Speaking at the Eurometal Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Thursday, April 27, in cooperation with SteelOrbis, Dr. Veysel Yayan, secretary general of the Turkish Iron and Steel Producers’ Association (TCUD), said that Turkey’s GDP has been growing continuously and that this would normally support all industries. However, he noted, the Turkish steel industry is not on a stable growth trajectory. In 2021, Turkey’s crude steel production increased by 12.7 percent, while declining by 12.9 percent in 2022 due to Russia’s invasion of Ukraine and the resulting energy crisis. Mr. Yayan pointed out that in the first three months of the current year Turkey’s crude steel production decreased by 21.5 percent. The country saw a 44 percent decline in crude steel output in January, while a 75 percent decrease was seen in February in the southern region because of the devastating earthquakes and a 50 percent decrease in March. Nevertheless, in the coming months a recovery is expected, he said. Especially with Isdemir resuming production, in April crude steel production is expected to increase and, with Tosyalı’s new plant in Sarıseki near Hatay due to come online, production figures in the second half of the year will improve. The TCUD official also pointed out that China’s steel production, that had registered consistent growth in recent years, has started to falter.
As of 2022, global overcapacity in steel amounted to 582 million mt, while in Turkey it stood at 55 million mt. Mr. Yayan noted that this overcapacity may be decommissioned during the transition period at integrated mills under the scope of the green deal, and so overcapacity may not create a problem.
Commenting on capacity utilization rates, Yayan stated that capacity utilization rates in the Turkish steel industry fell to 53 percent in the first three months of 2023, from 70 percent in the same period of 2022. The steel industry is not only facing challenges related to the protective measures implemented by the EU and the US, but is also facing challenges from shrinking global steel demand. He forecast that the market outlook will worsen starting from July this year. The TCUD official said that he does not expect the EU or the US to make compromises on their protective measures, while adding that Turkey will also take similar measures and that the general trend will be to focus on the domestic market.
In 2022, Turkey’s finished steel product consumption decreased to 32.5 million mt. The sharp decrease in production even though there was not much decline in consumption shows us that the gap in supply was met by imports, Yayan said. In the first two months of this year, the share of imported flats in Turkey’s overall consumption rose to 51.2 percent. The TCUD official pointed out that Russia ranked in the first place among the countries from which Turkey imported flats. Russia was followed by China, South Korea, Japan, Indonesia and Taiwan. Mr. Yayan, however, highlighted that trade with these countries is one-sided and that Turkey is unable to export to these markets. “In 2023, our trade with the EU became negative. We report a deficit in foreign trade,” he noted. In the January-February period this year, Turkey’s exports to the EU amounted to 330,000 mt, while imports from the region in question came to 400,000 mt. Pointing out during the same period the steel export to import ratio in Turkey dropped to 55.3 percent, compared to 80.1 percent in the first two months of 2022, Mr. Yayan stated that an extraordinary volume of flat steel inflow is expected in March and April, and the export to import ratio will decline even further because of this. In addition, Turkey, which ranked in sixth place globally in 2021 in terms of its exports, will regress to eighth or ninth place in 2022 and the situation may get even worse this year.