At the 14th SteelOrbis Steel Conference “New Horizons in Steel Markets” held on Wednesday, November 6 in Istanbul with the participation of over 400 attendees, Dr. Veysel Yayan, secretary general of the Turkish Iron and Steel Producers’ Association, said that the Turkish steel sector is going through difficult times, adding, “It is not possible to say that the global steel sector is in the process of contracting and that we are a part of this. Instead, the global steel industry grew by 4.6 percent in 2018. In the first nine months of 2019, it also grew, by 3.9 percent. Meanwhile, the Turkish steel sector contracted by 0.6 percent last year and in the first nine months this year there was a 10.1 percent contraction. Though conditions are better in the flats segment, negative conditions in the other product segments and the reduced number of shifts at mills have caused the steel industry to contract in Turkey.” Dr. Yayan stated that Turkey, which ranked in ninth place among the top 20 steel producing countries with 25.3 million mt of steel production in the first nine months this year, saw the biggest decrease in steel production compared to the other countries on the list. He also remarked that measures taken to boost current economic stability have not yet shown their positive effects on Turkey’s steel production volumes.
The Turkish Iron and Steel Producers’ Association official also referred to the significant decrease recorded in Turkish steelmakers’ capacity utilization rates. Accordingly, in the first nine months of this year, capacity utilization rates in Turkey’s steel sector decreased to 65 percent, compared to 80.9 percent recorded in the same period of 2018. On the other hand, finished steel production in Turkey contracted to 25 million mt in the January-September period this year, from 29.8 million mt in the same period of 2018. In the period in question, Turkish steel consumption decreased to 18.9 million mt, compared to 25.5 million mt in the first nine months of the previous year. Yayan said that steel import volumes also saw a significant decline, in line with lower consumption, and that import volumes decreased to 8.6 million mt from 11.3 million mt, though this was driven by the overall decrease in consumption, and not by the desire to reduce import levels, adding that the share of imports in Turkish steel consumption increased to 45.5 percent in the first nine months this year, compared to 44.3 percent in the same period last year. Yayan added that the Turkish Iron and Steel Producers’ Association had told worldsteel that it is expecting an eight percent increase in Turkey’s steel consumption in 2020, but worldsteel initially considered this expectation to be on the high side.
However, Turkey’s steel exports increased to 13.4 million mt from 12.1 million mt in the first nine months this year, year on year. Commenting on the results Yayan said, “The increase in export volumes is a result of Turkish steel producers’ turning to exports following Trump’s declarations which put pressure on the Turkish economy. In 2017, Turkey’s steel imports exceeded its steel exports, but now the opposite is the case.”
In the January-September period this year, Turkey’s steel exports to the EU amounted to 1.58 million mt, compared to 1.49 million mt in the first nine months of 2018. Commenting on the quota implemented by the European Commission, Dr. Yayan said that Turkey has been recording a trade deficit with Europe since its free trade agreement with the European Coal and Steel Community, while noting that the European side does not mention this.
Regarding issues affecting trade activities with the US, Dr. Yayan stated that Trump’s decisions are abrupt and far from being objective. He also remarked that the US has been criticizing China continuously, adding that he is worried about a possible increase in Chinese competition in global trade with its modernized new capacities, in the event of a decrease in China’s domestic market consumption.
Dr. Yayan said he expects the slowdown in Turkey’s steel exports - which has started to be seen as of September this year - to accelerate in the coming months. Meanwhile, the downward trend of Turkish domestic market consumption has lost momentum, though this is not expected to support steel production as export volumes are also decreasing. He concluded by saying that he expects the decrease in Turkey’s steel consumption to be lower than 20 percent by the end of the year.