Turkish steel industry enters into stagnation period: Colakoglu CEO

The Turkish steel industry has entered into a stagnation period, as the growth period has come to an end amid increased conflicts around the world, Ugur Dalbeler, CEO of Colakoglu, said at the 89th Irepas Meeting held in Istanbul Sept. 18.

Highlighting the decline seen in Turkish mills’ steel exports and steel production in 2023 amid unfavorable market conditions and protection measures, the CEO said: “We should keep what we have in our hands, but it will be hard.”

Steel export/import coverage ratio of the Turkish steel industry fell to 48:100 in the first seven months of 2023 from 94:100 a year prior, as steel exports declined 44% on the year to 5.3 million mt on low demand in main export markets, while imports increased by 22% on the year to 11 million mt, the Turkish Steel Producers’ Association data showed.

Despite the 7.7% on the year rise seen in Turkey’s crude steel production in July after a 14-month declining trend, crude steel production remained 13.3% lower on the year at 18.8 million mt in the first seven months of 2023, according to TCUD data.

Stiff Asian suppliers, particularly China, competition both in the domestic and global markets also harmed Turkish steel mills’ production and sales in 2023.

Turkish steel producers submitted a petition at the beginning of September to Turkey’s Trade Ministry for an antidumping investigation on imports of hot-rolled coil (HRC) from Chinese, Indian and Russian suppliers, as Dalbeler previously told S&P Global Commodity Insights.

“The global trade activity declined notably, due to high inflation, strong dollar and the Russia-Ukraine war,” Dalbeler said, adding that sanctions on Russian steel have also become a threat for Turkish steel producers.

“Some US officials have visited some companies in Turkey explaining the risks of not cutting ties with Russia,” the CEO said, adding that the EU producers have been also asking Turkish producers to prove that they have not been using Russian-origin semi-finished steel.

Noting that the US and the EU have been maintaining protection measures, Dalbeler said: “They have changed the rules of the play during the game as their competitive power declined.”

Highlighting that the EU has initiated its carbon border adjustment mechanism, the Colakoglu CEO said Turkey should also bring its own regulations into force in this regard.

Major Turkish steel producer Colakoglu, meanwhile, recently completed its ongoing capacity increase project and increased its HRC production capacity by 50% to 4.5 million mt/year despite unfavorable market conditions, Dalbeler noted.

Platts, part of S&P Global, last assessed domestic Turkish HRC at $655/mt ex-works on Sept. 15, down $10/mt on the week.

Author: Cenk Can