The problems on the steel market that have been observed in recent years and caused by the COVID-19 pandemic and growing energy prices as well as the proposals of the potential measures were discussed today between Minister Waldemar Buda and the representatives of the steel industry in Poland.

Shortages of steel have a negative impact on the construction, metal product, machinery, production of transport means and household equipment sectors.

Poland has already entered into negotiations to stabilise the situation on the steel market with Italy, which also face the same issue. The meetings with the representatives of the following EU Member States are also on schedule.

On behalf of the Polish Government, I shall call on the European Commission to respond to the situation and take a horizontal approach to the issue of access to scrap for the steel industry. Solving this problem requires the activities of the European Union as a whole

– says Waldemar Buda, Minister of Economic Development and Technology, during the meeting with the journalists.

I think that we have finally left behind the worst situation on the steel market.  Accessibility of this resource is no longer an issue, though its prices are not satisfactory

– stressed the Minister of Economic Development and Technology.

Poland demands monitoring of the steel scrap export

By submitting the letter to the management of the European Commission, Poland intends to highlight – at the EU level – the pressing problem of high prices of steel and scrap, in particular on the domestic market. 

Not only we face very high demand for steel in Poland and Europe, but we also observe the increasing export volumes from China and Turkey. This may ultimately lead to a limited accessibility of steel on the Polish and European market

– emphasized Minister Buda.

The Minister of Economic Development and Technology believes that all bans of scrap export in Poland may be ineffective, since it will take place via the neighbouring countries.

There is a need for actions throughout the European Union to secure the scrap resources. Scrap should be perceived as a strategic resource in a medium-term perspective

– stated Minister Waldemar Buda.

He informed that Poland remains in close contact with its Italian partners, who thoroughly monitor the scrap export from their country. In Poland, such monitoring is carried out by the Ministry of Climate and Environment.

Compensations for the energy-consuming sector

The Minister informed that by 30 April this year the entrepreneurs may apply for compensations for 2021. Poland submitted its compensation scheme for notification of the European Commission.

The compensation scheme should stabilise the costs of manufacturers and provide the opportunity for production at reasonable prices

– says the Minister. 

MEDT will immediately respond to the on-going difficulties of the industries

The Minister of Economic Development and Technology will respond to all issues of concern and “disturbances” in the individual sectors of the Polish economy on the on-going basis.

Just today, I had a meeting with the steel industry and commenced a cycle of meetings with the strategic economic sectors. Since the economy is a system of connected vessels, we will contact various sectors

– announced Minister Waldemar Buda at the press conference.

The Minister informed that such approach to solving the problems was warmly welcomed by the representatives of the industry.

Practically all steel manufacturers attended the today’s meeting and welcomed the openness of the Ministry to information sharing and direct solving of the problem by discussions

– recounted Minister Buda.

He emphasized that MEDT cannot affect the prices “individually”, but may trigger certain processes to mitigate the effects of the problems arising in the economy.

We must keep strong economic performance and the expected GDP growth. This requires access to resources at the predictable level in the individual sectors. We cannot lead to stoppage on the construction market or in steel manufacturing industry

– said the Head of MEDT.

Situation on the steel market in Poland

Throughout the last two decades, a continuous growth of the global production and consumption capacity of steel has been observed. In 2021, it amounted to 1.95 billion of tonnes. The potential of actual impact on the steel prices in Europe are limited due to the global nature of trade relations on this market, which is dominated by the Asian manufacturers. China (0.95 billion of tonnes), South Korea and Japan provide nearly 60 percent of the global production.

The war in Ukraine has resulted in breaking the steel supply chains from the East. It was replaced by import from among others Iran and Turkey.

In 2021, the manufacture of raw steel in Poland amounted to 8 454 thousand of tonnes, while of hot-rolled finished products to 7 909 thousand of tonnes. The production capacity  was used in approx. 83 percent. The key products of the domestic steel plants include: thin sheet coils, thick sheets, swages, reinforcement bars, wire rod, plain bars, seamless pipes, welded pipes and cold-formed closed profiles.

Due to the product structure of steel plants in Poland, 21 percent of supplies onto the domestic market are performed by the domestic entities, while 79 percent by import purchases and intra-community supplies.

We wish the manufacturers to switch towards the domestic production and sale the scrap onto the European market, which would increase our self-sufficiency and security in the event of breaking the supply chains, as we currently face in effect of a military conflict in Ukraine

– said the Minister of Economic Development and Technology.

The steel plants using the electric furnaces (a half of production capacity of steel industry in the country) are fed with steel scrap purchased both on the domestic market and imported from the EU states. In 2021, the Polish steel plants imported more than 0.6 million of tonnes of scrap, primarily from the neighbouring countries (Czech 0.24 million of tonnes; Slovakia 0.21 million of tonnes; Germany 0.08 million of tonnes). Import from Russia amounted to only 7.5 thousand of tonnes and was lower by 25% compared with 2020.

At the same time, 2.8 million of tonnes of scrap was exported from the domestic market (Germany 0.91 million of tonnes; Turkey 0.53 million of tonnes; Czech 0.36 million of tonnes).