The Polish market remains dependent on imports
In 8 months 2024, the share of imports in apparent consumption was 82%
Polish steel industry is going through difficult times: domestic production is decreasing, and demand is mostly met by imports. Polish plants are losing their competitiveness, in particular due to the high cost of electricity. More and more products from Asian countries are appearing on the market – distributors are looking for options to meet domestic demand at the most profitable offers.
Despite the problems of the steel-consuming industries, Poland remains a large enough market in which local producers are able to regain their position, and the upcoming launch of Hut Czestochowa could be the first step in this direction.
More details — in interview with Piotr Sikorski, the Head Manager at Polska Unia Dystrybutorow Stali (PUDS).
What dynamics of steel consumption in Poland do you see this year? What are your feelings about the market?
When we talked about the steel market in Poland last year, it may have seemed that the first half of the year was moderate, but if we repeat it somehow, the market will end the year on a positive note. It turned out that this was only the beginning of problems that unfortunately continue to this day.
It’s a very tricky year we have. Looking at the data alone, it may seem like the market is improving, as we’re seeing an 8% y/y increase in consumption so far this year. It looks quite impressive, but please remember about the low base effect. Moreover, only in August did consumption drop below 1 million tons/monthly for the first time this year – below the stable minimum for the market. However, if we look at the market more broadly, the picture is not so positive. Since mid-2023, prices on the Polish market are practically in a downward trend and inventory levels remain high, which with a rising cost is a vicious combination for business profitability. The August and September macroeconomic data are also disappointing, probably reducing GDP at the end of the year to below 3%. This will also drag down the level of steel consumption growth, which will probably drop at the end of the year from the currently mentioned 8%.
How can you describe activity in different steel consuming industries? For example, we see that according to new residential starts construction market in Poland is revitalizing. Is it really so?
The condition of the construction market is currently causing my greatest concerns. As for the residential market, after several months of solid growth, investor activity stabilized in September. There was an 1% y/y decline in building permits and a 1% increase in the number of construction started. The decline in developers’ sales undermine the upward trend. Among the largest companies, this decline was 12% in three quarters, and in the third quarter alone the sale was 44% down y/y. The market currently offers the highest number of flats since 2016. This might be the biggest cause of stagnation, next to uncertainty regarding government’s future housing programs, reflected in a drastic decline in granted housing loans. Unfortunately, this may result in investors suspending projects, denying a much-needed impulse for the steel industry. In other segments, the situation is only worse. In the three quarters of 2024, non-residential construction recorded a decline of 13% and engineering construction by 8%. If I were to look for positives, I would point out the increasing, although still too slow, pace of contracting EU funds from the 2021-2027 budget and the almost three-fold increase in the NRRP budget to be launched in 2025, compared to the current year.
What is import’s share in steel consumption, considering different segments of the market? Market of flat products traditionally depends on imports in the EU. What is the situation in Poland?
Even though the import of steel products to Poland in 2024 is decreasing, and in the case of flat products – remains at the last year’s level, import penetration is still very high.
In January-August 2024, the share of imports in the apparent consumption of all finished products amounted to 82%. For flat products it was 95%, for pipes and tubes – 94%. Due to dominant position of long products in steel production in Poland, the share of import in this group amounted “only” to 57%.
Do you feel any direct or indirect impact of increasing Asian imports? What are the main sources of steel imports in different segments?
As I said, so far in 2024 imports are falling, but despite this, Asian supplies are increasing. These are not yet significant amounts in terms of tonnage, but the growth dynamics is. I am thinking mainly of flat products, which have the highest import penetration. For example, this year we are seeing an increase of over 140% y/y in deliveries of hot-rolled products from Indonesia and a 160% increase in deliveries of cold-rolled sheets from Japan. In my opinion, in terms of volumes, supplies of coated sheets from South Korea are starting to be noticeable for the market – here the increase has already amounted to 91% and even higher from India – 113%, each almost 100 thousand tons this year.
It is worth emphasizing that in each product category, the European Union is the dominant supplier of steel to Poland (mainly Germany), and among third countries, of course, Ukraine.
Is there a chance for Polish steelmakers to increase their share on the domestic market? What conditions are necessary for this?
