Polish Metallurgy Report - 2015

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Polish Metallurgy Report - 2015

The current report reviews the developments in Poland’s metallurgical sector in 2014 (including available data for the first months of 2015) and provides an overall picture of the current trends and the outlook for the industry.

The metallurgical sector represents a significant part of Poland’s industry. It is dominated by the steel industry, which accounts for more than 90% of the country’s total metallurgical output. Copper production makes about 7% of the total, while other metals, like lead and zinc make the balance.

Key points:

• Poland’s steel production sector is mostly driven by the main domestic consumers - the construction sector, the auto manufacturing industry, the producers of machinery and other metal products and household appliances makers;

• Poland is the biggest steel producer in the CEE region and the sixth biggest in the EU, accounting for about 5% of the bloc’s total crude steel output. The market is dominated by ArcelorMittal, which controls about 70% of the country’s steel producing capacity, but accounts for about 50% of the annual output in the post-crisis years, following idling of several blast furnaces;

• After two years of contraction, Poland’s crude steel output grew 8.4% y/y in 2014 and is set to keep on rising in the medium term, driven by robust perspectives for the key domestic consumers – the automotive and construction sectors;

• After two years of contraction, Poland’s apparent crude steel consumption soared 18% y/y to an all-time high of 12.19mn tonnes in 2014, as performance improved at both the automotive and construction sectors. Consumption is also set to grow further in the coming years, reaching new record high levels;

• Poland’s copper sector is dominated by 32% state-owned KGHM, which is the sole domestic copper mining company and one of the leading copper producers in Europe.

• KGHM Polska produced 421,000 tonnes of copper in concentrate in 2014, accounting for 2.3% of the total global copper mine production. It produced also an all-time high of 576,900 tonnes of electrolytic copper, up 2.1% y/y;

• KGHM plans to push its copper production capacity to over 1mn tonnes by 2020. It plans to increase ore output at its Polish mines, but it is overseas where it hopes to get the largest boost. Domestic projects are set to account for more than half of its 2015-2020 CAPEX plan of PLN27bn.

Table of Contents

Executive summary 4
Poland’s economy at a glance 5
The metallurgical sector 7
Steel industry 8
Crude steel production 8
Pig iron production 9
Production of hot-rolled products 9
Steel consumption 10
Automotive industry 10
Construction industry 11
Market outlook 11
ArcelorMittal threatens to shut down Krakow blast furnace 11
Environmental challenges 12
Copper industry 12
Copper production 12
Mine production 13
Smelter production 13
Copper consumption 14
KGHM sales 14
Global demand 14
Market outlook 15
KGHM plans to push copper production past 1mn tonnes 15
Gaworzyce-Radwanice deposit development plans 15
Energy challenges and projects 15


Tables and charts

Table 1 Contribution to GDP volume growth rate (on percentage basis) 6
Table 2 Main features of EC’s 2015 Winter Forecast report 6
Table 3 Key indicators from IMF’s April 2015 World Economic Outlook 7
Table 4 Crude steel production and consumption 10
Table 6 KGHM’s Polish mine production 13
Table 7 KGHM smelter production 14
Table 8 KGHM sales volumes 14

Figure 1 GDP, quarterly data, annual % growth 5
Figure 4 Metallurgical sector structure 7
Figure 5 Polish monthly crude steel output, thousand tonnes 8
Figure 6 BOF and EAF steel production, mn tonnes 9
Figure 7 Pig iron production 9
Figure 8 Production of hot-rolled products (excluding semi-finished products), thousand tonnes and y/y % change 10

Number of pages: 16
Release Date: Thu, 30 Apr 2015