Global Steel Industry and Expectations Panel: The International Iron and Steel Symposium, organized for the third time this year by Karabuk University Iron and Steel Institute, continued with sessions and panels held at the Institute. Professor of the Department of Metallurgical and Materials Engineering, Istanbul Technical University Professor at the symposium's panel on the Global Steel Industry and Expectations in the afternoon. Dr. Hüseyin Çimenoğlu, General Manager of Çolakoğlu Metallurgy Uğur Dalbeler participated as a speaker. The panel, led by Ercüment Ünal, the General Manager of our company, discussed the developments in the world steel industry, the state of the Turkish Steel Industry, and expectations in the sector.
Vice Rector of Karabuk University Dr. Mustafa Yaşar, the academic staff of the university and our Financial Affairs Coordinator Hasan Sarıçiçek, Sales and Marketing Coordinator Reyhan Özkara and many managers and engineers from our company and the panel, Dr. It started with Hüseyin Çimenoğlu's presentation on the Wear Properties of Tool Steel at High Temperatures.
In his speech at the panel, General Manager of Kardemir Ercüment Ünal stated that it is not possible to make long-term forecasts about the sector. In the past, 3-5 annual forecasts for the steel industry were made, while 3 monthly estimates show that even deviations were experienced. Unal, in his speech said:
”When I started working in the steel industry in 1995, I worked in a unit where projections were made about the future of the industry. I held these positions from engineering to director. Here, we would make projections according to 3-5 years of data in the past. When we compare the results we have estimated with the data we use, we would have our estimates and price projections reaching 98,5%. Markets have changed since 2015. In the past, the industry would go well for 3 years and make a bottom for 1 year. Then he would recover again. We could have guessed this very well. The global steel industry is currently experiencing difficulties in supply and demand balance since 2015 due to the excess capacity. The main reason for this problem is the excess capacity in China. The fact that the facilities in China sold goods, even at a loss, with state supports, drove prices down. Located between the markets of Turkey has caused serious confusion in the market in the Middle East lost.
According to the data of 3-5 years and even 10 years in the past, our estimates are now 3 months. We have become alive in 3 months, what we used to experience in 3 years. For example, scrap prices were $ 300 two months ago. He then fell to $ 260 in a panic and soon returned to $ 300 in a new move. Now it has landed again. However, it used to rise and fall healthily. Now, demand and product prices do not support the input prices and prices are breaking back. The sector cannot determine its own direction.
China to Turkey in 2015 and 2016, due to a serious threat to China largely tax credits to Europe and America. When you look at these taxes, it was not important for China because they continued to sell steel significantly with state support. For example, a property with a reference number as $ 400 in China, paying the freight on $ 350 a able to bring Turkey. However, the global input cost of this product is already $ 350. When you consider state aids and walls of protection, there are serious taxes in America. an anti-dumping investigation is opened immediately when selling goods to reduce the costs of American manufacturers in Turkey.
China, which produces 50% of its current steel capacity and exports to the world, has cut its exports by changing its policy for the last 3-4 months. Our current problem has been the weakening of demand in developing countries. There is no movement in the Middle East. You go to Europe, there is no construction sector other than the automotive sector. The growths are not above the levels of 2- 2,5%. As it turns out, despite the separation of China and the USA, there are serious problems in demand. Despite the difficulties in demand, prices do not move downwards, prices are stable but uncertain.
There are over 50 million tons of steel production capacity in Turkey. Last year, actual production was 33,5 million tons. So a significant part of our capacities remained idle. Here we need to develop policies to increase final product consumption. On the one hand, we cannot use our idle capacities, on the other hand, we import as much steel as we export.
We are in a sector that is developing very rapidly and very sensitive to global developments. Our country's steel industry is either sick or flu with a small contraction. However, China is diverging from the developments, and the USA is diverging. However, we are delaying to take action in the face of the developments in our country and this loss of time makes the sector lose its competitiveness ”
Uğur Dalbeler, General Manager of Çolakoğlu Metallurgy, started his celebration by celebrating the 80th anniversary of the establishment of Kardemir and Karabük, and noted that the Turkish steel industry was the 30th largest producer and 8th largest exporter in the world in the last 7 years. Highlights from the speeches given by Dalbeler are as follows;
“I have been in the sector for 30 years and I have witnessed how this sector has changed and developed for 30 years. At first, there was a private sector that was constantly hurting, completely in politics, inefficient state-controlled factories, and on the other hand, crawling, unable to accumulate enough capital. When is the point we have reached today it has made progress in the sector of steel in the world today called a meeting where someone from a conference where the five countries said although Turkey. It has become the 8th largest producer in the world. Became the 7th largest exporter in the world. This is proud for our industry. There are many reasons behind this performance, but for me the biggest is the human culture it has. Because there is a serious, self-sacrificing hard-working accumulation in this country. Of course, there are entrepreneurs, the eldest of whom are dedicated to this business. One of its biggest examples is Kardemir. We have a group of entrepreneurs who decided to close down years ago, took over a completely desperate facility, regardless of all their impossibilities, and brought them to the present day by growing and multiplying. These people do not do this work only with money and reason. There is a serious unity of heart behind this work. On the other hand, there is a group of private entrepreneurs who turned the small rolling mills of that day into a very serious steel giant worldwide. In doing all this, they have brought the sector to their own state with their own resources, for the last 15 years, without making use of the slightest government incentives and state aid.
Unfortunately, the sector has been experiencing some difficulties for the last three years and has experienced a serious shrinkage. Now it has entered a growth trend again. Between 2004 and 2008, due to many reasons, the demand created by the oil countries due to the increase in China's demand and the increase in oil prices, we experienced a serious boom in steel demand with the global growth. The price of steel, which was around $ 200 in those days, suddenly reached $ 1.500. However, after the 2008 global crisis, these prices fell back to $ 300. It is not easy to remove such shocks. Some countries provided incentives to support their sectors during this period, while others supported their sectors by protecting them from outside. Due to the political turmoil in the geography we have recently experienced, the steel industry is going through a very difficult period. To give an example, while we reached a sales of 2013 million tons in 4, we achieved only 60% of this last year.
We think that a positive atmosphere has been entered again. We can say that there is a balance with the policy change in China, some decisions they have made to increase their consumption, and the relative pulls of the supply in the world markets for now.
Steel is the basic input of industry. Steel is essential in all areas of life. As a sector, we are actually producing the added value. You produce steel, then what you convert into steel is important. The added value is created at that time. If you can turn the produced steel to a car, a ship or a machine, there is an added value here.
Until 1995, the Japanese imported scrap. After 95, the scrap they created is exported as they are sufficient for them. It is important to produce steel, but the main thing is to consume steel. We have around 500 kg of steel consumption per capita today. In fact, it is above the world average. However, it is not sufficient in developed countries. Because half of this 500 kg is steel used in fixed asset investments, ie construction. A Korean consumes 1.000 kg. The goal and the need to be discussed should be how to increase the steel consumption and how that steel can be converted into added value.
The Turkish steel industry has the capacity, accumulation, technology and equipment to produce all kinds of steel needed. Our products are accepted and demanded in many countries. We have great advantages. We have a young industry. We have great potential. There is an opportunity to use more of what we produce. We are literally at the center of the steel trade. Our three sides are surrounded by the sea. We are equidistant from both east and west. For this reason, the export that we started in 1983 can still continue successfully. As someone who has truly committed this industry, I believe that the future of this industry is very bright. ”