During the panel moderated by SteelOrbis general manager Murat Eryılmaz at the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Thursday, April 27, the current situation and future expectations for the Turkish flat steel market were discussed.
In his speech, Kerem Çakır, chairman of the Association of Cold Rolled, Galvanized and Coated Coil Manufacturers (SOGAD) in Turkey and general manager of Borçelik, stated that regional protectionism, energy prices and the supply-demand balance have triggered fluctuations in the market, while Turkey has remained outside of the EU and the US markets. According to Mr. Çakır, Turkey must reach an agreement with the EU and the US within the scope of the EU quotas and US Section 232 measures as these are the most important markets for Turkey in terms of competition. Regarding galvanized steel capacity in Turkey, Çakır said that the current capacity of 5.3 million mt will increase to 6.5-7 million mt with new investments, but, as local demand is insufficient, it would be better to divert these capacities to the export markets. On the subject of green transformation, the Borçelik general manager stated that transformation cannot be considered without government support. Saying that Turkey should establish its own emissions trading system, he underlined that tax revenues should be transferred in a transparent manner to transition projects.
Sharing his views on the Turkish pipe market, Vedat Yalçın, chairman of the Turkish Steel Pipe Manufacturers Association (ÇEBID) and executive board member of Noksel Çelik Boru Sanayi, stated that the capacity utilization rates of large diameter pipe producers in Turkey decreased as exports declined after the imposition of Section 232 measures by the US. As regards small diameter pipes, Mr. Yalçın said that the flat steel investments that will come into play when the problem in semi-finished supplies is resolved will make a great contribution to the sector. Stating that the main problems in the market are unpredictable energy prices and exchange rates, Yalçın said that the fact that input costs are in dollars and that sales realizations are in Turkish liras is also a big problem. He added that logistics costs in foreign markets should also be taken into account and that the Turkish steel industry should make investments not only in domestic production, but also for on-site production in other countries, finding ways to open up to new markets.
Ahmet Özkan, vice chairman of Turkey’s Association of Flat Steel Exporters and Manufacturers (YISAD) and chairman of Dempaş Demir, stated that the biggest problems faced by the Turkish steel industry are exchange rates and price fluctuations. Pointing out that Turkish companies have started to withdraw from the market due to the approaching elections, Mr. Özkan stated that business in the domestic market will be active through 2024 with the revival of construction activities in the earthquake-hit zone after the elections. Saying that Turkey’s biggest option in response to the EU’s import quotas is its manufacturing sector, Özkan stated that the domestic manufacturing industry should be developed and that prices should be in line with global prices.
Commenting that the efforts of developed countries to slow down the economy amid the high inflation caused by the war between Russia and Ukraine have begun to be felt, Mehmet Çakmur, deputy chairman of Turkey’s Foreign Steel Trade Association (CDTD) and general manager of M Steel Dış Ticaret, said that market activity and demand have gradually slowed down. Mr. Çakmur said he thinks that the outlooks for the second and third quarters of the year seem to be negative for Turkey’s foreign trade due to the price pressures from aggressive steel offers from Far Eastern countries, which have not been hit so much by the increase in energy costs. He went on to state that the Far Eastern countries should reduce their capacities or stabilize their prices in order for the market to recover. Çakmur said that growth may be seen in Africa on the back of new investments, however, African market cannot absorbe the export volumes shipped to the EU and the US and that competitiveness would be achieved by establishing marketing networks.
