Turkish steel export value may reach USD 15 billion in 2011

Hurriyet Daily News reported that Turkey's total steel export value is expected to reach USD 15 billion in 2011, up by 20% YoY.

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.

Mr Veysel Yayan head of Turkish Iron & Steel Producers Association said that "Turkey's total steel export value increased by 11.5% mainly because of price increases compared to 2009."

He said that Turkey's crude steel production might rise to 33 million tonnes and iron and steel prices could jump as the industry reacts to a surge in raw material costs.

The country's total steel export value is expected to reach USD 15 billion in 2011, up by 20% 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.

Mr Peter Marsh journalist at Financial Times said that steel prices are set to jump by up to 66% in 2011, top executives and analysts have said, with a burst of inflation that the market has suffered only once in the last 70 years.

Talking about the predictions of foreign experts and analysts, including Mr Michael Shillakeri of Credit Suisse and Mr Eiji Hayashida of JPE of Japan commenting to FT, Mr Yayan said that "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 USD 450 but last year rose to nearly USD 700."

He said that 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 added that "The scrap metal prices were floating around $300 per tons and rose to USD 520 recently."

He said that it is normal to think that such an increase would be reflected in the iron and steel prices in all sectors. Its is likely for steel prices to hit USD 900 per tonne by the end of 2011, like when the market experienced rocketing prices in 2008 flat iron prices reached USD 1,500 per tonne.

Mr İsmail Durak sales and marketing chief for Kardemir said that "The peaking prices for steel could be because of the rising demand for steel sheets used in the automotive industry. 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. One of the main reason for the rising price for scrap metal is the harsh weather conditions in the US and Russia."

Mr Ç Kerem Vaizoğlu export manager of Ekinciler Iron & Steel Ind said that "I do not expect a rise by 60% in steel prices in 2011. Prices could rise due to rising demand caused by the automotive industry and construction sector."

Representatives of the world's steel and iron giants met at the first Regional Mining, Metals and Minerals Summit held in Istanbul and agreed on a great number of deals.

The source said that Iranian state officials are seeking opportunities in Turkey, 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 tonnes of rail from Turkish group Kardemir AŞ.

According to the source, Egyptian state officials also placed an order with Kardemir to produce 100,000 tonnes of rail after July 2011.

(Sourced from www.hurriyetdailynews.com)