Crude steel production in the Czech Republic fell by 11 percent to 4.2 million tons last year

Crude steel production in the Czech Republic fell by 11 percent to 4.2 million tons last year

The production of crude steel in the Czech Republic fell by 11 percent to 4.2 million tons last year

Steel production – illustrative photo.

Prague – Crude steel production in the Czech Republic fell by 11 percent year-on-year to 4.2 million tons last year. The volume of steel exports from the Czech Republic decreased by 18 percent to four million tons and was the lowest last year since the financial crisis in 2009. The results were influenced by the fighting after the Russian invasion of Ukraine, unprecedented energy prices, high inflation and expensive emission allowances. ČTK announced today the Ocelářská union, which brings together companies from the metallurgy and steel industry in the Czech Republic.

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The apparent consumption of steel in the Czech Republic dropped year-on-year by more than a million tons, or roughly 16 percent, to 6.6 million tons. According to the union, this is the biggest drop in the last ten years. “Consumption in 2021 shot up after the covid slump, so we fell from a high base last year. Even so, this is a strong signal of uncertainty in customer industries,” said Daniel Urban, Chairman of the Board of Directors of the Steel Union. Imports of steel products to the Czech Republic decreased by a fifth year-on-year to 6.6 million tons last year.

Production decreased most significantly last year in the case of flat steel products, it also decreased in the case of steel pipes, in the production of which the Czech Republic is traditionally strong. The only product category where production increased slightly was rails. Last year, 376,000 tons of steel pipes and 260,000 tons of rails were produced in the Czech Republic.

“Even though there was a drop in steel prices in the second half of 2022, the crown value of imports and exports for the whole year increased despite the drop in volumes,” Urban pointed out. Last year, steel was imported into the Czech Republic for almost 210 billion crowns, exports were worth 133 billion crowns. The key market for Czech steel remains the member states of the European Union, especially Poland, Germany and Slovakia. About 15 billion crowns worth of steel was exported from the Czech Republic to countries outside the EU last year.

Last year, production in the Czech Republic fell at a similar rate to that in the European Union, where, according to the Steel Union, it decreased by a tenth. Apparent steel consumption in the EU was almost five percent lower last year compared to the previous year. At the same time, the share of imports from third countries in apparent consumption reached 30 percent.

According to Urban, the outlook for the next period is not easy, because it is not clear how deep and long the recession of the Czech and European economies will be. “Input prices are still relatively high, the price of emission allowances is at a historic high. Smelter shutdowns due to expensive energy led to record imports of steel into the EU, which covered almost a third of consumption. This speaks of the deteriorating competitiveness of European steelmakers at a time when non-European countries massively they are investing in additional production capacity,” he pointed out.

According to the Steel Union, the world produced 1.879 billion tons of crude steel last year, 4.2 percent less year-on-year. Production thus returned to the level from before the coronavirus pandemic. China, which produced almost 54 percent of all world production last year, maintains its position as the world's number one by a large margin. Even China did not avoid a drop in production last year, of the ten largest producers, only India and Iran increased.