Iron and steel industry in Romania
• Machines • Technical Articles • South-East European INDUSTRIAL Мarket - issue 1/2023 • 22.03.2023
The iron and steel industry plays a significant role within the Romanian economy as it accounts for relevant shares of the main national economic activities, including industrial and manufacturing output and total exports. Romania has considerable amount of natural resources for a country of its size, including iron deposits. Major Romanian exports to the United States and other countries worldwide today include iron and steel – both metals and items. The main industry product groups include: iron (iron ores and concentrates) and steel, ram materials, ferrous waste and scrap, flat?rolled items of iron or non?alloy steel (hot rolled), flat?rolled and other products of stainless steel, tubes, pipes and hollow profiles, iron and steel stranded wires, ropes, cables, etc. The country has substantial capacities for the production of crude and cast steel and pig iron, and a large number of semi-finished and finished steel products, including long and flat articles, seamless and weldless tubes and tube fittings, etc.
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The iron and steel output has demonstrated a high degree of concentration among the manufacturing facilities over the years as the top producers cover a large percent of the total production. Among Romania’s most important partnering countries in the international trade of base metals, including iron and steel, are Germany, Italy, Hungary, France, Turkiye, United Kingdom, Sweden, Morocco, Poland, etc., the Romanian Trade and Investment Agency reports.
In 2018, the main partner countries from which Romania imported metals included Germany, Italy, Turkiye, France and Poland. Exports during that year were carried mostly to Germany, Italy, Hungary, Turkiye and Bulgaria. The total imports of metals by Romania from other countries in 2018 amounted over USD 10 billion, and the exports exceeded USD 7 billion.
There are numerous large iron and steel processing facilities in Romania which supply the contemporary machine building industry in the country and also cover export needs. New investments are traditionally being located near ports or other economic centers which provide the necessary infrastructure and conditions to convey large amounts of raw materials, semi- and finished products.
Some of the leading cities in Romania, whose history and development have been most strongly influenced by the iron and steel industry, are Galati, Hunedoara, Resita, Calarasi, Targoviste, Calan, Campia Turzii, Otelu Rosu, Vlahita and Cugir.
The Romanian metallurgical industry in general is concentrated around areas with strong economic potential, such as the Bucharest-Ilfov zone. According to official reports, most companies are registered in the North-West area of Romania (1485 companies, of which 1394 are involved in production activities and 91 involved in trade), in the Center part (1189 in total and 63 manufacturing) and in the Bucharest-Ilfov zone (1053/216).
One of the sector’s success stories is the Sidex Galati Steel Plant, which was privatized in the early 2000s. It proceeded its business activities under the name of ArcelorMittal. The ArcelorMittal corporation acquired many production units in the country, including facilities in Iasi, Roman and Hunedoara. The Galati business was recently rebranded as LIBERTY Galati.
Modernization and restructuring
According to the Ministry of Industry and Resources, in 1989 the total capacity of the iron and steel sector was around 18 million tons of steel per year, and the equivalent annual output produced by its 33 then units was 13,4 million tons of steel. “Out of a workforce of some 150 000 people, one-fourth was employed by the local iron and steel works in Galati. Subsequent evolutions registered a steep decline, by far steeper than in other Central European countries embroiled in the economic difficulties of the transition period, so that the 1995 output was less than half the 1989 one. That situation was engendered primarily by a reduction in the domestic demand for metal products”, the historic report also says.
The metallurgical industry, including the iron and steel sector, had an important place in the Romanian economy before 1990, as the cited report showed. After 1990 the local metal industry suffered some setback due to significant reduction of sale markets and entry of foreign capital. Between 2004 and 2008 a serios privatization, modernization and restructuring process took place in the country, including the completion of the privatization of all integrated steel mills and manufacturing companies. Strategic investors included ArcelorMittal, Tenaris, MECHEL and TMK.
A part of the process was the implementation of the “Restructuring strategy of Romanian steel industry and of the viability individual plans of steel companies for the period 2003-2008”, which was validated by the European Commission in the context of closure the negotiation of Chapter 6 – Competition of the Accession Treaty. Romania also became a full participant within the Steel Committee of OECD, following the invitation received in 2005.
