fbpx

SIMILAR ARTICLES

Loss in competitiveness compared to Hungary and Poland: Real effective exchange rate – a critical indicator for Romania

Romania has improved its competitiveness compared to the Czech Republic and Bulgaria at the regional level in recent years but lost ground compared to Croatia,… Mai mult

Gas extraction from Black Sea will become unprofitable if investment starts after 2022 – ANRM estimate

If delayed long after 2022, the investment in natural gas exploitation in the Romanian commercial area of ​​the Black Sea could become unprofitable. Also, not… Mai mult

A decade of change in Romanian economy structure: Trade, public sector salaries and IT replace the loss of industry and agriculture contribution to GVA

The structure of Romania’s economy has a number of peculiarities compared to the European average in terms of the contribution brought by major sectors to… Mai mult

GDP 2020, equal to GDP 2019 in nominal terms and GDP 2018 in real terms

The National Institute of Statistics confirmed the signal result of the economic growth for 2020 at the level of -3.9%, in the first preliminary version… Mai mult

Romgaz will submit an offer to take over ExxonMobil’s stake in the Black Sea, in Neptun Deep

Romgaz (SNG) will submit an offer to take over ExxonMobil’s participation in the concession for the exploitation of natural gas from Neptun Deep perimeter in… Mai mult

Construction works boom in Romania make neighbours’ factories churn: we import one million tons of steel-concrete, meaning 100% of necessary quantities

de Raluca Florescu , 28.9.2020

The footbridge of the suspended bridge from Braila.

Two contradictory phenomena occur during the development of an economic sector that is vital for development:

on one hand, we have the boom in the construction sector – increase of 8% in the midst of the pandemic, while the economy shrank by 4.6%;

on the other hand, we have imports of 100% of the necessary quantities of concrete-steel used in construction, although, 10 years ago, we imported only 20% of what we needed.

Like the situation of the bitumen that will have to be imported in a proportion of 95% within the big plan of road infrastructure restoration, in the concrete-steel case we also have to use neighbouring states’ production for constructions.

How and why?

Construction – boom and a net contributor to GDP growth

In the first 7 months of the year, construction works increased by 8% compared to the same period in 2019. In the same period, new residential construction works increased by 18%.

In recent years, constructions have contributed by shares between 5 and 7% to the formation of Gross Domestic Product, and last year this sector generated almost 25% of GDP growth, respectively one percentage point of the advance of 4.1%. Moreover, in the first half of 2020, when the economy as a whole registered an annual decrease of 4.6%, constructions partially mitigated this decline, with a contribution of + 0.5 points.

But how much does this sector contribute to the development of a horizontal raw materials industry? One of the basic elements in residential constructions is concrete-steel. How much of the quantity needed for the local market is produced in Romania and how much do we import?

2020 – zero domestic production for a need of one million tons

Currently, there are two large concrete steel producers in Romania: COS Targoviste and Ductil Steel Buzau, owned by Russian company Invest Nikarom SRL. Both companies are in a reorganization process. At COS Targoviste, the activity was stopped at the beginning of the year, while at Ductil Steel Buzau the production was stopped in the first quarter and resumed in April. The outcome? In the first half of 2020, the whole amount of concrete steel that residential building constructors needed came from import.

„In the last 2-3 years, the domestic production has been ensured – continuously or periodically – mainly by 2 producers: COS Targoviste, which ensures its semi-finished products from own production, Ductil Steel Buzau, with semi-finished products supplied from Targoviste (insufficient quantities). Currently, the activity of these units is stopped, with limited prospects of resuming production at Targoviste and Buzau and without any perspective at Focsani. For this reason, starting this year, the entire domestic need of concrete steel is exclusively covered from import”, according to the data provided to cursdeguvernare.ro by the Romanian Association of Metal Distributors (ARDIMET).

Consequently, in the first six months of the year, the local market was 100% dependent on imports totalling 380,000 tonnes. Throughout 2019, the demand was almost one million tons.

From whom we buy everything

The main countries that supply concrete steel to Romania are Turkey, Greece, Bulgaria, Moldova and Ukraine, in this order.

Ten years ago, the largest suppliers for the local market were companies from Turkey, Hungary, Italy, Greece, and Bulgaria.

