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Turkish Steelmakers See Prices Stabilizing on Construction Boom

Turkish steel producers expect prices to recover from last year’s decline as government building projects push output up an estimated 5.8 percent.

“I expect prices to be stable this year,” Veysel Yayan, secretary-general of the Iron & Steel Producers of Turkey, said in an interview in Istanbul. Turkey will produce 38 million metric tons of crude steel this year, up from 35.9 million tons in 2012, he said.

Demand for steel in Turkey is growing as the government auctions construction projects including a $6.5 billion highway to Istanbul from Izmir and a two-mile suspension bridge across the Sea of Marmara, as well as roads and housing. The increase in demand may drive a recovery in prices, which dropped about 7 percent last year, according to a Steel Business Briefing index.

“The government’s big infrastructure projects such as housing replacements, highways and railways, as well as a recovery that we expect in Europe, will help the steel industry and exports to grow this year,” Yayan said, estimating demand growth at 5.3 percent.

Turkey’s steel expansion beat every other country last year, Yayan said. The nation became the world’s eighth largest producer, leapfrogging Brazil and Ukraine, according to the World Steel Association. Eregli Demir & Celik Fabrikalari TAS, or Erdemir, and its Isdemir unit are the country’s biggest steelmakers.

Exports may rise 8.3 percent to 22 million tons this year, according to Yayan. Imports may fall 6 percent to 11 million tons as local production climbs, he said.

To contact the reporter on this story: Ercan Ersoy in Istanbul eersoy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.

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