Steel Demand Shows Resilience in Poland and the Czech Republic

1st May 2020

Steel demand in Poland and the Czech Republic is currently showing resilience, despite the existing coronavirus pandemic restrictions. In April, the depreciation of the zloty and koruna against the euro exerted upward pressure on steel prices, when denominated in local currencies.

Polish distributors report bright spots

In Poland, hot rolled coil demand remains reasonable but is slowing. Sales of high specification products are performing better than standard grades. Mill delivery lead times have shortened.

Several Polish service centres comment that consumption of steel plate by the yellow goods and rail industries remains buoyant. Nonetheless, companies in many sectors are closed or operating at reduced levels. Plate supply is readily available.

Cold rolled coil requirements from valve manufacturers remain resilient, despite restrictions as a result of the Covid-19 pandemic. In contrast, demand for galvanised coil from carmakers is declining. Deliveries to heavy duty transport manufacturers are falling significantly. Output at other Polish end-users is also reducing. Stocks of finished goods are being run down. On a positive note, announcements to reopen automotive plants in Central Europe are expected in the coming weeks.

Long product transaction values increased, in April. Prices are supported by the depreciation of the zloty and tight market supply. A lack of import availability is noted, due, in part, to production shutdowns across Italy. Nevertheless, domestic construction activity is weakening. Many Polish companies are experiencing issues obtaining new building permits, as local government offices are closed.

Outlook uncertain in the Czech Republic

Czech prices for long and flat products moved upwards, this month, in local currency terms.

Steel bar stockholders continue to reduce inventories as future demand levels remain uncertain. Existing construction schemes are continuing but new projects are on hold.

Demand for cold rolled coil from the food packaging industry is healthy. Mill delivery lead times are approximately six to eight weeks. Meanwhile, reduced availability, from certain steel producers, is noted for hot dipped galvanised coil. This is supporting domestic prices, in the Czech Republic.

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