The slowdown at steel sector started at the middle of July 2008. If we say that the level of the demand from industrialists till that time, this level became about 25-30 by September. The situation for steel producers is worse, it is said about 10-15 levels.

 

In fact, despite of all crisis conditions, we know that the production is not zero. Even if it is low, we make a little amount of production. Regarding to our forecast, real consumption is about 50-55 levels. But, industrialists and merchants have great amount of stock in their hands. Therefore, the demand at mershants is about 25-30, at producers is about 10-15 levels.

 

 

There are 2 conditions to awakening of the demand. Firstly, producers should abridge their productions. We should suggest that steelstores and hot rolling-mills should enter extended maintenance holiday without any delay. Moreover the aciding lines should be taken to maintenance. Manpower can be used for completing the semi-manufactures at cold rolling-mills.

 

Secondly, we will wait. Regarding to our forecast, The stocks in the hands of merchants and industrialists within 3-4 months. Production made in this period may extend this time. Therefore, we can expect that in March-April-June of next year the demands gradually increase about 30-40-50 levels. In fact this period is both the term of increase of the crisis, and the period of a relatively calm down term because of the decrease at stocks.

 

Increase of the demand to 100 levels may take a long time. Experts pronounce a 1-2 year period about this issue. We estimate that return is going to start at the last quarter of 2009 and calm down by the first quarter of 2010.

 

 

If we investigate the demand for metal sheet more closely, we will have the chance to see the details and it will be possible to determine the future more felicitous. The metal sheet of Turkey under normal conditions before the crisis was 6 million tones at domestic production, and 8 million tones from import, totally 14 million tones. While half of the domestic production was directly to the industrialists, and other half to the merchants, just 1 tone of imported 8 million tones went to industrialists and the rest to the mershants.

 

Accordingly if we calculate roughly, 4 millions tones of demand come from industrialists, 10 millions of tones comes from merchants of 14 million tones. Namely,by another saying, the ones who forms the great amount of the demand (more than 70 percent) are the merchants.

 

Not only in Turkey, but also at all regions of the world merchants struggle with excessive stocks. Most of them have goods on way which will come. Moreover, because of the high metal sheet prices bank credits became full to capacity. Also new credits can not be used from the banks. Therefore, this sector has not the possibility of ordering before melting its stocks and debts. Even the black metal sheet prices decrease to 400 dollar, none of the reasonable merchants will not buy goods before decrease their stocks and debts.

 

Steel prices are in a continous decrease. The prices over 1000 Dollar/tones, is started decrease by the merchants who face financing crisis by Agust 2008. Then, the producers who saw that the orders was cut off and have hundred thousands of stock, started decreasing the prices by the aim of melting thier stocks.

 

But as you can also see at the graphic next, accordingly to the basic rule of the economy,  quotaiton is defined at the composing point of supply and demand. (Look at the above graphic) If you, as a producer, increase the prices, will find less demand to your goods. On the contrary, if you decrease, you see the increase.

 

On the other hand, on the situations where there is no demand anf there are only people try to sell their goods, when merchants and producers can not find buyer, try to find demand by decreasing the prices. But throughout this period (if there is no demand), it is not possible to mention about a meaningful quotation. When the goods are sold in a price, real price is defined at there. Therefore, the prices, which wanders in market and continously decrease, are absurd prices. Besides, the prices which decrease continously refers that the goods can not be sold yet. Accordingly, it will not be wrong to say that steel prices are going to continue decreasing as can not find the demand for a definite period.

 

The goods sold in little amounts are the equipments which are necessary to be bought in order not to stop the production. Namely, these are the goods which are bought even the prices are 2000 dollar or 200 dollar.

 

 

We were mistaken at only one thing about our estimates at new-years day: We could not estimate the aimless of the prices in such a way. In such conditions, we estimated that the leader of the steel sector, Mittal, would step in and brought a discipline to whole sector. But, it didn’t like this. Mittal entered a great quietness. This certainly has a reason.

Regarding to the sayings, a steel company who made 142 million dolar giro last year, started affecting from credit crisis. It seems that big – small all of the companies are going to see the hell and some of them never return back. We estimate that many of the companies will change the hands, and the government will have to account for saving some of the major companies.

 

We think that many companies in China which are called as below stairs, and infertile, polluting the environment, can not get rid of this crisis. A small quantity of steel producers will remain who are powerful, new and qualified.

Earthquakes and natural disasters has regulative effects. For example, in a storm, hollow-inside trees fall. Good and young trees remain. By this way, only the powerful ones nourish from the rich minerals of the land. As the same, economical crisis have regulative effects. Creaky companies go and powerful companies stand.