At the third session of 19th SteelOrbis Steel Conference “New Horizons in Steel Markets” held on Tuesday, December 3, in Istanbul, during a panel discussion moderated by Mesut Özdöl, the panelists evaluated developments in 2024 and shared their expectations for the Turkish steel industry in the coming period.
Evaluating 2024, Kürşad Aynas, sales manager at Colakoğlu Metalurji, stated that Turkish companies have not experienced any problems regarding production and exports in 2024, when costs, geopolitical risks and interest pressures have been high, though "deadly competition" limited profitability. Stating that Turkish steel exporters do not have a problem with fair competition, Mr. Aynas said the situation with countries selling at dumped prices $60-70/mt below product costs cannot be considered as competition. He noted that Turkish producers who imported products within the scope of Turkey’s inward processing regime and used the products in the domestic market instead of processing and exporting them triggered a deterioration in the balance between imports and exports. Regarding prices, he commented that, to minimize the effects of price fluctuations, long-term contracts can be made, exchange rates can be agreed and cost-indexed agreements can be signed. Regarding the duties that US president-elect Donald Trump plans to impose upon taking office, Aynas stated that imposing duties on countries with which Turkey competes could have positive results for the Turkish steel industry.
Commenting on Turkey’s competitiveness, Mehmet Çakmur, vice president of Kocaer Çelik, stated that direct steel exports cannot be competitive under the current market conditions and that Turkey should increase value-added indirect steel exports. Pointing out that the production costs of Turkish steel producers’ rivals are lower, Mr. Çakmur stated that a strategy change is needed in order to make profits. Noting that the globalization was replaced by regionalization during Trump’s first presidency, Çakmur indicated that the US has increased trade with Canada and Mexico, that the EU trades within its own region, and Turkey has been unable to use its geopolitical advantage due to political problems. Meanwhile, he said that the developed economies, which have slowed down due to high inflation, aim to eliminate stagnation and revitalize their economies by slowly reducing interest rates, adding that even a small increase in demand in the EU will have a positive impact on Turkey’s steel exports.
Another speaker at the panel, Muammer Bilgiç, member of the executive committee of Turkish steel producer Bilecik Demir Çelik, stated that Turkey should focus on indirect steel exports and that the country’s transition to value-added product production has begun. Referring to the excess capacity in the market, Mr. Bilgiç stated that excess capacity has always existed, but the slowdown in demand has turned excess capacity into a problem. Regarding the EU’s CBAM, which is another important issue for the global steel industry, he stated that, despite Turkey’s electric arc furnace-based production, the country’s Scope 2 (energy-based) emissions are higher compared to the EU’s emissions. In addition, he indicated that energy costs in Turkey are high compared to the EU. Bilgiç noted that, unless Turkey’s energy profile is changed, the Turkish steel industry will not be able to use electric arc furnace-based production as a competitive advantage.