Overview Of Turkish Steel Industry

After attending the Turkish Metallurgical exhibition last week, we would like to share some updated information on the Turkish Steel Industry. Today, Türkiye has 27 electric arc furnace mill plants (EAF), 11 induction furnace plants and 3 BOF plants. All steel companies in the country are privately held, and Turkish steelmakers continue to pursue technological developments to enhance the long-term viability of the industry in the global marketplace. The steel industry has become one of the most developed sectors in Türkiye and today counts as the fifth largest contributor to the Turkish economy.

 

The Turkish steel industry is based on electric arc furnaces (in 2022, 71.5% of the country's steel is produced by them), so rising electricity prices remain a major unfavorable factor for the steel industry. According to the Turkish Steel Exporters' Union (CIB), electricity prices in Türkiye rose sharply in 2022 and accounted for 27% of steel mills' production costs compared to 8% in 2021. Subsequently, gas and electricity prices for industry were slightly reduced in late 2022 and early 2023, but it was not possible to fully mitigate the impact of this factor on production costs.

 

In terms of raw materials usage in the Turkish steel industry, such as Graphite Electrodes, most steel plants have very high standards for the quality of the products. Due to lack of iron ore, the plants in Turkey heavily rely on the imports of ferrous scraps. To produce high quality on steel products, UHP graphite electrodes are applied to their electric arc furnaces with no breakage and a low consumption rate. Analysts expect the Turkish steel market to improve this year, driven by global growth in steel demand, low interest rates in the world and others. Steel demand will benefit from the earthquake-related construction activities and the abandonment of its unconventional monetary policy that drove foreign investment out of the country.