The group sold 7.482 million tonnes of flat steel products in January-December 2018, down by 1.47% from the 7.594 million tonnes sold in 2017, it said last week.
The increase in earnings can be attributed to higher steel prices over the reporting period. The average market price for hot-rolled coil (HRC) - one of the group’s principal products - in 2018 was $627 per tonne, Erdemir said.
Fastmarkets’ yearly average price for domestic HRC in Turkey was $599.35 per tonne ex-works in 2018 compared with an average price of $547.53 per tonne in 2017.
Steel prices are likely to remain high in the coming months, according to the market participants in Turkey, because of increasing raw material prices and the demand for restocking.
Of the group’s total flat steel sales in 2018, flat steel exports came to only 1.529 million tonnes. This was up, however, by 47.01% from 1.04 million tonnes exported in the corresponding period of 2017.
The group’s flat steel exports went to 41 countries, while long steel exports went to 14 countries in the year.
Domestic flat steel product sales totaled 6 million tonnes in 2018, down by 9% year on year.
The group’s total long steel sales came to 919,000 tonnes in 2018, down by 33% year on year. Of this, 800,000 tonnes were sold to the domestic market, a 32% year on year decrease.
Iron ore and pellet sales totaled 1,880,000 tonnes in 2018, down by 8.38% year on year from 2,052,000 tonnes.
The reason for the decrease in local sales is negative sentiment in Turkey in 2018, especially after August 2018.
The Turkish Lira lost significant ground against the dollar after United States President Donald Trump doubled the tariffs for Turkish steel imported to the US.
The Turkish currency was trading at TRY100 to $19.0204 on February 11. Earlier this year it had fallen to TRY100 to $18.98 on August 8, compared with $28.31 on August 8, 2017, according to exchange rate website Oanda.com.
Relations between the US and Turkey worsened in early August because of the detention of American Christian pastor Andrew Brunson in Turkey over his alleged links with banned political factions. Brunson was released on October 12 and the lira has regained some value since then.
Erdemir’s liquid steel production reached 9.322 million tonnes in 2018, down by 0.75% compared with the 9.392 million tonnes produced in 2017. The group used 97% of its production capacity in 2018, same as the capacity use in 2017.
Slab production capacity utilization was 93%, up from 90%. The corresponding figure for billet was 40%, down from 54%.
Erdemir produced 3.387 million tonnes of crude steel at its Eregli plant in Northern Turkey in 2018, a 5% decrease year on year.
Crude steel production at its Iskenderun plant, at Isdemir in the south of the country, totaled 5.758 million tonnes, a 2% increase year on year.
Erdemir Group produced 7.743 million tonnes of flat steel, 980,000 tonnes of long steel, and 1.770 million tonnes of iron ore and pellet in 2018. The corresponding figures for 2017 were 7.713 million tonnes, 1.328 million tonnes and 1.996 million tonnes, respectively.
Turkey produced 37.311 million tonnes of crude steel in 2018, of which Erdemir produced a 25% share.
Erdemir Group’s total investments reached $215.928 million in 2018, 3.74% more than the $208.135 million in 2017.
The company continues to work on two new blast furnaces.
In addition, it will invest in a new sinter plant and 4th coke battery, Erdemir said.
* Note: Erdemir publishes its own dollar-equivalent values in its Turkish-language results statement. These are calculated from an average exchange rate taken from Turkish Central Bank figures. The company, therefore, reported its Ebitda for 2018 as $1.720 million, up from $1.496 million in 2017. Fastmarkets’ policy is to publish dollar-equivalent values calculated on the day of publication, taken from data on exchange rate website Oanda.com.
Turkey’s biggest steel producer, Erdemir Group, reported earnings before interest, taxes, depreciation and amortization (Ebitda) for 2018 of TRY8.302 billion ($1.579 billion*), up 52.24% from TRY5.453 billion for 2017.