New flats investments will shorten lead times, Turkey to be a net exporter

Thursday, 02 December 2021 13:49:35 (GMT+3)   |   Istanbul
       

At the 16th SteelOrbis Steel Conference “New Horizons in Steel Markets” held Wednesday, December 1, in Istanbul, Kürşad Aynas, sales manager of the pipe-profile producers & re-roller segment at Çolakoğlu Metalurji, Cem Üstün, general manager at Atakas Steel, Murat Demirci, sales director at Tatçelik and Gökhan Demiruz, chairman of Gökmetal, discussed major issues in the steel industry including new investments in the flats segment.

Mr. Aynas said that Çolakoğlu will increase its flat rolled capacity to 4.5 million mt from the current 3 million mt, while Tosyalı will have a new 4 million mt of flat rolled capacity, İçdaş will have 3-3.5 million mt of new capacity and MMK resuming production will add 2 million mt of hot rolled capacity, resulting in an additional capacity of 8-10 million mt in the Turkish hot rolled coil market in 2025. Thanks to these capacity increases, producers will be able to be more competitive and customers will be able to find material more easily and with shorter lead times. Mr. Aynas pointed out that Çolakoğlu is now the sole producer in the stainless sheet market in Turkey, adding that they have already rolled 100,000 mt of stainless steel both from scrap and slab. Besides, they have also produced IF steel for the automotive industry.

Cem Üstün stated that these new hot rolled coil investments present significant opportunities for customers such as themselves, Atakaş, underlining that Turkey is now a net importer of the product, while the added capacities will enable users to meet all of their needs from the domestic market. He went on to say that Atakaş has a pickling capacity of 1 million mt, cold rolling capacity of 700,000 mt, a galvanizing capacity of 450,000 mt, and an annealed cold rolled capacity of 250,000 mt. With ongoing investments, cold rolled capacity will increase to 1 million mt, while galvanizing capacity will total 700,000 mt. Mr. Üstün pointed out that hot rolled coil is expensive in the Turkish market and, on the export side, they are exporting to protected markets such as the EU. “The only positive thing, I believe, is that hot rolled coil prices in Turkey will become competitive with rising supply. Hot rolled coil prices are more expensive compared to the countries that we are in competition with. As re-rollers, we can get hold of cheaper hot rolled coil through the inward processing regime,” he added.

Informing the participants about Tatçelik’s current capacities and ongoing investments, Murat Demirci said that out of a total of 1.5 million mt, the company has a galvanizing capacity of 750,000-800,000 mt, a cold rolling capacity of 200,000-220,000 mt, a coated capacity of 200,000-220,000 mt, while the rest is pickling capacity. He explained that both demand and steel industry dynamics change every year, stating that the company’s export share in its sales which stood at 20-25 percent last year will go up to 47 percent on average this year as a result of current market conditions, in the last six months, Tatçelik exported 55-57 percent of its total production. Mr. Demirci said that Tatçelik exported to 23 new countries this year, adding that they are planning some investments regarding product combinations, rather than increasing the capacity, to be more present in the white goods and automotive industries.

Gökhan Demiruz, chairman of Turkey's Association of Flat Steel Exporters and Manufacturers (YISAD), and also of Gökmetal, shared the current figures regarding the Turkish flat rolled market. This year, Turkey’s flat steel production will reach 15.2 million mt, exports will stand at 6.3 million mt, while imports will amount to 9 million mt. He also stated that in the domestic market there is 10.2 million mt of hot rolled coil supply, 6.2 million mt of cold rolled coil and 4.7 million mt of coated steel. On the other hand, the export shares of sales of these products stand at 25 percent, 28 percent and 54 percent, respectively. Demiruz anticipates that in the next five years, Turkey’s hot rolled coil capacity will increase by 12-13 million mt, while in the next four years its galvanizing and cold rolling capacities will add 1.5 million mt each. He underlined that, with all these new capacities, Turkey will become a net exporter.

Also addressing protectionism, one of the most important challenges the industry is facing, Mr. Demiruz said that the trade measures especially those in the EU and the US have no economic basis. He explained that, since Turkey is importing its raw material, in the long term it is not possible to adopt a price policy that can impact export markets. He added that this year the steel industry worked with margins above average, though he does not expect the situation to continue like this.


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