While global crude steel production contracted by one percent in 2020 due to the protection measures implemented by the US and the EU and also due to the pandemic, Turkey’s crude steel production increased by six percent to 35.8 million mt, according to an iron and steel industry report published by audit, tax and advisory services agency KPMG Turkey. Turkey ended 2020 as the European leader in crude steel production. The country’s crude steel production increased by approximately 20 percent in the first six months of 2021, and the value of its exports increased by 50 percent.
In 2020, only Turkey, China, Vietnam, Russia and Iran showed growth in crude steel production, while crude steel production in the US, Japan, Germany, Italy and India contracted by 10-20 percent. The main reason for the growth of Turkish steel production was that China, which quickly returned to its pre-pandemic performance, focused on its domestic market and reduced its exports. Thus, Turkey exported a significant amount to the Far East and Southeast Asian markets.
“With the pandemic, protectionism has taken a step forward globally. For the last three years, the Turkish steel industry has been struggling with customs barriers, rising customs duties and quotas imposed by the US and the EU. In March 2018, the US subjected all countries to 25 percent additional duties on steel imports, and in August 2018 this was doubled for Turkey. Although the additional duties for Turkey were removed and reduced to 25 percent again in May 2019, Turkey’s steel exports to the US in 2019 decreased to almost one-fifth of the previous year’s volume. In the past years, the EU accounted for 50 percent of Turkey’s foreign steel exports. After all these quota measures and customs duties, the share of the Turkish steel industry’s exports to the EU and the US in total decreased to 35 percent,” Burak Yıldırım, KPMG Turkey Metal and Mining Industry leader, commented. Turkey tried to compensate for this contraction by finding new markets or increasing its presence in markets where it was weak. The Far East, Southeast Asia, Africa and South America have recently become alternative markets for the Turkish steel industry.
Mr. Yıldırım said he expects that the country’s crude steel production this year will easily reach 2017-2018 levels, or even exceed 40 million mt, given the performance of the Turkish steel industry in the first six months this year.
According to the report, with its share of more than 50 percent in global crude steel production, China will continue to dominate the steel industry in terms of pricing, production and consumption in the coming years. Meanwhile, the US, Japan, Germany and India are expected to continue their protectionism policies for a while in order to compensate for their losses during the pandemic.