Thursday, January 27, 2011
ISTANBUL - Hürriyet Daily News
 Turkey's total steel export value is expected to reach $15 billion in 2011, up 20 percent compared with last year. |
Turkish iron and steel producers are not content with the rise in the country’s production and exports in 2010, as the increase was mainly dependent on price hikes in global markets. The fact that the total volume of production and exports has been falling for the last two years – despite a rise in value in 2010 – backs the local producers’ thesis.
Still, professionals have slight hopes for a better year due to the global recovery, rise in demand and the condition’s in leading economies being directed toward an inevitable price hike.
“Turkey’s total steel export value increased by 11.5 percent mainly because of price increases compared to 2009,” Veysel Yayan, head of Turkish Iron and Steel Producers Association, told the Hürriyet Daily News & Economic Review this week.
Turkey’s crude steel production might rise to 33 million tons and iron and steel prices could jump as the industry reacts to a surge in raw material costs, he said.
The country’s total steel export value is expected to reach $15 billion in 2011, up by 20 percent compared with last year, mainly thanks to an apparent growth in crude steel production capacity, recovery in international markets and increasing product prices triggered by the rising cost of raw materials, according to Yayan.
Steel prices are set to jump by up to 66 percent this year, top executives and analysts have said, with a burst of inflation that the market has suffered only once in the last 70 years, said Financial Times journalist Peter Marsh in an article this week.
Talking about the predictions of foreign experts and analysts, including Michael Shillakeri of Credit Suisse and Eiji Hayashida of JPE of Japan commenting to FT, Yayan said, “It is hard to predict how much iron and steel prices could rise” and that the prices were already on an upward trend.
“Flat steel prices were around $450 but last year rose to nearly $700,” Yayan said. The hike in iron and steel prices mostly triggered by high demand in the Middle East and a global surge in raw material prices such as for iron ore and coal, he said. “The scrap metal prices were floating around $300 per tons and rose to $520 recently.”
It is normal to think that such an increase would be reflected in the iron and steel prices in all sectors, he said. Its is likely for steel prices to hit $900 per ton by the end of the year, like when the market experienced rocketing prices in 2008 flat iron prices reached $1,500 per ton. “It happened before and it can happen again,” he said.
Recent Bloomberg news also affirmed Yayan’s comments about the rising prices for raw material.
JSW Steel Ltd., India’s third-biggest producer, reported a worse-than-expected 32 percent drop in third-quarter profits as demand for automobile-grade sheets failed to counter increasing raw material costs, according to a Thursday report by the agency. Global contract prices for cooking coal surged 61 percent, while iron ore almost doubled and this increased raw material costs to 37.3 billion rupees ($800 million) from 24.4 billion rupees a year ago.
“The peaking prices for steel could be because of the rising demand for steel sheets used in the automotive industry,” said İsmail Durak, sales and marketing chief for Kardemir, a leading Turkish iron and steel producer with an annual overall production capacity of 1.8 million tons.
“As the global markets recover, consumption is on rise and this could reflect on steel and iron prices, as they are the main components of [many fields of] manufacturing,” Durak told the Daily News.
“One of the main reason for the rising price for scrap metal is the harsh weather conditions in the U.S. and Russia,” he said, adding that flood-hit eastern Australia affected the coalmines and caused “a great loss in production.”
“I do not expect a rise by 60 percent in steel prices in this year” said Ç. Kerem Vaizoğlu, export manager of Ekinciler Iron and Steel Ind., a firm that ranked among Turkey’s top 100 manufacturing firms according to the Istanbul Chamber of Commerce, or ICOC. “Prices could rise due to rising demand caused by the automotive industry and construction sector,” he said, adding that even so it would not reach $1,000 per ton.
One of the world’s biggest steel makers, ArcelorMittal’s chief executive officer Lakshmi Mittal said the steel maker is seeing a recovery in global demand, led by consumers in developing countries, in a Bloomberg interview at the ongoing World Economic Forum in Davos, Switzerland. “Steel makers are counting on strengthening sales in Asian nations such as India and China as costs for coal and iron ore, used to make the alloy, advance,” Mittal said.
“Due to the weak demand in many export markets, Turkey’s steel exports shifted from traditional markets to alterative ones and neighboring countries,” Veysal Yayan, head of Turkish Iron and Steel Producers Association, told the Hürriyet Daily News & Economic Review this week.
Steel exports to the European Union had declined by nearly 10 percent last year following a 37.7 percent drop in 2009, Yayan said.
The sharp drop in exports to the EU region, negatively affected the country’s total steel exports in 2010, Yayan said.
