Day: 21 August 2020

Polish passenger car production fell -48.5% on-year in the first half of 2020 to only 122,600 units, according to data from Poland’s Central Statistical Office (GUS) monitored by Kallanish.

Output had risen in January and February after a disappointing 2019, but was curtailed from March onwards, with May and June seeing particularly steep on-year drops of -48% and -49% respectively. This was a result of the Covid-19 pandemic impact on the European automotive industry, which has exacerbated already weakened demand from the sector last year. This has seen increased competition among regional auto sheet suppliers who have been forced to find new buyers.

In 2019 Polish car output fell -3.7% on-year to 434,700 units, its lowest since 2003.

Production of commercial vehicles, including trucks and tractors, slumped -36% in H1 to 75,759 units. In 2019 it had hit a new annual record of 207,802 units.

Public transport vehicle output, meanwhile, fell -23% in H1 to 2,761 units, following an annual record 7,362 units in 2019.

Overall Polish automotive production thus slumped -44% in H1 to 201,120 units.

The outlook is more positive, however. Poland’s overall industrial production rose 1.1% on-year in July compared to expectations of a -2% fall. This was helped by a 0.6% growth in the automotive sector. Polish production growth of electric appliances nevertheless slowed to 7.1% last month. “Industrial activity, alongside labour market developments, underlines that the recovery after the first Covid-19 wave continues faster than expected,” ING bank says of Polish industry.

Steel fabricators supplying the automotive industry are not happy about the breakdown in communication with their customers that occurred when Covid-19 lockdowns forced them to alter production.

“At times we learn on the day we deliver that the production plant does not take in material, not now and not for the coming weeks,” says Hubert Schmidt of automotive supplier company Hubert Stünken. “What’s worse, we don’t learn so from the customer, but from the transportation company in between.”

Schmidt is president of German steel and metals working federation WSM. “Our production has been like a quilt, in which some patches are totally quiet, while others keep operating in several shifts,” Schmidt says.

“For three or four weeks, it was like driving in the fog,” says a manager of fasteners maker company Wilhelm Schumacher. The company built up stocks that customers would not buy, and cut its output dramatically, Kallanish notes. Now that production along the chain could resume, he is concerned it could happen at a time when many mills have summer closures. “If automotive customers ramp up production now, they may even face supply shortages,” he says.

Greater weighting should be given to environmental factors in the UK’s procurement of steel, while the higher electricity costs paid by UK steelmakers than their EU counterparts need to be addressed, says the Trade Unions Congress (TUC).

Buying steel from China can produce up to 50 times more carbon than sourcing from the UK, TUC points out.

When the UK introduces its own Emissions Trading Scheme following Brexit in 2021, moreover, it must at least penalise steel producers no more than the current regime, TUC adds.

The comments come as part of the UK trade union federation’s report published on Friday outlining a balanced energy policy to meet the UK’s net zero commitments.

Financial support for the steel industry also needs to be brought forward. “The UK government has announced more than £500 million to help transition, through the Industrial Energy Transformation Fund and the Clean Steel Fund – but much of this is not available until mid-2020s,” TUC says in the report sent to Kallanish. “Bringing this funding forward could help us invest out of crisis.”

TUC says Tata Steel’s closure of its Orb Electrical Steels unit in Newport, Wales at the end of last year was a missed opportunity. An investment of around £20-40m ($26-53m) was seen required to upgrade it to make electrical steel for car engines.

“The electrical steel that Orb could have made for electric motors represented a small part of the value of the power train in isolation, but the capacity could have incentivised others to invest in other essential parts of process, like stamping and laminating, and so persuading companies to build powertrains for electric vehicles in the UK,” says the federation. This could mean lost value of more than £1 billion over ten years to the economy, it adds.

Voestalpine has come up with a manufacturing process to produce lighter weight rail cars, able to carry up to 4 mt more load as a result reducing environmental impact from freighting, the company said Aug. 19.

The Austrian steel and technology group said it has transferred a process for making ultra-high tensile auto parts to railway systems.

In cooperation with the Rail Cargo Group, the cargo subsidiary of the Austrian Railways (OBB), Voestalpine’s steel division and logistics subsidiary, Logserv, has developed TransANT, a design concept for manufacturing freight cars with lightweight modular superstructures.

Voestalpine has already started to supply a complete system for new lightweight freight cars, encompassing high-performance steels and a particular welding technology, which both contribute to the cars’ lower weight and greater performance.

Weight reductions are achieved through the use of stiff, ultra-high tensile section solutions.

“The undercarriage, which is about 20% lighter than conventional models, makes it possible to add loads of up to four tons per freight car,” the company said.

The steelmaker said this is the first time so-called topology optimization is being applied in the construction of freight cars. The technology, which so far has been used in automotive and aerospace construction, involves a software algorithm that works out a particular design proposal based on predetermined parameters yielding a structure that combines minimum weight with maximum tensile strength.

Logserv is already using the first batch of freight cars to carry iron ore, Voestalpine said, adding that the cars’ new design and the additional weight they accommodate should reduce the number of train trips for the subsidiary by about 100/year.

— Ekaterina Bouckley