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HIPH - polish steel industry
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Polish Steel Industry 2025
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PPS 2025
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Dear Readers,
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Last year did not treat us gently. The global steel market was affected by rising trade tensions, excess production capacity, and high commodity price volatility. Global consumption of steel products decreased by 0.9% to 1,751 million tons, and production fell by 0.8%, with China continuing to dominate as the largest producer.
In the European Union, the situation remained exceptionally tense, with steel production continuing to be very low (because what does a 2.6% increase compared to the catastrophic year of 2023 mean), and demand weakened again, especially in construction and automotive sectors. Apparent steel consumption in the EU fell by 1.1% to 129 million tons in 2024. This is the third consecutive decline in apparent consumption and the fifth in the last six years. With the exception of 2021, apparent consumption has been continuously declining since 2019, clearly indicating the difficult situation not only of the European steel industry but of the entire EU economy.
In Poland, production last year once again recorded the worst results in the history of post-war Poland. The situation at the Huta Częstochowa plant, where production was carried out to a very limited extent, significantly impacted the decline in the pace of production in the domestic steel industry. Other reasons for the poor situation in the steel industry, aside from the still low demand, include systemic problems in our sector observed across the EU: still excessively high energy prices, the geopolitical situation in the world hindering economic growth, pressure from unfair cheap supplies from third countries, and generally a poor economic situation in most EU countries.
A statistician could counter: after all, crude steel production increased in 2024 by 10.7% year-on-year. However, in response to such an argument, one must immediately point to the effect of an exceptionally low base from 2023. At the same time, Polish steel exports fell 8.2%, while imports remained at a high level. This only deepened the trade deficit.
All of this meant that although steel consumption in the country has again risen significantly, this time by 10%, the beneficiaries of this increase were primarily producers outside of Poland. This situation clearly demonstrates that the steel sector is correct in constantly emphasizing the need for actions at the EU and national levels, including market protection against unfair imports, supporting the energy transition, and improving the competitiveness of European steel.
The world is not standing still. While Europe is struggling with declines, global production capacities, according to OECD data, increased from 2,439 million tons in 2023 to 2,455 million tons in 2024. This means a further increase in global surplus capacity to 572.4 million tons (5.8% more than the previous year). Thus, the gap between rising capacities and lower demand has clearly widened, leading to increased price pressure in the global steel market.
The Polish steel industry is therefore facing serious challenges associated with increasing competition in the international market, high energy costs, and the ongoing global trade wars. Our goal must therefore be to reduce dependence on imports and increase the utilization of domestic production capacities. Consequently, the steel sector is putting up a number of proposals both at the EU level and nationally, aimed at improving the competitiveness and stability of the industry. Point by point, we consistently try to persuade the authorities to our case and achieve successes in this area.
The scale of the challenges, however, means that addressing individual demands is no longer sufficient. Package actions are needed. It is encouraging that this understanding is maturing both at the EU level and in the country.
The year 2024, along with a new opening in the EU Commission, brought a series of reports diagnosing the state of the Union?s competitiveness (Letta, Draghi, Siinistö). This was a catalyst for further work, which ultimately resulted in the announcement of the ?A European Steel and Metals Action Plan? on March 19, 2025. It is a good document, but there is still a lot of work ahead of us to ensure it becomes something more than just another paper tiger.
At the national level, with a certain cautious optimism, we welcomed the establishment of a special Metallurgy Team operating under the Ministry of Industry (thanks to the efforts of the Association), at the beginning of 2025. We did a huge amount of work in January and February to provide the government with our contributions to the national plan for metallurgy. Months are passing, and the plan is still under government consultations. We hope that the Prime Minister, as he announced his next participation in the Tripartite Team, will equally encourage his ministers to quickly conclude work on this much-needed document.
We need a strong economy, based on a strong industry, including a strong domestic metallurgy. As part of the implementation of the ?Eastern Shield? National Defense Program, which includes the construction of fortifications and defenses on Poland?s eastern border, priority should be given to steel produced by Polish mills. We hope that domestic mills will be duly considered in the announced strategy for the defense industry, which the government is set to unveil by the end of this year. Moreover, not only production for defense purposes, but all public procurement should support local production. It is gratifying that our proposal to exclude producers from outside the EU from public tenders is receiving an increasing response from among Ordering Parties.
But the rationalization of public procurement is only part of the solution. We need another piece of the action: comprehensive trade protection defenses. A declaration from the European Commission regarding the development of a solution to replace EU steel safeguard measures after their expiration at the end of June 2026 is extremely important for the steel production industry. According to the declaration, it will be a long-term solution that will provide protection against the spillover effects of global excess production capacity. The Commission has declared that it will present such a solution no later than the third quarter of 2025.
As can be seen, actions aimed at improving the condition of the steel industry and its development require numerous initiatives on many different levels. The main challenge in these efforts will be collaboration with lawmakers across all three pillars of sustainable development (environment, economy, society), coordinating these actions, and consequently, adopting a holistic approach to the problem. The Association and the metallurgical community will not miss any opportunity to add real value to these processes. All of this is aimed at ensuring that steel metallurgy in Poland takes advantage of the opportunities looming large based on the accumulation of further positive developments such as the expected improvement in the overall state of the economy and the utilization of RRF/ KPO funds, while also becoming more resilient to black swan events, which have loomed over us in recent years
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Mirosław Motyka
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President of the Board |
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Polish Steel Association
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