At the 16th SteelOrbis Steel Conference “New Horizons in Steel Markets” held on Wednesday, December 1, in Istanbul with the participation of approximately 900 participants including 300 on-site, Dr. Veysel Yayan, secretary general of the Turkish Iron and Steel Producers’ Association, said that, according to latest GDP figures, Turkey registered a growth of 12.2 percent in the first nine months and that the growth rate for the whole year is expected to remain above 10 percent. Based on these figures, Dr. Yayan explained that the construction industry is going through tough times, with rebar consumption down by 40 percent in September and up by 10 percent in October. He also added that, through liquidation of current inventories, the construction industry is expected to recover in the coming year.
Looking at crude steel production, Turkey registered almost 15 percent growth in the first three quarters compared to 5.9 percent growth in global crude steel production. Accordingly, for the whole year, Turkey’s growth in crude steel production is expected to be three times more than global steel production growth. In the first ten months, Turkey’s crude steel production stood at 33.3 million mt, up by 14.2 percent year on year, ranking eight with a share of 2.1 percent in global steel production. Yayan stated that the gap in steel production between Germany and Turkey has decreased to 200,000 mt from 500,000-600,000 mt, and that it is possible to close the gap in the next two months, underlining that Turkey may surpass Germany in steel production in 2021, as in 2020.
Stating that steel capacity utilization rates decreased to 75.1 percent in 2020 globally, and increased to 75 percent in Turkey from 65 percent, Dr. Yayan said that the capacity utilization rates globally will not exceed 75 percent at the end of the year, so that Turkey will close the gap with the rest of the world.
Turkey’s finished steel consumption, which was 29.5 million mt in 2020 and 27.6 million mt in the first 10 months of this year, is expected to increase by 5.5 million mt in the next two months. Noting that the long and flat product outputs totaled 21.8 million mt and 12.4 million mt, respectively, in the first 10 months this year, Dr. Yayan said that flat product output is expected to reach 15 million mt by the end of the year, and added that imports, which are currently around eight million mt, will decline rapidly with new investments to be made in the next two to three years. He underlined that the share of imports in total steel consumption was 34 percent, while the share of imports in flat product consumption increased to 53 percent. Meanwhile, indicating that with 16.6 million mt of exports and 12.9 million mt of imports, Turkey’s steel export to import ratio in the first 10 months of the year increased to 115.0 percent, from 110.0 percent recorded in the same period last year, Veysel Yayan said that the good performance seen in exports for two to three months is due to the pressure from the contraction in domestic demand. In addition, he stated that exports have supported the growth in the country’s steel production in recent months, and said that a structure will emerge in which domestic supply will be more dominant in the coming years.
Referring to the difficulties experienced in the steel industry in 2021, Yayan emphasized that transportation prices increased especially as a result of the container crisis and rising oil prices, and that there was a fourfold increase in natural gas prices amid the decrease in coal use with the green deal, and, as a result, electricity prices increased. Meanwhile, he also stated that attempts to prevent scrap exports have increased: Russia and Ukraine are increasing scrap export duty to €100/mt and €200/mt, respectively, as of 2022.