Turkey Faces Potential Risk Of Overcapacity in Galvanized Steel And Hot-rolled Coil

Turkey faces potential risk of overcapacity in galvanized steel and hot-rolled coil

Turkey faces the potential risk of overcapacity in galvanized steel and hot-rolled coil in the coming years, prompting the need to take steps to ensure a balance between supply and demand.
Kerem Çakır, chairman of the board of directors of the Turkish Association of Cold Rolled, Galvanized and Coated Coil Manufacturers (SOGAD), said that in the past few years, there has been an uncontrolled increase in Turkey's galvanized steel production capacity, mainly at the commercial grade.
Despite excess capacity, the country imported 800,000 tonnes of hot-dip galvanized (HDG) steel in 2022 while exporting 1.2 million tonnes. The key to solving this problem is to prioritize the production of products that are not currently produced in Turkey.
A similar situation is expected for HRC in the future, with Turkey transitioning from a net importer of HRC to a net exporter. However, commercial grade alone is not enough to replace the 4.3 million tonnes of imports. To remain competitive, the Turkish steel industry needs to focus on the production of value-added and high-quality products. Protectionist measures imposed by the European Union and the United States have further exacerbated the supply-demand imbalance.
Turkey, as the only NATO member bound by Section 232, faces challenges in exporting flats to the US.
It is worth noting that nearly 75% of flat lumber exported to the United States is from countries exempted from Section 232. Furthermore, despite Turkey's customs union agreement with the EU, it still encountered safeguards. Strengthening commercial relationships with these natural trading partners and finding long-term, mutual solutions becomes an urgent priority to overcome these trade problems. In addition to increasing production and export quality, Turkey can restore the supply-demand balance by emphasizing the use of steel in the construction sector. The importance of steel structures has become apparent after two major earthquakes. Therefore, the government should encourage the adoption of light-weight galvanized structural steel, thereby promoting the use of galvanized steel. This move not only created a new market for galvanized steel, but also promoted the use of safer construction materials, especially in areas prone to earthquakes.
By implementing these measures, Turkey can solve the overcapacity problem of galvanized steel and hot rolled coil, establish a balanced supply and demand situation, and maintain its competitiveness in the global market.