Turkey’s Erdemir to reach full capacity as Isdemir mill restarts BF

Turkey’s largest integrated steel producer, Oyak Maden Metalurji Group (Erdemir), could reach full capacity in the coming weeks, depending upon market conditions, as the company’s Iskenderun-based mill, Isdemir, restarted production at one of its blast furnaces following maintenance work, S&P Global Platts learned from a company source on June 18.

The group’s first quarter crude steel capacity usage was around at 93%, Platts observed from the company’s Q1 report. Capacity usage of the company, however, fell in April and May, amid the COVID-19 pandemic and the maintenance work at the Isdemir blast furnaces that began in the second week of April.

Following the maintenance work, the company restarted the Isdemir BF in line with the recovery seen in steel markets as of the end of May, amid business normalization efforts globally, a company source informed Platts on June 18.

Erdemir Group could gradually reach full capacity again at its Erdemir and Isdemir works in the coming weeks, as the market sentiment harmed by the COVID-19 pandemic has begun to show strong recovery signs in recent weeks, especially in the domestic market.

Turkish mills’ hot-rolled coil pricing rose around $35-$40/mt in the last two weeks and offers exceeded $450/mt ex-works for domestic sales and $440/mt FOB for exports for August rollings. However, there were doubts among some market participants that Turkish mills’ new HRC offer prices will be accepted in export markets, especially in Europe, as domestic prices in the EU region were generally lower than Turkish mills’ current offer prices.

Isdemir is planning to disassemble its fourth blast furnace, which is currently closed, and to build a new one on the same site in 2021, as Platts has reported.

Isdemir produces hot-rolled coil, rebar and wire rod with a liquid steel capacity of 5.3 million mt/year. Erdemir Metalurji Group’s total crude steel production capacity is 9.1 million mt/year.

— Cenk Can