On Tuesday, March 24, at the Istanbul Marriott Hotel Asia, during the second session of the Eurometal Steel Day & YİSAD Flat Steel Conference organized in collaboration with SteelOrbis, SteelOrbis general manager Murat Eryılmaz delivered a presentation titled “Turkish Steel Industry Overview” and shared key insights regarding global and local markets.
Mr. Eryılmaz noted that global steel production exceeded 1.9 billion mt in 2021, though there has been a limited decline over the past two years. Referring to China’s production policies, he stated that, despite production cut targets announced at the beginning of last year, production increased during the year but ended with a total of 960 million mt, reflecting a decline of approximately 45 million mt by the year-end. He added that he believed this decline was more a result of weak domestic demand than a planned measure, adding that China began 2026 with more aggressive production cuts, resulting in a production volume of 75.3 million mt in January, a 14 percent year-on-year decline. He emphasized that the production decline in China also affected global production, with a 6.5 percent year-on-year decline observed worldwide in January.
Signs of weakening production and capacity utilization in Turkey
In his assessment of Turkey, Mr. Eryılmaz noted that liquid steel production had reached its peak in 2021, experienced a significant decline during the 2022-23 period, and then entered a growth trend again in 2024 and 2025 with the addition of new capacity, surpassing 38 million mt. However, noting a weak start to 2026, he said that production in January stood at 3.39 million mt; while this represented a 5.8 percent increase year on year, it marked a decline compared to previous months. The primary reasons cited for this decline included export difficulties resulting from the implementation of CBAM and weak domestic demand.
Mr. Eryılmaz noted that the upward trend in electric arc furnace and blast furnace production observed in the second half of 2025 gave way to a decline at the start of the current year, adding that a downward trend in production had emerged due to the decline in exports and the weak performance of the domestic market. Looking at capacity utilization rates, he noted that flat products saw a level above 80 percent in January, but a decline to around 75 percent is expected in February due to weak exports. He added that the situation is even weaker for long products, with the capacity utilization rate falling below 60 percent.
Cost pressures are rising, while demand remains weak
Noting that costs have begun to rise again following the low levels seen in mid-2025 on the raw materials side, the SteelOrbis general manager stated that changes in iron ore and coal prices have increased blast furnace costs, while, on the scrap side, freight costs in particular have been the determining factor. He noted that hot rolled coil production costs declined for both electric arc furnaces and blast furnaces during the January-February period but rose again in March due to increases in energy and freight costs. He reported that hot rolled coil production costs for blast furnaces rose from $564/mt in February to $587-588/mt in March, while costs for electric arc furnaces rose from $588/mt to $604/mt.
The EU remains the largest supplier of scrap imports to Turkey, with the US in second place. As rising energy and fuel costs impact freight rates, making imports more difficult, it is critically important that no new restrictions are imposed, particularly on the EU side. Eryılmaz noted that slab imports have gained prominence during periods of high liquid steel production costs, adding that the primary suppliers in recent times have been Russia, Malaysia, and Algeria.
Significant increases in flat steel production capacity have been introduced over the past two years; while production reached 16.7 million mt in 2024 and 16.5 million mt in 2025, it was noted that, while a slowdown may be observed in the first months of 2026, production levels for the year as a whole could reach a higher level compared to pre-2024 levels.
Murat Eryılmaz, noting that hot rolled coil is the most important export item and that galvanized sheet ranks second, stated that the main reason for the decline in exports in the first two months of the year was CBAM. He also noted that the primary product in imports is hot rolled coil, and that antidumping measures and changes in the inward processing regime in Turkey have limited imports. Nevertheless, Eryılmaz noted that imports continue to exceed exports in Turkey’s trade balance, emphasizing that last year 6.5 million mt of exports were made against 8.94 million mt of imports, and that this balance has remained unchanged for the past seven to eight years.
Looking at the data, it appears that monthly flat steel consumption has followed a fluctuating trend; while it has occasionally exceeded the 2 million mt level, a slight slowdown has been observed over the past three months.
Addressing the risks for the coming period, Eryılmaz noted that rising protectionist trends on a global scale are one of the most significant pressures on the sector, adding that the process initiated by the US is being continued by other countries as well. He stated that the effects of CBAM, import pressure, and rising energy and freight costs will continue to be decisive factors for the sector, adding that price increases are not demand-driven but largely cost-driven.