Speaking to Turkish TV channel BloombergHT, Uğur Dalbeler, Turkish Steel Exporters’ Association (CIB) vice president and general manager of Turkish steel producer Çolakoğlu Metalurji, talked about the impact of the coronavirus on the steel sector, recalling that the Turkish steel industry had already experienced two tough years, first due to the narrowing of the domestic market in 2018 and then due to the protectionist policies observed in 2019. He stated that a ten percent fall was recorded in Turkey’s steel production last year, and, although the volume on the export side was sustained, the value of exports fell by 15 percent year on year.
Assessing the first two to three months of the current year, Mr. Dalbeler said, “Although various segments have been impacted negatively, upstream segments such as crude steel producers have not yet felt the blow.” Pointing out that steel producers are working with three-month schedules and are producing based on orders, he said that no orders have been received almost over the past one month. Indicating that many industries in many countries have halted production, Dalbeler said that the steel industry may be forced to suspend production in the coming months if the virus continues to have its current impact. “We are producing for previous orders on the export side too. I have the data for the first two months. There is an approximate five percent fall in export volumes and the value of exports declined by around ten percent year on year,” he said, adding that the slowdowns and halts observed in the steel-using industries will be reflected in the steel sector as of the current month.
The Çolakoğlu official said that, not only blast furnaces of the mills producing from iron ore, but also coke batteries, cannot be stopped, because if they stop the cost to start them up again will be as high as a new separate investment. “As we are talking about a global commodity, you can create new markets for your material if you have strong competitive power, and this is the steel sector’s advantage,” he said. “Although we have experienced some losses in the US and the EU markets, our biggest partners, we are still finding some shares in other markets. Maybe if the crisis in the Far East eases in the coming period and demand resurfaces again -besides there is some small demand coming from the region - maybe we can try to compensate for our losses there.” Commenting regarding the short-time working subvention in Turkey, Dalbeler said that a halt of production would lead to bigger devastation for the sector.
Commenting on recycling in Turkey, Dalbeler stated, “We do not miss even a ton or kilogram in terms of steel recycling. Turkey’s production based on recycling or steel scrap is at around 20 million tons. We procure only one third - even just 25 percent - of this from domestic sources, while we are forced to purchase 79-75 percent from imports. Turkey is the biggest scrap importer in the world, so we do not leave a ton or kilogram without recycling.”