Low demand, high supply and electricity prices force the company to optimize production processes and reduce staff
The steel industry in Europe is facing major challenges. High energy prices, low demand for steel in China and global overproduction are putting serious pressure on producers. In Poland, the situation is getting more complicated: after the closure of one of the large steel mills in Dąbrowa Górnicza in 2022, similar problems have now hit CMC Poland, which owns plants in Zawiercza and Dąbrowa Górnicza, Kurier zawiercianski writes.
On October 3, 2024, the company’s president, Wojciech Wincławik, announced a reduction in production and layoffs. In Zawiercza, the mesh production shop will switch to one shift, and in Dąbrowa Górnicza – to two shifts.
According to a letter to employees, the reasons for the cuts are inflation, high interest rates and low investment in Poland and the EU. The company is also suffering from an influx of cheap steel from Asia, Africa and the Middle East, where producers are not required to comply with EU climate standards.
CMC Poland has offered its employees voluntary redundancy and retirement programs. In particular, this applies to those who have reached retirement age or will acquire this right by 2028. Employees of the rolling mills, finished goods warehouses and both mesh production plants will also be made redundant.
CMC Poland’s current difficulties are part of a broader industry challenge. Other producers are also facing a crisis. For example, the German Thyssenkrupp announced the layoff of 11,000 employees. At the same time, positive news is coming from Czestochowa, where a steel plant that has been out of operation for a long time is set to be restored thanks to a new investor.
CMC Poland, as the largest employer in Zawierzec, has not yet commented on the company’s future plans. Meanwhile, local residents are worried about the future, as the stability of the company directly affects the development of the city.
As GMK Center reported earlier, CMC Poland reduced steel shipments by 28.5% year-on-year – to 1.23 million short tons in FY2023/2024 (ended in August). In the period under review, the company almost halved shipments of rebar year-on-year – to 364 thousand tons, and commercial long products and other products by 17% y/y – to 870 thousand tons.
