Turkiye reduced steel production by 2% m/m in January 2023

In January 2023, steel enterprises of Turkiye reduced steel production by 2% compared to December 2022 – to 2.605 million tons. This is evidenced by data, published on the World Steel Association website.

In comparison with January 2022, Turkish steelmakers reduced steel production by 17.6% in January 2023.

From February 1, 2023, the Turkish Oil Pipeline Corporation BOTAŞ reduced wholesale prices for natural gas for large industrial enterprises by 13.3-17.2% compared to October 2022.

The price cut will provide some relief for Turkish steelmakers, whose competitiveness has declined as local steelmakers’ costs are high compared to their European Union counterparts.

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

Such actions were supposed to facilitate the work of the Turkish steel industry, but the deadly earthquakes in Turkiye, which occurred in February 2023, destabilized the work of the country’s industry, destroyed logistics and led to the death of many people. As a result, part of the steel facilities in the country are not working due to the assessment of earthquake damage, problems with obtaining raw materials, and other reasons.

Due to the shutdown of some steel plants to eliminate the consequences of the earthquake, steel production in the country will begin to fall, which will affect domestic product supplies in Turkiye, as well as global ones. At the same time, when the country begins to rebuild destroyed districts and cities, all the rebar produced by Turkish steelmakers will be sent to the domestic market, and importers from the Middle East, who consumed about 4 million tons of finished steel from Turkiye per year, will lose their supplier. Such a shortage of steel in the future may provoke an increase in prices.

Turkiye ranks eighth in the world in terms of steel production. In 2022, Turkish enterprises reduced production of steel by 12.9% compared to 2021 – to 35.1 million tons.