Turkish steel output continues to rise

Edited by the Engineeringtalk editorial team Sep 22, 2004

Turkey is Europe's fastest growing steel producing nation, according to the latest European Steel Review from MEPS (International).

Turkey is Europe's fastest growing steel producing nation, according to the latest European Steel Review from MEPS (International).

Turkey has a lengthy track record of sustained growth in steel output.

The country's first integrated works, Karabuk Demir Celik, started production in 1937 and the flat products works Eregli Demir Celik (known as Erdemir) in 1965.

But it was in the mid 1980s that steel making started to take off and since 1980 it has grown almost five-fold, largely thanks to the rise of the mini-mill sector.

In recent years steel production rates in Turkey have risen faster than in any other European nation.

The country's crude steel output rose by about 60% between 1993 and 2003.

In the latest issue of its publication "Global iron and steel production", MEPS forecasts a further rise to 23.5 million tonnes in 2008.

This will make Turkey, Europe's third largest steel-producing country: only Germany and Italy will supply more.

Much of the growth to date has been export-led.

Turkey has become a major player in the global steel market and is in the top ten exporting countries.

Foreign sales stumbled in the late 1990s as a result of the economic crisis in Asia - one of Turkey's principal markets - but they bounced back again in the early 2000s.

Annual external sales now stand at around 11 million tonnes.

Turkish steel exporters have greatly benefited from proximity to rapidly expanding markets such as Iran, other Persian Gulf states and the rest of the Middle East.

This region now accounts for 35% of steel exports.

The EU has become another important market, especially since customs duties were abolished in 1996.

Only 17% of Turkey's finished steel output is flat rolled products, and the country is a significant importer of these steels.

Efforts are now under way to become more self-sufficient in strip.

Two years ago the Iskenderun steelworks was transferred to the ownership of Erdemir.

It is working on plans to develop a flat product capability at that plant which has, up to now, produced only long products.

Equipment orders have recently been placed for facilities to produce 2.5 million tonnes per year of slabs.

Erdemir is also expanding its own flat product capability, in both plates and strip products.

Capacity is due to rise from 3.4 million to 4.5 million tonnes per year in 2005 and to 7 million tonnes by 2007.

There are longer-term plans, which at present remain undefined, to raise flat product capacity across the whole Erdemir-Iskenderun group.

Erdemir shares are already publicly traded, but the state retains a large equity interest in the firm.

This is due to be sold off, perhaps in early 2005, and there is plenty of speculation as to who might be interested.

LNM Group is always attracted to good quality acquisitions, and has been building up an important strategic position on Turkey's doorstep in Eastern Europe and the Balkans.

However, Arcelor might be better placed as it already has joint ventures with Erdemir including a galvanising line and a tinplate operation, and in addition has close relations with the Turkish steel tube-making group Borusan.

Turkey's long product mills have been putting competitive pressure on their EU counterparts for some years; next it might be the turn of the country's flat rolled steel makers to do so.