Turkey is currently going through difficult times with the effects of the recession being observed throughout the economy - in consumption, in the various industrial sectors, in imports and exports. The latest available unemployment figures (for November) showed a year-on-year increase of 645,000, rising to a total of 2,995,000. Thus, the unemployment rate rose by 2.2 percent to 12.3 percent. The figures in question have lifted Turkey to fourth place in the world unemployment league. All the job losses and economic data for Turkey indicate that consumption and investments in the country will decrease. Especially in the current period, with such a high unemployment rate and many housing projects waiting forlornly for buyers, many investment projects are likely be delayed, construction sector will register a continuing slowdown, and an estimated 50 percent contraction will likely be observed in the export sectors. How will all this be reflected in the domestic stainless steel market? In short, the sector will experience a certain contraction and some businesses will probably go to the wall. However, the firms with high equity capital and with high added-value can expect to increase in strength after the crisis blows over.
Meanwhile, it can be said that price levels may see further decreases in the coming period. As is well known, as ordered materials require at least one month to arrive in Turkey, the price levels in the Turkish domestic market follow the levels of the producer countries with a delay of one month. Currently, ex-Europe 304/2B grade 2 mm stainless coil offers to Turkey are at €1,650-1,800/mt CIF Turkey. These materials will likely be sold in the domestic market at €1,800-1,900/mt. In consideration of the recent domestic prices at €1,900-2,000/mt, a slight decline may be expected. On the other hand, in the Turkish domestic market 316 grade 2 mm stainless coil prices are at €3,200-3,400/mt.
Nickel prices are in the range of $9,000-11,000/mt at the present time, thus indicating that alloy extras are not determining the price direction of stainless steel. Rather, the current decline in stainless prices is a reflection of the lack of demand. Once the economy recovers, the trading volume is likely to increase. Businesses have started to perform sales for cash payments in order to protect themselves during these hard times. Given the overall cash problems, the levels of trading activity are also decreasing due to the lack of sales on deferred payment basis. Dependent as it is on the foreign markets, the Turkish domestic market will be keeping a very close eye of developments in the overseas markets in the coming period. Without a revival in Europe in particular, a recovery in Turkey seems difficult.