LONDON (Reuters) - Turkey"s largest steelmaker Erdemir (EREGL.IS: Quote, Profile, Research, Stock Buzz) has left its options open for further production cuts as it does not expect collapsed steel demand to recover any time soon.
"I don"t see the demand recovering significantly," Coskun Ulusoy, chairman of Erdemir, Europe"s eighth largest steelmaker told the Reuters Global Mining and Steel Summit in London.
Global steel demand and prices have tumbled since mid-2008, as recession slashed demand from key steel consumer sectors such as automotive and construction, forcing steelmakers across the globe to reduce production sharply.
"We"re talking about five years to go back to the good, old days," he said, referring to the demand levels seen in 2007 and 2008. Global crude steel production fell to 1.33 billion tonnes in 2008, from a record of 1.345 billion tonnes in 2007.
Ulusoy said currently the Eregli plant in northern Turkey was running at full capacity, while production at Isdemir, located in southern Turkey was at 70 percent.
"We can go to 50 percent in Isdemir if circumstances warrant it," Ulusoy said. The Group has total crude steel capacity of 10.8 million tonnes.
The Eregli plant was producing a form of specialty flat steel, used in pipelines, which allowed production to be kept high as demand for that product remained resilient, Ulusoy said.
But for long products, which are used in construction, he predicted a grim picture.
"Long steel is not going to be a happy story this year," he said, adding that the demand from Dubai, the main export market for that material, has dried up.