According to the Turkish Iron and Steel Producers' Association (TCUD), the slowdown and overcapacity problems in the global economy have led to a rapid weakening in the global steel industry in recent months. The expected contraction in the global economy in the coming years also makes it difficult to evaluate the potential of the steel industry and to work efficiently. Negative signs in the global economy have caused the Organization for Economic Cooperation and Development (OECD) to lower its forecasts for the world economy and especially in the developing countries forecasts have also been revised due to the recession.
The TCUD stated that many investments and projects that directly affect demand for steel have been hit by the recession in the economy, thereby causing the weakening of demand in many steel producing countries in recent months and weeks. In particular, the slowdown in investment and production activities has affected the dynamics of the major steel producing countries.
The TCUD went on to say that, despite the large number of trade cases that restricts exports, the NAFTA region, the EU, South America and Asia showed an increase in exports in certain areas. The contraction in global steel demand, increasing imports and the sharp decline in production costs in many countries have caused steel prices to decline to historic low levels in 2015. The TCUD also stated that, although raw material prices have declined gradually in recent years, the profit margins of the global steel industry narrowed down further and fell to the negative levels.
In addition, the TCUD indicated that, while the signs of a slowdown in the Chinese economy and the recession in the CIS region set the ground for the decline in finished steel consumption, the impact of the recession has been felt in South America and several developed countries. Despite the significant signs of a slowdown in the major economies, demand in markets such as Africa, India, Southeast Asia and the Middle East is expected to continue to strengthen, the TCUD stated.