A very difficult question. If the answer was simple, the level of import penetration of major product groups would look completely different. Poland was and is heavily dependent on imports of finished steel products. To some extent, it is caused by the structure of production. The Polish market produces mainly long products, but consumes mainly flat ones. Therefore, the import of flat products is indeed very high, accounting for nearly 70% of all imports. So, on the one hand, some systemic changes would have to take place, but above all, the Polish steel industry must be more competitive in relation to foreign, mainly European, supplies. There is still a lot to do here, especially with regard to energy prices for mills. I can’t stress this enough: having strong domestic suppliers pays important function of stabilizing both prices and supply. On the other hand, you can`t blame distributors they seek the best deal possible.
Do you see any competition distortion because of continuing imports of Russian slabs in European countries?
Any market disruptions are currently difficult to see, mainly because the market is weak and can be easily compensated. The real test will be a high market, which will proof how strong the dependence on Russian semi-finished products really is. Supplies of Russian slabs to Poland are marginal, but on the other hand, significant import of products, based on Russian slabs is present on the market and doing quite well. This is something that obviously poses a threat to supplies, especially for strategic purposes.
How do you assess the situation on the domestic plates market? What are the main drivers on it?
Poland has all it takes to make this segment develop dynamically, also based on domestic production, which currently accounts for a negligible percentage of deliveries. End customers from construction, shipbuilding, energy, machinery and mining are strongly present on the market, although of course, in the current market situation, they also have their problems. This is a really large market, approximately 1 million tons per year, i.e. 12-15% of all steel consumption in Poland. Unfortunately, it is not sufficiently powered from the military side. Poland spends a lot of money on armaments, but largely buys it abroad. Plates market would look completely different if greater production for army needs was carried out domestically.
How can you assess prospects of Huta Częstochowa’s relaunch? If this plant resumes production, how can it impact on the market? Can the market absorb additional supplies of plates?
There is definitely a place for Huta Częstochowa on the Polish market, both in terms of profile of production and its characteristics. Unfortunately, the mill has a very turbulent history and lacks a stable period in which it could built its position on both the Polish and European markets. And the domestic market is a really large one, of which domestic production accounts for only a tenth. As in the case of other groups of flat products, the level of import is huge.
A year of shutdown is certainly not conducive to rebuilding the plant’s market position, especially in the context of competition such as Vitkovice Steel, which has normalized its financial and ownership situation and also has a stable source of low-emission semi-finished products.
The steelworks begins, so to speak, once again, the old-new stage, as it returns to the state owned company after 20 years. The four-month lease for Węglokoks is probably the first step to acquisition. The value of the facility is still relatively high, and the starting price will probably be higher than the one it had after the bankruptcy of ISD. I hope that production will start in the new year and this time it will become a permanent part of the Polish steel industry.
Source: gmk.center
ArcelorMittal Poland to build hydrogen plant to power steel sheet galvanizing lines
ArcelorMittal Poland has contracted Linde Gaz Polska to build a hydrogen production plant at its Krakow branch to supply process gas to two galvanizing lines, the steel company said.
The PLN 100 million ($24 million) investment has already started with design work underway. The plant will be producing hydrogen from natural gas with the startup planned for the end of 2026.
“The project with Linde is [meant] to ensure a reliable supply of hydrogen for our sheet galvanizing operations,” the director of the Krakow branch, Lukasz Skorupa, said in the company’s statement.
Separately, ArcelorMittal Poland is building several hydrogen furnaces that will make it possible to eliminate ammonia in the annealing plant boosting its safety, Skorupa said.
ArcelorMittal Poland has not used coal as a fuel since 2018, and it terminated coke production in July 2024. Its installations — the hot rolling mill and the cold rolling mill, the galvanizing and color-coating lines — now operate exclusively on natural gas, according to Skorupa.
“We are constantly improving the quality of our products, expanding their range, and at the same time gradually reducing our impact on the environment,” ArcelorMittal Poland CEO Wojciech Koszuta said.
“In our processes, we replace technologies with those that have a lower impact on the environment. Hence the elimination of ammonia and the transition to hydrogen.”
Węglokoks considers acquisition of pipe producer Rurexpol
The company promises to resume production at Huta Częstochowa in early 2025
Poland’s Węglokoks is considering acquiring pipe producer Rurexpol, which was one of the divisions of the Czestochowa steel mill before it was sold to Alchemia. This is reported by WNP.
