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Sharp rise in manufacturing sector demand pulls up Erdemir's flats sales

Friday, 13 August 2021

The sharp rise seen in the manufacturing industry's demand in the first half of the year pulled up the flat steel sale volume of Turkey's largest integrated steelmaker Erdemir.

According to the latest Turkish Statistical Institute (TUIK) data Aug. 12, calendar adjusted industrial production increased by 41.1% in the second quarter, compared with the same quarter the previous year. Seasonally and calendar adjusted industrial production was 1.6% higher on quarter.

According to an Erdemir presentation document seen by S&P Global Platts, the company sold 3.04 million mt of flat-rolled steel to the domestic market in H1, higher than 2.8 million mt sold in H1 2020.

The rise was due to improved sales to the general manufacturing industry, which more than doubled on year to 621,000 mt in H1, Platts observed.

Despite a 7.2% on-year decline, the pipe and rolling sectors remained Erdemir's main domestic outlet in H1, buying 1.48 million mt, while its sales to distribution channels totaled 532,000 mt.

Erdemir also sold 407,000 mt of flat steel to the automotive sector in H1, 25% lower on year despite the company's increased focus on producing value-added steel to meet automotive sector demand.

Erdemir doubled its galvanizing capacity with a new line at the end of 2019 in this regard, while parent company OYAK also opened an automotive-oriented Ro-Ro (roll-on, roll-off) port at the beginning of this year, which is one of the important needs of Turkey. OYAK laid the foundation of its $110 million OYAK Port investment in partnership with Nippon Yusen Kaisha (NYK line) in 2019, as Platts has reported.

OYAK Port will meet the demand generated by the increasing export volume in the automotive industry, and will serve as an export base, the company said.

The company's Eregli steelworks, Erdemir, produces hot-rolled, cold-rolled and galvanized coils, plate and tinplate, while the Iskenderun steelworks, Isdemir, produces billet, wire rod and hot-rolled coils with a total crude steel production capacity of 9.1 million mt/year.

-- Cenk Can

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