Parameters of production development

Due to the final steel production being characterised, on the one hand, by a high percentage of long products and, on the other hand, by a relatively large volume of tube production (including a large percentage of seamless tubes), the steel industry continued to be heavily affected by the tense situation in sale possibilities in foreign markets.

Loss of possibilities of direct as well as indirect export to the former COMECON countries and decline in domestic demand in the 1st year of transformation (1990) did not show up with full effect so that the most pronounced drop of production volume occurred since 1991. Also the problems of recession on foreign markets joined with a decrease in supply of the domestic market. Demand on foreign markets began to improve during 1994 and culminated in 1995.

Whereas the development of flat products’ share in total production practically has not changed in comparison with 1989, the structure of production usage shows remarkable changes.

In case of long products, the possibilities of inland deliveries decreased until the beginning of 1994 and ways are sought for how to place larger volumes of production on the foreign markets. Development of domestic demand turns in 1994 and, in this way, it was possible to decrease export volume. The end of 1993 is, consequently, the moment of double turn, i.e. coming on increase in domestic demand on the one hand and of decreased export possibilities in consequence of recession in foreign markets on the other hand.

The effect of demand on long products is a dominating factor for development of steel and rolled material production. In 1994, the rolled material export attained the top value and was approximately 57 % of production.

This is a rather large volume creating relatively heavy dependence on the condition of the global market in the steel products. From the viewpoint of territorial export possibilities, this volume could hardly be permanently maintained with respect to high transport costs and strict delivery terms concerning especially the deliveries to more distant territories.

The deliveries to the Slovak Republic show a practically permanent downward trend both in rolled material and in tubes. The effect of market globalisation can be considered as one of the main causes for this trend.

Development of apparent consumption of final products (a narrow concept) in recalculation to steel equivalent is seen from the following table where the forecast is also given.

Apparent Steel Consumption

data in million metric tons

The economic situation of steel works in the Czech Republic as a whole was stabilised. It is necessary to say that a number of West-European steel works was due to the second last, till now the most serious sales depression, still indebted and settled its debts. The greater part of the Czech steel companies remained to be profitable under the influence of various factors. Nevertheless, insolvency continued to be a chronic problem whose very beginning resulted in insolvency of customers and non-settled claims to the countries of the former Soviet Union.

The consequences of the situation described and their development (production, sales and production parameters, economy, employment) are seen from the charts and tables.