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Turkey’s DRI Market Outlook Report

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  • TRY: 365,000 ₺

Direct-reduced iron (DRI) is produced in a solid process that converts iron ore pellets or fines into pure iron by being reduced using reducing agents. DRI products are divided into three categories based on shape and appearance: sponge iron, briquettes, and fine; fine is usually used as cold-briquetted iron. DRI can also be categorized based on production process: direct-reduced using coal, and direct-reduced using natural gas. A major part of the Middle East as one of the most important sources of natural gas has been dominated by DRI products using natural gas.

Although producing steel using DRI requires electric furnaces, of there are plenty of in Turkey (EAFs), DRI accounts for a very small share of crude steel output in the country. Recycling and remelting scrap accounts for approximately a quarter of the country’s steel output. Notwithstanding, sponge iron and DRI are the main and only substitutes for scrap for the massive crude steel market in Turkey when raw materials are tight.

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Product Description

With a GDP of $761 billion in 2019, Turkey was the second largest economy in the region that year, behind Saudi Arabia. The country joined the Economic Cooperation Organization in 1961 and also became a member of G20 in 1991. However, Turkey is still a developing country, according to the UN in 2019. With an annual output of 35 million tonnes of crude steel, the country is the largest producer in the region. EAFs have accounted for almost 70% of the country’s output on average over the past years. However, that share has shrunk with increased development in blast furnaces over the recent years.

Market drivers of Turkey’s DRI

About 70% of Turkey’s steel is produced in electric furnaces using scrap or DRI as raw materials. Currently, scrap is the main feed for electric furnaces in the country, which is mostly imported. Although using scrap has advantages over DRI such as containing alloys, the lower price of DRI compared to scrap can be a major driver for the country’s DRI market and encourage steelmakers to use DRI.

Turkey recently announced that a new massive natural gas reserve has been discovered; with an estimated size of 320 billion cubic meters, the reserve can largely cut the country’s dependence on imports. Following the discovery, gas-related industries are more likely to be developed. As an industry depending on natural gas, DRI developments can reduce the country’s dependence on steel scrap imports.

DRI generally contains a higher level of impurities compared to scrap; this means that as the ratio of DRI to scrap in electric furnace feed increases, power consumption and as a result, production costs will increase. This is especially true for steelmakers whose power consumption takes a considerable share in their overall costs, damping their interest in using DRI as raw material. Power generation in Turkey, which generally depends on natural gas imported from Russia and Iran, is very costly; thus, power tariffs are higher than many other countries in the region. This weakens the eagerness of Turkish steelmakers to use sponge iron.

Overview of Turkey’s DRI market

Currently, Turkey does not produce any DRI and meets all of its demand through imports. However, only one year did the country’s net imports exceed 500,000 tonnes over the period under study. Considering Turkey’s crude steel output, it can be concluded that the share of DRI consumption in the country’s crude steel output is only 1%. However, as crude steel output increases, net imports will also rise. With crude steel output expected to decline in the short term, mostly due to Covid-19 lockdowns and restrictions, net imports are expected to decrease; but DRI demand from domestic producers is expected to gradually increase in the long term. Moreover, sponge iron capacities are very likely to be built following the discovery of a natural gas reserve in the Black Sea.

Breakdown of Turkey’s DRI market

Turkey’s DRI market is divided into sponge iron and briquettes. Since briquettes are less porous than sponge iron, they are easier to transport than sponge iron. Due to this, hot-briquetted iron takes a sizeable share in total DRI trade.

Key players in Turkey’s DRI market:

  • Çebitaş Demir Çelik Endüstrisi A.Ş.
  • CER Çelik Endüstrisi A.Ş.
  • Çolakoğlu Metalurji A.Ş.
  • Diler Demir Çelik Endüstrisi ve Ticaret A.Ş.
  • Ege Çelik Endüstrisi Sanayi ve Ticaret A.Ş.
  • Ekinciler Holding A.Ş.
  • Erege Metal Demir Çelik Sanayi ve Ticaret A.Ş.
  • Habaş Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S.
  • İçdaş Demir Çelik Enerji Tersane ve Ulaşım Sanayi A.Ş.
  • İzmir Demir Çelik Sanayi A.Ş. (IDÇ)
  • Kaptan Demir Çelik Endüstrisi ve Ticaret A.Ş.

