As the iron and steel industry has the input within almost all manufacturing  sectors, it plays an important role in the industrialization and development of a country. It is a general tendency that the production and consumption of steel are high in the developing countries and the developed countries.

The foundations of Turkish industrialization were laid in 1930s. The first integrated Iron and Steel Works (KDÇİ) began to operate in Karabük in 1939, where Turkey produced raw steel for the first time. In order to meet the demand for flat products, the second integrated plant, Ereğli Iron and Steel Works (ERDEMİR) started production in 1965. In 1977, Iskenderun Iron and Steel Works (ISDEMIR), Turkey’s third integrated steel mill, came on line to meet the demand for long products and semi-products.

Today, there are a total of three integrated works, one (KDÇİ) of which is privately-owned and located in Karabük; the other two are state-owned works located in Ereğli (ERDEMİR) and İskenderun (İSDEMİR). These works have a total production capacity of nearly 5.9 million tons per year. By the end of the 1950’s, the private sector began to invest in the steel industry. The private sector’s first electric furnace steel mill started production in İzmir in 1960. After 1970 private sector investments accelerated with the establishment of many private electric arc furnaces (EAF). At present, the Turkish steel industry has 17 electric arc furnaces, one of which is state-owned, with a total installed capacity of over 14 million tons per year.

In 1999 Turkey had a steel production capacity totalling 19.9 million tons, and of this capacity, 16.5 million tons, or 83% was for long-steel products, which are mostly used in the construction sector. Three million tons of the raw steel capacity is directed to flat products, while the remaining 482 thousands tons is directed to special steel products.

Raw steel production in Turkey rose to 14.3 million tons and Turkey became the 17^th largest steel producing country in the world by the end of 1999. By product type, 80% of total steel production was directed to long products, about 18.3% were for flat products and 1.7% was for special steel in 1999. In terms of the production processes, 62.5% was electric arc furnace steel, 32.5% was oxygen (BOF) steel and 5% was siemens-martin steel were produced. Turkey’s share in world steel production rose to 1.9% and consumption rose to 200 kilograms per capita in the same year.

The iron and steel industry has become one of the major driving forces in the development of Turkish exports. Though recent economic crises in Southeast Asia and Russia had negative effects on the sector, exports reached to $2.1 million in 1999. The steel industry is the second most important sector in Turkish exports.

Classified by product groups, long products accounted in value for 53% of the total steel exports in 1999. The share of flat products was 8.9% and the share of iron and steel tube and pipes was 8.6% in total iron and steel exports.

In 1999 steel products were exported to 149 countries in the world. In the same year, major markets for Turkish steel exports were Italy, Israel, UK, USA, UAE and Greece.

In July 1996 Turkey signed an agreement with the European Coal and Steel Community (ECSC) to mutually abolish customs duties on steel trade. In accordance with the agreement, the EU will abolish customs duties on 630 items and Turkey on the other hand, will abolish customs duties on flat products and special steels whose production is insufficient, and stainless products and some special steels (498 products) which are not produced by the industry at all. Turkey will gradually abolish customs duties on the remaining 132 products (long products and special steels which are produced). Both the European Union (EU) and Turkey will freely determine customs duties on trade with third countries according to the agreement. The agreement will be valid till the year 2001, when the ECSC Treaty will come to an end.

Developments in the iron & steel sector have also a positive influence on the growth of production in iron or steel articles. Among iron or steel articles, casting products have significant importance.

With the continuous demand generated by the Turkish manufacturing industry, the casting and forgings industry of Turkey has experienced booming development both in technology and in market. Today there are 89 large-scale ferrous casting enterprises, 235 small and medium-scale companies and 1369 small scale, family-owned casting companies, which are all privately-owned. There are also 20 state-owned foundries in industry. According to the figures of the State Planning Organisation (SPO) in 2000, 1614 of these companies were producing gray iron and ductile iron casting, 97 were steel casting and 2 malleable iron castings. Turkey has a total production capacity of 1,152,000 tpy. Turkish foundries which are able to produce every kind of alloyed or unalloyed ferrous castings specialise in the production of cast parts for domestic industries.

Where geographical distribution of the sector is concerned, the major foundries, which are all privately owned, are located in Istanbul, Kocaeli, Bursa, Eskisehir, Bilecik, Izmir and Ankara. Small-scale family-owned casting companies are widely spread in almost all regions of Turkey.

From 1990 onwards, the foundry production of Turkey has shown a steady increasing trend due to modernisation and capacity improvement investments.

According to figures of the Foundrymen’s Association of Turkey, 695,000 tons of gray iron castings, 123,000 tons of ductile castings, 12,000 tons of malleable iron castings and 101,000 tons of steel castings were produced in 1998. The total output of the castings industry reached 931,000 tons in 1998. Turkish foundry production has a share of 1.5 % in world production, ranking fourteenth, and a 5.4 % share of European production, ranking fifth in the EU.

The remarkable increase in casting production and exports is due to the increasing domestic demand and government policies, which encouraged many entrepreneurs to invest in the foundry sector. Turkish foundrymen have managed to improve productivity with the use of new technologies and attain low production cost with high quality. The ever developing Turkish foundry industry is currently in a phase of expansion and at the same time aims production at international standards.

At present, the Turkish casting and forging sector has considerable competitive advantages compared with European casting and forging sectors. In recent years the Turkish foundry industry has become an important supplier to Europe which has wide use of castings.

Parallel to the positive developments in production, the Turkish foundry industry showed an outstanding performance in exports. Exports reached a value of $692 million in 1999 and were composed mainly of castings for the automotive and machinery industries. The European Union has a share of 67 % in the castings and forgings exports of Turkey and Germany is the major customer of Turkish castings among EU countries.

In welded and seamless iron & steel pipes and tubes, which is also a significant sub-sector, production reached 1,671,000 tons in 1998. Over 99.7% of annual production of the iron & steel pipes and tubes is for welded pipes and tubes. Today, Turkish welded pipe technology has developed quite well and  is able to produce its own technology. Turkish iron & steel pipe sector has an important export potential in both production capacity and product quality. Exports of the sector reached 185 million $ in 1999.