Turkiye reduced steel output by 4% y/y

Turkiye’s steelmakers reduced steel production by 4% in 2023 compared to 2022, to 33.714 million tons. This is evidenced by data published on the World Steel Association website.

The average monthly steel production in Turkiye in 2023 amounted to 2.81 million tons, down 4.04% y/y.

In December 2023, Turkish steelmakers produced 3.22 million tons of steel, up 6.2% month-on-month and 21.2% compared to December 2022. Thus, in December, the country’s steel industry increased steel production to its highest level since April 2022.

Since October 2023, Turkiye has increased wholesale natural gas prices for large industrial enterprises by 20% compared to August. In addition, the country has increased electricity tariffs by 20%, which puts additional pressure on the country’s steel industry.

The last time Turkiye raised natural gas prices was in September 2022. At that time, tariffs increased by 50% amid rising demand due to the military aggression of Russia, the largest gas supplier to Europe. This trend continued until the end of the year, but in February 2023, BOTAŞ announced a 13.3-17.2% reduction in natural gas prices for large industrial enterprises. This was followed by price adjustments in March and April – by 20.95-26.12% and 20.01%, respectively. The tariffs remained stable thereafter.

In addition, at the end of 2022, the Turkish energy market regulator announced a 16% reduction in electricity prices for industrial consumers.

Steel production in Turkiye in 2022 decreased by 12.9% compared to 2021 – to 35.1 million tons. TCUD expected a drop in production of more than 13%. Over the year, steelmakers exported 19.6 million tons of steel, down 17.7% y/y. The main factors behind the decline in production are rising production costs and falling global steel demand.