According to Yayan, Turkey’s steel industry is forecasted to produce 33 million tons of crude steel.
Emerging markets hungry for deals
The rising prices of raw materials such as iron ore and scrap metal has caused international steel firms to buy new manufacturing firms and rush toward business deals, mainly among emerging markets, in order to resist the booming manufacturing costs.
Representatives of the world’s steel and iron giants met at the first Regional Mining, Metals and Minerals Summit held in Istanbul on Wednesday and Thursday, and agreed on a great number of deals, a source told the Hürriyet Daily News & Economic Review on the condition of anonymity.
Iranian state officials are seeking opportunities in Turkey, the source said, claiming that state officials attending a meeting with a member of the Iranian Industrialist and Businessmen’s Association signed a deal to purchase 170,000 tons of rail from Turkish group Kardemir A.Ş.
According to the source, Egyptian state officials also placed an order with Kardemir to produce 100,000 tons of rail after July.
The source told the Daily News that Asia’s first integrated steel manufacturer, Tata Steel, is preparing to sell iron ore to Turkey worth nearly $150 million and purchase high-quality sheet metal at around the same price to use in the automotive industry. “There seems to be a kind of long-lasting trade cooperation in steel between Turkey and India,” the source said.
Siemens Vai Metal Technologies, headquartered in Linz, Austria, is aiming to buy iron and steel manufacturing firms in İzmir, İskenderun and Karabük, which are among the main iron and steel manufacturing Turkish cities, the source said, adding that the firm is continuing the negations.
Some businessmen from the Italian Stainless Steel Development Association had agreed to purchase stainless steel worth nearly $150 million, the source told the Daily News.
Kardemir increases production capacity
Kardemir A.Ş., Turkey’s first integrated iron and steel manufacturer, is preparing to increase its production capacity with an investment worth 22 million euros, Anatolia news agency reported the general manager of Kardemir as saying Thursday.
Fadıl Demirel told the Anatolia news agency the firms fourth blast furnace would start operating within the next 20 days and that the firms total production capacity would increase to 1.8 million tons, up from the current 1.3 million ton capacity.
Demirel recently said at a meeting in Karabük, one of Turkey’s main iron and steel manufacturing provinces, that the firm’s total capacity was around 500,000 tons in 1995 when Kardemir was privatized. “The fourth blast furnace will produce nearly 500,000 tons by itself, bringing the total amount of iron and steel production to 1.8 million tons,” Anatolia reported Demirel as saying.
Still, professionals have slight hopes for a better year due to the global recovery, rise in demand and the condition’s in leading economies being directed toward an inevitable price hike.
“Turkey’s total steel export value increased by 11.5 percent mainly because of price increases compared to 2009,” Veysel Yayan, head of Turkish Iron and Steel Producers Association, told the Hürriyet Daily News & Economic Review this week.
Turkey’s crude steel production might rise to 33 million tons and iron and steel prices could jump as the industry reacts to a surge in raw material costs, he said.
The country’s total steel export value is expected to reach $15 billion in 2011, up by 20 percent compared with last year, mainly thanks to an apparent growth in crude steel production capacity, recovery in international markets and increasing product prices triggered by the rising cost of raw materials, according to Yayan.
Steel prices are set to jump by up to 66 percent this year, top executives and analysts have said, with a burst of inflation that the market has suffered only once in the last 70 years, said Financial Times journalist Peter Marsh in an article this week.
Talking about the predictions of foreign experts and analysts, including Michael Shillakeri of Credit Suisse and Eiji Hayashida of JPE of Japan commenting to FT, Yayan said, “It is hard to predict how much iron and steel prices could rise” and that the prices were already on an upward trend.
“Flat steel prices were around $450 but last year rose to nearly $700,” Yayan said. The hike in iron and steel prices mostly triggered by high demand in the Middle East and a global surge in raw material prices such as for iron ore and coal, he said. “The scrap metal prices were floating around $300 per tons and rose to $520 recently.”
It is normal to think that such an increase would be reflected in the iron and steel prices in all sectors, he said. Its is likely for steel prices to hit $900 per ton by the end of the year, like when the market experienced rocketing prices in 2008 flat iron prices reached $1,500 per ton. “It happened before and it can happen again,” he said.
Recent Bloomberg news also affirmed Yayan’s comments about the rising prices for raw material.
