Uğur Dalbeler at YISAD: 2018 expectations still remain positive

Wednesday, 04 April 2018 14:58:41 (GMT+3)   |   Istanbul

Speaking at the first session of the 6th YISAD Flat Steel Conference & SteelOrbis Market Talks held in Istanbul on April 4, Uğur Dalbeler, general manager of Turkish steel producer Çolakoğlu Metalurji, said that he cannot yet draw a clear picture on how the Section 232 measures will affect the markets. Stating that steel is a difficult commodity to make assumptions on given the uncertainty and volatility in prices, he said that steel has now become a matter of politics.

Mr. Dalbeler said that, as Turkey is a NATO member and one of the largest customers of the US, a threat to the US national security is not a valid reason for these measures, adding that he believes that the US will have a difficult time finding itself new rebar sources given that the US receives the lion’s share of Turkey’s rebar exports. He went on to say that Turkey’s steel exports account for a significant volume of steel consumption in the US and the EU, and these regions are in fact open to discussions regarding trade matters and so Turkey should make use of this situation.

The Çolakoğlu official indicated that the biggest reason for the increased global steel consumption after 2008 has been Asia, especially China. According to Mr. Dalbeler Turkey’s steel consumption increased by 13 percent in 2017, but he said this should not be seen as growth as it was in reality only compensation for the decline in consumption recorded between 2013 and 2015. “If Turkish steel consumption had not decreased in 2013-15 and if growth of production had continued at the usual levels, Turkish steel production would have reached 40 million mt and would have constituted competition for Germany in terms of global ranking,” Mr. Dalbeler said.

He said that global steel consumption is expected to grow by two percent in 2018 and remain stable in 2019, while Turkey’s steel consumption which reached 37 million mt in 2017 is expected to increase to 37 million in 2018 and is likely to see further growth in 2019 as well. Mr. Dalbeler said that Turkey’s steel export value is on the low side and the industry should focus on high value-added and high quality products. Considering the Section 232 measures and the reactions from other countries, he said Turkey might lose two thirds of its steel export volume.

According to Mr. Dalbeler, Turkey’s flat steel production exceed its consumption by 60 percent in 2015 and by 88 percent in 2017. In 2018 Turkish flat steel production is expected to reach 14 million and will likely increase to 15 million if MMK Metalurji restarts its hot rolled coil line which was idle for the past five years.

Despite all the latest development in the steel industry, the Çolakoğlu official said that 2018 expectations still remain positive, mostly due to China’s strict reforms on the supply side which started in 2016, including measures to increase consumption and close down outdated capacities.