Accession of the metallurgically significant countries of the Central and Eastern Europe to the EU in 2004 was conditioned by fulfilling the Restructuring Programs as the foundation for achievement of competitiveness and guarancy of viability. The Restructuring Programs, which fulfilling and regular monitoring had lasted 5 years, demonstrated the right of the significant position of the steel industry in the new EU members, especially in Poland, Czech Republic, Slovakia, and in Hungary. The objective of the article is to point to the key elements in context of steel industry global trends, regarding either production or especially utility values and total consumption. In this connection, privatization took an important role too.Prinos metalurgije glavnih zemalja Srednje i Istočne Europe u EU u 2004. je bilo ostvarenje restrukturiranja programa kao temelj za postizanje konkurentnosti i jamstvo opstanka. Restrukturiranje programa, provedba i redovito praćenj za 5 godina opravdalo je značajno mjesto u industriji čelika u novim zemljama EU, naročito u Poljskoj, Češkoj, Slovačkoj i Mađarskoj. Ovaj članak ima za cilj istaknuti ključne elemente u razvojnom konextu industrija čelika u svijetu, kako u pogledu proizvodnje, a posebice u odnosu na kvalitete i ukupnu potrošnju. Važan element u tom pogledu, nastavak privatizacije

F. Chowaniec

J. Mannheim

J. Raab

R. Talarek

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F. CHOWANIEC, J. MANNHEIM, J. RAAB, R. TALAREKSTEEL INDUSTRY IN NEW EU MEMBERSTATES IN COMPARISON WITH THE GLOBAL TRENDSReceived – Prispjelo: 2010-02-02Accepted – Prihva}eno: 2010-03-20Review paper – Pregledni radINTRODUCTIONIn the end of February 2010, when this article was beingprepared, the figures of global steel production in January2010 were announced comparing the situation of the pre-vious year. Production of 109 millions tons in 1/2010 rep-resents 25 % increase year-on-year. The coarse estimate,i.e. multiplication of this figure by 12, shows the annualsteel production at the level higher than 1300 milliontons. At the World Steel Association Annual Confe-rencein Beijing in October 2009, the prediction of the con-sumption in 2010 was introduced as it is shown in the Ta-ble 1.; that represents return to the level of 2008 1.Nevertheless, the trends of consumption as well asproduction vary region to region. So, the ratio of particu-lar region has substantially changed. The Figure 1.shows growing share of Asia at the expense of EU andNAFTA countries 1. The share of Asian countriesgrew by nearly 10 % within just last two years; this situ-ation is mainly because of rapidly growing China. It isnecessary to stress that within two last years, when thecrisis impacted the whole world, only China and Indiashow out growing steel production.This article documents the development of the CentralEuropean countries – mainly Poland, Czech Republic,Slovakia, and Hungary. In these countries the steel indus- try was perceived as the sensitive branch, thus viability cri-teria as the indicator of competitiveness had to be achie-ved. Moreover, the fulfilling of the restructuring programwas the compulsory part of the Accession Treaty.METALURGIJA 49 (2010) 3, 165-168 165Accession of the metallurgically significant countries of the Central and Eastern Europe to the EU in 2004 wasconditioned by fulfilling the Restructuring Programs as the foundation for achievement of competitiveness andguarancy of viability. The Restructuring Programs, which fulfilling and regular monitoring had lasted 5 years,demonstrated the right of the significant position of the steel industry in the new EU members, especially in Po-land, Czech Republic, Slovakia, and in Hungary. The objective of the article is to point to the key elements incontext of steel industry global trends, regarding either production or especially utility values and total con-sumption. In this connection, privatization took an important role too.Key words: steel, products, consumption, Central Europe, worldIndustrija ~elika u novim ~lanicama EU u usporedbi sa globalnim trendovima. Prinos metalurgijeglavnih zemalja Srednje i Isto~ne Europe u EU u 2004. je bilo ostvarenje restrukturiranja programa kao temelj zapostizanje konkurentnosti i jamstvo opstanka. Restrukturiranje programa, provedba i redovito pra}enj za 5 go-dina opravdalo je zna~ajno mjesto u industriji ~elika u novim zemljama EU, naro~ito u Poljskoj, ^e{koj, Slo-va~koj i Ma|arskoj. Ovaj ~lanak ima za cilj istaknuti klju~ne elemente u razvojnom konextu industrija ~elika usvijetu, kako u pogledu proizvodnje, a posebice u odnosu na kvalitete i ukupnu potro{nju. Va`an element utom pogledu, nastavak