Stalprofil ups shipments, sees risks to economic growth

Stalprofil’s steel product sales rose 12% on-year in 2021 to 207,721 tonnes, with steel structures sales up 9% to 2,216t. The infrastructure segment however saw insulated pipe sales drop 30% to 1.36 million m2, due to the completion of two large contracts during the year.

The Polish distributor’s steel segment saw revenue surge 64% on-year in 2021 to PLN 924.6 million ($206.4m), thanks mainly to a continued price uptrend until the third quarter, but infrastructure segment revenue fell 27% to PLN 723.7m. Consolidated net profit surged over 350% to PLN 123.3m.

Consolidated domestic revenue rose 12% to PLN 1.48 billion but export sales dropped 27% to PLN 171.3m due to the completion of an insulated pipe supply contract to Lithuania. The main export markets were neighbouring countries, although non-EU European countries generated 60% more revenue than in 2020. Sales to Russia, Ukraine and Belarus comprised 1.6% of revenue and 1.5% of volumes.

A major risk factor going forwards is the war in Ukraine and consequent sanctions on Russia and Belarus, which have impacted supply chains for steel and raw materials, Stalprofil says. In 2021, supply from Russia, Ukraine and Belarus comprised 25% of overall Polish steel imports. The current situation could lead to price fluctuations; slowing economic growth, especially public and private sector investment; the weakening of the zloty; higher inflation; and higher interest rates that hamper investment.

“The domestic market expects a continuation of investments financed from EU funds in gas transmission networks, and road and rail infrastructure,” Stalprofil chief executive Henryk Orczykowski says in a note seen by Kallanish. “Their implementation should have a positive effect on demand and prices in the steel market. A threat to the nation’s investment plans could be the potential suspension by the EU of previously anticipated payments from EU funds due to the escalation of the conflict with Polish authorities over the rule of law.”

Adam Smith Germany