Iron and Steel Raw Materials Production in Turkey: A Comprehensive Analysis

Turkey's iron and steel industry is a cornerstone of its economy, contributing significantly to both domestic manufacturing and exports. As the 8th largest steel producer in the world, Turkey has developed a robust infrastructure for the production of iron and steel raw materials. This blog post explores the specifics of iron and steel raw material production in Turkey, examining historical trends, current market dynamics, and future projections, supported by relevant data and charts.

Historical Overview

Turkey's journey in iron and steel production began in the late 19th century. However, significant growth occurred post-1980, with production surging from 2.5 million tons in 1980 to approximately 40.4 million tons by 2021.This growth trajectory established Turkey as a key player in the global steel market.

Production Processes

The Turkish iron and steel industry primarily utilizes two methods for production:

1. Integrated Steel Mills: These facilities utilize iron ore as the primary raw material, which is processed through blast furnaces. The ore is smelted with coke and limestone at high temperatures to produce molten iron.

2. Electric Arc Furnace (EAF): This method predominantly uses scrap metal as input, making it more environmentally friendly. EAFs accounted for about 71.5% of Turkey's total steel production in 2022.

Current Market Dynamics

Turkey's iron and steel industry is heavily reliant on imported raw materials, with over 60% of iron ore sourced from abroad. In 2023, Turkey imported approximately 9.58 million tons of iron ore, a slight decrease from previous years due to fluctuating global demand and local production challenges.

The following chart illustrates the trend of iron ore imports over recent years:

Year	Iron Ore Imports (Million Tons)
2020	10.25
2021	10.00
2022	9.98
2023	9.58

Production Trends

In terms of steel production, Turkey produced 33.7 million tons in 2023, reflecting a 4% decline from the previous year due to various factors including increased electricity costs and VAT hikes on steel products.

The following chart demonstrates the annual crude steel production from 2018 to 2023:

Year	Crude Steel Production (Million Tons)
2018	37.5
2019	33.6
2020	35.8
2021	40.4
2022	35.1
2023	33.7

Key Players in the Industry

Several companies dominate Turkey's iron and steel sector:

• Erdemir Group

• İsdemir

• Kardemir

These companies operate integrated plants that significantly contribute to Turkey’s crude steel output.

Challenges Facing the Industry

The Turkish iron and steel industry faces several challenges:

• Dependence on Imports: The reliance on imported raw materials exposes the industry to global market fluctuations.

• Rising Energy Costs: Increased electricity prices have substantially impacted production costs, accounting for approximately 27% of total costs in recent years.

• Regulatory Changes: VAT increases on steel products have further complicated market dynamics.

Future Outlook

Despite recent declines, the outlook for Turkey's iron and steel industry remains positive due to anticipated increases in domestic demand driven by reconstruction efforts following natural disasters and ongoing infrastructure projects.

The Turkish Steel Producers Association predicts that domestic demand will grow in 2024, supported by new investments aimed at enhancing production capacity.

Conclusion

Turkey's position as a leading producer of iron and steel raw materials is underpinned by its historical legacy, current market dynamics, and future potential for growth. As the industry adapts to challenges such as import dependencies and rising costs, it continues to play a crucial role in both the national economy and global markets. With ongoing investments in technology and sustainability practices, Turkey is poised to maintain its status as a key player in the global iron and steel landscape.