Turkish steel producer Karabuk Demir Celik (Kardemir) is currently undergoing revamping at its blast furnace to increase its capacity. As per the latest updates, the company has halted its blast furnace no.4 (total blast furnaces are 5) and oxygen converter no.2 to carry out the revamp work.
While the converter is being upgraded from a 90 tonne unit to 120 tonne, lime plant capacity will also be raised to 425 tonne per day from the current 260 tonne per day. The firm also plans to commission the new continuous caster no.4 in October. The entire blast furnace revamp is scheduled for 106 days.
Kardmeir was established in 1938 as a state-owned company and Turkey’s first integrated steel producer. In 1995, the company was privatized. It offers steel products, such as blooms, billets, rebar, profiles along with other steel products.
In 2018 the company produced 2.41 MnT of liquid steel. Once the three units are revamped and back online, capacity will be increased to 2.9 MnT per year and the firm will increase shipments of billet and finished product. The ultimate aim is to increase crude steelmaking capacity of the company to 3.5 MnT per year.
In March Kardemir begun production of 52mm diameter wire rod, the thickest produced in Turkey. The firm is planning to add new steel grades to its rebar and wire rod mill in 2019 and also aims to start commercial production at its new railway wheel plant.
What’s happening in Turkey’s steel market?
Turkey produced 11,233,000 tonnes of crude steel in January-April 2019, 10.5% less than the 12,548,000 tonnes produced in January-April 2018, according to the Turkish Steel Producers’ Association (TCUD).
The country has registered a fall in steel output amid negative sentiments that have been dominating Turkey’s domestic steel market since August last year, when the country’s currency, Lira depreciated against the U.S. dollar after the Trump government doubled the tariffs on steel imports from Turkey. In addition, the European Commission imposed definitive safeguard duties on imports of a range of steel products on 1 Feb’19, including from Turkey.
Turkey’s steel consumption fell by 39% in the first three months of 2019 to 5.4 MnT from 8.8 MnT in January-March 2018, while exports grew by 18.7% to 7.45 MnT in the first four months of 2019, compared with 6.28 MnT exported in the first four months of 2018.
However, last month, U.S. has halved its tariffs on steel imports from Turkey from 50% to 25% and the market participants now are of opinion that the reduction of the U.S. import duty will have a positive effect on the Turkish steel market. But it is likely that Turkey’s exports may not increase to as high as they once were because the export market has changed since August last year.
Before Section 232 tariffs were initiated last year by U.S., Turkey used to have a 15% share in the U.S. steel imports market. However, the recent duty exemptions for Canada and Mexico announced on May 17 will not allow Turkish steel to restore its place in the U.S. market. Turkish steel will still be subject to a 25% duty, while Canada and Mexico will not pay any duty for their steel exports to the US. In addition, Italy and Spain are now also targeting the U.S. market, so now Turkey will have to fight for its market share in Washington.
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