Turkey earthquakes paralyze a third of steel production

About a dozen facilities in Iskenderun and Osmaniye, near the epicenter of the February 6 tremors, account for a third of national steel production, according to Veysel YayanSecretary General of the Turkish Association of Steel Producers.

Although plants in the area were not physically damaged, many workers or their family members died, while survivors struggle to get by in precarious conditions, he said.

“All steel mills in the area are closedhe said by phone Monday. “The plants could remain closed at least until the end of this month, or possibly until mid-March.”

Turkey is one of the world’s top 10 steel producers and exporters, and the industry is among the first to assess the aftermath of the deadliest tremors to hit the country in nearly a century.

Although the impact on regional activity is still not entirely clear, Bloomberg Economics estimates that addressing the consequences could require the equivalent of 5.5% of gross domestic product in public spending.

A business group has said the cost of the earthquakes will exceed $84 billion, including damage to buildings and loss of national income. The reduction in the labor force would cost another US$ 2.900 million, said the Confederation of Companies and Businesses of Turkey in a February 10 report.

‘They will need to calibrate’

Steelmakers are facing another disruption after having to send in machinery and equipment to help with the rescue efforts. “Cranes and some other key equipment will need to be calibrated” after the job is finished, he said Yayan.

Iskenderun Demir ve Celik AS, a unit of the largest steel group in TurkeyErdemir, Toscelik of Tosyali Group, Tosyali Demir Celik AS and Tosyali Toyo Celik AS, a joint venture with Japan’s Toyo Kohan Co. Ltd., MMK Metalurji, a unit of Russia’s Magnitogorsk Iron and Steel Works, are among the companies that operate in the region.

Steel producers from other parts of Turkey will have to give priority to domestic demand over exports, according to Yayan. The country’s annual steel production capacity of 55 million tons a year is more than enough to meet local demand, he said.