Pointing out that global steel production and consumption have consistently increased over the past 30–40 years, aside from periodic market challenges and major crises such as the 2008 global financial crisis, Muammer Bilgiç stated that steel production between 1990 and 2026 increased by 15 times in China, 4 times in Türkiye, 3 times in South Korea, 246 times in Vietnam, and 15 times in India. However, he noted that changes in the global growth trend began to emerge after 2019, with concerns over significant excess capacity and raw material supply constraints becoming increasingly prominent.
"2021 May Remain Türkiye's Peak Year for Steel Production"
Bilgiç emphasized that continuous growth, which has been the steel industry's primary economic assumption and performance benchmark in Türkiye for the past four decades, is still widely accepted without question. While discussions about a potential crisis have become frequent, he noted that the relationship between crisis conditions and production volumes has yet to be seriously debated. He pointed out that both government authorities and industry representatives project Türkiye's crude steel production to reach around 60 million tonnes by 2050. However, Bilgiç argued that steel production in 2021 will most likely remain the country's historical peak. Although there are clear signs that the world is evolving toward a different economic reality, he said that this shift has not yet been reflected in the fundamental assumptions of Türkiye's steel industry. He stressed that accurately anticipating future trends is particularly crucial when making long-term investment decisions.
"The Era of Steel Growth Is Over Outside India and Africa"
Sharing his assessment of the industry's structural dynamics, Bilgiç stated that the era of steel demand growth has effectively ended globally, with the exception of India and Africa. He believes that examples of declining global steel production, which have become more frequent since 2019, will continue to increase. According to Bilgiç, production growth in certain countries will no longer be sufficient to offset declines elsewhere, suggesting that the overall global trend will remain downward. While steel remains the foundation of industrialization and modern civilization, he explained that structural steel accounts for approximately 30–50% of total steel consumption, depending on the country, with the remainder varying according to industrial priorities. He recalled that Türkiye's high share of structural steel consumption—around 60% for many years—was closely linked to rapid urbanization and a relatively young population. However, he noted that structural steel consumption has started to decline while industrial steel consumption is increasing, emphasizing that a production model heavily dependent on structural steel demand is no longer sustainable.
"Growth Based Solely on Steel Consumption Represents a Middle-Technology Trap"
Bilgiç stated that industrial steel consumption is a key indicator of a country's level of industrialization and primarily consists of engineering steels and flat steel products. He noted that Türkiye has made significant progress in this area over the past 10–15 years. He identified Europe, South Korea, and Japan as leading examples of economies with high industrial steel consumption. However, he argued that the 20th-century model in which steel-based industrialization served as the primary driver of high per capita income has gradually changed. At more advanced stages of development, knowledge-based industries and technological innovation have become the main engines of economic growth. According to Bilgiç, this shift, together with other structural factors, has reduced steel consumption in developed economies. He pointed out that steel consumption has declined by around 30% over the past 25 years in the EU, Japan, and the United States, while South Korea has experienced a 15% decline over the past decade, with the downward trend expected to continue. Referring to Mario Draghi's report on the EU's declining competitiveness, Bilgiç noted that growth based solely on steel consumption is described as a middle-technology trap. He argued that Türkiye, which is still industrializing and striving to escape the middle-income trap, is likely to follow a similar path.
"Global Steel Consumption Will Decline to 1.6 Billion Tonnes by 2050"
Bilgiç stated that circularity is becoming increasingly widespread across the steel industry and that lower overall consumption will be a natural consequence of this transformation. Contrary to forecasts suggesting global steel consumption will rise from the current 1.8 billion tonnes to 2.2 billion tonnes by 2050, he predicted that demand will instead decline to around 1.6 billion tonnes. He explained that circularity encompasses not only recycling but also eco-design, longer product lifespans, higher-quality products, and increased reuse, all of which reduce material consumption. Bilgiç emphasized that China, which has been the main driver of global steel demand over the past two to three decades, has become the first country to officially adopt the view that steel growth has ended and contraction is inevitable. Under China's policy framework, production capacity is not allowed to increase, and when facilities are modernized, 1.5 tonnes of existing capacity must be permanently removed for every 1 tonne of new capacity added. He added that similar capacity reduction strategies are also being implemented by major European steelmakers transitioning from the BOF route to electric arc furnace (EAF) production.
"Investors Must Recognize the Realities of the New World"
Bilgiç argued that technological improvements aimed at reducing carbon intensity alone will not be sufficient to achieve net-zero emission targets. Without fundamental changes in consumption patterns and resource utilization, he said, it will be impossible to halt the rise in carbon emissions. He explained that replacing traditional production, growth, and consumption models with new approaches will inevitably be a gradual and uneven process. Even if production and consumption temporarily stabilize at peak levels, he believes a long-term decline is unavoidable. Bilgiç stressed that production volume alone is no longer the primary measure of value creation and that productivity gains represent the opposite of growth driven purely by increasing output. He argued that inefficient, consumption-driven quantitative growth is neither the only path to prosperity nor a sustainable model for the future. While acknowledging that Türkiye's heavy reliance on structural steel production will be affected by these global changes, he also believes that the country's high steel consumption represents a major opportunity, provided the industry successfully shifts toward higher-value product segments.
Concluding his remarks, Bilgiç outlined the key factors that will shape the future of the steel industry:
"Productivity improvement, lean management, economies of scale, circularity in materials and energy, renewable energy, and sustainability are the new fundamentals. Companies investing in additional capacity for existing products should recognize that their investments will operate in a fundamentally different world, where production volume alone is no longer the defining measure of success."
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