The European energy crisis and Ukraine war-related trade sanctions have resulted in Poland becoming a net rebar exporter, thereby benefiting its trade position, points out Barbara Smith, president of US steelmaker CMC which has a steel mill in Poland.
“The European energy crisis, combined with trade sanctions, have impacted historical trade flows in the region, which has benefited Poland on a relative basis. Poland has recently moved into a net rebar export position compared to a fairly large net import position a year ago,” Smith said during CMC’s November-quarter earnings call this week monitored by Kallanish.
“Electricity price volatility relative to the broader EU has tended to be less extreme in Poland over the last year due to a variety of factors, which has created a favourable cost dynamic for Polish producers. Energy costs have been both lower and more stable, providing some protection from imported materials originating from other European Union countries,” she added.
Non-EU rebar imports have meanwhile gone to EU countries that are more logistically accessible and experiencing higher energy costs. The supply side of the economic equation is thus helping to offset much of the detrimental economic impact on CMC Poland, Smith observed.
As for natural gas costs, chief financial officer Paul Lawrence said gas contracts are reset twice a year in October and May. CMC Poland was paying pre-war prices until October, and then saw a six-fold rate hike thereafter. Luckily, the mill’s natural gas consumption is limited to the reheating furnace and therefore not a major cost, he concluded.
According to Poland’s Central Statistical Office (GUS) latest available data, the country imported 344,411 tonnes of HS code 721420 rebar in January-October 2022, down 41% on-year. Germany remained top supplier, but intake from Russia and Belarus reduced notably. Exports meanwhile surged 40% to 292,051t, with Germany remaining the top market.
CMC Poland increased shipments 30% on-year in its first fiscal quarter through November 2022 to 473,000t (see separate story).
Adam Smith Poland