On Wednesday, June 11, with the support of Turkish integrated steel producer Erdemir, the SteelOrbis Market Talks meeting was held at the Intercontinental Hotel in Istanbul with over 700 participants. The meeting discussed the fundamental challenges facing the sector and predictions for the future of the Turkish steel industry in light of recent global developments. Other sponsors of the meeting included Davutoğlu Metal, Galva Metal, Nea Metal, Nehir Metal, Seçkin Metal, Yametaş, and Zey Demir.
Following the opening speech by Murat Eryılmaz, general manager of SteelOrbis, Sercan Büyükbayram, deputy head of marketing and sales at OYAK Maden Metalürji, gave a speech on Erdemir's activities and provided an overview of the Turkish steel sector. He began by stating that both the global and Turkish economies, as well as the steel sector, are going through difficult times. He noted that over the past five years the sector has experienced high volatility followed by a slowdown in production post-pandemic, emphasizing that efforts to combat inflation and interest rate decisions were being closely monitored. He stated that unexpected geopolitical developments have been observed, that they were trying to find solutions to the disrupted supply chain due to such developments in neighboring regions, and that the slowdown in the Chinese economy and its consequences were the main concern for everyone. Büyükbayram stated that, as a producer under the OYAK Mining and Metallurgy umbrella, they have invested approximately $1 billion annually over the past three years despite challenging market conditions. He emphasized that, while producers in competing countries receive subsidies from their governments, steel producers in Turkey carry out their investments without any state support. "In the first four months of this year, flat steel consumption declined by 12 percent, while imports accounted for 50 percent of consumption. In our opinion, these figures mean a loss for local production. Although the decline in production or increase in imports may seem like mere numbers today, the losses they will cause tomorrow may be too heavy to be expressed in monetary terms," said Büyükbayram, stressing the need for fair competition and expressing his objection to the risk of Turkey's industry becoming increasingly dependent on imports.
Following Büyükbayram's speech, the first session of the meeting, which focused on raw material markets, began with Eryılmaz as moderator and the participation of Şevket Selim Yılmaz, deputy group president of purchasing at OYAK Mining and Metallurgy, and Volkan Başol, operations director at Amsterdam Scrap Terminal. Yılmaz shared a comprehensive analysis, stating that global developments between 2020 and 2025 must be remembered in order to understand the current market conditions. He explained that the wars that began in neighboring regions in 2022 affected the supply chain, that these effects were reflected as far as Suez, that climate change has become part of crisis management, and that trade wars continue to create uncertainty. Regarding raw materials, Yılmaz stated that Brazil and Australia are the main suppliers in the 2.3 billion mt iron ore market, with China as the main consumer, that supply has increased, and the increase in supply on the production side has been reflected in prices. He also noted that production costs have increased and prices are under pressure due to logistics costs.
Volkan Başol focused on scrap markets and the impact of trade policies, emphasizing that the US has a capacity of 80 million mt, imported 20 million mt last year, and exported 15 million mt of scrap, with Turkey being the largest contributor to this volume. Stating that if scrap remains in the domestic market due to the increase in US production given the tariffs imposed on steel imports, importers will be affected and countries importing scrap will turn to alternative scrap sources, Başol said that, if Europe imposes restrictions on scrap exports, as has been on the agenda for some time, there could be a significant scrap shortage. Başol emphasized that capacities continue to increase and that it is critical to manage these risks, adding that they aim to add value through green transformation initiatives.
In the second session of the meeting, moderated by Mesut Özdöl, Tolga Koçer, director of distribution channels and long products sales and marketing at OYAK Mining and Metallurgy, said that imports remained high in the first four months this year despite the decline in flat steel consumption in Turkey. He stated that high financing costs have shifted purchasing behavior towards smaller, more frequent and short-term purchases. According to Koçer, this situation is making operational management more difficult for integrated facilities. Koçer stated that the Turkish steel market is under pressure from the aggressive pricing policies of Asian countries and that Russia, which has an advantage due to its own resources, is trying to increase its share in the Turkish market. He emphasized that the main factor creating pressure in the steel market is China and this pressure is increasing due to China's new capacity investments in Southeast Asian countries. Despite these challenges, he added that OYAK Mining and Metallurgy companies account for 23 percent of Turkey's total crude steel production. Koçer emphasized that they are involved in prestigious projects such as YEKA wind energy, national shipbuilding, and national submarine projects. In addition, he stated that they are continuing their green transformation activities, have successfully conducted hydrogen tests, and are evaluating the transition to hydrogen-based production in the coming period.
Following Koçer, OYAK Mining and Metallurgy export director Meltem Alim Atmaca stated that there is unprecedented uncertainty in the current markets and emphasized that even the World Steel Association has not announced its forecast due to deep uncertainty this year. Atmaca revealed that, according to the IMF's latest 10-year data, global growth rates have fallen below 2.79 percent for the first time since the economic crisis period. Highlighting the manufacturing purchasing managers' index and the services purchasing managers' index as two important indicators of global growth, she noted that the gap between these two indices, which are normally considered to move in parallel, has been widening for a long time and that the manufacturing index has been diverging negatively. Despite challenges such as China increasing its share of steel exports from 23 percent to 38 percent and creating price pressures, Ms. Atmaca stated that Turkey's flat steel sector achieved exports of 5.7 million mt, with Erdemir and İsdemir accounting for 20 percent of this export volume and approximately 30 percent of hot rolled products. Atmaca expressed confidence in their ability to find customers and make sales in every region, even under challenging conditions, while emphasizing that their priority remains regular customers in the domestic market.
Tolga Kısacıkoğlu, chairman of Galva Metal, one of the speakers at the third session, addressed the challenging market conditions and stated that the fact that 51 percent of companies listed on the stock exchange reported losses in the first quarter was the most important evidence of the difficulties. He stated that both global and local overcapacity had seriously depressed prices, creating a death spiral effect that particularly affected SMEs. He pointed out that industrialists and end-users have different perspectives on imports, that both views are correct, but regular adjustments are necessary because recovery will take a long time when the sector collapses. Kısacıkoğlu said, “There are factors that can stimulate demand in Turkey, but the most important thing is for the Turkish steel sector to seriously overcome its inefficiency and consolidate.”
Following the two sessions, economist and academic associated professor Derya Hekim gave a presentation on global uncertainty, disinflation, and interest rates, stating that multilateral agreements will become increasingly important for making trade policies more predictable in the coming period, but that this will be difficult in the current geopolitical environment. She said that regional trade agreements will gain importance and that Turkey can benefit from this situation thanks to its geographical location. In order for the steel sector to survive this difficult period, it needs to invest in technological innovations and optimize its cost structure, she stressed.