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Steelmakers in Turkey eye self-sufficiency

Keywords: Tags  steel, Turkey, long products, flat products, Veysel Yayan, Namik Ekcini, Turkish Steel Exporters' Association, Steel Success Strategies XXVIII conference Catherine Ngai

NEW YORK — Turkish steelmakers hope that product diversification, along with a push to fill existing supply gaps, will propel the industry toward self-sufficiency, according to executives from the nation’s steel trade groups.

Since the recession, Turkey has faced the same sluggish growth as other global steelmakers. But the country’s steel industry has bounced back due to its cost-competitiveness and strong export volumes, members of the Turkish steel delegation told AMM in an interview during the Steel Success Strategies XXVIII conference in New York.

"Despite the ongoing crisis and seasonal effects, in the first four months there was a 3-percent increase in steel consumption, so it’s an important development for us," Namik Ekinci, chairman of the Turkish Steel Exporters’ Association, said.

Turkey’s crude steel production grew 5.2 percent to 35.9 million tons last year, according to World Steel Association data, with the country overtaking Brazil and Ukraine to become the world’s eighth-largest steelmaker. Imports, however, rose 10.8 percent to 11.8 million tons, due mainly to high levels of flat steel and slab.

Ekinci said that while imports aren’t necessarily a negative thing, particularly because of the nation’s open markets, Turkish steelmakers—predominantly known for making long products—are trying to become more active in the flats sector to satisfy domestic demand. "In the past, there was only one facility for flat production," he said. "Now, there are many investments for flat products and the number increases."

Veysel Yayan, general secretary of the Turkish Iron and Steel Producers’ Association, said Turkey’s steel industry has dragged its feet in the flats sector due to competition from neighboring countries such as Ukraine and Russia. "So now, under these market conditions, the (blast oxygen furnace) facilities are running at 100 percent (of capacity) but (electric-arc furnaces) are running at a very low capacity utilization because ... margins are not satisfactory with scrap (prices)," he said.

Ekinci refuted suggestions that Turkey is an unfair player in the global market due to its large volume of exports. Instead, he said, steelmakers have adopted a competitive cost structure, even with natural gas prices that are two to three times higher than those in the United States.

"We always choose to proceed within World Trade (Organization) rules. So, if there are some countries that say we cannot send materials to (their) backyard, actually, we’re not taking it positively," he said.

Discussions have surfaced in recent years about U.S. trade cases against Turkey, including imports of wire rod and reinforcing bar. However, both Turkish executives said they were not aware of the rumors, reaffirming that its industry is simply more cost-competitive rather than acting illegally.

"Of course there’s no dumping from Turkey. The U.S. authorities are well aware of this," Ekinci said. "Also, the people who spread these rumors ... what they’re trying to do is to ... create confusion for importers. So, (with) confusion for importers and exporters from Turkey, they think they (will) gain (some) advantage."

Ekinci added that Turkey’s steelmaking facilities are technologically advanced, its inputs and raw materials are used efficiently and its workforce and productivity levels are both high. "We entered the market not with high profit margins. We make a reasonable profit," he said.

Moving forward, the Turkish steel industry will continue to grow, but the association said that its top goals are to diversify its product mix, allow for more self-sufficiency in its steel industry and add value to steel.

"We will compete on the basis of high value. On the basis of price, to make dispute is not (a) solution. As it’s been mentioned, we’re making newer and newer items to make more efficient and more attractive steel," Yayan said.

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