Global steel sees no ’green shoots’
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Daily News with wires
Oluşturulma Tarihi: Mayıs 21, 2009 00:00
ISTANBUL - Financial markets celebrate ’green shoots,’ data perceived as indicating the end of the global turmoil, but data from core industries are a different matter. International raw steel production fell 24 percent in April, according to the World Steel Association. In line with the global picture, Turkish steel giant Erdemir posts a quarterly loss
Financial markets may be going through a period of "green shoots," as investor appetite returns to stock markets, but the sharp decline in steel production reported by an industry association points to a continuing slowdown.
Weaker demand worldwide resulted in a 24 percent drop in global raw steel production, according to the World Steel Association, or WSA. The figures also showed that Turkish steel production dropped 13.4 percent in April compared to the same month last year.
Erdemir, Turkey’s iron and steel giant, posted a net loss of 136.4 million Turkish Liras ($89 million) for the first quarter after the collapse in demand led to a sharp reduction in prices.
The fall in global raw steel production was led by declines in Germany, Japan and the United States, Bloomberg reported. Global output fell to 89.45 million metric tons, according to a statement by the WSA yesterday. Production in China fell 3.9 percent, while output in Japan slid 44 percent. German production dropped 53 percent.
Turkish output unfazed
Surprisingly, Turkey, the world’s seventh-biggest steel producer, posted an increase in output as these giants declined. Turkish production stood at 1.98 million tons in April, up from January’s 1.94 million tons. But the global slowdown took its toll in February and March, as Turkish output fell to 1.7 million tons and 1.83 million tons, respectively.
Turkey’s share in global production in April stood at 2.21 percent, down from January’s figure of 2.24 percent. But the April number represents a recovery over February and March figures, which were 2.01 and 1.99 percent, respectively.
Erdemir, which is short for Ereğli Demir Çelik Fabrikaları is Turkey’s biggest steelmaker. The company reported a first-quarter loss after prices fell due to the collapse in global demand.
The net loss of 136.4 million liras ($89 million) compares with a year-earlier profit of 223.2 million liras, the Zonguldak-based company said in a stock exchange filing late Tuesday. The loss was larger than the 110 million lira average estimate of six analysts surveyed by Bloomberg. Sales dropped 25 percent to 1.06 billion liras.
Turkish prices for hot-rolled coil, a benchmark steel product, averaged $445 a metric ton in the quarter, compared with $1,360 as of July 10, data compiled by Metal Bulletin shows. Erdemir reported a 69 percent plunge in annual profit in March.
"We don’t think the results will be good because of the decline in steel prices and sales volume," Bloomberg quoted Bahar Deniz Egemen, an analyst at Garanti Securities, as saying before the results were posted. "Foreign-exchange losses also had an impact," said Egemen, who has a "market perform" rating on Erdemir.
The lira fell 7.5 percent against the U.S. dollar in the first quarter. The greenback was trading at 1.5330 liras at 3:30 p.m. yesterday.
Prices for hot-rolled coil rose to a record in September and have since slid 57 percent. World steel demand may drop as much as 20 percent in 2009 on weakness in the European and U.S. economies, Lakshmi Mittal, chief executive officer of ArcelorMittal, said this week. The company is the world’s biggest steel producer.
The Turkish Armed Forces Assistance Fund, or Oyak, controls Erdemir after buying a 49 percent stake from the government for $3 billion in 2005.
Weaker demand worldwide resulted in a 24 percent drop in global raw steel production, according to the World Steel Association, or WSA. The figures also showed that Turkish steel production dropped 13.4 percent in April compared to the same month last year.
Erdemir, Turkey’s iron and steel giant, posted a net loss of 136.4 million Turkish Liras ($89 million) for the first quarter after the collapse in demand led to a sharp reduction in prices.
The fall in global raw steel production was led by declines in Germany, Japan and the United States, Bloomberg reported. Global output fell to 89.45 million metric tons, according to a statement by the WSA yesterday. Production in China fell 3.9 percent, while output in Japan slid 44 percent. German production dropped 53 percent.
Turkish output unfazed
Surprisingly, Turkey, the world’s seventh-biggest steel producer, posted an increase in output as these giants declined. Turkish production stood at 1.98 million tons in April, up from January’s 1.94 million tons. But the global slowdown took its toll in February and March, as Turkish output fell to 1.7 million tons and 1.83 million tons, respectively.
Turkey’s share in global production in April stood at 2.21 percent, down from January’s figure of 2.24 percent. But the April number represents a recovery over February and March figures, which were 2.01 and 1.99 percent, respectively.
Erdemir, which is short for Ereğli Demir Çelik Fabrikaları is Turkey’s biggest steelmaker. The company reported a first-quarter loss after prices fell due to the collapse in global demand.
The net loss of 136.4 million liras ($89 million) compares with a year-earlier profit of 223.2 million liras, the Zonguldak-based company said in a stock exchange filing late Tuesday. The loss was larger than the 110 million lira average estimate of six analysts surveyed by Bloomberg. Sales dropped 25 percent to 1.06 billion liras.
Turkish prices for hot-rolled coil, a benchmark steel product, averaged $445 a metric ton in the quarter, compared with $1,360 as of July 10, data compiled by Metal Bulletin shows. Erdemir reported a 69 percent plunge in annual profit in March.
"We don’t think the results will be good because of the decline in steel prices and sales volume," Bloomberg quoted Bahar Deniz Egemen, an analyst at Garanti Securities, as saying before the results were posted. "Foreign-exchange losses also had an impact," said Egemen, who has a "market perform" rating on Erdemir.
The lira fell 7.5 percent against the U.S. dollar in the first quarter. The greenback was trading at 1.5330 liras at 3:30 p.m. yesterday.
Prices for hot-rolled coil rose to a record in September and have since slid 57 percent. World steel demand may drop as much as 20 percent in 2009 on weakness in the European and U.S. economies, Lakshmi Mittal, chief executive officer of ArcelorMittal, said this week. The company is the world’s biggest steel producer.
The Turkish Armed Forces Assistance Fund, or Oyak, controls Erdemir after buying a 49 percent stake from the government for $3 billion in 2005.