Turkish steel tube & section market analysis

Turkish steel tube & section market analysis

Turkish steel tube and section producers are mainly dependent on overseas sources in terms of raw material due to inadequate domestic production. In 2003, iron-steel demand in China increased considerably and this increase gave rise to prices in international markets which affected steel tube producers negatively. The export bookings effected by Turkish mills in the fourth quarter of last year, suffered from unsteady prices and the producers which are dependent on overseas in terms of raw material in any case were also affected by material shortage in the market. Turkish mills don't make export bookings due to continuous price increases and act cautiously. In 2003, steel tube sector was rather affected from inadequate investments in public and private sectors and gradually weakening construction sector in the last years. However, steel tube sector is not limited with the infrastructure and construction sectors and covers automotive and related industry, white goods and steel construction sectors , the recovery in economy and the revival in aforementioned sectors will reflect positively to the steel tube producers. Domestic demand is expected to increase in the second quarter of 2004 as construction season will start to brisk again at the end of February and particularly public investments will revive in 2004. For steel tube producers last year was a successful period in terms of production and export although domestic sales were under the expectations. Although European steel tube producers showed a decrease in production compared to previous years, Turkish mills' productions increased by 23.5% in 2003 compared to previous year. In 2003, steel tube production amounted to 1'700'000 tons. Particularly the projects materialized in domestic and foreign natural gas pipelines were the main factors to reach these figures. Turkish mills' priority exports are EU and US markets oriented. However, Turkish mills which have gone through hard times because of anti-damping investigations implemented by both EU and US, passed over a successful year with 800'000 tons of export amount. The anti-damping investigation on imports of square and rectangular section from Turkey initiated by EU in the last quarter of 2003, has been terminated in December. Accordingly, one of the major difficulty that exporting Turkish mills face, is the anti-damping investigations implemented by its leading export markets EU and US. Shortly, significant problems that Turkish steel tube producers face are; * the fluctuation in flat product prices in international markets and supply difficulties as well as producers' dependence on overseas sources in terms of raw material due to inadequate domestic production * the continuously initiated anti-damping investigations by leading export markets EU and US * weak construction sector and inadequate investments in domestic market However, as stated above; steel tube sector is not limited only with construction and infrastructure sectors, it has a large sector range and the public investments that will increase in construction and infrastructure sectors in 2004 and the revivals expected in these sectors indicate a pretty successful period for steel tube and section sector. Since last quarter of 2003, the fluctuation in iron-steel prices and red hot demand in China are expected to stabilize in the second quarter of this year. Accordingly, steel tube producers can see their way more clearly and will recruit stabilization and have a more profitable year compared to 2003.