Turkish steel production has been curtailed by electricity outages, following last week’s cut in natural gas supply and significant hike in gas prices. Electric arc furnace mills have been forced to halt production for at least three days, with output planned to resume on Thursday.
The move to suspend power supply to industry for three days as of 00:00 local time on Monday follows last week’s gas supply cut by 40% (see Kallanish passim).
Veysel Yayan, general secretary of the Turkish Steel Producers’ Association (TCUD), says industry was informed of the power outage in an official letter.
“The steel industry is one of the sectors that use the most electricity in Turkey. Every second of the outage is a financial loss for the steel industry,” says Yayan. All of Turkey’s industrial sectors will suffer as a result of the power outages, he adds.
“It creates an extraordinary, serious problem for all industries. We hope that Turkey will overcome this trouble as soon as possible. Every second causes financial damage. We hope that lessons will be learned from this problem and that we will not encounter similar situations in the coming years,” Yayan concludes.
A Turkish merchant bar mill tells Kallanish: “As we are dependent on electricity, we were not much affected by the natural gas cuts. But the electricity outage has come unexpectedly and hit our industry. These cuts are untimely given we are receiving serious demand for merchant bar in the global market.”
Another producer says there is a risk of electricity cuts continuing for more than three days.
“The natural gas cut and the accompanying power outages are an unexpected development that could have a serious negative impact on the production and exports of our industry in January,” says Turkish Automotive Manufacturers Association (OSD) chairman Haydar Yenigun.
“In this process, it must be taken into account that the coordination of all stakeholders in the value chain is critical for the efficiency of production plans,” he continues. “Another important issue is that when developments that will affect production come to the fore, informing as much as possible in advance in order to be able to prepare for the application will allow the automotive industry to adapt to the process.”
“When we consider the export of $30 billion, the domestic market of $40 billion, and when we include the whole ecosystem of service and dealers, a three-day cessation of production means a loss of $1 billion dollars by the simplest analysis,” adds Vehicle Supply Manufacturers Association (TAYSAD) president Albert Saydam.
Burcak Alpman Turkey