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Prague – The future of steelmaking in the Czech Republic and in European Union countries is uncertain. The industry could further shrink or cease to exist in its current form altogether. This follows from the statements of experts available to CTK. According to them, the steel industry is negatively affected not only by the overall slowdown of the European economy but also by low demand, expensive energy prices, pressure for more ecological production, and the import of cheap steel from Asia. The growing interest in strengthening the arms industry may be a boost for the sector, but due to this, it may not be necessary for steel to be produced in the Czech Republic itself, experts suggest.
“The unfavorable situation in the steel industry is due to the permanently adverse development of demand for steel products in the EU. Crises in construction and other buyer sectors, such as engineering or automotive, are negatively impacting total steel production,” said the chairman of the supervisory board of the Steel Union and the general director of Třinec Iron and Steel Works Roman Heide. According to him, the competitiveness of European manufacturers is further threatened by high energy prices or cheap imports from third countries. “The ever-growing share of imports in the overall consumption of steel in the EU represents one of the main problems of European steelmaking,” he said. In the event that the EU does not change measures regarding steel, the competitiveness of manufacturers will continue to be threatened according to Heide. “This could lead to the extinction of the entire industry in the EU as we know it now,” he added.
A positive development in the sector is currently not seen even by the investment platform XTB analyst Jiří Tyleček. Although, according to him, the pressure to increase production in the defense industry could help increase demand for steel, if the expensive energy issue is not resolved, the entire sector will continue to shrink in the long term, he opines. “A certain positive effect can be brought by modernization, but due to more expensive production compared to China and other cheap countries, ecological steel will only prevail with difficulty without subsidies,” said Tyleček.
According to the analyst of the Capitalinked.com portal Radim Dohnal, the question currently arises whether primary production of raw steel should exist in the Czech Republic when iron ore is not mined in the Czech Republic. “Primary steel hasn’t been produced in Denmark for years, yet they have top-notch weapon manufacturers. If the EU operates a common market without barriers, then even for higher volumes of arms production in the Czech Republic, it will probably be sufficient to only have secondary steel production on the territory and strengthen it,” said Dohnal. (March 23)