The metallurgical sector is one of the most important branches of the manufacturing industry in Poland. The largest production centers are located in the Silesian and Masovian voivodeships. Polish metallurgy compares very well to world metallurgy, as it is one of the most modern branches of this sector in Europe. As a result, our country is among the leaders in terms of the quality of produced steel and in limiting emission levels.
In the Polish metallurgical industry iron and non-ferrous metal metallurgy dominate, with the majority of production focused on steel. The development of the sector depends on many factors. One of the main factors determining its development is the condition of the industries that use its production. One of the main consumers is, among others, the automotive industry. Foreign investments are also of great importance, which recorded the largest share in the trade of cast iron, steel and copper. Trading companies – distributors – also influence the condition of the Polish metallurgical industry. These include both distributors of domestic products and importers. Their market share is ensured primarily by specialized service centers and specialized supply kitting, which producers are not directly interested in (too great a diversity of demand, small quantities, and other additional requirements). One example of such activity is Stalesia – specializing in the kitting of supplies of materials in high-alloy grades (seamless tubes, flanges, valves, sheets, profiles and fittings).
The year 2013 in the Polish steel industry
The year 2013 was not very favorable for the heavy industry of European Union countries. This was mainly due to the prevailing economic crisis. In the steel industry, the biggest problems were the decline in steel production, workforce reductions, the need to reduce production capacities, and a decrease in demand for steel products in the European Union. The weakened economic situation also strongly affected domestic steelworks, to which irregularities in the trade of reinforcing steel contributed, among other things. However, after 1 October 2013, when the reverse charge VAT procedure was introduced, the situation improved somewhat.
Steel production in 2013 was 4,9% lower than in 2012 – 8 million tonnes of steel were produced that year. Average capacity utilization also fell – in 2013 it was 63% and was 1 percentage point lower than in 2012. As for Poland’s share in total steel production in the European Union, it remained at the same level and amounted to 5%. No major changes were recorded in the structure of crude steel production by grade. The most produced was non-alloy steel (93,6%), the least was alloy steel (6,4%) and corrosion-resistant steel (0,02%). In the case of hot-rolled steel production there was also a decline. In 2013 it amounted to 7,4 mln tonnes, which is 3,9% less than in 2012.
However, the share of finished flat products in total hot-rolled products is growing. In this sector an increase of 1 percentage point was recorded, mainly in the production of rods and strip sheets. Growth was also observed for cold-rolled flat products, where cold-rolled sheets and strips dominated. There are also optimistic forecasts regarding stainless steel sales. In this sector there had been stagnation over the last two years, mainly due to unfavorable prices. The situation began to slowly change, so that in 2013 nearly 40 million tonnes of stainless steel were produced worldwide. The first months of 2014 also brought positive changes – in the first quarter alone imports exceeded 105 thousand tonnes, while exports reached 20 thousand tonnes.
The most anticipated growth stimulus for the industry in Poland is EU funds, which in the second half of the year should revive the investment market. However, using the new funds may be more difficult than in the previous program. The current EU perspective may accelerate more slowly because it starts under quite different conditions than the first. At that time only a few local centers were indebted; currently there are very many, which may hinder the implementation of further tasks. Using EU funds requires substantial own contributions and many municipalities have taken out large loans to obtain EU co-financing under the previous program.
Problems of the steel sector
The development of the metallurgical industry in Europe is hampered, among other things, by the EU’s unfavorable climate policy. The biggest difficulties are the emission reduction targets that are impossible to meet and apply to all member states. For Poland the problems do not end there, because our metallurgy additionally struggles with non-competitive energy costs, which result mainly from the level of taxes and para-taxes imposed on it. Energy prices are a threat mainly because they have a large impact on competitiveness. Trade-related legal regulations also do not favor the steel industry. This mainly concerns the use of price as the decisive criterion in tenders, which often limits the competitiveness of companies that guarantee the highest quality of products and compliance with the highest quality standards.
The aforementioned restrictions are particularly significant for specialized products. Advanced rolling technologies that guarantee alloy stability and the quality tests performed often result in production costs up to 30% higher than those of cheaper products from outside Europe.
