ÇİB: We will continue to increase our share in new markets in 2023 

Friday, 06 January 2023 14:44:32 (GMT+3)   |   Istanbul
       

SteelOrbis talked to Adnan Aslan, chairman of The Turkish Steel Exporters’ Association (ÇİB), about his evaluations for 2022 and the outlook for 2023. 

Breaking a record in terms of exports in 2021 with its long-standing market experience, the Turkish steel industry started 2022 with the same momentum. However, it was an exceptional year due to the outbreak of the Russia-Ukraine war. Also, other factors such as ongoing protectionist measures in the global market and the rise in energy costs negatively impacted the steel industry. We closed 2022 with 19.6 million metric tons of exports, down 17.7 percent, with a value of $21.1 billion, down 5.3 percent, both year on year. 

As an energy-intensive sector, the increases that the government applied on input costs increased our production costs significantly. Consequently, the share of energy costs in our overall production costs rose by 4-5 times as compared to the previous year. The Turkish steel industry has started to lose its competitiveness due to the increasing energy cost. High rises in energy costs in Turkey in 2022, which reduced the competitiveness of our steel industry, also negatively affected our steel exports. 

Meanwhile, with the start of the Russia-Ukraine war, we began to work in order to grab the missing share in the market. Although the Turkish steel sector tried to seize new opportunities with its export capability throughout the years, steel demand in the global market and especially in Europe weakened due to the war. On the other hand, steel imports from Russia in Turkey increased significantly since several countries had imposed embargoes on imported steel from Russia. Russian exporters’ aggressive price policy severely impacted the Turkish market. As a result of the differences in terms of competition and costs, new dynamics started to be seen in the market. 

In addition, we started to observe that steel demand in North Africa, the Middle East and North America increased, while the effectiveness of Russia and Ukraine weakened. We turned towards the markets in question to take advantage of this opportunity. We also organized trade delegation visits to the Balkans and Baltic countries, where Russian and Ukrainian exporters had become less effective. We compensated for our losses in terms of sales to these markets, which had created opportunities for exports. In 2023, we will continue working to obtain greater shares in these markets. 

We can also say that protectionism measures in the global markets and the rises in energy costs will be the most important issues for the Turkish steel industry in 2023, while we are trying to deal with the problems affecting our exports. The rise in the share of energy in production costs is negatively impacting our competitiveness since the steel industry is an energy-intensive sector. 

We, the Turkish Steel Exporters’ Association, are continuing our activities without a pause to achieve sustainable competitiveness at a global level. We continue to work with our sub-sectors with our UR-GE projects. We reorganized our trade delegations in line with the developing conditions. While the export trade delegation continues our work, we will also be following expo calendar. On the other hand, we will closely monitor the organizations which are held for the sector and will continue to implement training programs which can meet our members’ needs. We hope to contribute both to our industry and to the Turkish economy in 2023, with projects and studies which will increase our market share. 

In addition, the EU has started to take measures such as the Green Deal and Carbon Border Adjustment Mechanism (CBAM). Turkey is also working on this issue. Most of the steel production in our country is carried out by electric arc furnaces. So, the average carbon emissions created are relatively lower when compared to other countries. Although it seems that our carbon emissions are below the world average, we have disadvantages when compared to countries and regions such as the European Union, where the renewable energy use is high. Therefore, we will contribute to our country's commitment to carbon emissions in the period up to 2050. Meanwhile, in 2023, we will also work on the use of hydrogen, which allows clean energy production in the iron and steel sector through MATİL A.Ş. which was established by our association. In this context, we will establish a center (including 12 qualified tests) to determine the properties of materials, including steel, which are used in the transportation and storage systems for hydrogen, in terms of quality, lifetime and performance. We will continue our activities with the awareness that we must increase the share of renewable energy use in the steel industry. 

The Turkish steel industry has the same specifications as the world in terms of changing production methods and technological transformation, and has the power to easily compete with its competitors in free market conditions. 


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