privatizacije.Klju~ne rije~i: ~elik, proizvodi, potro{nja, Centralna Europa, svijetISSN 0543-5846METABK 49(3) 165-168 (2010)UDC – UDK 669.14:3394:669.18:672:914:913.0=111F. Chowaniec, Arcelor Mittal, J. Mannheim, Steelworks of Trinec; J.Raab, Czech Steel Federation, Czech Republic, R. Talarek, Polish SteelAssociation, PolandTable 1 ASU (Apparent Steel Use) Finished Steel /mil. tASU Change2008 1 207 -1,4%2009 1 104 -8,6%2010 1 206 +9,2%Figure 1 ASU by regions; ROW (Rest of World)HISTORY OF THE CENTRALEUROPEAN STEEL INDUSTRYRegarding the quest after the steel production in par-ticular country, the specific regional conditions shouldbe taken into consideration. Looking at the dates of es-tablishment of the both main steel companies and educa-tional insti-tutions – technical universities – the steel tra-dition goes at least 200 years back. For example, estab-lishment of the Mining Academy in Banská [tiavnicareaches the year of 1762, the Montan Institute inJáchymov (Joachimsthal) was established in 1716. Aca-demia Metallurgica Omnium Prima was established in1763 as a part of the Charles University and mainly theImperial Decree, which influenced the birth of Techni-cal Universities in Austrian Leoben and Czech Pøíbram(the university moved to Ostrava in 1945) in 1849. TheAcademy of Mining in Cracow was established in 1919,the same year Poland recovered its independence.Even today’s significant steel companies have theirroots in the long tradition. The reason of formation ofthe steel regions was local deposits of iron ore and suffi-ciency of energy, mainly from the water and woods andlater coal, when the steel companies concentrated to thecoal basins. The rising of the new transport infrastruc-ture even accelerated the development of this industry.Further development of communications, followedby the construction and later the machinery went on dur-ing 19th and the whole 20th century. The peak of steelproduction in the four (three then) countries was in theend of 1980s, when 35 million tons of steel were pro-duced – e.g. 17.1 million tons in Poland, 15.1 milliontons in Czechoslovakia and 3.7 million tons in Hungaryin 1986. This production represented the utilization ofabout 80 % of the capacities 2.Political and economical changes in 1989 distinc-tively influenced steel industry as well as other traditionalbranches. This showed in the drop in consumption at first,so the production was exported and gradually decreased.Later, the quantity of imports started to grow and namelyfor the products our companies were not able to producebecause the manufacturers of steel products increasedtheir requirements. It is possible to say that these trendswere similar in all four countries. The economy of this sit-uation was even accelerated by the policy of the banks.The environmental legislation was also the new and verydistinctive aspect, mainly the Law on the Air Protection.Above all, the weird approach of the new political garni-ture to the heavy industry in their effort to differ fromtheir predecessors resulted in drop of new investmentsand impossibility to finance the down-stream facilities asit was done in the old EU countries.The solution of the situation in connection with in-terest in the admission to EU was to achieve the viabilitycriteria, in order to be fully competitive within Europeas well as other markets. This led to the removal of theobsolete capacities, increase of the labor productivityand fulfilling the aforementioned restructuring pro-grams. In the case of the Czech Republic it was ProtocolNo. 2, and for Poland it was Protocol No. 8 of the Treatyof accession. The similar situation was in Slovakia andHungary. The fulfilling of the restructuring programwas regularly monitored by EU twice a year.Simultaneously, the main producers of all countrieswere privatized. Todays’ steel companies have transpar-ent owners, in many cases they are part of the multina-tional groups. The industry is now viable and fully com-petitive.The beginning of the 21st century was significant notonly because of the termination of the ECSC after 50years of the activity 2 but also by the most extensiveenlargement of EU – from 15 to 25 countries. Besidesfour countries mentioned in this article, also Latvia andSlovenia are the new EU members producing steel.Nevertheless, it is necessary to stress that the processof restructuring in the new EU members was accompa-nied not only by bold drop of capacities and increase ofproductivity, but also by new legislative requirements,regarding mainly environmental and social issues. In-vestments to the primary production ensued from thissituation, while the old EU members already invested inthe final