Speaking to Turkish newspaper Cumhuriyet, Veysel Yayan, secretary general of the Turkish Steel Producers’ Association (TCUD) has stated that the hikes in energy prices are not sustainable and that the producers are not able to pass higher costs on to their customers. Previously, steelmakers were planning to reduce their capacity rather than stop production, as SteelOrbis reported, however, according to Mr. Yayan, these unsustainable hikes seem to cause production to halt, albeit temporarily.
Saying that the recent energy price hikes have negatively affected competitiveness, Mr. Yayan stated that there is a negative discrimination against large companies in terms of price hikes and that this should be eliminated.
Veysel Yayan indicated that steel producers are trying to keep stocks in line with the market demand. As the capacity utilization rate, which was 75 percent last year, decreased to 60 percent in the last three months, Mr. Yayan estimates that it will decrease further in the last quarter of the year. The TCUD official informed that steel production in 2022 will see a decrease of over 10 percent compared to the previous estimate of a 10 percent increase and he went onto say that the negative impact of the hikes in energy prices has not been seen yet, and that the last quarter of the year will be more difficult for the Turkish steel industry.
In addition, Veysel Yayan stated that although some steel producers in Europe have shut down production, Europe provides energy subsidies to the mills and the Turkish government should do the same.