The monitoring of the Romanian steel sector by the European Commission (2005-2008) came to the conclusion that the restructuring process in the transitional period had ended, generally, with success.
Among the main goals of the latter Strategy for restructuring the iron and steel industry in Romania, elaborated by the Ministry of Industry and Resources, are “to correlate the production capacities with the structure of products and semi-fabricated products on demand in the domestic and foreign markets (that is, produce more pipes, hot rolling metal-tapes and reduce the output destined to the mining and oil sectors); to update the production capacities by using new, more efficient and less polluting technologies and to reduce the specific consumption of raw materials and energy”.
The Strategy was also aimed to increase labor productivity and improve working conditions, to succeed in exporting iron and steel products efficiently by increasing the share of highly-processed items and to further reduce the workforce.
The global financial and economic crisis affected the Romanian economy and the iron and steel industry. The results of this event were strongly manifested in the period 2009 – 2015.
The significant decrease of production and associated steel demand resulted in further reduction of production capacities and of the number of employees. There was a subsequent increase in imports, particularly from non-EU countries (Ukraine, Turkiye, China, etc.), of concrete steel, wire rod, flat coated products, semi-finished products and so on.
During that period approximately 250 000 employees were working in the metallurgical sector in Romania. This number decreased to only 25 000 by 2015.
In 2014 almost 7700 companies were active in the Romanian metallurgical industry, of which 948 were in the specific trade sector. Two years later, the figures were 7592 and 798 respectively, official reports state. In 2016 despite working at 70,8% capacity, gross steel production in Romania amounted to 3,4 million tons. In 2016, production capacities in some metallurgical sectors in Romania increased compared to the previous year. The largest increases were recorded in steel used for continuous casting, coated products, cast iron, ferro-alloys and hot-rolled flat products, statistics show.
“In 2018 crude steel production was 3,62 million tons, 5,3% higher than 2017. Year-by-year comparison showed that most raw material consumption increased. The consumption of pellets for the production of blast furnace iron increased by 11,2%. There were also increases in the consumption of iron ore and concentrates, as well as in the consumption of ferrous agglomerate, which led to an increase in the production of blast furnace iron by 8,9%. Also, there was an increase of 3,6% of the consumption of ferroalloys for obtaining crude steel, which is also reflected in the increase of crude steel production by 5,3% compared to 2017”, official report data shows.
At present the Romanian iron and steel industry has at its disposal numerous integrated production works, out of which only one is based on converter flow and six on arc furnace (Mittal Steel Galati, Mittal Steel Hunedoara, Mechel Targoviste, Mechel Campia Turzii, TMK Resita, Donasid Calarasi and Ductil Steel Otelu Rosu), the ICEM Bucuresti Institute reports.
There are many companies manufacturing seamless and welded pipes, rolled steel, siderurgical equipment and castings, ferro alloys, smaller units as nails, steel wire mashes and metal braids. Some of these enterprises are the property of big international metallurgy groups. Arcelor Mittal, one of the biggest steel producers in the world, owns the iron and steel works in Galati and Hunedoara, the pipe plants in Roman and Iasi. Mechel – the Russian group, holds the iron and steel works in Targoviste and Campia Turzii. TMK – Russia, owns the Resita works and the Artrom pipe plant in Slatina. Donasid – Spain, is the owner of the iron and steel works in Calarasi and the Silcotub pipe factory at Zalau.
There are also many research and development institutes, carrying out innovation initiatives in the sector.
The technology in use is characterized by two types of production units. The first has an integrated production cycle based on two technological steel production variants: by processing hot iron (Resita, Hunedoara and Galati), and the processing of iron (Targoviste, Calarasi and Campia Turzii). The second has a production cycle based on the processing of semifabs and the manufacturing of finite goods (seamless pipes, long and flat rolled products) – in Bucuresti, Focsani, Targoviste, etc.
Among the key branch organizations in the country is UNIROMSIDER – the Union of the Romanian steel producers. It represents a large number of companies which produce, process metallurgical materials or carry out activities within the field of metallurgy. The goal of the Union is to preserve and favor the general economic importance of the metallurgical industry in Romania by supporting and representing its members. It also actively assists the market consolidation of the sector, the organization’s official website states.
Keywords: iron and steel, iron industry, steel industry, Romania
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