Veysel Yayan: Turkey’s crude steel output in 2020 to reach 35 million mt

Veysel Yayan: Turkey’s crude steel output in 2020 to reach 35 million mt

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At the 15th SteelOrbis Steel Conference “New Horizons in Steel Markets” being held virtually on December 1-3 due to the Covid-19 pandemic, Dr. Veysel Yayan, secretary general of the Turkish Iron and Steel Producers’ Association, stated that 2020 was again another year – after the grim 2008 – which saw serious fluctuations, stating that economies saw contractions, with some starting in March and others in April. Pointing out that Turkey was different in this respect, as it saw a strong performance in the first quarter and, following the negative situation in April and May, the country started to recover again in June due to economic measures, Dr. Yayan said that this was reflected in the GDP growth of 6.7 percent in the third quarter.

World crude steel production followed a negative trend with a two percent decline in the first 10 months, Dr. Yayan said, noting that this year global production, balanced by a strong China, will see similar levels to 2019 by the end of this year. “In the coming year, crude steel production will pick up in Western counties, while there are some suggestions that consumption in China may slow down. This year, global production was balanced by China, while next year production and consumption will increase within a balanced structure where the Western world will be compensating for any slowdown in China,” the Turkish Iron and Steel Producers’ Association official noted.

Turkey’s crude steel output recorded a 4.2 percent decrease in the first ten months this year, remaining well below 2017 figures. Turkish crude steel output is expected to reach 35 million mt by the end of this year, Dr. Yayan stated. Additionally, the capacity utilization rate which was 70.5 percent in the first ten months is likely to rise to an average of 75 percent for the full year. Yayan drew attention to Vietnam’s ranking in World steel production, explaining that the 28.8 percent increase in the country’s crude steel output may be due to new capacities and added that this could enable Vietnam to surpass Turkey and Germany in the coming years. On the other hand, Yayan said that the world steel capacity utilization rate remained at an effective level of 79.1 percent in 2019, while, though a utilization rate above 80 percent does not reflect the current reality, in the coming years the steel industry might see levels higher than these.

Dr. Yayan stated that the 16.2 percent increase in Turkey’s finished steel consumption in the first ten months this year is better compared to the increase in crude steel production, adding that the increase of 30 million mt in imports also contributed to this growth. Finished steel production is expected to be 36 million for the whole of 2020. He underlined that Turkey’s long steel production has lagged behind its flat steel production this time, as a result of the recovery of manufacturing industries. The distribution of consumption was 70 percent – 30 percent in favor of long products, while Dr. Yayan warned that this could be reversed, though he recalled that Turkey is in an earthquake-prone zone and has 3.7 million buildings in need of renovation.

Commenting on Turkey’s steel imports, he described the almost 50 percent share of imports in finished steel consumption as “extraordinarily disturbing”, indicating that, as the world’s eighth-largest steel producer, Turkey’s steel imports account for 43 percent of its total consumption, while for long steel the share stands at 48.5 percent.

Dr. Yayan said that protectionist measures may change in line with the change of administration in the US, adding that this is vital to maintain the $100 billion trade goal with the US. He added that, if the US makes changes in its trade measures, this would also eliminate the justification of the EU to implement its own trade restrictions. He said that Turkey’s steel export to import ratio has declined to 109 percent, from 127 percent last year.

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