CURRENT SITUATION IN TURKISH STEEL INDUSTRY & OUTLOOK 86 th OECD Steel Committee Meeting Dr. Veysel Yayan Secretary General Turkish Steel Producers Association 25-26 March 2019 Paris 1
Development of Turkish Economy, Construction, Manufacturing and Steel Industries (%) 20 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -5 -10 -15 -20 GDP Construction Manufacturing Steel Industry 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 GDP 0,7 -4,7 9 8,8 2,2 4 2,9 6,1 2,9 7,4 2,6 8,9 Construction -8,1 -16,3 17,1 11,5 0,6 7,2 2,2 4,9 5,4 -1,9 8,8 Manufacturing -0,1 -7 13,3 10 1,9 3,8 3,7 5,9 3,8 1,1 Steel Industry 4,1 -5,6 15,2 17 5,2 -3,4 -1,8 -7,4 5,2 -0,6 13,2 2
Steel Using Industries - Construction 20 17.1 15 11.5 10 9,0 7.2 5.4 4.9 5 2.2 0.6 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 -1.9 -5 3
Steel Using Industries - Manufacturing 14 13.3 12 10 10 9.1 8 5.9 6 3.8 3.8 3.7 4 1.9 2 1.1 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 4
Industrial Production Index 140 130 120 110 100 90 80 Source: TurkStat 5
GDP Growth Rate (%) 8 7.4 7 6 5 4,0 4,0 4 3.2 2.9 3 2.6 2.1 2 1 0 2012 2013 2014 2015 2016 2017 2018 6
Turkey’s Total Steel Trade (million tons) 25 22.1 20.3 20 19,0 19,0 18.5 18.3 18,0 17.5 17.6 16.9 16.7 16.3 14.9 14.5 15 13.8 11.9 11.1 10.7 10 5 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Export Import Source: TurkStat 7
Turkey’s Net Total Steel Export (milion tons) 10 8.4 7.8 7.6 8 6.5 6 4.2 4.1 4 2.0 2 -0.6 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 -2 -2.3 -4 Source: TurkStat 8
Turkey’s Total Steel Export/Import Ratio ($), % 165.0 155.0 152.5 145.0 140.5 138.0 135.0 133.2 126.5 125.0 123.0 115.0 108.1 105.0 99 95.3 95.0 85.0 75.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 9
Crude Steel Production of Turkey (Mt) & y-o-y Growth (%) 40.0 20.0 17,0 15.2 35.0 15.0 13.2 30.0 10.0 5.2 5.2 25.0 5.0 20.0 0.0 -0.6 -1.8 -3.4 15.0 -5.0 -7.4 10.0 -10.0 -16.1 5.0 -15.0 29.1 34.1 35.9 34.7 34.0 31.5 33.2 37.5 37.3 6.2 5.2 0.0 -20.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018-2m 2019-2m Production Growth (%) 10
Turkey’s Crude Steel Production Capacity, Production (mt) & Capacity Utilisation (% ) 60.0 90 84.6 80.5 80 78.6 50.0 73.2 73.2 72.4 71.9 70.4 70 68.2 67.8 66.1 64.4 62.5 40.0 60 50 30.0 40 20.0 30 20 10.0 10 0.0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Production Capacity CU % 11
Turkey’s Finished Steel Production (Mt) 45.0 39.1 38.6 40.0 36.9 36.9 36.4 36.1 34.3 35.0 31.9 30.0 26.3 25.0 21.5 20.0 15.0 10.0 7.3 6.2 6.2 5.0 4.6 2.3 0.0 -0.2 -0.9 -1.1 2010 2011 2012 2013 2014 2015 2016 2017 2018 -5.0 Production Change % 12
Turkey’s Finished Steel Consumption (Mt) 40.0 36.1 34.4 34.1 31.3 30.7 30.6 28.5 30.0 26.9 23.6 20.0 14.2 12.4 11.8 10,0 10.0 5.8 5.6 -0.9 -1.8 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 -10.0 -14.9 -20.0 Consumption Change % 13
Conclusion • Protectionist policies, high exchange rate volatilities and contraction in domestic demand, affected crude steel production negatively. In 2018, crude steel production decreased by 0.6%. • Due to these developments, during the first 2 months of the year, production decreased by 16.1% and capacity utilization rate declined from 71.9% to 60.2%. • The contraction experienced in domestic consumption, led steel producers to turn to export market. Thus, in 2018 Turkey's steel exports increased by 20.5%. • Because of the protectionist measures that are being implemented worldwide, we are expecting that, starting from the second quarter of the year, export will decrease gradually. 14
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