Delay in Taking Measures is Destroying the Steel Sector
Demand contraction for steel products continues in the People's Republic of China and the Russian Federation. According to a recent study, it is stated that the demand contraction in China will deepen over the next 10 years. A similar situation, albeit to a more limited extent, also applies to Russia. Concerns about Russia, which is essentially a net exporter, increasing its exports due to demand contraction and turning towards Turkey have begun to materialize since May. A similar situation is manifested in China as a doubling of exports.
This year, significant increases have been observed in imports from Far Eastern countries and Russia, especially in the last 3 months. According to TÜİK data, during the last 3 months, imports of 1.4 million tons from China, 1.3 million tons from Russia, 600 thousand tons from South Korea, and 521 thousand tons from Malaysia have been recorded. It has been observed that the exports of only China and Russia to Turkey have reached monthly levels of 500 thousand tons each. If this situation continues, it is estimated that the mentioned monthly level of 500 thousand tons could be surpassed in the coming months, and even if it remains at the current level, it could reach 5 million tons by the end of the year. On the other hand, in India, where exports have been limited until now, it has been observed that exports increased by 90.3% as of July. It is reported that the Indian government is trying to increase capacity on one hand and redirect excess production to exports on the other.
Therefore, it is clearly seen that Turkey has become a target for the world's largest steel exporters. Undoubtedly, other Far Eastern countries among the major exporters continue to take their share from exports to a certain extent.
In this situation, it is unclear why similar measures, akin to those taken by the US and the EU Commission, which have taken very large precautions even without such a concentration, have not been implemented. Currently, it is known that steel producers have reduced their number of shifts, curtailed their production, and some organizations have dropped to a single shift, with capacity utilization rates hovering around 60%. If this continues, there are concerns that some organizations may have to completely suspend their operations. All these developments are extremely disturbing.
This situation raises concerns not only in terms of the inability to utilize capacities in the steel sector but also due to the blockage of imports, leading to the initiation of "circumvention" investigations in many countries, especially in the US and Europe. The indifference to the destruction of steel capacity, which has been brought to its current state with great efforts due to the dumping prices applied by the world's largest producers, seems to pose serious risks for the economy as well.
It must be said that the knife has not only reached the bone but has started to cut. Remaining indifferent to this issue raises the possibility that the measures to be taken later will be ineffective against products stocked at dumping prices.
The US is setting a dumping margin for our extremely limited exports. A safeguard investigation is being initiated regarding the import of Semi-Finished Products from Iron or Non-Alloy Steel, Cold Rolled Flat Steel, Galvanized/Coated Steel, and Painted Steel Products from Turkey by Egypt. "Eurofer" is applying to the European Commission for dumping on our cold-rolled products. Therefore, at a time when the steel sectors are being effectively protected by the world, Turkey's following policies that lag behind developments carries a very serious cost.