Dec 04, 2020
Turkish steel industry seeks solution to safeguard measures and structural issues

mir Çelik, also agreed with this opinion and said that structural corruption in the sector results in inefficient usage of the limited sources of the country. Mr. Bilgiç also stated that consolidations in the steel industry via mergers and acquisitions in foreign countries are not much considered by Turkish mills since Turkish companies are mostly subject to private ownership. He went on to say that it is a very wrong attitude not to consider consolidations in a sector which has serious financing issues. “If you want to become the biggest steel producer in Europe, then you should go in the direction of major producers’ management patterns,” he commented.

One of the topics discussed during the panel were the free trade agreements among regions. According to Bilgiç, “The world’s center of gravity has changed” and the recent Regional Comprehensive Economic Partnership (RCEP) signed by ASEAN countries is encouraging free trade in opposition to trade measures. He said that Turkey has a significant geopolitical advantage though it is not using this effectively, adding, “In its international relations, Turkey is mostly thinking of political parameters rather than using economic parameters. We need to look at diplomacy as an art for negotiation and involvement in partnerships which focus on economic gains. On the same issue, Mehmet Çakmur stated that the markets that foreign countries keep an eye on are Turkey’s neighboring counties and that Turkey can focus on these markets. “We should think about how to collaborate with Africa and the Middle East. Protectionist measures will not continue forever, but are likely to remain in the medium term because of new agreements,” he said. Çakmur also stated that Turkish mills can fill the absence that China has left in the global market, adding that this is a big opportunity. 

Meanwhile, Muammer Bilgiç mentioned the steps that European Union (EU) is taking in terms of environmental measures and carbon footprint and said that countries will take this as a criteria when doing trade. “The EU is working seriously on this issue and has an €800 million-worth investment plan. China is also taking radical measures and implementing them strictly. I really do not want to see Turkey as the only country among the G20 which has not signed the Paris Agreement,” he said. Bilgiç also interpreted the value-added production issue from a different perspective. He said that Turkish mills should work on research and development projects which aim to decrease costs, instead of focusing just on new products. He said that, amid the rises in scrap prices, major steel producers in Europe are using hydrogen when processing iron ore and, as a result, they are decreasing their carbon footprint and easing their dependency on scrap as a raw material. He said Turkey is not even available to finance any research for alternative raw materials, while he said that the issues of metals efficiency and energy efficiency should be worked on to achieve value-added production.

As for China’s decision to resume scrap imports, Mr. Bilgiç said that, considering the expectation that China will import 10 million mt of scrap in 2021 while Turkey’s annual scrap imports amount to 20 million mt, there may be a problem with scrap supply, adding that the biggest risk for the Turkish steel industry is raw material supply. On the same issue, Çakmur said that he did not think that there will be a supply shortage but that costs will increase in the coming period and so Turkish mills should find alternative sources.

Source: Steel Orbis