Steel demand rises in Turkey, exports slump

Although Turkey’s steel consumption may have turned a corner after a rebound in domestic demand as of the fourth quarter, as Turkish mills’ exports fell sharply in recent months amid a sluggish market sentiment, the pressure on Turkish mills’ output and pricing continues.

According to the latest Turkish Steel Producers Association (TCUD) data published Thursday, domestic steel consumption continued to recover for the second consecutive month in November, after a significant 34% rise seen in local consumption in October.

Turkey’s overall steel consumption in the first eleven months was, however, still 17.6% lower than the same period the previous year at 23.9 million mt.

Turkey’s flats consumption declined by 4.5% on year in January-November to 13.8 million mt, while longs consumption slumped by 30.7% to 10.1 million mt, amid a construction sector crisis, the latest data showed.

Turkey’s overall finished steel output was also down in this sentiment by 14.5% year on year to 30.5 million mt in the eleven-month period. Turkey’s longs production declined by 20.5% to 18.3 million mt, while mills’ flats output fell by 4.5% to 13.8 million mt in the same comparison.

Although Turkish mills focused more on exports and managed to increase their overall steel export volumes by 1.3% year on year to 20.1 million mt in the first eleven months, as export volumes slumped in November the pressure on mill quotations rose.

Turkish mills’ steel exports slumped by 34% on year to 1.6 million mt in November, while the revenue generated from these exports fell more sharply, by 35.1%, to $1.2 billion.

Turkish mills’ longs exports declined by 23.5% on year to 776,000 mt in that month, while flat steel exports slumped by 45.1% to 417,000 mt. Turkish mills’ semi-finished product exports fell more sharply in November by 86% to 40,000 mt, the latest TCUD data showed.

Although Turkish mills, which reduced their capacity usage notably in previous months, have started to ramp up activity in recent months, leading to stronger domestic market sentiment and higher steel prices, the slowdown in export volumes may force them to adjust their capacity usages again, if a notable recovery in export demand doesn’t emerge.

— Cenk Can