Steel market Poland: Record steel production and consumption
Last year, the steelworks operating on the Polish market produced a total of 10.3 million tonnes of raw steel, which translates into a growth of almost 15% in the production of this material compared to 2016.
This quite significant growth was possible thanks to the increase of production capacity in the domestic metallurgy by 10 percentage points which, on average, amounted to 80%. Despite this growth in production, in the global ranking of steel producers Poland fell by one position from 18th to 19th position. Amongst EU countries, Poland ranks fifth, only behind such economies like Germany, Italy, France and Spain.
Structure of the Polish steel production
Apart from raw steel, Polish steel industry also manufactures quite a large amount of hot rolled steel products. Last year, the production of such products totalled 8.8 million tonnes and grew by 9.6%. Over 60% of them were long products (5.3 million tonnes) and almost 40% of them were flat products (3.5 million tonnes). The former group was dominated by the production of rods which totalled 2.5 million tonnes. In terms of production output, this was followed by the products wire rod, heavy sections, rails and light sections.
Last year, the group of hot rolled flat steel products was dominated by sheet metals and amounted to 2.9 million tonnes, an increase of 17% compared to 2016. Thick plates accounted for approximately 15% of this product group.
In the category of flat products manufactured using the method of cold processing, there was a growth in the production of sheet metals and cold rolled tapes, with 952 thousand tonnes of these produced. Further, 764 thousand tonnes of galvanized sheet metals and tapes were produced, whilst the amount of manufactured sheet metals and tapes with organic coatings was 291 thousand tonnes, slightly less than the year before.
Consumption of steel products is also growing
Even though the 3% apparent consumption growth of steel products in Poland in 2017 was lower than the growth of raw steel production, the production of Polish steel industry is yet to fulfil the total demand for various steel products. Last year, the apparent consumption of ready steel products was 13.5 million tonnes. Slight increases were observed across all major types of steel products. The highest growth was reported in the apparent consumption of pipes and closed cold bent sections (+9%), less for long products (+5%) and flat products (+1%).
Industries with the highest steel consumption
The dynamic growth of implemented infrastructural investments, con-financed from EU funds has made construction the industry which currently consumes the largest proportion of steel products (e.g. for the construction of roads, buildings, pipelines and other steel structures). In 2017, the construction sector consumed 5.7 million tonnes of steel, i.e. over 42% of the total domestic consumption of this raw material.
The second largest sector in terms of steel consumption is currently the metal products industry with a consumption of 2.8 million tonnes of steel products, whilst the third place goes to machinery and appliances, for the production of which 2.1 million tonnes of the raw material were used last year.
Negative trade balance
Apparent consumption of ready steel products is still largely met by foreign steel. Even though last year the export of steel products was growing much faster, both in terms of quantity and value, the trade balance of the steel industry is negative and was -4.3 million tonnes and -3.9 billion euros respectively. The total turnover of steel products in international trade grew by 8% in terms of quantity whilst their value increased by as much as 24%.
In 2017, the export of Polish steel industry was 6 million tonnes which is an increase of 15% compared to the year before. Germany, Czech Republic and Italy remain the biggest recipients of Polish steel. During the same period, the import of steel products was 10.3 million tonnes and grew by 6%. There was a significant growth of import from other EU countries (+11%) which currently constitutes 82% of the total import of steel products. In 2017, the biggest import in terms of quantity was from Ukraine, Russia and India.
Threats to further development of the steel market
Despite the fact that the economic situation in Poland and in Europe allows to look into the future with optimism, one cannot fail to also observe realistic threats which may threaten further development of the steel market in the foreseeable future. Various tensions in international trade might also slow down future economic growth, which will most likely have a negative impact on the situation of the steel market. On the other hand, the policy of the European Union concerning steel producers from third countries is still quite liberal, which results in the fact that the import of steel products mainly from Asia and former Soviet Union countries remains high.