The Turkish steel industry is setting ambitious targets for 2025, aiming to increase its capacity utilization to 70%. Despite challenges in the global steel market, the sector is pushing for a strong recovery, focusing on higher production levels and job retention. This goal is a significant step as the industry has been operating at just 62.6% of its total capacity. According to Veysel Yayan, the General Secretary of the Turkish Steel Producers’ Association (TÇÜD), efforts are underway to boost production and minimize the impact of the difficulties faced in recent years.
In the face of a global downturn in steel production, Turkish steelmakers are adopting a strategy that prioritizes maintaining workforce levels instead of layoffs. This approach stands in stark contrast to other global steel giants like Thyssenkrupp, which has announced plans to cut 11,000 jobs by 2030. Yayan explained that during challenging periods, major steel producers in Turkey prefer reducing shifts or focusing on maintenance and repair tasks rather than reducing staff. In some cases, employees may be put on leave until conditions improve. This decision reflects a long-term vision of retaining skilled labor and avoiding the potential social and economic consequences of mass unemployment.
The Turkish steel sector's resilience is further demonstrated by recent production figures. In October 2024, Turkey's crude steel production rose by 0.7% compared to the same month last year, totaling 3 million metric tons. Over the first ten months of 2024, Turkey produced 30.9 million metric tons of crude steel, marking a significant 12.4% year-on-year increase. This surge in production comes at a time when the global steel market has faced a decline, with total global production for January to October 2024 falling by 1.6% to 1.55 billion metric tons, according to the World Steel Association.
The Turkish steel industry’s ability to outperform global trends highlights the country's competitive position in the global steel market. Despite facing rising costs, supply chain disruptions, and fluctuating demand, Turkish steelmakers have managed to increase output while many of their international counterparts have seen declines. This growth is not just a sign of recovery, but also an indicator of Turkey's increasing share in global steel exports, which has become a vital component of its industrial strategy.
In addition to boosting production capacity, Turkish steel producers are also diversifying their product offerings and seeking alternative export markets. Yayan emphasized that in times of economic slowdown, the industry turns to product diversification to meet changing market demands. This includes the development of high-quality steel products for specialized industries like automotive, construction, and infrastructure, which require advanced manufacturing technologies. By expanding their product range, Turkish steelmakers are able to reduce their dependency on specific markets and adapt to shifts in global demand.
As part of this strategy, Turkish steel producers are also focusing on improving their environmental sustainability. Many steelmakers in Turkey are investing in technologies that reduce the carbon footprint of steel production, a growing concern in an industry notorious for its environmental impact. These efforts are aligned with global trends where countries and companies are increasingly prioritizing green steel solutions to meet international climate commitments. Turkey’s focus on sustainable steel production is seen as an opportunity to not only meet domestic and European Union environmental standards but also to tap into the growing global market for green steel.
The Turkish government has supported the steel sector's growth and sustainability plans with various incentives, including tax breaks and investments in infrastructure. By aligning with the government's broader economic objectives, the steel industry is expected to play a key role in Turkey's industrial transformation, which aims to move away from low-cost, labor-intensive manufacturing towards more technology-driven, high-value industries. The government's backing has also helped mitigate some of the financial pressures faced by steelmakers, enabling them to continue investing in innovation and maintaining a competitive edge in the global market.
Looking ahead, the Turkish steel industry's target of achieving 70% capacity utilization by 2025 is ambitious but achievable given the current growth trajectory. The sector is positioning itself to play a critical role in the global steel supply chain, both as a major producer and as a key player in green steel production. However, the road to this goal will require continued adaptation to global challenges, such as fluctuating steel prices, trade tensions, and environmental regulations. Yet, Turkey’s strategic focus on workforce stability, product diversification, and sustainable practices suggests that the country’s steel industry is poised to continue growing and expanding its market share in the years ahead.
With the global steel industry grappling with its own set of problems, Turkey’s resolve to maintain a steady course is a testament to its resilience and forward-thinking approach. By focusing on innovation, sustainability, and employment retention, Turkey aims to strengthen its position as one of the world's leading steel producers while ensuring long-term stability for its workforce. As the global steel industry evolves, the Turkish steel sector’s ability to adapt to these challenges will be key to its future success.
