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Turkey: White goods exports increased and reached 6.5 million units

Turkey’s white goods exports reached 6.5 million units in the first three months of the year, with an increase of 6% on unit basis.

Can Dincer, President of the Turkish White Goods Manufacturers Association (TURKBESD), said, “While our domestic sales contracted in the first three months of the year due to the high base effect, our exports continued to increase, albeit at a slower pace.”

TURKBESD shared the export, production and sales figures for the first three months of 2022 and the developments in the sector at an online press conference. According to TURKBESD data, in the first quarter of 2022, total sales, including domestic sales and exports, increased by 2% and exports by 6% in 6 main product groups.

TURKBESD President Can Dincer, in his speech at the meeting, stated that the industry has performed very well both in exports and in domestic sales, especially in the last two years during which the epidemic was fought.

Dincer stated that domestic sales declined in the first three months of the year due to the high base effect and exports continued to increase, albeit at a slower pace. “Globally effective inflation, developments such as war involving countries that are important raw material suppliers next to us, cause the prices of raw materials, especially flat steel, to rise even more, negatively affecting our competitiveness in exports.”

“Damping measure in flat steel may cause export loss”

Noting that the Turkish white goods industry exports 75% of its production, Can Dincer said:

“Increasing freight costs, energy and oil prices, Russia-Ukraine war cause high metal, steel and plastic prices and supply problems. We are having a difficult year due to the ongoing problem in chip supply, the Russia-Ukraine crisis and raw material prices. The taxes on flat steel, which is the most important input of white goods, cause great concern for our industry. Flat steel produced in Turkey cannot meet the needs of our industry in terms of quality, quantity and supply continuity. There is a risk that protectionist policies in this area will negatively affect inflation by causing cost increases in supply and production.”

“Flat steel production in Turkey is below the domestic market’s needs”

TURKBESD Vice President Semir Kuseyri stated that the Ministry of Commerce evaluated the anti-dumping tax within the scope of the dumping investigation initiated for some HRC products originating from the European Union and Korea in 2021.

Stating that possible measures are worrisome not only for the white goods sector but also for all manufacturing sectors, Kuseyri said, “It is calculated that the production cost of white goods will increase by up to 16% due to the rise in HRC prices. Based on the calculations in an independent research, a 16% increase in input costs may cause an export loss of approximately $750 million in the white goods sector. Considering all of the other manufacturing sectors that use the subject product as input in production, it is estimated that the total losses in exports will be over $4.2-$4.9 billion.”

Pointing out that Turkish steel producers surpassed Germany in 2021 to become Europe’s largest and the world’s 7th largest crude steel producer, Semir Kuseyri said:

“The war between Russia and Ukraine and the sanctions imposed on Russia have further increased the demand for Turkish steel products. Of course, this is a positive development. On the other hand, 2.8 million tons of the 11.3 million tons of HRC produced in our country are exported. The need of the domestic market is 14 million tons. Flat steel production in Turkey is below the domestic market’s needs. The tension in Russia and Ukraine, which are among the most important supply sources of the user sectors, necessitated the rapid diversification of supply sources. Hot-rolled coils procured from countries included in the investigation of the Ministry of Commerce are also an input to the production of high-quality sheets. The dumping measures for these products are worrying in terms of the possible inflationary effect it will create not only for the white goods sector, but also for all manufacturing sectors that use flat steel in their production.”

“Turkey is the world’s second-largest production base”

TURKBESD Board Member Fatih Ozkadi touched upon the position of the Turkish white goods industry in the world and its contribution to the economy in his presentation.

Expressing that the sector creates 60 thousand direct and 600 thousand indirect jobs, Ozkadi also stated that Turkey is the second-largest production base in the world and meets 7% of the world’s white goods production.

Ozkadi, who also gave detailed information about the supply sources of the HRC, which Turkey imports compulsorily, said:

“Cold and galvanized sheets, which are mainly used in the production of white goods, are produced by the additional processing of hot sheet metal. Since it was not produced in sufficient quantity in the domestic market in 2021, 36% of the compulsory HRC was supplied from Russia and 22% from Ukraine. The fact that this import became impossible due to the war between the two countries caused very sharp increases in prices. The rise in metal prices, which increased by 50% last year, continues. Metal prices have increased by more than 20% since January this year. The deadlines are up to 4 months. One of the most important factors supporting China being the world’s largest white goods producer is that it is also the world’s largest steel producer. Our ability to compete against China, especially in international export markets, depends on increasing our production capacity and being able to supply the required different quality sheets in the most competitive way.”

Fatih Ozkadi added that the Inward Processing Regime (DIR), which enables exporting industries to benefit from tax advantages in input imports, will not be a solution to the additional tax burden proposed for flat steel.

On the other hand, according to the information shared by TURKBESD, Turkey’s white goods exports in March increased by 11% in six main product groups compared to March of the previous year. Exports reached 6.5 million units in the first quarter, with an increase of 6% on a unit basis. On the other hand, domestic sales decreased by 9% in the first 3 months of the year. Total sales, including domestic sales and exports in 6 main products, increased by 2% compared to the previous year and reached 8 million 688 thousand 496 units.

Source: Trthaber / Translated by Irem Yildiz

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