Polish steel billet, bar and rebar producer Cognor, which ran flat out throughout 2020, said March 3 it expected Polish and EU GDP to rebound this year supporting Poland’s crude steel production, which it believed could grow slightly on the year.
The electric arc furnace (EAF)-based company said blast furnace-based steelmakers faced difficulties this year from increasing CO2 permit prices, while EAF mills would continue utilizing their capacity to the maximum.
Polish steel consumption growth may improve due to returning demand from the EU auto sector, Cognor said.
The company said that last year Poland plunged into recession for the first time in almost 30 years with its GDP contracting by 2.8% year on year compared with 4% growth in 2019.
The Polish steel industry responded to the recession with an almost 11.9% reduction in crude steel output to 7.9 million mt, largely in line with the 11.8% cut in the EU’s total.
Steel demand from the automotive industry was the worst affected last year, with EU protectionist measures proving inadequate to offset the fall in local steel output, according to Cognor.
Despite this, Cognor kept its overall steel sales stable on the year and sustained its maximum capacity utilization rate of 100%.
Last year, the company shipped to customers almost 505,000 mt of finished products, up 6% on the year. Rebars comprised 46% of this total. Its finished steel output inched up by 0.5% to 487,100 mt.
External billet shipments dropped 14% from 2019 to 160,000 mt sold in 2020.
The company’s revenue declined by 9% year on year, but its pre-tax earnings (EBITDA) and net profit were significantly higher.
2020 saw steel scrap prices weaken, while iron ore prices rose sharply, enhancing the advantage of EAF mills over blast furnace mills.
EAF producers had this cost position advantage throughout 2019-20, and in Q4 2020 the favorable difference widened further.
— Ekaterina Bouckley