In November 2024, Alchemia began the process of liquidating Rurexpol’s branch in Czestochowa due to the expected loss of its ability to compete in the market amid the deteriorating situation in the European steel industry.
“We are considering this potential transaction. When Rurexpol was part of a steel plant, its operating model was cost-effective due to access to resources and sharing of some services. The plant produces interesting products, including drill pipes, and we believe it would be a very interesting business to acquire. However, it is too early to talk about it,” said Tomasz Ślęzak, President of Węglokoks.
As for the Huta Częstochowa steel mill, which Węglokoks has been selected as a tenant, the company’s launch plan is designed to take 45 days. The cold start is scheduled for December 20 this year, with production resuming in January 2025. Maintenance services have already started preparations.
The plant is expected to produce 10 kt of steel in the first month of operation and double this in the second month. In addition, salary payments to employees have already begun.
Węglokoks also notes that it is interested in acquiring Huta Częstochowa, as it “fits into the company’s operational logic” and will reduce dependence on raw material suppliers.
“The big advantage of the plant’s foundry facilities is that they can cast billets and slabs. We can supply raw materials to the plate mill in Batory and to Huta Łabędy,” explained Tomasz Ślęzak.
Jarosław Guptysz, Production Director of Huta Częstochowa, believes that there are no threats to the implementation of the estimated 45-day launch plan for Huta Częstochowa.
On November 19, Węglokoks signed a lease agreement for the Czestochowa steel plant with the company’s insolvency administrator. To fulfill the agreement, Huta Częstochowa sp. z o.o. was established to take over the employer’s obligations to the bankrupt plant’s employees and will be responsible for restoring its operations.
Source: gmk.center
Polish steel rebar, wire rod prices decrease further on poor demand
Wire rod
Polish mills announced lower offers for October-delivery low-carbon drawing quality wire rod, at 2,700-2,750 zloty ($692-705) per tonne CPT, sources told Fastmarkets.
In comparison, at the beginning of September, similar material was on offer at 2,800-2,850 zloty per tonne CPT.
But persistently low demand has made producers revise their offers downward, Fastmarkets understands.
Fastmarkets’ sources estimated the tradeable market level at 2,650-2,700 zloty per tonne CPT.
As a result, Fastmarkets’ price assessment for steel wire rod (drawing quality), domestic, delivered Poland, was 2,650-2,750 zloty per tonne on Friday, decreasing by 50 zloty per tonne from 2,700-2,800 zloty per tonne on September 27.
“Demand is still very weak, and there is no restocking,” a distributor source told Fastmarkets. The source added that the situation remained unpredictable due to the conflicts in Ukraine and the Middle East.
Import offers of low-carbon drawing quality wire rod from Italy to Poland were heard at €630-650 ($695-717) per tonne CPT, depending on the destination.
From Ukraine, offers of mesh-quality material were heard at €600-610 per tonne CPT.
Moldava-origin mesh-quality wire rod was on offer at €620 per tonne CPT.
Rebar
Prices for Polish rebar also decreased during the assessment week, and were heard at 2,530 zloty per tonne CPT.
In comparison, at the beginning of the previous month, Polish rebar was on offer at 2,610-2,660 zloty per tonne CPT.
Market participants estimated the tradeable market level for the assessment week to be 2,500 zloty per tonne CPT.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,500-2,530 zloty per tonne on Friday, down by 70-75 zloty per tonne from 2,570-2,605 zloty per tonne on September 27.
In the secondary market, prices for rebar from stock were heard at 2,620-2,650 zloty per tonne CPT, depending on the region.
Demand for rebar in Poland also remained weak, according to Fastmarkets’ sources.
The completion of some significant construction projects will be postponed until next year, Fastmarkets understands.
“Some infrastructure projects, which are supposed to be funded by the EU, will start no sooner than the first half of 2025,” a second distributor source told Fastmarkets.
Besides, it was not clear yet whether the government’s program to grant low-interest-rate loans to first-time home buyers would continue. The program was expected to support the residential construction sub-sector.
“The government does not even know what form the program would take. I doubt it will come into force in the first half of next year,” the second distributor said.
