Impact of COVID 19 on Steel Industry – A case Study of RINL, Visakhapatnam Steel Plant

Steel is by far, the most widely used and is environment friendly as it can be recycled 100%. Steel has wide variety of applications in day to day life. Indeed, steel is the backbone and support of the global economy and infrastructure. Steel has got many forward linkages with manufacturing industries. Status of global steel industry before the onset of COVID 19 and the effect of pandemic on industry in both global and Indian contexts were discussed. The status of Indian economy was briefly explained and projected outlook for steel market after breakout of the pandemic. The effect of COVID on RINL was discussed in detail and various strategies adopted by the industry during the period were explained. Handling of such future eventualities were addressed. After the outbreak, the recovery and outlook were explained in detail. Interventions and initiatives sought from the Government were presented in this paper.

Ukraine's metallurgical industry: output dynamics through the prism of external factors

Domestic metallurgical industry is an integral part of the world industry, and its development takes place in the context of global trends, such as constant growth of metallurgical production with simultaneous excess of smelting, increasing concentration of production, and increasing consumption and export of metal products in TOP-15 leading smelting countries. The main consequence of such trends is a significant intensification of competition on the global steel market. Despite the fact, that Ukraine's metallurgical industry is an important participant in the global market of ferrous metals and raw materials for their production and has certain advantages in their production and export, like the whole Ukraine's economy, is open and small in macroeconomic terms. This gives grounds to refer Ukraine's metallurgical industry of to the category of "small open industry", which is characterized by export orientation, a small share of output in global output, exports, imports, and domestic consumption and, most importantly – by the lack of decisive influence on world prices. Since Ukraine's metallurgical industry is small and open, and the vast majority of its products are shipped to world markets, it was suggested that the dynamics of metallurgical output is directly influenced by external factors such as world steel prices, the hryvnia exchange rate and the price for natural gas. The obtained results confirmed the hypothesis that Ukraine's metallurgical industry throughout the entire study period was completely dependent on the action of external factors. In particular, the favorable price situation on the global market of metal products ensured a high dynamics of metallurgical output. At the same time, devaluation of Ukrainian national currency in different periods had different effects. The price for natural gas restrained the metallurgical output throughout the entire study period.

Volatility in the Raw Materials Market and Risk Mitigation Methods

Companies in the raw materials market operate in a volatile and unstable market. Business downturns exert a particular effecton the level of cash flows and generate insolvency risk among companies, all the more so when crises are driven by objective circumstancesbeyond human control. Being well-versed with these risks, a company should take steps to mitigate the risk of rawmaterials price volatility affecting the planned results in at least the medium term. The subject of this analysis is to point out theinterdependencies between the basic economic categories when it comes to how the steel market functions and the risks stemmingfrom the volatility of the raw materials market. Moreover, it portrays the main financial instruments that can be used to mitigatethe consequences of the risk of movement of raw materials prices.

Ukraine's metallurgical industry: output dynamics through the prism of external factors

Domestic metallurgical industry is an integral part of the world industry, and its development takes place in the context of global trends, such as constant growth of metallurgical production with simultaneous excess of smelting, increasing concentration of production, and increasing consumption and export of metal products in TOP-15 leading smelting countries. The main consequence of such trends is a significant intensification of competition on the global steel market. Despite the fact, that Ukraine’s metallurgical industry is an important participant in the global market of ferrous metals and raw materials for their production and has certain advantages in their production and export, like the whole Ukraine’s economy, is open and small in macroeconomic terms. This gives grounds to refer Ukraine’s metallurgical industry of to the category of "small open industry", which is characterized by export orientation, a small share of output in global output, exports, imports, and domestic consumption and, most importantly – by the lack of decisive influence on world prices. Since Ukraine’s metallurgical industry is small and open, and the vast majority of its products are shipped to world markets, it was suggested that the dynamics of metallurgical output is directly influenced by external factors such as world steel prices, the hryvnia exchange rate and the price for natural gas. The obtained results confirmed the hypothesis that Ukraine’s metallurgical industry throughout the entire study period was completely dependent on the action of external factors. In particular, the favorable price situation on the global market of metal products ensured a high dynamics of metallurgical output. At the same time, devaluation of Ukrainian national currency in different periods had different effects. The price for natural gas restrained the metallurgical output throughout the entire study period.

Influence of the COVID-19 Crisis on Steel Production in Poland Compared to the Financial Crisis of 2009 and to Boom Periods in the Market

This paper presents an analysis of the volume of steel production in Poland during the COVID-19 crisis in the first half of 2020 in comparison to the volume of steel production during the financial crisis initiated in the US during the period 2007–2008, whose effects, in the form of a large decrease in steel production, were seen in 2009 in Poland. A comparison is also made to periods of prosperity in 2004, 2007, and 2017 (when there was a good economic situation in the steel market in Poland). The selection of the time period—the first half of 2020—was based on the emergence of a new situation in the economy, which was lockdown. The aim of the analysis is to determine the impact of the COVID-19 situation on the steel market (volume of steel production) in Poland. The analysis performed could help entrepreneurs manage their companies during the COVID-19 crisis. This paper belongs to the category of research work. The statistical analysis was realized regarding steel production in Poland. Three periods were analyzed: The first half of 2020—the period termed the COVID-19 crisis; the year 2019—the year of a large decrease in steel production in Poland caused by the world financial crisis; and periods of prosperity in the steel market—the years 2004, 2007, and 2017 (periods before crises). The analysis shows that, in order to assess the impact of the COVID-19 crisis on the functioning of enterprises or industries, it is necessary to analyze the situation and compare it with other situations in the past. Moreover, crisis management in the COVID-19 situation must be highly rationalized and real, and the various industrial sectors and companies forming them should adapt this process to their own situation. Results: On the basis of the statistical data, it was found that, in the short term (months), the production of steel during the COVID-19 crisis was a little higher than in the financial crisis of 2009 (excluding steel production in June 2020), and lower than during the boom in the steel market (the comparison to the periods when there was a boom in the Polish steel market was made to show the dynamics of decline).

EVALUATION OF THE EFFECTIVENESS OF PROTECTIONISM POLICY TOOLS IN OVERCOMING THE CRISIS OF EXCESS CAPACITY IN THE FERROUS INDUSTRY

The article focuses on strengthening of protectionism policy and on trade defense measures, which significantly influence the current global steel market situation. The detailed analyses of the type, product scope and potential effect on international iron and steel market was conducted. The characteristics of the crisis period of exceed capacities problem caused by structural disbalance of global supply and demand in combination with the further steel products consumption decline are presented in the article. The particular focus is on the effectiveness evaluation of protectionism policy on the national level taken the US steel market as an example. The study concludes that protectionism policy of 2017-2019 not only has not solved the global problem of steel exceed capacities, but also escalated national level challenges: lack of motivation of local manufactures to decrease emissions, high unemployment rate and consumer product prices growth. The core outcome of the article is that unbased import trade barriers in steel sector are ineffective for global and national problems solving and that the only way is to implement coordinated actions by the major global steel market players.