Veysel Yayan, secretary general of the Turkish Steel Producers’ Association (TCUD), in an interview on Turkish TV channel Bloomberg HT, stated that the coronavirus outbreak has brought many markets to a standstill, “with an especially severe contraction seen in terms of exports to the EU as European consumers have slowed down their production operations, while exports to the US have also narrowed.” However, while China is temporarily out of the market as a seller, Turkey still has sales opportunities in the Far East. In addition, the African market maintains its vitality for Turkish mils. “Overall, there is a general contraction of 10 percent in terms of export volumes for the January-February period. We expect the downturn to deepen in March, but the negative effects may be seen more vividly in April,” the TCUD secretary general said.
Recalling that Turkey’s steel production has been decreasing in past years, Veysel Yayan said, “After a peak of steel production back in 2017, there was a minor decline in 2018 and in 2019 the downturn deepened. This year we actually entered a recovery process as steel production rose by 12.7 percent in the first two months. However, with the spread of the virus, we have started to experience negative developments. For March, we see that production has been on the rise with consumption growth registered at the extraordinarily high level or around 40 percent. As for April, we will start to see the effects of the measures and production stops, but our numbers show we are not among the countries most affected by the coronavirus globally. Despite all these negative developments in the world, our steel sector continues its positive performance.”
The main problem that disturbs the association is that the increase in local consumption in Turkey to a large extent is being covered by foreign suppliers. Mr. Yayan stated that imports increased by 41.3 percent in February and that the current challenging market conditions impact foreign supply to a larger extent compared to the domestic one.
Stating that there has been a sharp fall in the global markets which have slowly been coming to an almost complete stop, Mr. Yayan added that Turkey has started feeling the impact of the situation. Although mills in the country have been trying to sustain production activities, he stressed that producing for stocks is risky. On the other hand, he said that reasonable stock accumulation may eventually turn into an opportunity, taking into account that other countries have closed their facilities and that the delayed demand will appear once the current situation is resolved. Yayan also underlined that integrated facilities are not able to stop production and that EAF-based mills are continuing their output despite challenges, though being more flexible in terms of production adjustments.
Yayan stated he believes that some developments in the direction of stabilization of the market situation may start from June.