Additional Information

Industry

DRI and HBI
Region

Turkey
Report Type

Industry Report

Specifications

Report Attribute Details
The base year for estimation 2019
Historical data 2009-2018
Forecast period 2020-2025
Quantitative units Value in USD and Volume in Tonne
Report coverage Market Overview, Dynamics, Market Outlook, Risks to Forecast, Consumer Market, Industry Overview, Market Landscape, Competitive Landscape, Market Attractiveness, External Macro Environment Analysis
Segments covered Source, Composition, Type, Application
Pricing and purchase options Please explore our purchase options to meet your exact research needs.

Reasons to Buy

  • Recognize the geographical distribution of import demand
  • Identify the current and future key players of the trading market
  • Achieve a better insight on potential target markets
  • Understand the behavior of major suppliers/customers either globally or regionally
  • Identify competitors as a feed for market analysis

Table of Content

  1. Executive summary
  2. Introduction
    • Objective
    • Market under study
    • Product
      • Product specifications
      • Consumption structure
        • Applications
        • Physical properties
      • Subjects discussed
      • Geographical scope under study
      • Study timeframe
      • Study currency
      • Potential audience
  1. Market dynamics
    • Market drivers
    • Restraints
    • Opportunities
    • Challenges
  2. Market overview
    • Market size
    • Industry capacities
      • Existing capacities
        • Capacity distribution
        • Geographical distribution of capacities
      • Future capacities
    • Output
      • Output trends
      • Operating rates
    • Consumption
      • Consumption trend
      • Consumption Share of domestic product
    • Trade
      • Exports
      • Imports
      • Trade balance
      • Market balance
    • Market breakdown by product type
    • Market breakdown by product type
    • Market breakdown by application
    • Inventory
      • Producers inventory
      • Consumers inventory
      • Traders inventory
  1. Market outlook
    • Market factors
      • Raw materials
      • Costs and prices
      • Competition
      • The government
      • Other factors
    • Future scenarios
    • Risks to forecast
  2. Consumer markets
    • End-user markets
      • Building construction
      • Infrastructure construction
      • Transportation manufacturing
      • Industrial equipment manufacturing
      • Durable goods manufacturing
      • Consumable goods manufacturing
    • Direct consumer markets
      • Major Direct consumers
        • Existing capacities
        • Drivers
  1. Export potentials
    • Destinations
      • Trade and insurance costs
      • Import market suppliers
      • Producers potential share
  1. Industry overview
    • Raw materials
      • The supply volume of raw materials
      • Supply channels of raw materials
      • Raw materials procurement costs
    • Cost structure of producers
    • Production cost curve
    • Industry value added
    • Generated new scrap
    • Technology
  2. Market landscape
    • Domestic sales markets
      • Pricing in the domestic market
      • Potential domestic demand
      • Trade agreements for imports
      • Foreign suppliers
    • Foreign sales market
      • Prices
      • Potential markets overview
      • Trade agreements for exports
      • Foreign customers
  1. Competitive landscape
    • Producers
      • Company profile
      • Revenue structure
      • Gross profit margins
      • Capacity, output and sales
    • Consumers
      • Company profile
      • Revenue structure
      • Gross profit margins
      • Capacity, output and sales
  1. Market attractiveness
    • Industry rivalry
    • Threat of new entrants
    • Threat of substitutes
    • Bargaining power of buyers
    • Bargaining power of suppliers
    • Conclusion of Porter analysis
  2. PESTEL analysis
    • Political factors
    • Economic factors
    • Social factors
    • Technology factors
    • Environmental factors
    • Legal factors
  3. SWOT analysis
    • Large-scale companies with favorable conditions
      • Short-term strategies
      • Long-term strategies
    • Large-scale companies with unfavorable conditions
      • Short-term strategies
      • Long-term strategies
    • Small enterprises with favorable conditions
      • Short-term strategies
      • Long-term strategies
    • Small enterprises with unfavorable conditions
      • Short-term strategies
      • Long-term strategies

