The Turkish steel industry is setting an ambitious goal to increase capacity utilization to 70% in 2025, said Veysel Yayan, Secretary General of the Turkish Steel Producers Association (TCUD).
In contrast to Turkish plans, the European market is facing significant difficulties: the German concern Thyssenkrupp last week announced the reduction of 11 thousand jobs. The main reason, according to Yayan, is the decline in demand caused by high energy prices in the EU.
“The decision of Thyssenkrupp will not have a significant impact on the global steel market, as this is a rather rare situation. Germany, as the largest industrialized country in Europe, is experiencing an economic downturn, which affects not only the steel industry but also the construction and automotive sectors,” he said.
Global economic conditions and industry changes have a direct impact on the steel industry. Over the past three years, global steel consumption has been declining by 3.2%, 0.8% and 0.9%, respectively. Despite the global crisis, Turkey has been following a strategy of avoiding layoffs during downturns. Instead of laying off staff, manufacturers are reducing the number of shifts, paying more attention to equipment repair and maintenance, diversifying products and developing new export markets.
Currently, the capacity utilization rate in Turkey is 62.6%.
“We aim to increase this figure to 70% over the next year, compensating for the losses of previous years,” Yayan emphasized.
However, the industry is facing challenges: Turkish steel export growth, which currently stands at 30.7% year-on-year, is expected to slow to less than 20% in the last two months of the year due to lower demand, especially in the EU.
As GMK Center reported earlier, steel consumption in Turkey in January-October 2024 decreased by 1.8% year-on-year – to 31.4 million tons. Over 10 months, local steelmakers produced 30.9 million tons of steel, up 12.4% y/y. Exports of finished steel products increased by 30.7% y/y – to 11.2 million tons, while imports decreased by 7.2% y/y – to 13.7 million tons. Thus, the export-import coverage ratio, which stood at 54% in January-October 2023, rose to 76% this year.
