Domestic supply: Erdemir's current priority

Domestic supply: Erdemir’s current priority

According to a recent press release by Erdemir, the company explained its prospects as focusing on supplying the domestic market instead of exports, at this stage, in order to minimize the negative impacts of market conditions on Turkish steel industry. One of the basic issues for Turkish steel industry is the imbalance between the production volumes of long and flat rolled products. Only 17% of the total steel production currently stands for flat rolled steel in Turkey, against levels around 60% in developed countries. Therefore Erdemir, being the sole flat rolled steel producer in Turkey, takes to supply the domestic demand as a priority and currently is in a position to meet almost half of this requirement. The rest of the flat rolled steel product demand in Turkey is met via imports. Total flat rolled steel requirement in Turkey is around 6.2 million mts. Following the rising trend of steel prices on the back of huge demand from China, particularly for flat rolled steel products, import availabilities for Turkish steel consumers restricted. The rising raw material costs and freight rates added on top of the globally increased demand for flat products put the manufacturing industry into difficulty. As an inevitable consequence, demand from Erdemir by the manufacturers in the domestic market has remarkably increased. Despite higher production costs and opportunities of exports at higher numbers, Erdemir allocated 95% of its production to the domestic market, according to statement by the company. Furthermore, the company is planning to increase its annual production capacity from the current 3.5 million mts to 4.5 million mts by end 2005.