Turkey's biggest firm to halt steel production on demand slump - report
Koç Holding, Turkey’s biggest industrial group, will halt steel production at its Iskenderun plant unless the market situation in the country improves, Argus reported.
The company’s Koç Çelik unit will suspend production from the end of September until January, Argus, a specialist in news on the global commodities industry, said on Wednesday.
Koç Çelik has been unable to offset a slump in domestic demand for steel billet with overseas sales, Argus said. Demand in Turkey sharply decreased in August last year, when a currency crisis sparked an economic recession.
Koç’s local customers slowly reduced their purchases over a prolonged period, prompting the company to make the decision to shut production, Argus said. Other Turkish steelmakers cut output slightly in August as a deterioration in the overseas market weighed on sales, it said.
The company, which has the capacity to produce 1.2 million tonnes of liquid steel at Iskenderun, informed a local environmental agency as early as June of the potential shutdown, Argus said citing two people it didn't identify.
Turkey's economy has contracted on an annual basis for the past three quarters. Most economists expect growth of around zero for the whole of 2019. Consumer confidence in Turkey edged up to 58.3 in August from 56.5 in July. Any reading below 100 reflects pessimism about the future.
Koç Çelik also manufactures rebar at a mill in Hatay, which has an annual capacity of 500,000 tonnes, Argus said.