Posted on 16 Apr 2020
Turkish steel producers are striving to maintain production despite the Covid-19-induced contraction in steel demand. Veysel Yayan, general secretary of Turkish steel producers’ association TCUD, says that production should continue in a controlled manner in industries where production is possible.
Yayan points to the halt in steel production in countries such as Italy and Spain. “We have seen limited contraction in relatively more controlled countries, such as Germany,” he observes. “The Turkish steel industry, on the other hand, has preferred to work and continue its activities, provided that it took the necessary measures.”
“Our exports to the EU have become limited,” he continues. “With the pauses in steel consuming industries, demand has decreased. Beyond that, logistics problems began to occur. The steel products loaded from here faced difficulties in the transportation channels while going to the ports and from there to the buyer. As such, production continues to complete existing orders. Once these orders are finished and stocks are completed, it will become difficult to produce.”
Building inventory amid current conditions could be advantageous, according to Yayan, as suppliers will be able to immediately meet demand when it returns after the virus is brought under control.
“First, it is not possible for the demand to come quickly,” Yayan says in a note seen by Kallanish. “There may be an adaptation process here. Second, prices fluctuate a lot. This is understandable if you only bear the cost of inventory while keeping goods in stock, but prices are volatile in the industry. Therefore, if you are not producing to order, you are faced with price fluctuations. There is also a risk in this regard.”
Around 10% of Turkey’s exports are accounted for by the steel industry, Yayan points out, adding that the industry will continue production by taking the necessary precautions to protect employees.
Source:Kallanish
