Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Selim Argun, sales manager, Metkim

Selim Argun, sales manager, Metkim, spoke with Davis Index about how the COVID-19 pandemic impacted Turkish steel demand in the first half of 2020 and his outlook for the market moving forward as global economies look to ramp up their businesses to pre-pandemic levels.


What is the status of domestic as well as export demand for Turkish steel products?

The COVID-19 pandemic hit the global markets hard, affecting all countries and economies. In Turkey, the pandemic first emerged on March 11, 2020. At that time there was a lot of uncertainty around the future of the business even though it continued throughout March. April was the quietest period for the market as uncertainties around the pandemic and global lockdowns made market participants hesitate on doing new business. However, business resumed in May, as markets around the world began reopening and governments announced economic support plans to reactivate markets. In Turkey, for example, the government decreased interest rates for mortgage loans to support the real estate market, which, in turn, had a positive effect on the steel market as construction increased. Now, Turkey along with other world economies is trying now to compensate for its losses due to the pandemic by focusing on increasing global trade. Local demand and export in Turkey are considerably better than H1 2020 and we seem to have left the worst period behind.


What is your outlook for the second half of the year?

The first six months of 2020 were a quiet period for the market as demand weakened along with challenging conditions for scrap collection in other countries due to the pandemic. However, the market has started picking up since May and we expect demand for scrap in Turkey to strengthen further until the end of this year.


Has scrap supply from Turkey’s local market remained robust? Do you see the volumes growing in H2 2020?

Domestic scrap supply in Turkey was low in H1 2020 due to the pandemic with limited collection activity. Demand for scrap was also low and prices decreased. With global lockdowns lifting, the demand for local scrap also improved and we expect better scrap supply activity in the domestic market in H2 2020. However, we still expect the quantities to be lower compared with the same period last year.


Do you see scrap prices increasing further by the end of the year?

The Turkish market is in recovery now and increased market activity, as well as stronger demand, are key factors that are increasing scrap prices. We expect some more fluctuations, but overall expect prices to continue at similar levels being seen at present and remain firm until the end of the year.


What was the impact of the COVID-19 pandemic on the Turkish steel industry?

The pandemic had a massive negative effect across the world and Turkey was no exception. The business saw a steep decline amid the uncertainty as did steel production capacities. However, the worst period is over and now we must continue to recover and compensate for the losses we incurred in H1 2020. The Turkish steel industry is definitely strong to overcome these challenges for a robust future. 

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