The Polish steel market is still experiencing a serious deficit

Metallurgical plants are delaying the coordination of prices with contractual buyers. The cost of operations with hot-rolled coils on the domestic market increased significantly in December. With supply constraints and high production costs, further price increases are expected.

The auto and home appliance markets are strong, which translates into good sales from local steel distributors. Although the IHS Markit Poland Manufacturing PMI has not changed over the past three months at 50.8, sentiment is strong regarding an increase in steel demand in 2021.

The prices for long products, which lagged behind flat products analogues, began to grow. This increase is expected to continue in the short term due to higher production costs.

Although Poland is in the midst of a second wave of COVID-19, steel market participants have a positive outlook for 2021.

Offer in the Czech Republic remains limited

Czech steel distributors and service centers are currently very busy. The demand in the automotive industry and household appliances remains strong. However, stock levels are low. This is a concern for steel buyers.

The flat products segment continues to experience a deficit, which is expected to continue in the first quarter of 2021. It is unlikely that European mills will recover a significant amount of previously idle capacity in the near future. In the short term, this is likely to maintain upward pressure on local steel prices.

IHS Markit’s latest PMI points to encouraging signs of recovery in Czech manufacturing. The headline increased to 53.9 in November from 51.9 in the previous month. The growth was primarily driven by an increase in new orders. The general consensus is that demand will remain strong next year. This should support both steel prices and consumption over the medium term.

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