Turkish steel output to rebound in May: Veysel Yayan

Turkish crude steel output which declined 21.5% year on year to 7.4 million mt in the first quarter of 2023, amid negative effects of the devastating February 6 earthquakes, and is expected to rebound in May in line with the restart of the major steel mills, Veysel Yayan, general secretary of the Turkish Steel producers’ Association said at the EUROMETAL Steel Day conference held in Istanbul April 27.

Turkey’s largest integrated long and flat steelmaker, Isdemir, which suspended its production at its facilities in Southeastern Turkey for due diligence studies after the major Feb. 6 earthquakes, recently restarted output in a gradual and controlled manner.

“The pre-earthquake production levels were already reached,” Isdemir said April 24.

MMK Metalurji, the Turkey-based subsidiary of Russian steelmaker MMK, also restarted its electric arc furnace and hot-rolling mill in Dilovasi, western Turkey, at the beginning of April, Yayan noted.

Highlighting that one of Turkey’s largest steel producers, Tosyali, will also start trial production at its new flat steel mill with a capacity of 4 million mt/year in Sariseki, southern Turkey, at the end of May, Yayan said these developments will pull up Turkey’s crude steel output gradually as of May.

Yayan, however, said demand will determine the rise in capacity usage at steel mills in the coming months, which fell as low as 53.6% recently.

Noting that the housing development administration of Turkey is planning to build 350,000 houses in the earthquake-affected 11 cities in South Eastern Turkey within a year, Yayan said, this could support domestic steel consumption in the coming months, especially in longs products.

This will require 5 million mt of steel products, including 3 million mt of rebar, 750,000 mt of wire rod, and 1.25 million mt of sheet metal, according to calculations done at the meetings held with steel producers and government officials since the beginning of March.

Highlighting that Turkey’s steel exports fell significantly by 45% on the year to 1.4 million mt in January-February, as energy prices in Turkey remained higher than their rivals despite recent cuts in energy prices, Yayan said protectionist measures in main export markets in the EU and the US could continue to limit Turkish mills’ export volumes in the coming months of the year.

Yayan was also concerned about a rise in foreign trade deficit in steel, as huge amounts of flat steel were imported in the first four months of 2023 with lower prices compared to domestic mills, he also said.

The Turkish government postponed the effective date of the increase in customs duties on imports of flat steel to May 1 from Feb. 27.

Turkey’s customs duties on unalloyed hot-rolled, cold-rolled, and coated coil imports will be increased by 6%-7% to 15%, 17% and 20%, respectively, as of May 1.

Platts, part of S&P Global Commodity Insights, assessed Turkish HRC at $760/mt ex-works April 21, down 4.4% on the week, amid pressure from imports and slow demand.

Author Cenk Can