The Turkish government is concerned by increasing iron prices and has instructed the country’s official statistics agency (TÜİK) to develop a price index for iron and steel, Customs and Trade Minister Hayati Yazıcı has said.
Speaking at a recent meeting with iron and steel representatives in Ankara, the minister said they would submit a proposal to TÜİK to develop a price index on iron and steel prices as they directly affect the construction industry, the engine of the Turkish economy.
These issues should be solved through consultation, Anatolia news agency reported Yazıcı as saying yesterday.
Iron prices have increased as a result of the Turkish Lira’s depreciation against the U.S. dollar and increases in scrap iron prices, according to iron and steel representatives, who said they were also concerned about this increasing trend. Pices of iron used for construction in Turkish markets calculated in terms of US dollars, have posted only a 1.5 percent increase this year, from $822.5 per ton in January to $835 per ton in October, according to Turkey’s Iron and Steel Producers Association (DÇÜD). Prices in liras have, on the other hand, increased by 19.9 percent, due to volatility of the lira – dollar exchange rates recently.
Meanwhile, representatives of the construction industry pretend prices have hiked at a larger scale recently, which they say has increased their costs of production.
Noting that there are 30 crude steel producers, about 200 blooming mills, tens of steel service centers and more than 100 steel trading firms in Turkey, DÇÜD said it was not possible to speculate in the Turkish steel market to increase prices artificially. “Claims from both parties [steel producers and construction sector representatives] differ mainly because they make calculations in different currencies,” Murat Köse, chief editor of the Iron Steel Store magazine, told the Hürriyet Daily News on a phone interview yesterday, confirming figures regarding steel prices provided by DÇÜD.
Competition board investigation
Noting that the trend in sector prices would now be monitored regularly, Yazıcı said they also asked the Competition Board to start an investigation regarding the increase in iron prices.
Explaining the steps to be taken to address concerns in the iron and steel sectors within a short period of time, Yazıcı said: “Iron prices will be monitored on a daily basis. We will submit a proposal to TÜİK to develop price indices for all components related to the construction sector, particularly iron and steel, as soon as possible. When a contract is concluded, sector representatives will assess whether the [parties agree on] wholesale and fixed prices.”
Increases in iron and steel prices were introduced to Turkey’s agenda after Turkish Prime Minister Recep Tayyip Erdoğan said last week that “those who provoke the markets will have to face us.”
Still, the government does not intend to blame anyone on the developments, Yazıcı said. “We knew things would come to this point in advance. We conducted another similar meeting in August. … We would like the parties of the issue to generate a solution that will come as relief to us, too.” The government aims to protect both the rights of both the sectors and Turkish citizens, he added.
Sector representatives agreed to establish a joint working group that will try to analyze and follow developments before presenting a report to the minister by the coming week. Moreover, the ministry will coordinate regular group meetings and become an overseeing and evaluating platform.
Turkish Construction Industrialists Employers’ Union President Şükrü Koçoğlu, Turkish Iron and Steel Producers’ Association Co-chairman Bayram Yusuf Aslan and Turkish Contractors’ Union President Emin Sazak all participated in the meeting with the minister.