"Investment Motivation Weakened in a High Interest Rate Environment"

Ekinciler Group - Group Marketing Manager

Kaan Özülü

Kaan Özülü, Group Marketing Manager at Ekinciler Group, stated that steel producers have been struggling to stay afloat for two years amidst financial pressure and weak domestic demand. "You can't invest with 40% interest in a sector where profitability is 3-4%," Özülü said, adding that they do not expect a real recovery in the domestic market before the interest rate reduction process begins.

The Turkish steel industry is going through one of its most challenging periods in history due to high financing costs and declining domestic demand. Kaan Özülü stated that producers have been forced to suspend their investment plans, saying, "Companies are now talking about sustainability, not growth." According to Özülü, if the interest rate reduction process begins, capacity utilization rates could rise again to 65-66 percent in 2026.

"A wave of protectionism is redrawing export markets"

Özülü stated that the resurgence of protectionist policies in the US is creating a chain reaction in global trade, saying, “If scrap metal prices rise, Türkiye’s cost advantage will erode. Moreover, countries like China, Mexico, and South Korea are turning to our markets as the US market closes.” According to Özülü, protectionism has now become a trade strategy, and the Turkish steel sector must act more proactively to maintain its bargaining power in this new order.

“Permanent restrictions in the DİR (Domestic Industry Protection) will end export dominance.”

Özülü, noting that the regulations recently introduced under the Inward Processing Regime (IPR), while well-intentioned, pose risks for exporters, warned, “The obligation to use domestic products may be a correct approach, but if it becomes permanent, Türkiye's competitive advantage in rebar exports will disappear.” Özülü also pointed out that in the first eight months of 2025 alone, billet imports increased by 55 percent to 2.9 million tons, adding, “This picture shows how dependent production is on the global supply chain.”

"SKDM may not be a threat, but a strategic opportunity."

In his assessment of the European Union's Border Carbon Adjustment Mechanism (BCRM), which will come into effect in 2026, Özülü described this regulation as "the new game of trade." "If we document our production chain and prove our energy efficiency, the BCRM will be an opportunity for us, not a threat. Turkey is in the position of being the closest alternative supplier to Europe," said Özülü, emphasizing that the green transformation has become not only an environmental but also a geo-economic competitive element.

"Iran dominates in Iraq, Syria could open a new chapter."

Speaking about regional markets, Özülü stated that 90% of Iraq's imports consist of products from Iran, indicating that Türkiye has lost market share there. However, the reconstruction process in Syria could be a new area of growth for Turkish steel producers.

"Flexibility is the survival instinct of the Turkish steel industry."

Kaan Özülü concluded his speech by saying, "If our production chain has remained standing despite the crises, it is entirely due to the agility of the sector. In the coming period, flexibility will be a competitive advantage as valuable as capacity."

Özülü's assessments were shared at the SteelOrbis Market Talks meeting, held in Iskenderun on October 7th and sponsored by Atakaş Çelik. The event, attended by over 400 industry representatives, addressed critical topics such as interest rate policies, protectionist measures, green transformation, and the Inward Processing Regime.

SteelOrbis Market Talks - October 7, 2025, Iskenderun