Türkiye’s Electricity Price Rises, Steel Mills Cut Output

  Since July 1, the electricity price in Türkiye has risen. Residential electricity prices have increased by 38%, while for high energy consuming users such as steel mills, electricity prices have increased by 20%. At present, steel mills are facing pressure from high costs and unfair competition, and the rise in electricity prices may force steel mills and heavy rolling mills to further reduce production.

  Ç olako ğ lu CEO U ğ ur Dalbeler stated that the cost of steel manufacturing has increased by about $10 per ton, and the market environment is harsh, so steel mills may further reduce production. On the one hand, the import price of scrap steel is high, far higher than the world average. On the other hand, many countries have taken restrictive measures against Türkiye’s steel exports, while China’s steel prices continue to fall. Although the Ministry of Trade of Türkiye has launched an anti-dumping investigation on HRC imports from China, India, Japan and Russia on October 31, 2023, China’s HRC imports are still increasing. The above factors have put pressure on the profits of steel mills, and some steel mills have begun to experience losses. Türkiye’s monetary policy is tight, steel demand is limited, market participants are increasingly difficult to obtain credit, and the steel market has insufficient cash liquidity.

  Bastug Metalurji, a large Türkiye steel manufacturer, has begun to lay off workers. Previously, the company had an annual capacity of 2 million tons of rebar. Tosyali Holdings initially announced its intention to acquire the company and subsequently suspended its layoff plan. But the two parties reached a final agreement on July 3rd, canceling the acquisition plan.