Polish domestic rebar prices were still under pressure from imports, Fastmarkets understands. Import offers of rebar from European suppliers to Poland were heard at €600-620 per tonne CPT.
KRUDO Industrial to sell a fully operational seamless pipe mill in Poland
KRUDO Industrial, a global industrial asset monetization firm, is selling a fully operational seamless pipe mill in Poland. The mill, owned by Alchemia Group, produces high-quality, hot-rolled, small-diameter steel tubes used in various industries, including transportation, construction, and shipbuilding. The equipment is state-of-the-art and certified to meet international standards.
Alchemia is selling the mill as part of its restructuring efforts to adapt to changing market conditions. KRUDO will handle the global marketing and sale of the assets, as well as project management during the relocation process. The sale presents a unique opportunity for buyers looking to acquire advanced seamless pipe manufacturing capabilities for their operations.
Source: projects-krudoind.com
Court overturns Czestochowa insolvency following Liberty appeal
The Czestochowa regional court has repealed its decision to start bankruptcy proceedings against Liberty Czestochowa following an appeal by Liberty, Kallanish notes.
The court declared the Polish plate maker insolvent in July following a protracted production stoppage in 2023-24 and a working capital shortage. Its appointed administrator subsequently launched a tender to lease the plant, with five companies reported to be in the running, including Metinvest and Weglokoks.
Liberty appealed, claiming the business demonstrated strong support from its largest creditor and was already undergoing a “robust” restructuring and restart process.
Liberty Steel Europe chief executive Thomas Gangl says: “This is a positive result and means we can continue to move towards a sustainable future for Liberty Czestochowa. We believe the business is well positioned to support Poland’s fast-growing defence and sustainable energy sectors with its green steel plate. Our restructuring plan will be the best route to secure sustainable employment and production at Czestochowa and the repayment of all of its creditors.”
Liberty Czestochowa has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity.
It is one Liberty plant struggling to survive in Central and Eastern Europe, along with Liberty’s Czech steelworks in Ostrava – also up for sale – and its Dunaújváros mill in Hungary. Production at both units has been idled for some time. However, the Hungarian plant recently received China Export and Credit Insurance Corporation funding for its transformation to EAF steelmaking.
Adam Smith Poland
Prices for Polish rebar inch lower amid poor trading
Fastmarkets’ weekly assessment for steel reinforcing bar (rebar), domestic, cpt Poland — which has been falling since July 19 — reached 2,600-2,640 zloty ($669-679) per tonne on Friday, down by 10-20 zloty per tonne from 2,610-2,660 zloty per tonne on September 6.
A local producer offered rebar to many Polish steel traders at 2,600 zloty per tonne CPT, sources told Fastmarkets. This urged other mills in the country to adjust their offers to similar price levels.
Buyers estimated the tradeable market level at 2,600-2,640 zloty per tonne CPT, depending on tonnages.
Lower scrap prices on the Polish market were also among the reasons for the decreasing rebar prices, Fastmarkets understands.
Scrap prices in September contracts decreased by 90-110 zloty per tonne, a distributor source said.
“Consumers in Poland are aware of these developments, and when the local mills try to offer higher prices, they do not accept these offers,” the source added. “No one is buying huge volumes now due to the decreasing rebar prices.”
Competitive imports also put additional pressure on domestic prices.
German material was heard offered to Poland at €610-615 ($673-679) per tonne CPT. For deliveries close to the border with Germany, the price could drop to €605 per tonne CPT, sources told Fastmarkets.
Offers for November-delivery rebar from Ukraine were heard recently at €570 per tonne DAP border for material with 10-32 mm diameter, which nets back to €600 per tonne CPT.
According to a second distributor source, slow demand, combined with strong competition from imports, will continue to put downward pressure on Polish rebar prices.
Interpipe tests rail deliveries via Poland
Ukraine’s Interpipe is testing a new logistics route for delivering products to EU countries using rail and road transport, in particular through a terminal in Poland, the company confirms to Kallanish.
“Interpipe is currently carrying out test shipments of pipes by rail cars to a terminal with a wide-gauge rail track in the polish city of Chelm,” the company’s procurement and logistics director, Oleksiy Yanovsky, tells Ukraine’s Centre for Transport Strategies (CFTS). “The products are then reloaded into trucks and delivered to their final destination in Europe.”