production. Moreover, after the EU admission,the last customs barriers fell, that resulted in enormousgrowth of imports, mainly because of the requirementsof customers for products, which were not available atthe domestic markets. The share of import converged to70 %, for some branches – mainly the automotive – itwas even 90 %. The example of the trends of steel tradeis shown in the Figure 2 and 3 3-5.IMPACT OF THE GLOBALFINAN-CIAL AND ECONOMIC CRISISThe period of the growing imports could be charac-terized as the period of the growing demands of custom-ers on the utility value of final steel products. Rapidlygrowing demands of customers, especially on the so-phisticated products, resulted in the fact that only 30 %of steel products at today’s global market are older than10 years 6. For example, the new advanced high-stren-gth steels used in the automotive not only improve theeconomy of engine operation and thus improve theenvi-ronmental parameters of means of transport, butalso improve the safety of transport. This fact results inthe close cooperation of the end users with steel produc-ers mainly in the scope of R & D. It shows us the onlyway the Central European steel industry should follow.The global crisis even amplifies this need.Regarding the steel sector, the global economic cri-sis started to show itself worldwide in the second half of2008. Its impact has been varying regionally; we can saythat the traditional steel regions have been affected moreseverely than areas that can be understood as emergingones. Some world regions, especially China, India andthe Middle East countries showed out even the increasein production and con-sumption. This fact is confirmedby the figures of the Figure 4., which compares thetrends in production of the World, China and EU27 inthe period of 2000 to 2009 7.As it concerns the Central European countries, theimpact of the crisis – comparing the steel production in166 METALURGIJA 49 (2010) 3, 165-168F. CHOWANIEC et al.: STEEL INDUSTRY IN NEW EU MEMBER STATES IN COMPARISON WITH THE GLOBAL TRENDS2008 and 2009 – was similar as in the other developedcountries. Nevertheless, in these countries, where theproduction of cars dramatically grew in the last years,the drop was influenced mainly by the construction andmachinery connected to the construction. Production ofhousehold appliances has some effect, too.Relatively distinct reaction to the crisis, which re-sulted in restricting the production capacities of less ef-ficient facilities and strong pressure to the costs reduc-tion, allows the steel companies to survive the crisis inthe condition allowing rapid reactions in the case of thedemand resurrection. Table No. 2 shows the steel pro-duction drop between 2008 and 2009 8.The global decrease, which is less than 10 %, isstrongly influenced by the BRIC countries – Brazil,Russia (to the less extent due to proximity of EU), Indiaand China. The analysis of these global trends is anoff-topic of this article, but we must realize that Chinachanged from the net importer to the net exporter withinrelatively short period.The global recovery is also evident from utilizationof the world’s steel capacities, which were used tonearly 90% until the first half of 2008 and then droppedas far as 58% in December 2008. Since then it has beengrowing as shown in Figure 5 8.CONSEQUENCES OF THE CRISISThe World Steel Association forecast as well as thesituation in particular steel top countries; clearly prove atrend of the shift of consumption and production of steelfrom North America and Europe to Asia. worldsteelforecasts also the growing share of regional consump-tion of steel products in Asia. The Figure 1 depicts thesituation between 2005 and 2010. But the most impor-tant is that within the two year period (2008 to 2010) theglobal steel consumption returns to the same level, butthe share of Asia has increased by almost 10%, reachingtwo-thirds of global consumption 1.What consequences it brings to the Central Europeancountries? The end users will be pushier regarding thelevel of product sophistication, the enduring coopera-tion between producers and customers, mainly in the R& D scope, will become the business as usual. However,all these changes must respect the legislation, mainly inthe field of environment, energy and finance. The car-bon leakage as a reaction to needlessly strict EU legisla-tion in the scope of carbon dioxide emissions reductionis imminent for the Central European countries 5.For example, to sketch in the matter: the CO2 emis-sions were 2.8 bln tons in USA and 2.7 bln tons in Chinain 2007. The 2017 forecast counts with the growth to3.4 bln tons in USA and 4.3 bln tons in