At the 3rd SteelOrbis Turkish Steel Market Conference held in Istanbul on Friday, the issue of the imbalance between Turkey's long and flat steel production capacities was addressed and various steel companies made presentations concerning the investments they are making to ease the problem.
The statistics show that longs production in Turkey far exceeds flats production, while the consumption of both product categories is almost the same. This situation of imbalance, driven by the high levels of demand for flats in the country, creates space for investors, both domestic and international, to put money into flat capacity expansion projects in Turkey. While some projects have been finalized, some are still ongoing and are expected to be commissioned in the next two to five years.
Isdemir, one of the largest Turkish steel producers, specialized for a long time in the production of longs but now is ready to switch to flats production. Following Isdemir's privatization in 1998 and especially after it was taken over by Erdemir in 2006, Isdemir started to implement a modernization program directed at increasing its longs production capacity and also at commissioning new flats production. Isdemir has since implemented 25 out of its 40 planned projects. The most noteworthy of the projects in question includes the increase in the producer's annual port handling capacity from 12 million mt to 20 million mt, while its ship capacity has been raised from 150,000 dwt to 180,000 dwt.
In addition, the modernization of Isdemir's metallurgical coke production facilities has been completed. As a result of this modernization which has seen the renewal of four coke batteries, the annual metcoke production capacity increased to 2.3 million mt from 1.3 million mt. Meanwhile, Isdemir is continuing modernization work on its coke by-product mill. Isdemir is also currently implementing the second phase of modernization at its sinter production facility, which will bring its capacity up to 5.7 million mt of sinter per year.
As for its steel projects, Isdemir has modernized one of its blast furnaces, installed new pulverized coal injection (PCI) technology, and started the construction of its BF No. 4 with a planned annual production capacity of 2.2 million mt, raising the mill's annual liquid steel capacity to 5.5 million mt. The completion of BF No. 4 is expected for March 2010. Meanwhile, Isdemir has also replaced old steel converters with new 200,000 mt-capacity converters.
As regards its semis production, Isdemir has commissioned two slab concasters each with an annual production capacity of 2.5 million mt and also two billet concasters with annual capacities of 1.25 million mt each. With the commissioning of all semis facilities, Isdemir's combined slab and billet output capacity has increased to 7.5 million mt.
As regards flats production, Isdemir plans to start production at its new hot rolling mill in July 2008. The mill's production capacity will be around 3.5 million mt per annum.
The second mill to make a presentation regarding its investment in flat production was Turkish steel producer Borusan. In October 2007, Borusan and ArcelorMittal established a 50/50 joint venture company for the production of hot rolled sheets, HDG, and cold rolled sheets. The mill is expected to come on stream in the first quarter of 2011. The annual production capacity of the new company is expected to be 4.8 million mt. Borusan is also active in the steel service business through its wholly-owned subsidiary Kerim Celik.
The next steelmaker to give details of its flat steel investments in Turkey was Colakoglu Metalurji. Having been a producer of long products since its establishment, Colakoglu Metalurji entered into the flats segment in 2007 with the construction of a modern EAF and new slab caster. Currently the steelmaker is implementing a new investment program directed at increasing its crude steel capacity to 3.5 million mt via installation of a new melt shop. In addition, Colakoglu is also proceeding with the construction of its new hot strip mill in order to meet demand from the pipe producing, cold rolling, galvanizing, machine building, shipbuilding and API pipe producing sectors.
Borcelik is focusing its investment on galvanized steel production, thereby aiming to satisfy the needs of the Turkish automotive sector. Two HDG lines with a combined annual production capacity of 420,000 mt have already been commissioned, and a third HDG line with a production capacity of 350,000 mt per annum is on the way.
Another Turkish steelmaker, Tat Metal, is also making a contribution to Turkey's goal of self-sufficiency in flat steel production. Since the groundbreaking ceremony held in August 2005, Tat Metal has been proceeding with its investment in cold rolling and galvanizing mills. The steelmaker has completed its CR mill with an annual output capacity of 400,000 mt and is now continuing with the construction of a HDG line, which is expected to have a capacity of 280,000 mt per annum.
A new joint venture between Russian steel producer MMK and Turkish coal producer Atakas was set up in 2007 at a total cost of $1.5 billion with the aim of responding to the need for additional capacity in the Turkish flat steel sector. Within the scope of this investment, two service centers, each with an annual capacity of 340,000 mt, are to come into operation in October 2008, one in Iskenderun and the other in Gebze, Istanbul. The service centers will include cutting and slitting operations.
As regards the 2.3 million mt capacity mill planned by MMK and Atakas, it is expected that the 1.2 million mt pickling line and 750,000 mt cold rolling mill to be based in Iskenderun will start production operations in the last quarter of 2009. Also based in Iskenderun, the hot dipped galvanized line with a capacity of 450,000 mt and the pre-painted line with a capacity of 200,000 mt will start production in November 2009. The Istanbul facilities are expected to become operative in early 2010 with a galvanized capacity of 450,000 mt per year and a pre-painted steel capacity of 200,000 mt per year. The mill in Iskenderun is expected to start operating at full production capacity in the last quarter of 2010.