120,000 construction companies set to halt work to protest sharp increases in iron prices

Gülistan Alagöz - ISTANBUL

REUTERS photo

A total of 120,000 Turkish construction companies are set to halt activities on June 9 to protest a skyrocketing rise in iron prices and a visible undersupply in the material. 

The protests are expected to last one month, according to sector representatives. 

In response to the sector’s demand to decrease iron prices, Turkish authorities said earlier in May that there was no problem with iron production in the country, adding that they would take measures to ease the price increases. 

A leading sector player said the country overcame a tough three years which were full of a series of elections and that the sector was waiting for a revival in activities, only to be thwarted by the iron shortage.

Tahir Tellioğlu, the head of the Construction Contractors Confederation (İMKON) and of the Construction Sector Assembly of Turkey’s leading business organization, TOBB, said a total of 120,000 companies from five federations had decided to halt activities in a bid to call for an urgent action to resolve the iron problem. 

“We resisted this call for the last 15 days in coordination with our [Economy] Minister Nihat Zeybekci, but we will unfortunately have to announce a work stoppage unless a solid rebound is seen regarding the issue by June 9 after final talks with the top management of all respective federations,” he said. 

“It is possible to apply various instruments to ease the hikes in iron prices. If any solid solution is not met through these ways, we will call for a decrease in the value-added tax (VAT) from 18 to 9 percent,” added Tellioğlu. 

Noting that it did not make sense for Turkey to face an iron shortage and a significant rise in iron prices given that the country is one of the world’s top five iron producers, he said: “In the last four months, the cost of a kilogram of iron rose to 2,100-2,250 Turkish Liras from 1,600 liras. While iron producers say they can supply the needed output, we have seen just the opposite in the market.”

But the head of the Steel Producers Association of Turkey, Fuat Tosyalı, said there was no problem in meeting the iron demand. 

“Companies should do good planning and give orders beforehand. They should not send their orders on short notice. Moreover, iron costs no more than 1,900 liras per kilo,” he added.