Speaking during a panel discussion about the impact of Covid-19 on the flat steel, coated steel and steel pipe segments on the last day of the 15th SteelOrbis "New Horizons in Steel Markets" annual conference being held virtually on December 1-3, Kerem Çakır, general manager at Turkey-based Borçelik, said that the impact of the pandemic has been really harsh, resulting in a 91 percent decrease in automotive production and 52 percent decrease in white goods production in Turkey in April, after both had gained momentum at the beginning of the year. He stressed, however, that Turkey was familiar with crises and pointed to two important factors during these times: good communication with customers and exports. He stated that Borçelik had quickly turned towards exports during this period, adding that increasing its export market share is less costly than increasing its domestic market share. Mr. Çakır said that the company had achieved its 2020 export target in September, with 35 percent of exports made to new customers.
Commenting on the pick-up in market activity in November, Mr. Çakır said that it was the consequence of the developments in China, which accounts for more than 50 percent of global steel demand, adding that the recovery of demand was reflected in producers’ activities. He went on to say that customer orders in Turkey dropped by almost half in April and May, while they doubled in November and December, though he also pointed out that producers have a ceiling in terms of capacity. He added that another factor affecting the supply-demand balance is that globally 100 million mt of capacity was permanently shut down during the pandemic, while 200 million mt was temporarily idled, 90 million mt of which has come back online. The Borçelik official predicted that such zigzags in demand will continue in 2021, but will ease, with next year nevertheless seeing some fluctuations.
Regarding the oversupply in the galvanizing industry, Kerem Çakır stated that in the coming years the focus will remain on exports will remain, but, amid rising protectionism and freight rates, along with the challenges of competing with integrated mills in target markets, exports are not easy either.
He explained that, in terms of supplies to the automotive industry, Borçelik has helped reduce Turkey’s dependence on imports and, with Erdemir’s new galvanizing line coming on stream, domestic producers account for almost 70 percent of the supply to the Turkish automotive industry. Çakır said that the Turkish automotive industry is expected to close 2020 at levels similar to 2014 and may only reach the record levels of 2017 levels in 2025-2027.
Answering a question about what kind of a path they follow against the quotas implemented by the EU, he stated, “We tried to get as much of the quota as we could, not just as a company but as Turkey. We acted proactively. We are the first one to take action when we are in the ‘other countries’ group. Our only problem is the low quota volumes for color coated products.”