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Austrian Steel Production Rises Amidst EU Decline: Voestalpine’s BYD Deal and Energy Cost Concerns

In Europe, while overall EU steel output decreased, Austria shows signs of resilience. According to “Austria increased steel production by 12.2% m/m in May“, “Austria ramps up crude steel production in May,” and “Austria to increase crude steel production in May“, Austrian steel production increased in May. However, these articles do not explicitly link to observed activity changes in specific plants via satellite data.

Bar chart and satellite map of steel production activity in Europe

The mean steel plant activity in Europe shows significant volatility and a substantial drop in July to 8.0, after consistently exceeding 9 billion from March to June.

AG der Dillinger Hüttenwerke Dillingen, a German integrated steel plant with a BOF capacity of 2.76 million tonnes, saw its activity level decrease from a peak of 40.0 in April to 32.0 in June. No direct link to news articles could be established.

Diósgyőr Steelworks Miskolc, a Hungarian electric arc furnace (EAF) plant with a capacity of 550,000 tonnes, exhibited very low activity until June, when activity surged to 24.0. No direct link to news articles could be established.

Magnitogorsk Iron & Steel Works, a major Russian integrated steel plant with both BOF (10.5 million tonnes) and EAF (4 million tonnes) capacity, showed relatively stable activity, fluctuating between 46.0 and 48.0. No direct link to news articles could be established.

Although “Austria ramps up crude steel production in May” notes that Voestalpine will supply steel to BYD’s new factory in Hungary, it is unclear if this is related to the increased activity observed at Diósgyőr Steelworks Miskolc. “Austria increased steel production by 12.2% m/m in May” also mentions Voestalpine’s concerns regarding energy costs and competitiveness; however, there is no direct correlation to the Dillingen plant’s observed decrease in activity.

Given the increase in Austrian steel production reported in “Austria increased steel production by 12.2% m/m in May”, buyers should:

  • Monitor Voestalpine’s pricing closely, considering their concerns about energy costs potentially impacting competitiveness. “Austria increased steel production by 12.2% m/m in May” states that Voestalpine is facing challenges with product costs and competitiveness, particularly due to high electricity expenses.
  • Assess the potential for sourcing steel from Austria, particularly for applications where Voestalpine’s products are suitable. This may partially offset supply chain issues stemming from decreased production by other EU steel producers.
  • Track developments related to potential energy cost compensation mechanisms in Austria, as mentioned in “Austria increased steel production by 12.2% m/m in May”, as these could influence Voestalpine’s pricing strategies.
  • Diversify your sources. As overall EU steel output decreased by 3.1% year-on-year in May, according to “Austria ramps up crude steel production in May”, buyers need to consider alternative sources in case of price increases.