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Hungarian Steel Market Reacts Positively to BYD’s Investment and Voestalpine Partnership: Rising Plant Activity Anticipates Increased Demand

The Hungarian steel market is showing strong positive sentiment driven by BYD’s significant investment in a new plant and their partnership with Voestalpine. Several news articles point to increased activity, including “Voestalpine to supply steel for BYD’s Hungary plant,” “BYD selects Voestalpine as major steel supplier for upcoming plant in EU,” “BYD has chosen voestalpine as its steel supplier for its Hungarian car plant,” and “Voestalpine to supply steel for BYD plant in Hungary.” While these articles strongly suggest increasing demand, the satellite data does not directly show an immediately correlative increase in Voestalpine’s Linz plant activity levels; however, the Hungarian plant activity levels show an average increase, suggesting downstream anticipation of increased demand.

The mean steel plant activity in Hungary shows a generally increasing trend from January (25%) to June (40%). ISD Dunaferr’s activity shows a slight but steady increase. Diósgyőr Steelworks experienced very low activity until a significant rise to 24% in June. ÓAM Ózdi Acélművek Kft consistently maintained high activity levels, peaking at 93% in June. The most significant increase in June came from Diósgyőr Steelworks, while ÓAM Ózdi Acélművek Kft remains the most active plant by a significant margin.

ISD Dunaferr Dunaújváros, an integrated steel plant utilizing BF and BOF technologies with a crude steel capacity of 1.6 million tonnes, shows a slow but consistent increase in activity, rising from 12% in January to 15% in June. The plant focuses on semi-finished and finished rolled products. While there isn’t a sharp increase directly linked to the news articles about BYD, its gradual increase reflects anticipation of growing demand in the broader market.

Diósgyőr Steelworks in Miskolc, an EAF-based plant with a 550,000-tonne crude steel capacity, experienced very low activity levels for the first five months of the year, but a substantial surge to 24% in June. This sharp increase might indicate preparations for increased production due to the expected demand from BYD or related industries. The plant specializes in various specialized steel grades for building and infrastructure, and the timing of this activity spike could suggest a reaction to the anticipated increased infrastructure development related to BYD’s plant.

ÓAM Ózdi Acélművek Kft in Ózd, an EAF-based plant with a 690,000-tonne crude steel capacity, has consistently maintained high activity levels, reaching 93% in June. This indicates strong and stable demand for its products, including hot rolled steel, rebar, wire mesh, and wire coils. While the news articles don’t directly correlate to this plant’s activity, its high utilization rate suggests it’s already operating near capacity and well-positioned to capitalize on the general market upswing due to the BYD investment.

The news of Voestalpine supplying BYD, coupled with the observed rise in overall Hungarian steel plant activity, suggests a tightening steel market in the region.

Evaluated Market Implications

The significant increase in activity at Diósgyőr Steelworks in June, along with the consistently high activity at ÓAM Ózdi Acélművek Kft, suggests that these plants may be operating at or near capacity. This could lead to supply constraints, particularly for specialized steel grades produced by Diósgyőr Steelworks and the products offered by ÓAM Ózdi Acélművek Kft. While ISD Dunaferr shows slow increases, its integrated production might have challenges in rapidly increasing production to meet new demands.

Recommended Procurement Actions

• Steel Buyers: Given the projected increase in demand from BYD and the relatively inelastic increase in supply from the major regional plants, steel buyers should proactively secure contracts with multiple suppliers to mitigate potential supply disruptions. Focus on establishing relationships with suppliers beyond the primary Voestalpine supply chain to ensure diversification and redundancy.
• Market Analysts: Closely monitor the activity levels of Diósgyőr Steelworks and ÓAM Ózdi Acélművek Kft. A sustained high activity level followed by a sudden drop may indicate capacity constraints or production bottlenecks, signaling potential price increases for their specific product categories. A failure of Dunaferr to increase production may cause reliance on the Linz plant.