Bowim increases shipments but turns to loss

Bowim’s consolidated steel sales rose 2% on-year in the first half of 2019 to 261,029 tonnes. This was driven by an 18% surge in sheet sales to 96,284t, which offset a -9% drop in pipe and profile sales to 50,330t and a -10% decline in rebar sales to 46,073t.

The steel structures and metals industry segments increased their share in sales by 4 percentage points and 2pp respectively to 25% and 18%, but the construction segment’s share fell 4pp to 17%.

Revenue rose 0.8% in H1 to PLN 685.7 million ($170.7m), but the firm turned to a PLN 1.96m net loss versus a profit a year earlier of PLN 7.5m.

The improved sales were thanks to the seeking out of new customers and the recommissioning of the modernised Sosnowiec logistics distribution centre. Subsidiary Bowim Podkarpacie also commissioned its distribution warehouse near Rzeszow. The better sales were despite the continued price downtrend since April, Bowim says in a report seen by Kallanish.

The EU produced 84.6 million tonnes of steel in H1, down -2.5% on-year, with Polish output falling -6% to 4.9mt. EU steel demand is being stifled by uncertainty surrounding Brexit, as well as weakening economic growth in various member countries. In Poland raw materials and energy costs are high, while the cost of CO2 emissions allowances is rising rapidly, Bowim says. European mills’ attempts to raise prices in H1 after they fell in the first quarter were unsuccessful.

Besides higher CO2 emissions, energy and coal costs, significant uncertainty over increased global capacity utilisation will present a challenge for the steel industry going forward, Bowim concludes.