TÇÜD: Turkish steel market expected to improve in June

According to the assessment in the press release of TÇÜD, steel demand is expected to improve in June

TÇÜD said that production losses recovered in March and Turkey overtook Italy and increased to 9th place

In the first quarter of 2023, steel production decreased by 21.5% y-o-y to 7.4 million tons due to the earthquake in Turkey. Production in the earthquake zone, which had decreased to 227 thousand tons in February, reached 534 thousand tons in March as our steel producers in the earthquake zone started their activities. Turkey's total crude steel production increased by 28.9% compared to the previous month and reached 2.7 million tons. According to the production figures of the first 2 months of 2023, our steel industry, which had decreased to 10th place in the world crude steel production ranking, increased to 9th place in the first 3 months of the year, leaving Italy behind, thanks to the recovery in production in March. Thus, expectations for a full recovery of the production loss in the second half of the year gained strength.

"In March, the exports of our steel industry decreased by 52.8% in quantity to 810.6 thousand tons, while imports increased by 43% in quantity to 1.7 million tons. In the first quarter of 2023, the continued focus on the Turkish market by Russia and Far Eastern countries, which had state-subsidized production and dumped exports, due to their inability to export to the US and the EU, and the postponement of customs duties on flat products caused our flat product exports to decrease by 36.4%, while our imports increased by 32.2%. This situation played an important role in the growth of the foreign trade deficit in the steel sector in Turkey and led to a decrease in the ratio of exports to imports, which was 92.6% in the first quarter of last year, to 53.9%, increasing concerns that flat product imports will increase and the deficit in steel foreign trade will gradually grow in May.

TÇÜD evaluated the developments expected to take place in the near term as follows;

Our steel industry, which saw a contraction in export data in March compared to the same month of the previous year due to the contraction in global demand and high energy prices, is expected to regain its competitiveness in global markets with the discounts applied to natural gas and electricity used in industry, and production and export figures are expected to enter a gradual recovery process in April and May, and stabilize as of June and surpass the production levels of 2022.