After the conflict between Russia and Ukraine in March 2022, the market trade flow changed accordingly. The former Russian and Ukrainian buyers turned to Turkey for procurement, which made Turkish steel mills quickly seize the export market share of billet and rebar steel, and the market demand for Turkish steel was strong. But later costs rose and demand was sluggish, with Turkey’s steel production down 30% by the end of November 2022, making it the country with the biggest decline. Mysteel understands that last year’s full-year output was down 12.3 per cent year-on-year. The main reason for the decline in production is that, apart from the failure to boost demand, rising energy costs are making exports less expensive than those of low-cost countries such as Russia, India and China.

 Turkey’s own electricity and gas costs have risen by around 50% since September 2022, and gas and electricity production costs account for around 30% of total steel production costs. As a result, production has fallen and capacity utilization has fallen to 60. Production is expected to fall by 10% this year, and there is likely to be a shutdown due to issues such as energy costs.