Turkish crude steel output nudges up despite difficult economic climate

In September, crude steel production was 2.80 million tonnes, a 5.90% year-on-year fall.

The country produced 9.416 million tonnes of slab in January-September, up by 6.94% year on year from 8.805 million tonnes in the same period in 2017, TÇÜD said on Wednesday October 24. 

Meanwhile, steel billet production was 18.565 million tonnes in the first nine months of 2018, down by 1.96% from 18.936 million tonnes in January-September 2017.

The volume of steel produced in Turkey using electric-arc furnaces increased by 1.43% to 19.381 million tonnes in January-September 2018, up from 19.107 million tonnes in the same year-earlier period. Output from blast furnaces decreased by 0.45% to 8.60 million tonnes from 8.635 million tonnes in the same comparison.

The small increase in Turkish crude steel production is largely due to the negative sentiment prevalent in the country’s steel market since August this year, when the Turkish lira lost significant ground against the dollar after US president Donald Trump doubled  the tariffs applicable to steel arriving from Turkey. 

The Turkish currency was trading at TRY100 to $17.4072 on October 24, having first fallen to TRY100 to $18.98 on August 8 this year, compared with TRY100 to $28.31 on August 3, 2017, according to exchange rate website Oanda.com.

Relations between the US and Turkey also  worsened in early August because of the trial in Turkey of American Christian pastor Andrew Brunson over his alleged links with banned political factions. Brunson was released on October 12 and the lira has regained some value since then.

Most market participants in Turkey now expect the US import duties on steel to be reduced to 25% again, in line with the Section 232 penalties faced by most other countries.

Fastmarkets MB’s weekly price assessment for domestic billet in Turkey fell to $457-460 per tonne ex-works on October 18, from $475-480 per tonne ex-works previously.