Exports contracted in the Turkish steel industry, but an increase in domestic demand is expected

According to the annual assessment of the Turkish Steel Producers Association (TCUD), global steel production remained stable, while steel production in Turkey decreased by 4% throughout the year due to the impact of tightening monetary policies weakening consumption and investments, particularly in the construction sector, and the stagnation in the real estate market in China. The trade deficit in steel products reached $6.3 billion, with indications that new export markets should be targeted due to the crisis in the Red Sea and future taxes related to carbon regulations at the border.

Trade deficit rises to $6.3 billion

The trade deficit in steel products increased from $1.6 billion in 2022 to $6.3 billion in 2023. The export-to-import ratio declined from 89.6% in 2022 to 56.6% in 2023.

Final consumption of finished products reached a record level of 38.1 million tons in 2023, showing a 17.1% increase.

Continued increase in domestic demand expected in 2024

It is anticipated that the upward trend in domestic demand will continue in 2024, supporting investments that came into play in the second half of the year and contributing to the completion of ongoing investments.

Thus, in 2024, along with existing capacities, it is targeted to reach the production level of 40.4 million tons achieved in 2021, with increased efficiency in export markets due to reduced geopolitical tensions and factors affecting global trade. The goal is to surpass the 15.2 million tons of exports recorded in 2022.

Red Sea crisis expected to have a negative impact

However, it is assessed that the crisis in the Red Sea, along with recent increases in freight prices and geopolitical risks, especially conflicts in regions such as Yemen, could negatively affect export markets. Therefore, efforts to increase export shares in developing alternative markets, such as North Africa, will become crucial, especially considering possible taxes under the Carbon Border Adjustment Mechanism (CBAM) and protective measures by the European Union.