair competition, and that Turkey is lagging behind despite its freight advantage.