During the first session of the 5th YISAD Flat Steel Conference & SteelOrbis Market Talks held in Istanbul on May 11, Ugur Dalbeler, general manager of Turkish steelmaker Colakolgu Metalurji stated that in 2016 the rise in global steel production was supported by higher steel production in Asia, adding that share of Asia in global steel production was 42 percent 15 years ago, while it rose to 70 percent in 2016. He said that steel production has been shifting towards developing countries from developed countries, stating that this brings a significant opportunity for Turkey.
Mr. Dalbeler pointed out that share of Asian countries in global steel consumption increased from 44 percent to 65 percent in 15 years, adding that global steel consumption is expected to increase by 1.3 percent this year and by 0.9 percent in 2018. Meanwhile, steel consumption growth has started to slow down in Asian countries. Asian steel consumption is expected to increase by one percent this year and to fall by 0.1 percent in 2018, with Chinese steel consumption likely to shrink by two percent next year. The Colakoglu Metalurji official said that the global steel consumption growth forecast excluding China for the current year stands at 2.4 percent and at 3.1 percent for 2018, while for Turkey the steel consumption growth forecasts are three percent for 2017 and four percent for 2018.
Regarding Turkey’s hot rolling capacity, Dalbeler said that it stands at 20 million mt, though the capacity utilization rate is just a bit higher than 50 percent, adding that he hopes the capacity utilization rate will pick up this year. During the first quarter this year, Turkey’s flat steel consumption increased by 2.6 percent to 4.31 million mt, and production rose by 30 percent to 3.3 million mt. He also stated that Turkey ranks ninth in the world in terms of steel export volume with 16.5 million mt, while it ranks 13th in terms of steel export value with $9.1 billion.
Commenting on the Turkish steel industry’s strengths and weaknesses, Mr. Dalbeler said that the logistics advantage of Turkey’s geographical location and steel mills’ easy access to ports as well as strong domestic steel demand make up the industry’s strengths, while dependency on imports for raw material, small-scale production plants and the lack of cooperation between the steel industry and steel consuming sectors form its weaknesses.
Regarding the flat steel consuming sectors, Ugur Dalbeler pointed out that oil prices are expected to see a moderate increase in 2017-2018, while they are unlikely to reach the high levels seen in 2010-2012 despite the oil production restrictions applied by OPEC. On the other hand, the automotive industry, which peaked due to the recovery seen in consumption in developed countries, low oil prices and government programs subsidizing automobile purchases in certain countries, is expected to see a deceleration in the coming period.