Turkish steel industry cannot utilize its capacity due to increasing imports

While many sectors around the world are facing economic difficulties, the dominance of China and other Asian countries in the iron and steel market is driving the Turkish iron and steel sector to imports. While countries are taking various measures to protect their local producers, Türkiye is criticized for lagging behind in this regard. While many countries such as the US, European countries and Canada increase import taxes, Türkiye's insufficient protection measures draw attention.

Decrease in Capacity Utilization

Türkiye's crude steel production capacity was 53.9 million tons in 2021, while production was 40.3 million tons. In 2022, capacity increased to 55.1 million tons, while production decreased to 35.1 million tons. In 2023, capacity reached 59.3 million tons, but production decreased to 33.7 million tons. Capacity utilization rate decreased to 74% in 2021, 63% in 2022 and 56% in 2023. Between 2021 and 2023, capacity increased by 10%, while the capacity utilization rate decreased by 16.4%.

Despite a 13.8% increase in crude steel production in August, the Turkish steel industry is unable to fully utilize its production capacities due to increasing costs and prices of Asian products becoming equivalent to Turkish raw material prices. In this situation, producers are forced to turn to imports due to costs.

In addition, exporting countries such as the US and Canada have launched dumping investigations into some steel products imported from Türkiye. While Turkish steel producers are searching for new markets in the face of these developments, they are very dissatisfied with the situation.

Hot rolled flat steel (HRC) is the most imported product from China in Türkiye's import ranking. HRC is followed by seamless pipe, while imports of billet blum from Malaysia increased by nearly 400% in July.

Billets imported under export registration negatively affect domestic production, reducing the country's output, which in turn leads to lower production levels and increased costs in the sector. The increase in costs, in particular, weakens the competitiveness of producers, and in the long run brings with it the risk of crude steel production facilities closing down due to low capacity and high costs. This serious danger worries Turkish producers. While the sector is waiting for these imports to be prevented and domestic producers to be supported more, Türkiye imposed a dumping margin on hot rolled coil imports from China, India, Japan and Russia in August. However, the information that imports are still continuing is met with concern in the sector.