Friday, 26 Feb 2010
Hurriyet daily reported that at a steel conference held in Istanbul on February 24th 2010, steel market analysts and businessmen discussed challenges facing the steel industry globally and in Turkey.

According to Mr Taylan Karagül export sales manager of İçdaş, Turkey has just begun its recovery but it will be slow. He said that steel consumption will remain below pre crisis levels because it has been directly affected by the global macroeconomic crisis.

One major concern of conference participants was the impact that China’s soaring steel market is having on the sector.

Turkey’s steel industry is suffering in the current global economic downturn partly due to a decline in the real estate sector. However, the massive demand Chinese steel companies are creating for raw materials, such as the iron ore that goes into steel production, is also raising the basic cost of production for steel companies around the world, which is negatively affecting companies’ ability to stay competitive.

Mr Roger Manser managing editor of Steel Business Briefing said that the recession has actually had very little effect on China.

According to Mr Manser, iron ore producers in Latin America have raised their prices by 80% in 2010. China, because of its purchasing power, managed to negotiate supplies of raw materials for a price only 40% higher than 2009.

He said that because they are increasing in the Far East, because of China, Turkey is no longer a price setter. Producer margins will be squeezed. More Chinese exports will affect the markets where Turkey is also selling, the flat market for example in the Middle East.

Mr Manser said that local prices in Turkish export markets under more pressure, because everyone has a capacity, so that’s going to put prices under pressure in some of your markets. There will be more protectionism, slow growth and hence the need to look elsewhere for new markets.