State-owned
Polish coal trader and steel re-roller Weglokoks plans to commission in 2027 a
new 1 million tonnes/year capacity hot strip mill in Ruda Slaska, next to
Katowice, Kallanish notes.
The plant, to be located on the territory of stockist and fabricator
subsidiary Huta Pokoj, will allocate half of its production capacity for the
needs of the group’s re-rolling lines, with the balance sold on the merchant
market.
The PLN 5 billion ($1.1 billion) plant will use electric arc
furnaces to melt scrap, of which Poland is a major supplier. Weglokoks
forecasts the operation will generate PLN 4.5 billion in annual revenue and
provide an average sales margin of 8%.
The aim of the investment is to complete the value chain in
Weglokoks’ steel segment, which will result in increased competitiveness and
production at its processing lines. This will also result in reduced steel
imports into Poland and an improvement in foreign trade balance.
“We are determined that Poland’s steel industry, the part which
is in the hands of the state, is rebuilt,” says Polish state assets minister
Jacek Sasin.
The state has also released PLN 560 million of funding to
Weglokoks for the recapitalisation of its steel subsidiaries.
The group says the main driver behind the investment is the fact
the steel industry plays a key role in economic development, and 80% of Polish
steel demand is currently covered by imports.
Weglokoks also owns welded pipemaker and mine roadway support
producer Huta Labedy, as well as heavy plate producer Walcownia Blach Batory
(WBB). The firm had previously planned to consolidate the three steel
subsidiaries under a subsidiary called “Weglokoks Stal”.
WBB has suffered from merchant slab procurement issues since it
restarted production in late 2017 following an almost two-year stoppage. Huta
Pokoj has likewise had issues with billet and hot rolled coil feedstock
availability. These have been exacerbated by the disruption in steel supply due
to war from Russia, Ukraine and Belarus, which accounted for 25% of Polish steel
imports in 2021.
In January-May 2022, Poland imported 1.25 million tonnes of hot
rolled flat products under HS code heading 7208, according to Poland’s Central
Statistical Office (GUS). HS code 720839 comprised 235,558t, with 76,961t
coming from Ukraine and 55,638t from Russia. HS code 720838 accounted for
207,269t, with 58,939t coming from Slovakia and 41,361t from Ukraine.
Despite Poland’s dependence on imports, steel industry
participants have said in recent years it is unlikely that Poland will build
new crude steelmaking capacity. The new investment is all the more surprising
given the current energy crisis Europe is facing. Weglokoks, however, has the
backing of the state and said in 2018 that building its own crude steelmaking
capacity was an option it was mulling.
Poland’s only current slab and hot strip producer is
ArcelorMittal Poland.