Increase in July Imports Pressures Our Steel Production

The foreign trade statistics for July announced by TÜİK clearly reveal that the import of steel products, which is extremely concerning for our sector, will not remain at the 2024 level and will continue to increase significantly. Despite a 31.1% increase in steel consumption, it is observed that the increase in our steel production remained at 4.2% due to a 55.1% increase in total steel product imports. The fact that 86.5% of the increase in consumption has been directed towards imports has led to complete disappointment in our steel sector, which had pinned its hopes on the increase in consumption. If the situation continues like this, it seems impossible to increase our capacity utilization rate, which appears to be fixed at around 62%, to at least the world average of around 75%. It is understood that the July imports from the People's Republic of China increased by 122.9% to 558 thousand tons, and the 7-month imports reached the level of 2.7 million tons. Additionally, imports from India increased by 940%, and imports from the Russian Federation increased by 62%. If imports from the People's Republic of China continue in this way, it is estimated that the figure of 2.8 million tons from last year could be reached within the next month, and by the end of the year, it could rise to the level of 5 million tons. Considering that imports from China alone mean the shutdown of 7 facilities with a capacity of 1 million tons, working at a capacity utilization rate of around 62%, this situation gives extremely negative signals for the sustainability of the Turkish steel sector. The continuation of insufficient domestic demand in China and Russia leads these countries, which cannot export to the US and EU countries, to concentrate their exports on Turkey. In India, producers are turning to exports because the demand is not at a level to meet the increase in capacity and production. The Indian government, with its multifaceted support decisions, continues its efforts to increase both production and exports in a way that does not align with the concept of idle steel capacities worldwide. In light of all these developments, it has become very clear that Turkey needs to take serious measures to limit imports, just as the European Union and the United States have done, because even if all the capacities in the Turkish steel sector, which were created as a result of 80 years of efforts, were completely halted, it would not be possible to satisfy the export appetite of the People's Republic of China, which is approximately 120 million tons. In this respect, it is important to accelerate efforts to establish better commercial relations with the European Union, with which we have a Free Trade Agreement, and with the United States and other countries, in a framework that will not cause more harm to the sector, against import restrictions and protection measures.