List of Figures

  1. Output and consumption; 2009-2020
  2. Market share of product applications; 2020
  3. Market surplus; 2020-2025
  4. Production process flowchart
  5. Market size; 2009-2025
  6. Existing capacity; 2009-2020
  7. Capacity distribution; 2020
  8. Geographic distribution of capacities; 2020
  9. Development of future capacity; 2009-2025
  10. Amount of output; 2009-2025
  11. Operating rates of production plants; 2009-2025
  12. Amount of consumption; 2009-2025
  13. Consumption share of domestic product; 2009-2025
  14. Exports of product; 2009-2020
  15. Imports of product; 2009-2020
  16. Historical trade balance; 2009-2020
  17. Future Market balance; 2021-2025
  18. Market output breakdown by alloy type; 2009-2025
  19. Market consumption breakdown by alloy type; 2009-2025
  20. Market balance breakdown by alloy type; 2009-2025
  21. Market output breakdown by product type; 2009-2025
  22. Market consumption breakdown by product type; 2009-2025
  23. Market balance breakdown by product type; 2009-2025
  24. Market consumption breakdown by application; 2009-2025
  25. Inventories of raw materials and products at producers factories; 2009-2020
  26. Consumers’ inventory of product; 2009-2020
  27. Traders’ inventory; 2009-2020
  28. Production forecast, according to raw materials and sales analysis; 2020-2025
  29. Market surplus; 2020-2025
  30. The share of end-user industries in the consumption; 2009 and 2020
  31. Changes in the end-consumption of extrusion products; 2020 vs 2025
  32. Applications in building construction industry; 2020
  33. Applications in infrastructure construction industry; 2020
  34. Applications in transportation manufacturing industry; 2020
  35. Applications in industrial equipment manufacturing industry; 2020
  36. Applications in durable goods manufacturing industry; 2020
  37. Applications in consumable goods manufacturing industry; 2020
  38. Capacity distribution structure of direct consumers; 2020
  39. Existing capacities of direct consumers in each province; 2020
  40. Suppliers of the export potential destination; 2020
  41. Historical exports to the export potential destination and future potential; 2016-2025
  42. Up-stream domestic supply; 2009-2020
  43. Raw materials domestic supply; 2009-2020
  44. Supply channels of producer plants
  45. Spot price of raw material in the market; 2009-2025
  46. Cash cost structure for production the product; 2020
  47. Production cost curve of the plants; 2020
  48. Gross value added of the industry; 2009-2020
  49. Generated new scrap; 2009-2020
  50. Sales channels
  51. Realized price of the product in the market; 2009-2025
  52. Potential demand of each province; 2020
  53. The main foreign suppliers to the market; 2009-2020
  54. FOB price vs domestic market; 2009-2025
  55. Map of global major importers > 20,000t; 2020
  56. Major foreign customers; 2009-2020
  57. Revenue structure of the producers; FY2020
  58. Sales income and gross profit margin of the producers; FY2009-2020
  59. Output and sales of the producers; FY2009-2020
  60. Revenue structure of the consumers; FY2020
  61. Sales income and gross profit margin of the consumers; FY2009-2020
  62. Output and sales of the consumers; FY2009-2020
  63. SWOT matrix for large-scale companies with favorable conditions
  64. Strategies positioning for large-scale companies with favorable conditions
  65. SWOT matrix for large-scale companies with unfavorable conditions
  66. Strategies positioning for large-scale companies with unfavorable conditions
  67. SWOT matrix for small enterprises with favorable conditions
  68. Strategies positioning for small enterprises with favorable conditions
  69. SWOT matrix for small enterprises with unfavorable conditions
  70. Strategies positioning for small enterprises with unfavorable conditions

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