Yayan evaluated the difference between steel production and steel consumption in Türkiye, current data, problems in the steel sector and proposed solutions to the İHA reporter.
"Steel production reached 30 million 500 thousand tons in November"
Veysel Yayan stated that Türkiye's steel production reached 30500000 tons as of November 2023 and said, "If we add 3 million tons more than 30500000 tons by 2022, this figure will be 33500000 tons by the end of the year." 33500000 tons represents a lower production level of approximately one and a half million tons compared to the 35.2 million tons of 2022, and approximately 7 million tons compared to the 40.4 million tons of 2021. This decline in production is especially evident in "The extraordinary increases in energy prices after Russia invaded Ukraine in 2022 were effective in making the Turkish steel industry unable to compete in the international market," he said.
"We experienced a production loss of around one and a half million tons"
Stating that the Kahramanmaras earthquakes caused serious losses for the Turkish steel industry, Yayan said, "Our steel producers in the region had to stop their production for a certain period of time. We experienced a production loss of approximately one and a half million tons. But we have compensated for these production losses since June. All Our producers started to operate again. Our production started to increase again as of the second half of 2023, but these production increases correspond to an average monthly production of around 2900000 tons. However, we were producing an average of around 3.4 million tons per month in 2021. Therefore "The recent momentum we have achieved is acceptable to us and does not represent a figure higher than the figures we achieved in the past," he said.
"It was decided to implement a protection measure around 176 dollars"
Referring to the reasons for the decrease in steel production, Yayan said, "The first is that the conditions regarding energy prices at the beginning of the year continue to have an effect to a certain extent. And also the losses arising from the earthquake. First, the fact that our new facilities have come into operation has some contributions to where we are today. Second, energy prices have fallen to reasonable levels. From here We are grateful to the Ministry of Energy for this. Thirdly, there are some measures taken by our Ministry of Commerce. Finally, considering the import trend in Turkey, it was decided to implement a protection measure of around 176 dollars, taking into account the possibility of damage here. This is exactly the capacity of Türkiye. "We think that the sector will have benefits such as increasing the export chances of the sector due to its use and at the same time benefiting from economies of scale."
"Our long-term goal is to rank 6th in the world"
Stating that Turkey imports nearly 9.5 million tons of flat products, Yayan said, "When we look at long products, there is an import of around 14 million tons. It will be possible to supply these largely domestically. Not only will it help to close the current account balance deficit, but also It will also contribute to creating added value and providing additional employment in Türkiye. Therefore, we expect serious steps to be taken in this direction in 2024 and to be further strengthened in 2025. In this way, our steel industry will become Europe's largest steel producer, which it had previously captured and abandoned in 2022. "We hope that we will be able to regain the position of being ranked 6th by 2024. Our long-term goal will be to catch up with Korea and rank 6th. This is our expectation," he said.
"Environmental contribution fee needs to be abolished"
Reminding that Türkiye has to invest within the scope of the Green Deal, Yayan said, "We have to invest billions of dollars. The figures announced by Erdemir three days ago alone indicate an investment of 3.2 billion dollars. In terms of the sector, the 650 billion dollar amount determined by the World Bank for Türkiye "It is possible to realize approximately 10 percent of the USD investment. We have to be strong in terms of finance to do this. However, there is a burden of environmental contribution on us. This needs to be removed. It brings an annual cost of around 70 million dollars," he said.
"There was a revenue decrease of around 43 percent in our exports in 2023"
Yayan noted that environmental deductions from scrap and coal could exceed an estimated $70 million in the coming years, "This is a cause for concern for us. Under the latest rebar monitoring system, marking rebar and painting it with safety paint will result in extraordinarily high prices that we never expected." We were faced with a price that was 38 times the price we had paid for similar labels we had bought before. This is a very worrying situation. When we look at this together with the environmental contribution margin, another factor comes to the fore that will prevent our industry from competing. We really need to rethink this and focus on the work of this monitoring system. Trying to generate certain revenues with public energy does not suit public institutions. Therefore, it is time to give up on this and support the efforts of the steel industry to get back on its feet and compensate for its serious losses in 2023. In 2023, there was a decrease of around 43 percent in our exports. There was also a serious decrease in our production. These are factors that negatively affect the Turkish economy as a whole. Our capacity utilization rates have decreased. We are hopeful for 2024. "In order for this to happen, it is important to remove all artificial burdens on us and to focus on the contribution of the sector to the economy, the value added tax on employment, instead of making some marginal cuts on the sector, and to adopt an approach that will continue to be able to do this," he said.
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