Turkey’s Energy Market Regulatory Authority (EPDK) announced a 16% reduction in electricity prices for industrial consumers.
The authority also reduced the maximum price of electricity in the free market from 4.8 thousand pounds/megawatt hour to 4.2 thousand pounds/megawatt hour.
According to the Chairman of the Board of Directors of the Authority (EPDK), Mustafa Yilmaz, it is expected that the cost of electricity for industrial establishments, which consume it at the prices available in the free market, will decrease by 10-15%.
At the same time, the discount may not be enough and will only greatly reduce the costs of Turkish steelmakers.
In September 2022, Turkey raised electricity and gas prices for the industry by 50%. The regulatory agency connected the electricity prices rise to the peak in energy prices, especially under the influence of the war in Ukraine.
According to Veysel Yayan, CEO of the Turkish Steel Producers Association (TCUD), the share of energy costs in the Turkish steel sector has risen to 28-30% of total steel production costs on the back of the increase in the gas and electricity cost.
The capacity utilization rate of Turkey’s steel industry has fallen from 75% to less than 60% as producers cut shifts or shut down operations.
The Turkish Steel Producers Union (TCUD) expects steel production in Turkey this year to decline by 13%; the country’s factories are studying the possibility of stopping production due to high-energy costs.
Turkey was the seventh largest steel producer in the world in 2021, with a production of 40 million tonnes, an increase of 12.7% compared to 2020.