At a press conference held today by the Turkish Steel Exporters’ Association (ÇİB), the main discussion topic was the impact of electricity costs and global developments on the production and exports of the Turkish steel industry. The association also shared its expectations for 2023.
Turkey’s steel exports, which had been on an upward trend in the first six months of 2022, decreased at the end of the year due to the negative effects of rising energy costs and inflation, global recession expectations, and the war between Russia and Ukraine. The country’s steel exports fell by 17.7 percent year on year to 19.6 million mt and the production decreased by 12.9 percent to 35.1 million mt.
The steel industry, which was the sector that contributed the third largest share to the country's exports in 2021, fell to fourth place in the export ranking this year due to the decrease in its competitiveness amid the large increase in energy costs, especially compared to its competitors in the EU.
Pointing out that steel demand in the US and Europe, the main markets for the Turkish steel industry, has contracted, Adnan Aslan, chairman of the ÇİB, stated that, if the energy crisis and the slowdown in demand continue, the Turkish steel industry will focus on protecting the existing production level rather than on increasing it in 2023.
Saying that the country’s steel exports were at good levels in the first half of 2022, but the rise in energy prices after June increased production costs, Mr. Aslan stated that the decline in exports will continue until June this year, but, with the expectation of a decline in inflation, the expected increase in global steel demand, energy and energy efficiency investments, he expects the global steel industry to begin recovering in the second half of this year and the Turkish steel industry to regain its competitiveness in the export markets. In addition, stating that countries such as Russia, China, India and Iran continue to conclude sales to Turkey at dumped prices, Aslan stressed that the necessary measures should be taken to prevent dumping of imports.
Regarding investments, Uğur Dalbeler, vice president of the ÇİB, stated that almost half of Turkey’s steel consumption is met by imports, and the country’s capacity utilization rate fell to 51 percent, which is the lowest level in history. Dalbeler said that the steel industry requires investment, not just for capacity increase but at least for renovation of equipment, otherwise the competitiveness of the Turkish steel industry will weaken.