Investments in Turkish aluminium market

The Turkish aluminium industry comprises around 1500 companies with approximately 20,000 employees. Turkey has a primary aluminium production capacity of 65,000 tons per annum by processing bauxite reserves in the region. Eti Aluminum is the only primary aluminium producer in Turkey, while there is also secondary aluminium production from scrap. The country is the major hub for aluminium downstream production and around 900,000 tons of primary aluminium was imported in 2012. High energy and labour costs in developed countries have resulted in the shifting of production to Turkey. Key aluminium consuming industries such as automotive, construction etc. and demand for semi-finished and finished aluminium products for the packaging industry and electric household devices have been influential factors in the growth of the sector.

Turkey produced a total of approximately 920,000 tons of aluminium products in 2012; extrusion, secondary aluminium, and flat rolled products (FRP) constituted the major part. At present, construction, packaging, and transportation sectors are the key drivers for domestic aluminium downstream products demand. Assan Aluminum and Teknik Aluminum are the main flat aluminium producers.

The key aluminium downstream products exported from Turkey are flat-rolled products and extrusions, as there is an excess supply in domestic market. There is a huge opportunity for primary aluminium production in Turkey as the gap was 897,470 tons in 2012.

Primary aluminium

Eti Aluminum is the only liquid aluminium (primary aluminium) producer in Turkey with annual production capacity of 65,000 tons per annum; its key products are aluminium ingot, billet, slab, alloyed ingot, hot roll and sheets. Primary aluminium imports have been growing at a Compound Annual Growth Rate (CAGR) of 11.8 percent over the period 2008-2012. Imports are majorly from Russia, Tajikistan, and Qatar.

Turkey’s total bauxite reserves have been estimated to be around 90 million tons. These bauxite reserves can be classified into different groups according to reserve contents and technological properties. There are diasporic, boehmitic and diasporic-boehmitic bauxite reserves in Turkey, whereas only boehmitic bauxite reserves have been used for alumina production. However, the greater part of diasporic bauxites has not been investigated until now. Turkey holds 0.4 percent of world bauxite reserves and has 0.3 percent of annual production in the world. Besides alumina & aluminium production, bauxite is also used in the production of cement with alumina. Turkey’s bauxite reserves are enough for nearly 60 years and hence, Turkey is poised to become a major hub for primary aluminium production over the coming decade.

Conclusion

Turkey is majorly import-dependent due to lack of domestic supply of primary aluminium. Around 85 percent of the total imports were primary aluminium whereas the main exported products include extrusion and flat-rolled products. Turkey not only provides opportunity for the primary aluminium sector but also offers potential for the development of downstream industries like aluminium foils and Wire Rods. Turkey's per capita consumption of aluminium is around 8 kg compared to the world average of 12 kg. However, low penetration of aluminium indicates high growth potential and opportunity for investors to exploit the untapped market. These strategic advantages, coupled with expected demand growth, make TurAir Jordan VIII 8 Shoes