Loss of ‘energy’ in the steel industry

Turkish Steel Producers Association (TÇÜD) announced production, consumption and foreign trade data for September 2022 and for the 9-month period. Accordingly, Turkey’s crude steel production decreased by 19 percent in September compared to the same month of the previous year, and decreased to 2.7 million tons. Crude steel production decreased by 9.3 percent in the January-September period, amounting to 27.3 million tons. Finished steel consumption was 2.1 million tons in September with a decrease of 3.2 percent on an annual basis, and 24.1 million tons with a decrease of 5.2 percent in the January-September period. In September, exports of steel products were recorded as 1.4 million tons with a decrease of 31.2 percent on an annual basis in terms of quantity, and as 1.1 billion dollars with a decrease of 42.1 percent in terms of value. In the January-September period, compared to the same period of the previous year, exports amounted to 12.5 million tons with a decrease of 15 percent, and 11.7 billion dollars with an increase of 0.2 percent in value. In September, steel products imports amounted to 1.1 million tons with an increase of 0.8 percent in terms of quantity and 1.1 billion dollars with a decrease of 6.5 percent in terms of value compared to the same month of the previous year. In the 9 months of this year, imports amounted to 11.3 million tons with a 5 percent decrease compared to the same period of the previous year, and 12.4 billion dollars with an increase of 17.6 percent in terms of value. While the share of imports in steel products consumption was 32 percent, the share of imports in flat product consumption reached 50 percent. The share of imports made under the Inward Processing Regime (DIR) in total imports was determined as 65.4 percent. The ratio of exports to imports, which was 110.8 percent in the January-September period of last year, decreased to 94.5 percent in the same period of this year.

“Multi-directional steps should be taken in the sector”

In the evaluation made in the statement, it was pointed out that the prices of electricity and natural gas have increased approximately 4 times in the last year and the effects of higher natural gas prices on large user industrial sectors. The fact that the share of electricity and natural gas, which is around 8 percent in the steel industry’s total costs, has reached 30 percent, has led to a significant decline in the competitiveness of the industry in the domestic and foreign markets. was recorded. The following statements were included in the evaluation: “Monthly production, which was 3.3 million tons in September 2021, decreased to 2.7 million tons in 2022. The effect of the high-rate increases in energy prices on August 30, which reduced our competitiveness in the international market, This was reflected in our export figures, and our steel exports decreased by 31 percent in September. These developments, which led to a decrease in the capacity utilization rate from 75 percent to 60 percent, strengthened the possibility that downward movements in production will continue as we enter the last quarter of 2022. In this context, steel exports have declined by 31 percent in September. It is important to take multi-faceted steps to put an end to the negative trend observed in the industry and to put an end to the application of different natural gas tariffs to industrial sectors.