China. This is indirect contradiction to the EU obligation to decrease thecarbon dioxide emissions by 20 % till 2020, which canharm or even destroy the Central European industry inthe end 6. In that case, the price would be too high.METALURGIJA 49 (2010) 3, 165-168 167F. CHOWANIEC et al.: STEEL INDUSTRY IN NEW EU MEMBER STATES IN COMPARISON WITH THE GLOBAL TRENDSFigure 3 Trends of Commercial Characteristics in Poland/ mil. t;%Figure 2 Trends of Commercial Characteristics in CzechRepublic / mil t;%Figure 4 Steel production / mil. tTable 2 Comparison of steel production in 2008 and2009 / mil. t2008 2009 % changeWorld 1304,2 1199,1 -8,1China 500,3 567,8 +13,5EU-27 198,0 139,1 -29,7Czech Rep. 6,387 4,594 -28,1Slovakia 4,490 3,747 -16,5Poland 9,728 7,208 -25,9Hungary 2,096 1,401 -33,2CONCLUSIONAs it has been already mentioned, the key driving en-gine of the consumption and production of steel are theAsian countries as well as Russia and Brazil. The BRICcountries are often evaluated separately in order to dem-onstrate the dynamic of the “hunger” for the steel prod-ucts. Consumption is no more connected to the tradi-tional countries, while the new capacities are takingover the leading role and facing the global crisis moreeasily. The co-operation of producers with their custom-ers is slightly becoming utterly requisite. This fact willlead not only to better utility values of the products butalso to the reduction of the environmental burden duringproduction as well as use of the final products.Consumption and production of steel products is alsoinfluenced by the macroeconomic situation. The com-parison of CE countries with the traditional EU mem-bers is shown in Table 3. 3.Table 3 GDP growth / %2007 2008 2009 2010 2011France 2,1 0,3 -2,3 1,2 1,5Germany 2,5 1,3 -4,8 1,5 1,7EU 10 2,5 0,6 -4,0 1,1 1,7Czech Rep. 6,1 2,3 -4,0 2,1 3,1Hungary 1,0 0,6 -6,5 0,0 3,4Poland 6,8 4,9 +1,4 1,7 3,0Slovakia 10,6 6,2 -4,8 3,1 4,3EU 2,7 0,7 -3,9 1,1 1,7The specific consumption (i.e. consump-tion per ca-pita) of steel products is a para-mount factor for the de-velopment in particular countries. Following Table 4.shows that the new member countries, especially CZand SLO overtop the values of traditional EU membersas well as the NAFTA countries 5.The recent trends in the World and Europe prove thatsteel products are still indispensable, while the mainbranches of users are general machinery, constructionand automobile industry. The historically significant re-gions, mainly Europe and North America are facing se-verely competitive environment from Asian countries,mainly China. The prognoses indicate growth not onlyof production but also of consumption in these countries– the consumption per capita in China should exceed400 kg this year.Table 4 Trends of specific ASU / kg per capita2006 2007 2008 2009 2010World 179 193 190 174 190Germany 475 517 496 350 385France 261 269 251 170 192Austria 483 488 474 341 372EU15 407 421 387 265 299Czech Rep. 580 638 631 439 467Poland 279 315 302 203 236Hungary 224 265 273 173 197Slovakia 363 422 376 245 271Slovenia 593 687 702 631 641EU12 289 322 294 184 202EU27 382 400 367 248 278Russia 246 285 250 176 191USA 387 350 319 195 232China 277 322 331 394 413Japan 604 622 597 410 475Korea 1 037 1 136 1 210 953 1 102The way for the steel companies of the Central Eu-rope has to follow enduring cooperation with customers,production of higher share of sophisticated products aswell as respecting the legislation requirements regard-ing decreasing the environmental burden, energy con-sumption and improving the SOH conditions. The po-tential of the domestic customer branches is the positivepromise to the future.LITERATURE1 WorldSteel Association: Short Range Outlook for Steel De-mand, Beijing, 20092 ECSC: How to pave the way for a greater community…,Luxembourg, 19983 EUROFER´s Economic Committee: Economic and SteelMarket Outlook 2010-20114 R.Talarek: Modern Polish steel industry opposite to globaleconomic crisis, HUTNIK, 12/20095 Hutnictvi zeleza: Predikce vyvoje ceskeho ocelarskehoprumyslu, Praha, 20106 EUROPEAN PARLIAMENT: The European Steel SectorFacing Globalisation Challenges, Brussels, 20107 WorldSteel Association: World Steel in Figures, Brussels,20098 WorldSteel Association: News Releases, January 2010Note: The responsible translator for English language – Steel Federation,Czech Republic168 METALURGIJA 49 (2010) 3, 165-168F. CHOWANIEC et al.: STEEL INDUSTRY IN NEW EU MEMBER STATES IN COMPARISON WITH THE GLOBAL TRENDSFigure 5 Monthly global utilization of the steel capaci-ties / %

Industrija čelika u novim članicama EU u usporedbi s globalnim trendovima

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