The outlook for Polish economic growth in 2018 has improved from forecasts made last year, with Gdp now set to rise over 4% this year. Steel consumption, meanwhile, should grow 2-3% and 1.9% in the EU as a whole. However, US 232 steel tariffs look set to change trading patterns, which could have a negative impact on the EU market. This is according to top-three Polish distributor Konsorcjum Stali (KS).
Stable consumption should help support current steel price trends; however, 232 tariffs are a new factor that could destabilise the situation, according to KS. “The US’ protectionist trade policy could result in repercussions from other countries and lead to a trade war,” the distributor says in a report seen by Kallanish. The tariffs are “… one of the biggest threats to economic stability in the coming years.”
In 2017 KS increased sales 5% on-year to 639,000 tonnes. This was driven by a 7% rise in traded product sales to 398,000t. Rebar sales rose 15% to 168,000t, but sheet deliveries fell -6.8% to 69,000t. Z and G sections sales were flat at 60,000t. Sales of KS-produced or processed products, meanwhile, rose 3.4% to 241,000t.
Sheet deliveries nevertheless generated 17.9% more revenue at PLN 183.4 million ($51.35m) due to the gradual ramp-up of the coil service centre in Krakow, which was opened in 2013, and the resulting increase in cold and hot-dip galvanized coil processing.
Exports accounted for 0.56% of KS revenue in 2017, down from 0.58% in 2016.
Celsa Huta Ostrowiec and CMC Poland accounted for 26.2% and 19.2% respectively of KS’ procurement in 2017.
KS says the anticipated investment into developing the Polish railways and energy sector, as well as further expansion of road infrastructure and residential construction will continue to generate significant steel demand. However, Brexit will result in a reduction of EU structural and investment funding available for poorer member countries. “This could have a negative impact on the scope of investments realised in Poland after 2020, and therefore also have a negative impact on steel demand in Poland,” KS observes.
KS reported a 26% increase in revenue in 2017 to PLN 1.53 billion, but net profit fell -3% to PLN 41.55m due to higher costs.
