SteelOrbis talked to Piotr Ślusarz, president of Polish Metallurgical Chamber of Industry and Commerce, about latest developments in EU steel industry.
How would you describe the current steel demand trends in the EU steel market across major sectors (construction, automotive, machinery, etc.)?
The visible economic slowdown in Europe is negatively impacting demand for steel and, consequently, demand for ferrous scrap. Low steel demand is under pressure from imports of steel products from non-EU sources, including the import of steel products and semi-finished products from Ukraine, which is most damaging to the Polish economy.
How are high energy prices affecting output, investment and competitiveness?
Unfortunately, in Poland we have some of the highest electricity prices in the EU, which results in lower margins and very often in the inability to achieve profitability in industries such as steel production or scrap recycling.
Do you foresee further consolidation or restructuring in the European steel industry?
If the process of restricting the trade in ferrous scrap continues, the only plants processing ferrous scrap in Poland will remain those belonging to steel mills.
What are the effects of geopolitical developments on trade routes?
The restrictions introduced in the WSR will affect the trade routes for ferrous scrap and significantly weaken the scrap industry, which is responsible for achieving recycling and recovery levels for many key sectors in terms of GDP generation for the country.
What are your expectations for steel demand and prices in the short to medium term?
Observing the direction the EU is following, the industry is dismayed by the months-long decline in scrap metal values and the quantitative reduction in demand for ferrous scrap in Europe.
Are you optimistic or cautious about the EU steel sector’s medium-term competitiveness?
The competitiveness of the steel and scrap recycling sectors is burdened with significant costs and struggles with expensive electricity, especially in Poland.
How do you evaluate the latest announcement from the EU regarding the safeguard policy?
The EU should ensure not only support and protection for the steel industry, but also for the recycling sector. Without a scrap metal industry, the steel industry will be unable to meet the requirements and expectations of EU industry.
Are these trade measures effective in ensuring a level playing field, or do they distort competition?
The focus should be on resolving the causes of the lack of competitiveness. Regulation alone will not solve the problem of the steel industry's lack of competitiveness. Regulation cannot be effective since we are dependent on steel imports from outside the EU, have insufficient production capacity and lack energy infrastructure.
What do you think the main challenges of CBAM are and what effects do you anticipate on trade flows?
I think it will seal off some trade flows, blocking steel products and semi-finished goods entering the EU from the east (Ukraine and Russia) via transit countries.
Do you think current EU funding mechanisms are sufficient to support the green transition in steel?
Support mechanisms apply only to steel mills, and not to all of them, only to those that meet the appropriate criteria. For this mechanism to be effective, this support must cover the entire supply chain, including the scrap industry.
How do you see the balance between environmental targets and global competitiveness?
To achieve environmental goals, it is necessary to create market conditions that provide opportunities for competitiveness. Without these conditions, achieving environmental goals will mean abandoning local industry in the EU.