The product, brought to the country in the form of bars and rolls and later shaped by the distributor, currently costs about 2.5 RON / kilogram.

In terms of price, concrete steel in Romania has become about 10-15% more expensive than the one from import. However, ARDIMET representatives claim that local products partially compensate for this gap by quality, as the concrete steel produced at COS Targoviste, for example, is extremely reliable and malleable and can take a variety of shapes.

However, the price gap also seems to be generated by the fact that, in Romania, the energy price, which represents about 40% of the total cost of concrete steel, is higher than in most countries from where we import, respectively Turkey, Bulgaria or Ukraine.

Fewer plants, less concrete steel

Total import in 2020 was “prepared” step by step in previous years when local demand was served by more and more imports. In 2019, in Romania, about 80% of the concrete-steel used in civil constructions came from abroad, according to the data provided by ARDIMET.

Specifically, in 2019, the total amount of concrete steel used on the local market was 978,000 tons, of which 803,000 tons, respectively 82%, were imports. The rest, of approximately 179,000 tons, was represented by the internal production of COS Targoviste and Ductil Steel Buzau.

In 2018, so two years ago, Romania imported a total quantity of 700,000 tons (80.4% of the market demand), and domestic production (made by the same two companies) amounted to 170,700 tons. The volume of the entire market was 870,000 tons.

The situation in 2019 and 2018 sharply contrasts with what happened 10 years ago, in 2008, when 7 concrete steel producers were active on the local market, namely MECHEL Targoviste, DUCTIL STEEL Buzau, MECHEL Campia Turzii, ArcelorMittal Hunedoara, OTELINOX Targoviste, LAMDRO Turnu Severin and Laminorul Focsani. In 2008, the seven companies produced 944,000 tons, twice the imported quantity, respectively 468,000 tons. Also in 2008, the market demand was 1,184,000 tons, which means that domestic production could cover 80% of local demand. As local producers exported about a quarter of what they produced, domestic production supplied the construction market with “only” 60% of the concrete-steel need.

Perspectives

Currently, the concrete steel industry in Romania depends on the future of the two plants, from Targoviste and Buzau, given that other units operating in 2008 were closed (the plant from Campia Turzii), and other left this market to focus on other products.

However, it is not excluded that new production capacities would appear.

“Regarding the medium and long term perspectives, there are known some concerns of LIBERTY Group to start an opportunity analysis of an investment in Galati Plant for producing concrete steel by building a modern flow consisting of a machine for continuous casting of tiles and a concrete steel rolling mill”, ARDIMET representatives mentioned for cursdeguvernare.ro.

Mergeți în homepage ›

Publicat la data de 28.9.2020

Lăsați un comentariu


NEWS

New Renault boss: “Dacia is a miracle. It's time for the brand to flourish"

Luca de Meo (foto), the new general manager (CEO) of Renault group, considers that Dacia project proved to be a miracle and that no one… Mai mult

Pentagon transforms Campia Turzii unit into a NATO air hub at the Black Sea

A former Soviet airbase in central Romania could become a hub for US Air Force operations in south-eastern Europe, where the Pentagon is seeking to… Mai mult

Nuclearelectrica shareholders approved to terminate negotiations with Chinese for building reactors 3 and 4 from Cernavoda

Nuclearelectrica's Board of Directors has been mandated to initiate proceedings to terminate negotiations with China General Nuclear Power Group (CGN), as well as legal effects… Mai mult

Renault holds expansion of its plant in Romania, 15,000 jobs cancelled at global level

"Putting capacity growth projects planned in Morocco and Romania on hold" - is one of the measures included in the draft plan of Renault Group… Mai mult

Romania is a net importer of electricity in 2020 as well

Romania imported an amount of electricity of almost 796 GWh in the first month of this year, by more than 36% above what it exported… Mai mult

Shareholders of Galati steel plant promise investments of one billion euros

GFG Alliance has committed to invest one billion euros to upgrade Galati steel plant in order to reduce emissions and increase production. Another EUR 1… Mai mult

Transport Ministry announces it has sent to Brussels the financing request for Sibiu - Pitesti highway

The Transport Ministry, as the Intermediate Body in Transport, approved the financing request for the project "Construction of Sibiu - Pitesti highway", Sections 1, 4… Mai mult

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult