SteelOrbis talked to Kerem Çakır, general manager of Borçelik, regarding factors affecting flat steel segment.
How do you assess the current situation in the flat product market?
At Borçelik, we assess that the flat product market is experiencing a period of limited activity and stagnation in line with global and regional developments. Following the fluctuating recovery observed after the pandemic, recession concerns that resurfaced in 2023 put pressure on demand throughout 2024. We observe that this pressure continues into the first half of 2025.
On the other hand, the inability to balance excess supply, aggressive export pressure from countries in the Far East such as China, geopolitical uncertainties, and global increases in production costs are among the main obstacles to market recovery. Therefore, we expect stagnation in the short term and a cautious improvement in the medium term.
What can you say about the outlook for demand and prices?
As of 2025, demand generally remains flat. We are closely analyzing the sectors in our customer portfolio. In the automotive and white goods sectors, production plans are expected to remain at similar levels compared to the end of 2024. It is difficult to say that this situation has had a positive impact on flat product demand. In addition, high production costs and tight global interest rate policies continue to put pressure on the sector.
Although there have been limited and seasonal increases in prices, the overall trend is weak. The most important factor driving this picture is the continuing fragility of demand.
What is the situation regarding domestic consumption, and what are your expectations for the coming period?
The Turkish automotive sector produced 475,000 units in the first four months of 2025, down four percent year on year. Similarly, the white goods sector also saw a four percent decline in the first three months of the year, to 8.1 million units. The construction and machinery sectors are also experiencing a similar contraction. In general, we can say that domestic consumption has declined.
However, in line with our expectations of a recovery in the steel sector starting in the second half of the year, we are optimizing our portfolio for the domestic market. Thanks to our logistical advantage and customer-focused supply chain capabilities, we are well positioned to respond quickly and effectively to any increase in domestic demand.
How are Trump's protectionist moves affecting the sector?
The customs duties imposed by the US under Section 232 have been a serious pressure factor for the Turkish steel sector since 2018. At Borçelik, we managed this situation with alternative market strategies and a growth model based on the domestic market.
With the return of US President Donald Trump to office, it was announced in February that the exemptions under Section 232 would be lifted, and this decision came into effect on March 12. As a result, many countries that were previously exempt are now subject to tariffs. In 2024, approximately 80 percent of US steel imports came from these exempt countries. Although the exemptions have been lifted, it is of great importance for Turkey to start negotiations with the US now in case similar agreements are made in the future.
From Turkey's perspective, the changes made may create an opportunity to level the playing field. However, the 25 percent tariff rate continues to pose a significant cost burden.
The EU reduced its quota tonnages as a result of its review of protective measures. How does this affect trade?
The quota adjustments made by the European Union under its protective measures constitute a serious trade barrier for countries such as Turkey that export heavily to the EU. As of the second quarter of 2025, the reduction of quota tonnages in product groups and the introduction of country-specific caps for the “other countries” quota are weakening the competitiveness of Turkish-origin products in the EU market.
Turkey has a structural excess capacity in flat steel. Therefore, the restrictions on our exports to the EU are also putting pressure on sales in the domestic market.
The current protective measures are expected to expire in the second half of 2026. However, the “Steel Action Plan” introduced by the European Commission indicates that new regulations to replace these measures are on the agenda. This suggests that protectionism will continue in a different format.
What is the general situation in export markets and your expectations regarding trade routes?
As Borçelik, we direct 20–25 percent of our sales directly to exports. The remaining 75–80 percent is sold in the domestic market. However, since we serve sectors with high export rates, approximately 80 percent of our products are exported directly or indirectly.
Protectionism in global trade has increased significantly in recent years. The EU's quota measures mentioned above, the US's Section 232 policies, and ongoing antidumping cases are playing a decisive role in export routes. These measures are changing the nature of trade, turning international competition into a kind of trade war.
In addition, economic uncertainties in our main export markets, difficulties in accessing finance, and geopolitical risks are forcing us to reshape our trade strategies. In this context, Borçelik is pursuing a strategy that diversifies export risks and focuses on market diversification.
China continues to pose a threat to global markets. What are your expectations for Chinese exports?
China, whose production structure is heavily subsidized by the state, continues to exert pressure on the global flat steel market with its aggressive export policy. In particular, low-priced hot rolled steel products are seriously squeezing the profit margins of local producers in many markets.
Although the Chinese government is trying various incentive and restriction mechanisms to balance domestic demand, we anticipate that fluctuations originating from China will continue to affect the global supply-demand balance. Therefore, as Borçelik, we are focused on maintaining our competitive advantage through our product quality, customer-oriented approach, and sustainability-focused differentiation strategy.
How is the economic situation affecting your business?
Macroeconomic fluctuations affect Borçelik as they do all industrial companies. In the current environment of persistent high inflation and a currency that is lagging behind this increase, pressure on our costs is rising, while high interest rates are making access to finance more difficult.
Therefore, we are prioritizing operational efficiency, digitalization, and customer loyalty during such periods to maintain our competitive strength.