Preparing to close this year with an increase in exports, the Turkish steel industry aims to continue growing with new markets. Adnan Aslan, Chairman of the Board of Directors of the Turkish Steel Exporters' Association (ÇİB), said that they have made serious efforts in recent years, especially in the African and South American markets, and that they will reap the fruits of these efforts in the coming period, “2025 will be the year of Africa and South America in steel.” Noting that they aim to double exports to Azerbaijan, Mr. Aslan said that they have come to Azerbaijan with 21 companies to achieve this goal and that they will hold important meetings with potential buyers.
While Türkiye is experiencing difficult times in exports due to the low dollar exchange rate and high interest rates making it difficult to access financing, the figures in the steel sector are above last year. As of the first nine months of the year, steel exports increased by 28 percent in tonnage and about 11 percent in value. Exports, which totaled 14.9 billion dollars last year, are expected to reach 16.5 billion dollars this year.
EXPORTS INCREASE WITH VALUE-ADDED PRODUCTS, TARGET AFRICA AND SOUTH AMERICA
Speaking at the trade delegation organized by the Steel Exporters' Association (ÇİB) to Azerbaijan, ÇİB Chairman Adnan Aslan said that the increase in export figures is closely related to the complete elimination of the impact of the pandemic. Noting that despite the increase in export figures, they are still far from the level of 22.2 billion dollars in 2021 and profitability has declined, Aslan stated that especially long product exports have decreased proportionally, and that they are trying to compensate for this decrease with flat products with more added value.
Explaining that while the export unit price of long products is around 665 dollars, this figure is up to 800 dollars for products such as hot sheet, cold sheet, coating, cold coating and galvanized sheet, Aslan said, “Our primary goal is to reach a record level of 22 billion dollars. For this, we continue to search for new markets, especially in Africa and South America. We have focused a lot on these two markets for the last 3 years and we have made good progress. We think that we will make a serious leap in these two regions, especially in 2025, with the B2B delegations we will organize. We can say that 2025 will be the year of Africa and South America.”
TÜRKİYE HAS SIGNIFICANT ADVANTAGES IN AFRICA
Noting that the banking system in Africa is not sufficiently developed and therefore Turkish companies have an advantage, Aslan explained the system there as follows:
“Since banking systems are not developed, for example, Chinese traders can only sell if they can give an open account. Traders in Türkiye, on the other hand, buy the goods from the producers by paying the money or opening a letter of credit, and then ship them to the region. They have companies there, they have staff, they have warehouses... They wait for thirty days, sixty days, ninety days and take risks. It is not possible for China to sell directly.”
COUNTRIES WE USED TO SELL GOODS TO ARE NOW OUR COMPETITORS
Pointing out that North African countries and the Gulf Region, to which Türkiye has been exporting from the steel sector for years, have recently started to become Türkiye's competitors, first as producers and then as exporters, Aslan said: “Countries such as Egypt, Algeria and Morocco have taken over Türkiye's US, Canadian and European markets. Countries such as the United Arab Emirates, Qatar and Saudi Arabia have also become net exporters in the sector. While Türkiye used to export iron and steel to these countries, and our products were used in airports and hotels in Dubai, they are now selling goods to the countries that Türkiye exports to, and they have started to take our markets away from us.”
Referring to the giant billion-dollar projects recently announced to be realized in Saudi Arabia, Aslan said that this situation excited the entire sector at first, but the expected volume did not materialize. Aslan emphasized that although some Turkish companies were registered as official suppliers, the projects were carried out in parts and did not materialize at the expected pace.
IT'S NOT THE DOLLAR RATE, IT'S THE COSTS
Speaking about the exchange rate, which is one of the issues that exporters have complained about the most recently, Aslan said that the level of the exchange rate does not affect them too much, but that the main factors that reduce profitability are the costs. Pointing out that 75 percent of steel production in Türkiye is made by melting scrap, Aslan said, “We import nearly 80 percent of this scrap. In addition, natural gas, electricity and energy costs are our main costs. Therefore, energy and raw material costs stand out as the two most critical issues for our sector.”
EXPORTS TO AZERBAIJAN TO DOUBLE
Providing information about the trade delegation organized to Azerbaijan, Aslan stated that Türkiye is the third country that exports the most steel to Azerbaijan after Russia and Iran.
Stating that Azerbaijan's total imports are 850 thousand tons and Türkiye exported 63 thousand tons last year, Aslan said, “Azerbaijan makes half of its total imports from Russia. We want to increase our steel exports to our brotherly country Azerbaijan. For this, we organized a delegation with 33 participants from 21 companies. We will hold very important meetings with potential buyers. We aim to double our exports to 125 thousand tons.”
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