Speaking to Turkish TV channel Bloomberg HT regarding the difficulties experienced by the Turkish steel industry, Uğur Dalbeler, vice president of the Turkish Steel Exporters’ Association (CIB), stated that the increase in costs and imports has undermined the competitiveness of the Turkish steel industry and that urgent measures must be taken to prevent irreparable problems that may arise in the future.
Stressing that the Turkish steel industry has begun to lose its competitiveness in terms of energy and labor costs, Mr. Dalbeler added that the situation cannot be resolved by only increasing funding. Looking at energy, he said that electricity prices in Turkey are twice as high as in the US and that natural gas prices are three times higher. He also noted that labor costs in Turkey have tripled in euro terms over the past five years. He stated that the loss of workforce in the metal industry exceeded 20,000 in the first six months of the year, with a similar loss expected for the remainder of the year.
Indicating that China, which used to export 50 million mt per year, has increased its exports to 10 million mt per month, the CIB vice went on to say that this situation is gradually narrowing the playing field for Turkey. Recalling that the steel industries in the countries that compete with Turkey receive subsidies, Mr. Dalbeler stated that the European steel sector has received approximately €13 billion in grants for decarbonization in the last three to four years, while Turkey is still experiencing difficulties in this regard. Commenting that Turkey has not been able to benefit from subsidies since becoming a member of the European Coal and Steel Community in 1997, Dalbeler stated that, even without state support, some improvements in input costs such as energy and natural gas will contribute to the industry maintaining its competitiveness. He added that the Turkish steel industry is also under some financial burdens created by the recently introduced Rebar Monitoring System and sector-specific withholding of VAT refunds.
Highlighting that Turkey used to export 40 percent of its steel products to Europe before, but now just 25 percent, Dalbeler mentioned the need to renegotiate the Customs Union agreement and free trade agreement with the EU. Stating that imports from China, Malaysia, Indonesia and Vietnam, which have gained competitiveness with subsidies, have increased significantly, he added that the share of consumption in Turkey being met by imports has reached 50 percent. He stressed that Turkey needs measures against this increase in imports in order for the steel industry to survive.