Speaking at the 6th SteelOrbis Turkish Steel Market Conference, held in Istanbul on November 18, Çetin Kaya, the general coordinator of Turkish steel producer Yolbulan Baştuğ, said that the uncertainties and fragility surrounding the world economy are having a negative impact on the Turkish steel industry, increasing the volatility in the world steel industry and causing reduced demand in Turkey's export markets. Mr. Kaya also stated that there is a lack of optimism regarding the outlook for 2012. According to Mr. Kaya, consumers find the prices of all commodities, including steel and steelmaking raw materials, to be on the high side and are waiting for new price levels to emerge.
Mr. Kaya stated that Asia and developing countries are now the main drivers of growth in steel production and consumption. However, he also warned that global steel supplies are expected to exceed worldwide steel demand by 500 million mt by 2012, adding that this will result in increased competition in the global industry.
As for the Turkish steel industry, Mr. Kaya said that domestic steel consumption is still below pre-crisis levels, and this coupled with increased local production on the back of the commissioning of new capacities has increased the pressure on the domestic steel sector to export.
Mr. Kaya also told attendees that, after the devastating earthquake which hit the eastern Turkish city of Van in October, reconstruction projects across the country and new mass housing investments may create huge demand for structural steels, but it will take some time before this demand is seen.
Finally, Mr. Kaya said that high raw material prices, indirect taxes and expensive energy prices are placing a heavy burden on the Turkish steel industry, and that this is an issue that must be addressed by the Turkish government.