We have been observing the turbulences in the EU steel market almost from the beginning of hostilities in Ukraine. – Already on the second day after the outbreak of the war, raw materials for steel production began to skyrocket and panic set in. It was not known for how much and whether to sell at all metallurgical products. Fortunately, later the prices of raw materials fell a bit and the market situation slowly began to stabilize – reports Stefan Dzienniak, president of the Metallurgical Chamber of Industry and Commerce.
All this contributed to the sharp increase in steel prices. According to DM BDM calculations, in the last week alone, cold-formed sections increased by 74 percent, sheets by 51 percent, and ribbed bars by 40 percent. In the case of metal sheets, prices are as much as 228 percent higher. than last year, and the prices of bars during the year jumped by 195%.
– Price increases are caused by the war in Ukraine, as Russia and Ukraine are significant producers and exporters of steel and iron ore, used in the production of steel using the blast furnace method. There have been reports on the Polish market that steel producers and distributors have suspended their offers due to unprecedented price volatility, comments Krystian Brymora, DM BDM analyst.
Erste Group analyst Jakub Szkopek emphasizes that the waiting times for steel have also shifted significantly – from 4-5 weeks to 5-6 weeks. Moreover, the price of coking coal used in metallurgy increased drastically – from USD 430 to 670 / t. Conversely, the rates of scrap used in electric steel mills increased from $ 500 to about $ 700 / t.
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– The war in Ukraine completely changed the situation on the steel market in Europe. Russia and Ukraine are big players in our region. So today we have a situation where some Ukrainian steel plants have suspended production, and all of them have frozen exports of products abroad. On the other hand, European industry has been reluctant to place orders with Russian producers since the outbreak of the war for political, image and sanctions reasons, explains Szkopek.
See also: Possible coal embargo from Russia. Polish heating plants are already looking for an alternative
As a result, steel prices in Europe began to go crazy. – Especially since Russian products were cheap. In addition, the European steel industry also heavily used Russian coking coal and now must quickly look for alternative supplies, fearing a possible embargo on the import of this raw material, emphasizes Szkopek.
Problems in construction
The more expensive steel will affect all recipients of this product. Moreover, according to analysts, prices will continue to rise.
– This is not the end of the increases. In my opinion, this is just the beginning of the increases, because European steel producers will not be able to meet the growing demand on the domestic market. Although the situation of the demand for steel in the automotive industry looks weaker, we are entering a high season in the construction industry, which is a major recipient of steel products. Perturbation will not be avoided by automotive and construction companies, companies producing household appliances or carrying out railway investments. I am concerned whether they are prepared for such a large increase in costs – underlines Szkopek.
Polish construction it is already getting ready for hard times. The Polish Association of Construction Employers, among the greatest challenges facing the industry after the outbreak of the war in Ukraine, lists, inter alia, the outflow of workers from Ukraine, but also a shortage of steel products and further increases in material prices. As a consequence, this organization sees the risk of a wave of bankruptcies of construction companies and a slowdown in investments.
