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The main reasons are low demand for steel products and high energy costs

Turkish steel mills producing long products are 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, while energy and scrap costs have remained high. Eurometal reports about it with the reference to S&P Global Commodity Insight.

“Without a recovery in demand, it wouldn’t be possible for Turkish producers to continue production. As our raw material stocks are enough to work till the end of October, we could continue to work with reduced capacity depending on market conditions,” said a manager of a large Turkish long products company anonymously.

The manager added that as producers had been adding to stocks for a while due to low demand, they had begun considering stoppages. In particular, his company had already reduced output to 12 hours/day.

“If the weak market sentiment persists and input costs remain high, we may stop production fully in the first week of November,” the manager said.

Some Turkish steel mills raised their lira rebar prices on August 19 to keep them stable against the dollar in the $650-670/t EXW range. However, after the Turkish currency depreciated further, low demand continued to pressure quotes amid strong input costs.

As GMK Center reported earlier, a number of European steel companies have decided to reduce production due to weak demand for steel. Car manufacturers have consumed less steel because of lower production rates caused by a shortage of components. Other end-users, including the white goods segment, were also reported to show lower demand for steel.