Financiers step in to save Polish steel mill

Polish financial institution Sunningwell International has stepped in to save the bankrupt Huta Czestochowa steel mill in Poland.

The trustee of the steel mill and a court agreed last night to a one-year lease agreement with Sunningwell for the embattled Polish steel mill, which shut down production in May following financial issues.

The agreement means production will restart on 5-10 October. The plant is one of the largest heavy plate steel producers in Poland, with a capacity of 800,000 t/yr. The mill also has a rolling facility, which has a capacity of 1.2mn t/yr. When it closed in May, the steel mill had an output of 50,000-55,000 t/month.

Huta Czestochowa is one of the largest buyers of ferro-alloys in Poland and regularly entered the market for material each month before it shut down. An eastern European trader said the plant regularly entered the market for 50t of manganese flake, 500-800t of silicomanganese, 200-300t of ferromanganese, 5-25t of ferro-molybdenum, 3-5t of ferro-niobium and 3-5t of ferro-vanadium among other metals, before it closed.

Steel mills across Europe have been struggling because of increased import penetration into Europe from steel produced in Asia. Asian producers, especially in China, have redirected some of their production to Europe after the US introduced tariffs on steel imports in 2018. The EU imposed quotas on foreign steel imports, but European steel industry association Eurofer said the measures were largely ineffective.

Polish steel mills have been under pressure from high power and emissions charges as the country struggles to switch from coal to more sustainable forms of energy. Steelmaker Arcelor Mittal attempted to close its steel mill in Krakow but reversed its decision after protests from workers unions. The 1,200 workers at the Huta Czestochowa plant will return on 5-10 October for the one-year lease, but discussions are continuing between Sunningwell, the court and the trustee to potentially buy the plant.