Steel producers, including mills and re-rolling companies, have been temporarily slowing their operations across Turkey, specifically the ones involved in longs segment. The move is an expected one, taking into account severe declines in business activity, primarily in the local market, as a result of the Covid-19 spread impact.
Significant weakening of construction and therefore shrinkage of local rebar demand in Turkey, combined with the need to keep their employees safe, has resulted in some producers’ decisions to limit their operations for now. Some mills decided to temporarily suspend part of their rebar rolling capacities; some reduced the number of shifts, adjusting the production and labor needed to be involved. In particular, according to sources, Ekinciler has suspended rolling operations this week while the largest steel producer in Izmir region remains concentrated on the flats and wire rod production with some cuts on the rebar side. In addition Ege Celik, as SteelOrbis reported earlier, has decided to stop rolling operations for around two weeks. In the re-rolling segment larger companies like Kocaer have been stopping production only partially, while a lot of smaller ones, in Iskenderun and Izmir regions specifically, have decided to stop rebar production for now, SteelOrbis understands.
It is also worth mentioning that some large longs producers have slowed down production at minimal rates only, likely because they are better covered with orders compared to the rest of the market. In addition, there is no reduction seen just yet on the hot-rolled production side as by the time the market started to collapse in Turkey and demand minimized, mills had been sold out for April and part of May production.
For now the production suspension mainly concerns the rebar segment, while no serious reductions have been seen on crude steel output yet. However, scrap market players expect some stoppages of the electric-arc furnaces in Turkey starting from next week. “Nobody can tell really how long all this might take. Seems mills are more or less good for April [in terms of rebar orders] and a lot of them are empty-handed for May,” a large producer told SteelOrbis.