Turkey Metals Report Q3 2014

Date: May 21, 2014
Pages: 49
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download

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Includes 3 FREE quarterly updates

BMI View: Despite relatively weak growth to be expected over coming months, the medium-term outlook for Turkey's metals sector remains promising due to strong demand from the domestic construction and autos sectors. Near-term headwinds are likely to include currency weakness making imports of materials more expensive and weak global steel prices squeezing steel-makers' margins. An uptick in political risk in Turkey also presents a key downside risk.

Over the medium-term we forecast Turkey's total steel production to grow from 34.7mnt in 2013 to 44.6mnt in 2018. We expect growth to average 5.2% y-o-y over 2014-2018, as we predict a recovery from the negative growth seen during 2013, which was a result of weak global steel prices and a weak lira pushing up the cost of imports of materials.

We expect to see the share prices of Turkey's two largest steel producers, Erdemir and Kardemir, continue to outperform following steady output growth over 2013. In July 2013 Standard and Poor's raised Erdemir's long-term corporate credit rating from 'B' to 'B+' reflecting the company's strong operating performance.
BMI Industry View
Metals SWOT
Industry Forecast
Steel: Near-Term Headwinds For Sector
  Table: Turkey - Steel Production & Consumption (kt)
  Table: Turkey - Steel Industry Historical Data (kt)
Regulatory Development
Political Risk Heightened
Anti-Corruption Drive Paying Off
Tax Regime
  Table: Political Overview
Commodities Forecast
Steel Price Forecast
  Table: BMI Steel Forecast
Short-Term Outlook
Core View
Global Steel Glut To Persist
Production: Rationalisation In The Long Term
Consumption: Growth Decelerating
Excessive Chinese Exports
Growing Arbitrage Between East & West
Risks To Price Outlook
  Table: Steel Data & Forecasts
  Table: Global Steel Prices By Region & Product, US$/tonne (ave)
Commodity Strategy
Iron Ore: Chinese Stimulus Not A Game Changer
Steel: Gradual Rationalisation Insufficient To Boost Prices
Aluminium: Recent Rally Unlikely To Persist Into H214
Copper: Bearish Forecast Appears Well Placed
Lead: Picking Up Autos Sector Tailwinds
Nickel: Recent Rise To Fall Back In H214
Zinc: Potential Test Of Resistance In Coming Weeks
  Table: Select Commodities - Performance & BMI Forecasts
Competitive Landscape
  Table: Turkey - Steel Mills
  Table: Turkey - Largest Listed Metal Producers, Key Financial Metrics
Company Profile
Company Strategy
  Table: Erdemir - Financial Data
Company Strategy
  Table: Kardemir - Financial Data
Cross Checks
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