Sunday, September 26, 2021

The Polish economy uses more steel than it did before the pandemic

 The Polish economy uses more steel than before the pandemic, and its demand is twice as high as current production, says the Polish Economic Institute. The need for steel is growing in construction and industry, where it is used, among others, to produce household appliances and in the automotive industry.

Unfortunately, steel, even with higher prices, is not readily available now. On the Polish market, price increases are mainly caused by a shortage of supply. Some industries, such as household appliances, indicate the lack of raw materials as one of the main obstacles to production development.

EU steel production in 2016-2018 was "under weighty import pressure." In 2018, more than 34 million tonnes were imported, with European production falling simultaneously. Market protection measures introduced by the European Commission from mid-2018 resulted in a decline in imports, which did not bring about the expected change because the weakening steel consumption - especially in the automotive industry - and the uncertainty of demand forced steel mills to further reduce production.

During the rapidly awakening demand for steel in China in mid-2020, the steel market in Europe also began to recover. But not fast enough while imports face many obstacles because of protective instruments for steel products which significantly reduce the possibility of supplementing the deficiencies with imports. Anti-dumping duties, in many cases, exceed the level of 25% and are calculated regardless of availability.

The level of rebound in the steel market after the pandemic crisis surprised the market and companies. The dramatic rise in prices is a response to increased demand, shortages, and limited supplies.

Still, it's a good problem to have.