Published On: Mon, Sep 23rd, 2019

Turkey’s steel exports continue to go up in first 7 months 2019 despite quotas



Steel sector is one of the locomotive industries in Turkey and has a big share in total export revenues, as well. In fact, despite some unfavorable developments in recent years the sector has managed to grow and continue to contributing to the economy of the country.

Turkey’s crude steel production went down to 2.9 million tons corresponding to a decrease of 10.6% in July 2019 as compared to same month previous year and became 19.9 million tons in the January-July period in 2019 corresponding to a 10.2 percent decrease in same period last year.

Consumption of finished steel on the other hand declined to 14.5 million tons in first 7 months showing a decrease of 14.5 percent as compared to same period last year. The decrease in long product consumption was 40.5% and the decrease in flat product consumption was 18.6%.

As for foreign trade of Turkey in the sector, based on July data exports of steel products are recorded to have amounted to 1.9 million tons with an increase of 5.7% in terms of quantity and to $ 1.4 billion with a 4.5% decrease in value due to the decrease in prices.

In January-July period 2019, exports increased by 13.5% to 13.1 million tons as compared to same period of 2018 and to US$ 9.7 billion with an increase of 7 percent in value. However despite the strong outlook for exports, the threats to limit the export potential of the sector continued to grow due to increasing global protection measures.

Turkey informs WTO it will apply quota for steel imports to protect its steel industry

On the other hand imports decreased by 30.1% to 6.9 million tons in the first seven months of 2019, compared to the same period of the previous year due to the contraction in consumption. Despite the sharp contraction in consumption, the share of imports in consumption reached a high level of 50%, especially in the flat product group, which accounts for 75% of imports.

Thus, as far as Foreign Trade Balance is concerned, the ratio of exports to imports, which was 115% in the first seven months of 2018, rose to 167 % in the same period of the current year.

To make an evaluation of the picture the steel industry of Turkey has been facing, we should note the following:

Turkish steel sector, which has been going through a difficult period due to protection measures, trade deviations, EU quota practices and consumption losses in domestic and foreign markets, has tried to compensate its losses with exports. In the meantime, it is clearly observed that Turkey was the direct target of some new applications put into effect by EU. The quota applied to Turkey by EU based on “temporary export surplus” in 2018 and the additional restrictions on flat products thus introduced, showed that the deficit recorded in favor of EU in past years was not taken into account and the trade between two parties moved further away from the fair and free approach to contradict the provisions inserted in the Free Trade Agreement between two parties.

In the second quarter of the year, Turkey’s exports to the EU decreased.

The increase in exports of EU with growing risks in its economy, to Turkey and the decline in steel consumption in EU in recent months caused Turkey’s Steel Market to become a backyard for EU. The European Commission took protective measures for 28 steel products in February, while Turkish market was left vulnerable in this regard. Generally speaking while most exporter countries of steel such as China, Russia, Ukraine and even Brazil took necessary measures to protect their sectors, Turkey’s steel sector was left vulnerable.

This being the case, despite high rates of contraction in consumption experienced, if imports continue in high rates it will be inevitable to face more serious losses in the steel sector which has a strategic importance for Turkey with an employment capacity of 300,000 people, due to reasons such as unused capacity created by new investments recently made, the continuation of increased losses in crude steel production already decreased by 10 percent and cancelling of new investment projects.

Considering all these developments, it is clearly necessary to implement the protection measures to reduce the damage incurred by the sector, as practiced by the USA and EU.

ADVERTISEMENT: BEAUTIFUL HOUSE FOR SALE IN FETHIYE





Web
Analytics Made Easy - StatCounter



Pin It
Google+ - STATS