Interpipe has also very carefully studied the possibility of using the Danube for deliveries to EU countries. “However, unfortunately, the current level of service does not allow it to compete with direct road transport either from an economic point of view or from the point of view of transit time,” he adds.
“This method is relatively economically justified, given the current level of rates for cars, but has a number of disadvantages, in particular, the issue of combating rust on the surface of pipes arises,” Yanovsky claims. “However, it is unlikely this method of delivery will be acceptable for railway products due to the extreme sensitivity of these products in storage and transportation conditions. For railway wheels and wheel pairs, direct road transport will probably remain the most appropriate method of delivery to customers in Europe.”
Earlier, Interpipe said it was trying to reach pre-war production levels through the development of its Interpipe Niko Tube product range (see Kallanish passim). Pre-war output was some 70,000 tonnes/month compared to 50,000 t/m today.
Interpipe produced almost 43,500t of rail wheels in January-June, a significant on-year increase (see Kallanish passim).
In 2023, it supplied 387,000t of pipe and 95,000t of railway products.
Svetoslav Abrossimov Bulgaria
Polish steel rebar prices inch downward on low demand, oversupply
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, cpt Poland, was 2,680-2,730 zloty ($674-686) per tonne on Friday, widening downward by 20 zloty per tonne from 2,700-2,730 zloty per tonne the previous week.
Polish mills were heard to be hoping to achieve 2,750 zloty per tonne CPT, but lower offers at 2,700 zloty per tonne CPT were available in the market this week, sources told Fastmarkets.
Market participants estimated the tradeable market price at 2,680-2,730 zloty per tonne CPT.
According to some sources, even lower prices at 2,600-2,650 zloty per tonne could be achieved for large volumes exceeding 1,000 tonnes. But these were not included in this week’s assessment because they were not in line with Fastmarkets’ methodology.
“Demand [in Poland] is currently… moderate, but there is oversupply in the market, and that is why the prices are going down,” a distributor source told Fastmarkets.
According to a second distributor source, only the cut-and-bend sector in Poland was performing well at the moment, but demand in general remained low.
A producer source agreed that demand for rebar in the Polish market remained comparatively low, with the summer holiday period also having an effect.
“No significant changes are expected in August,” the producer source added.
In terms of any future developments in Polish rebar prices, the first distributor source said that, in summer, even significant price decreases would not revive the market.
“I am afraid that in September, when mills come back to the market, and demand is still not so good, there could be more price decreases,” the first distributor source said.
The same source added that more significant funding from the EU for infrastructure projects, which could eventually support the local demand for rebar, would come no earlier than next year.
In terms of imports, offers of rebar from Germany were heard at €625-635 ($675-686) per tonne CPT.
Ukrainian material was offered to Poland at €570-580 per tonne DAP border, sources told Fastmarkets.
Kametstal to offer new rebar grade to Polish market
Kametstal, a subsidiary of Ukrainian steel producer Metinvest, has received international compliance certificate No. 020-UWB-3057/W, which will allow it to supply B500B rebar in diameters of 8-32mm to the Polish market, the company has announced. The certificate will be valid until 2028.
This means that Kametstal will be able to expand its product portfolio in Poland.
According to Fastmarkets’ sources, the first volumes of this material have already been traded in the Polish market.
ArcelorMittal Poland eyes two BF operation following restart
ArcelorMittal Poland (AMP) has completed the revamp of its Dabrowa Gornicza plant’s blast furnace no.2 and blown the unit in, the firm says.
The work, which began at the end of March, included the replacement of the furnace hearth refractory lining as well as the construction of a new cooling system and modern gas treatment plant. It will result in the reduction of 45,000 tonnes/year of CO2 emissions. Moreover, electricity consumption has been lowered nearly 400 MWh per year and over 18,000t of dust are recycled and reused in the steelmaking process.
The firm tells Kallanish it now plans to operate both blast furnaces at Dabrowa Gornicza and has no intention of idling either one. BF3 was restarted in January, following its idling last September due to weak demand, in preparation for the shutdown of BF2 for revamping, which cost PLN 720 million ($167m).
AMP saw crude steel production fall 15% on-year in 2022 to 3.4 million tonnes, thereby dropping below 2020-pandemic output of 3.9mt.
Adam Smith Poland