JSW Steel Ltd., India’s third-biggest producer, reported a worse-than-expected 32 percent drop in third-quarter profits as demand for automobile-grade sheets failed to counter increasing raw material costs, according to a Thursday report by the agency. Global contract prices for cooking coal surged 61 percent, while iron ore almost doubled and this increased raw material costs to 37.3 billion rupees ($800 million) from 24.4 billion rupees a year ago.
“The peaking prices for steel could be because of the rising demand for steel sheets used in the automotive industry,” said İsmail Durak, sales and marketing chief for Kardemir, a leading Turkish iron and steel producer with an annual overall production capacity of 1.8 million tons.
“As the global markets recover, consumption is on rise and this could reflect on steel and iron prices, as they are the main components of [many fields of] manufacturing,” Durak told the Daily News.
“One of the main reason for the rising price for scrap metal is the harsh weather conditions in the U.S. and Russia,” he said, adding that flood-hit eastern Australia affected the coalmines and caused “a great loss in production.”
“I do not expect a rise by 60 percent in steel prices in this year” said Ç. Kerem Vaizoğlu, export manager of Ekinciler Iron and Steel Ind., a firm that ranked among Turkey’s top 100 manufacturing firms according to the Istanbul Chamber of Commerce, or ICOC. “Prices could rise due to rising demand caused by the automotive industry and construction sector,” he said, adding that even so it would not reach $1,000 per ton.
One of the world’s biggest steel makers, ArcelorMittal’s chief executive officer Lakshmi Mittal said the steel maker is seeing a recovery in global demand, led by consumers in developing countries, in a Bloomberg interview at the ongoing World Economic Forum in Davos, Switzerland. “Steel makers are counting on strengthening sales in Asian nations such as India and China as costs for coal and iron ore, used to make the alloy, advance,” Mittal said.
“Due to the weak demand in many export markets, Turkey’s steel exports shifted from traditional markets to alterative ones and neighboring countries,” Veysal Yayan, head of Turkish Iron and Steel Producers Association, told the Hürriyet Daily News & Economic Review this week.
Steel exports to the European Union had declined by nearly 10 percent last year following a 37.7 percent drop in 2009, Yayan said.
The sharp drop in exports to the EU region, negatively affected the country’s total steel exports in 2010, Yayan said.
According to Yayan, Turkey’s steel industry is forecasted to produce 33 million tons of crude steel.
Emerging markets hungry for deals
The rising prices of raw materials such as iron ore and scrap metal has caused international steel firms to buy new manufacturing firms and rush toward business deals, mainly among emerging markets, in order to resist the booming manufacturing costs.
Representatives of the world’s steel and iron giants met at the first Regional Mining, Metals and Minerals Summit held in Istanbul on Wednesday and Thursday, and agreed on a great number of deals, a source told the Hürriyet Daily News & Economic Review on the condition of anonymity.
Iranian state officials are seeking opportunities in Turkey, the source said, claiming that state officials attending a meeting with a member of the Iranian Industrialist and Businessmen’s Association signed a deal to purchase 170,000 tons of rail from Turkish group Kardemir A.Ş.
According to the source, Egyptian state officials also placed an order with Kardemir to produce 100,000 tons of rail after July.
The source told the Daily News that Asia’s first integrated steel manufacturer, Tata Steel, is preparing to sell iron ore to Turkey worth nearly $150 million and purchase high-quality sheet metal at around the same price to use in the automotive industry. “There seems to be a kind of long-lasting trade cooperation in steel between Turkey and India,” the source said.
Siemens Vai Metal Technologies, headquartered in Linz, Austria, is aiming to buy iron and steel manufacturing firms in İzmir, İskenderun and Karabük, which are among the main iron and steel manufacturing Turkish cities, the source said, adding that the firm is continuing the negations.
Some businessmen from the Italian Stainless Steel Development Association had agreed to purchase stainless steel worth nearly $150 million, the source told the Daily News.
Kardemir increases production capacity
Kardemir A.Ş., Turkey’s first integrated iron and steel manufacturer, is preparing to increase its production capacity with an investment worth 22 million euros, Anatolia news agency reported the general manager of Kardemir as saying Thursday.
Fadıl Demirel told the Anatolia news agency the firms fourth blast furnace would start operating within the next 20 days and that the firms total production capacity would increase to 1.8 million tons, up from the current 1.3 million ton capacity.
Demirel recently said at a meeting in Karabük, one of Turkey’s main iron and steel manufacturing provinces, that the firm’s total capacity was around 500,000 tons in 1995 when Kardemir was privatized. “The fourth blast furnace will produce nearly 500,000 tons by itself, bringing the total amount of iron and steel production to 1.8 million tons,” Anatolia reported Demirel as saying.
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