Turkey cut steel production by 21% y/y in July 2022

Steel exports for the month decreased by 23% y/y

In July 2022, Turkish steel companies reduced steel production by 20.7% compared to July 2021 – to 2.7 million tons. SteelOrbis reports about it with the reference to data from the Turkish Steel Producer’s Association (TCUD).

In January-July 2022, Turkey produced 21.6 million tons of steel, which is 6.9% less than in the same period of 2021. The consumption of finished steel in the country decreased by 11.2% y/y in July 2022 – to 2.7 million tons, and in 7 months – by 3.6% y/y, to 19.6 million tons.

Steel exports from Turkey in July 2022 decreased by 1.8% compared to July 2021 – to 1.3 million tons, and in the first 7 months – by 10.2% y/y, to 9.4 million tons. Steel imports into the country in July 2022 amounted to 1.3 million tons, which is 1.8% less than in July 2021. For January-July 2022, steel supplies to Turkey decreased by 5.4% y/y – to 9.1 million tons.

“The acceleration of the decline in the country’s steel production strengthened the negative concerns of the market. The factors of the decline were the unfavorable situation of the world market, as well as the pressure of Russian products low prices on the domestic Turkish market. Turkish producers cannot compete with them, so they are forced to reduce or stop production” comments TCUD.

Turkey’s capacity utilization fell from 75.2% in July 2022 to 59.7% in July 2021.

As GMK Center reported earlier, in the middle of August, Turkish steel mills were considering stoppages of production due to low demand and high costs. Such plants cannot ensure an increase in prices neither on the domestic nor on the export markets. As a result, the steel production becomes unprofitable.

In addition, since September, Turkey have grown electricity and gas tariffs for industry by 50%, which further worsens the situation for local steelmakers.

Turkey ranks seventh in the world in terms of steel production. In 2021, Turkish enterprises increased production of steel by 12.7% compared to 2020 – up to 40 million tons. This is a record indicator.