Asian Metal: Please provide a brief introduction of Ekin Maden and please outline the market position of Ekin Maden in the chrome industry.

Cenk: Ekin Maden Group of companies is a Turkey’s leading company in the metals and minerals sector, mainly working in the area of non-ferrous metals such as zinc, lead, copper & aluminium and minerals like chrome, manganese, iron, zinc, lead, copper ores and concentrates. The company has been dealing with non-ferrous mining for almost 30 years and has been exporting to all over the world.

In 2012, the group has exported approximately 150,000 tons of zinc & lead concentrates as well as 400,000 tons of chrome ore and concentrates that made the company the leading mineral exporter in Turkey.

Ekin Group of companies operates several mines in Turkey for chrome, zinc and lead, as well as a copper mine in Albania with a copper concentrate plant which has the latest technology and highest production capacity in Europe. Being one of the leading players in the Turkish metal industry, the company annual turnover is around 1 billion USD.

As for chrome business, apart from supplying our own material, the company has long term contracts with several mines in order to ensure that we have the required quantity and quality of material to supply to our consumers.

With the company’s new investments in this field, according to the Turkish Minerals and Metals Exporter's Association, the company has been awarded to be the No#1 top exporter from Turkey for worldwide sales.

Asian Metal: Can you give a brief summary of the chrome market in the first half of 2013 and what is the main factor that caused prices to fall significantly after the Chinese New Year?

Cenk: As in all markets, supply and demand is the major constraint for the pricing of any commodity. Just after the Chinese New Year, with Kazakhstan restarting to deliver ferrochrome after their winter and South African producers trying to deliver materials, especially their UG2 materials, at any price, brought an oversupply of chrome ore to the market, coupling with the drop of stainless steel mill tendering prices for ferrochrome, have placed a downward pressure on chrome ore prices.

Asian Metal: How did Ekin Maden react to the falling price trend? Did you reduce output?

Cenk: For the chrome business, today we are a major trader at the market, though absolutely it is not our decision to reduce the output. But as a partner to our suppliers and in our business model, where we are financing and marketing their goods, at a time when producers are making loss, we have advise our partners that up to a certain period of time we will cease supply and wait for the market to rebound. We have declared this situation in some international magazines and react accordingly in March’13 conferences as well. This idea was followed by all major producers and traders of Turkish chrome ore, and has lead to a shortage of mainly Turkish concentrates, which brought the market back to the reasonable levels.

Actually I believe our statement was the voice of all Turkish producers who were suffering and making loss throughout the past year.

Asian Metal: What is your expectation about the second half of 2013?

Cenk: Today (early July), market prices are stable with very low demand, which is what we have expected and experienced in the past years. We predict that slow demand will continue in the 3rd quarter and prices may decrease marginally, but by the 4th quarter business will rebound and will continue in 2014.

Asian Metal: How about 2014?

Cenk: Chinese market is the leading purchaser of chrome ore and concentrate, where Turkey is the 2nd biggest supplier with 20% market share behind South Africa leading with 50%. We believe that Chinese Stainless steel market will grow around 1% compared to 2013 and will reach 18 million tons, thus demand for ferrochrome and chrome ore will be stable on yearly basis.

Asian Metal: What will be the major challenges ahead of the Turkish chrome industry in the next few years?

Cenk: In the last few years, Turkish chrome industry has faced significant fixed cost increases mainly in terms of energy, fuel and labour, which has led to low or even no profit from the business, therefore some have decided to stop their productions, while some are struggling but still trying to survive for more time.

Every passing year, we need to get deeper for the ore and costs are increasing which makes it more difficult to make profit with the existing worldwide chrome ore prices.

Asian Metal: And what should the industry do in order to overcome these challenges?

Cenk: The problem at both the supplier side and end user side is the same. We need consolidation.

There are a lot of small-sized companies causing chaos at the market. The big companies have the ability to invest big and to cut costs where necessary, while maintaining a stable margin. That’s why many small sized mines and small ferrochrome plants are disappearing everyday and we started to see big capacity plants in China and mines in Turkey.

Asian Metal: What is Ekin Maden plan in the future development plan? Will Ekin Maden look to reduce investment size due to the sluggish and volatile market?

Cenk: Actually Ekin Maden has more projects and investments to do for 2H 2013 and 2014. The company has some plans to invest in some small mines, combining them and increase production capacity. We also like to do some toll treatment at some ferrochrome plants in Middle East, while starting again in the Albanian market with strong moves.

2013 forecast is to make an 8% increase at export volume compared to 2012. The first half of 2013 showed good signs to fulfil this target.

Asian Metal: Anything you would like to add?

Cenk: We believe that, for every player in this market, there is still a long way to go.

We hope that the cooperation of all participants will give hope and support to this market and we will see better days.