Uğur Dalbeler: Opening of US market will give Turkey bargaining power in global markets

Friday, 17 May 2019 12:29:15 (GMT+3)   |   Istanbul
       

Commenting on reduction of the 50 percent duty in the US on Turkish steel imports to 25 percent, Uğur Dalbeler, general manager of Turkish steel producer Çolakoğlu Metalurji, told SteelOrbis that this decision will help Turkey’s capacity utilization rates to increase, adding that the opening of the US market will add another export market for Turkey and this will increase the country’s bargaining power in the global steel market. Mr. Dalbeler said that the strengthening of Turkey’s bargaining power will support steel prices, especially flat steel product prices, but a negative result will be the upward movement of raw material prices.

He went on to say that Turkey’s exports to the US previously accounted for 15 percent of Turkey’s total steel exports, translating into 3 million mt in terms of volumes. However, he expects that exports to the US will increase to around 1.5 million mt, as reaching 3 million mt is not likely under the current market conditions. Mr. Dalbeler added that Turkish domestic steel consumption declined by 38-39 percent in the first quarter of the current year, with 15-16 percent of this loss compensated for by exports, resulting in a net loss of 25 percent in steel production.

The Çolakoğlu official pointed out that Turkey has been following the US-China trade talks closely. “If the two countries come to an agreement, domestic steel demand in China will see a further increase and this will be reflected in Chinese steel prices. Accordingly, I believe that Turkey would have an advantage in the Far Eastern market. We can make up most of the loss in the domestic market through exports,” he said.

Regarding the US terminating the Generalized System of Preferences (GSP) program for Turkey, Mr. Dalbeler said, although it will not have a direct effect on the steel industry, it will negatively affect the exports of the automotive industry, one of the main customers of the steel industry, resulting in lower steel demand.

Answering a question from SteelOrbis about the repercussions of the reduction of the duty in the EU market, Dalbeler said: “This decision eliminates two important issues in the EU. First of all, the Europeans will not claim that Turkey is turning to EU as it is not able to sell to the US. Additionally, there have been demands lately to initiate additional trade measures against Turkey on the grounds that current safeguard measures are insufficient. This lacks validity now.” He also said that the downward price pressure in the EU will ease following the reduction of the duty in the US.


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