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The economic recovery in Poland continues to stutter. The IHS Markit Poland Manufacturing PMI remained unchanged for October, indicating that growth is lacking momentum. There is no doubt that consumer confidence has decreased due to the onset of the coronavirus second wave.

Despite this, Polish hot rolled coil prices increased, in November, for the fifth consecutive month. Demand for hot dipped galvanised coil is exceptionally strong, with delivery lead times being quoted as far out as May 2021.

Supply of flat rolled products remains very tight, in the local market, particularly for cold rolled and coated coil. Steelmakers have an aggressive pricing strategy, which will inevitably continue into the next quarter.

In contrast, conditions in the Polish long products segment are more subdued. Supply remains adequate, with the exception of wire rod. Sales activity for low carbon wire rod picked up significantly, over the past month. There is concern, however, with a notable softening of demand in the construction sector and a decrease in the number of new projects.

Czech steel shortages continue

Steel shortages, particularly for coil products, continue in the Czech Republic. Mills are extending their delivery lead times, which in turn is leading to restricted availability in the steel market. Rolling allocation in the first quarter for spot buyers has all but disappeared.

Although demand has increased due to the replenishment of inventories by stockholders and distributors, buyers are becoming cautious about placing forward orders owing to the resurgence of Covid-19 cases. Despite confidence seemingly waning, the IHS Markit Czech Republic Manufacturing PMI increased by 1.2 points in October. Steel demand from the automotive and construction sectors remain strong.

Prices in the Czech Republic have increased further for flat products, particularly cold rolled and hot dipped galvanised coil. They look set to continue increasing in the coming weeks, as local mills hike their offers.