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The Polish Iron and Steel Industry*
Published online by Cambridge University Press: 25 March 2019
Extract
This article presents a general survey of the metallurgical industry of Poland based on recent statistics, some of which are still unpublished. The information on efficiency, raw material shortages, and costs is designed to throw light on the industry's comparative advantage position and on the economic rationality of its investments.
In 1955, Poland produced 4,400,000 tons of crude steel, a little less than one-tenth as much as the Soviet Union and seven percent of the steel output of the entire Soviet bloc including Communist China. By 1960, the output of steel is scheduled to reach around 250 kilograms per head (which may be compared with 291 kgs in France and 113 kgs in Italy in 1955). Poland is now in process of overtaking Czechoslovakia in overall level of steel production though still lagging far behind in output per head.
- Type
- Research Article
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- Copyright
- Copyright © Association for Slavic, East European, and Eurasian Studies 1957
Footnotes
*
I am indebted to Professor M. Gardner Clark, to Dr. Aleksander Erlich and to Mr. Lynn Turgeon for their valuable criticisms and suggestions. Professor Ignacy Haendel and Mr. Tadeusz Dabrowski of the Polish Ministry of Heavy Industry kindly helped me to prepare this material and checked some of my data. The research on this paper was carried out with the help of a fellowship and of a travel grant to Poland from the Ford Foundation.
References
1 G16wny Urzad Statystyczny Polskiej Rzeczypospolitej Ludowej, Rocznik Statystyczny 1956, pp. 85, 99.
2 Huet, Robert, “L'Industrie du fer en Pologne” in La Silésie Polonaise (Paris 1932), p. 181 Google Scholar, and Rudowski, Zbigniew, “L'Industrie Lourde” in Pologne 1919-1930, (Neuchatel, 1940), II, 305Google Scholar.
3 Steel was exported during the thirties at dumping prices. The internal market was protected by import duties amounting to 150 to 250 zlotys per ton for commercial grades (Tarif douanier du 23 Août 1932 [Polska Gospodarcza, ed., Warsaw, 1933] p. 123.) The duty worked out to between 50 and 100 percent of domestic steel prices.
4 Zelaznych, Zwiazek Polskich Hut, Sprawozdanie z dzialalności w roku 1937 (Warsaw 1938), Table 3, p. 19.Google Scholar
5 Ibid., pp. 23, 35, 37.
6 United Nations estimates for 1943 for prewar and postwar territory excluding Teschen are reproduced in the Quarterly Bulletin of Statistics for Europe, VII, No. 1, 10, 52. German official statistics for 1941 to 1944 include Teschen, now a part of Czechoslovakia.
7 Stefan Wróblewski, “Plan odbudowy hutnictwa zelaza,” Hutnik, No. 1 (1946), 525-30.
8 Ibid., p. 528. However, by 1949 the former German territories produced only 21 percent of the Polish crude steel output. Gospodarka Planowa, No. 6 (1951), 2.
9 Jan Aniola, “Rola Nowej Huty w postepie technicznym hutnictwa,” Gospodarka Planowa, No. 1 (1951), 25.
10 The revised goals of the Six Year Plan, were 3,500,000 tons of pig iron, 4,600,000 tons of crude steel and 3,200,000 tons of rolled products. (“6-letni plan,” special number of Hutnik, 1951.)
11 Bronislaw Hala, “Program rozwoju wielkopiecownictwa,” Problemyprojektowe hutnictwa, No. 1 (1957), 17.
12 Trybuna Ludu, December 22 and December 24 to 26, 1956.
13 During the Six-Year Plan the planners standardized production by reducing the number of shapes (“profiles“) by 30 to 50 percent. In recent years insufficient attention to consumers’ needs has caused waste of steel and extra labor costs, since products often have to be machined down to exact size in the workshops of metal processers. These shortages also account in part for the excessive weight of Polish machines and equipment.
14 Strzelecki, K., “Z zagadnien zaopatrzenia gospodarki narodowej w stal,” Gospodarka Materialowa, No. 3, (1954), 68 Google Scholar.
15 Gwiaździński, “O szybszy wzrost produkcji stali jakościowych,” Gospodarka Planowa, No. 1 (1956), 6. Details on the composition of Polish alloy steels and on the grades produced are contained in the Cennik 8-Z (Stalinogród 1955), of the Ministry of Metallurgy.
16 Trybuna Ludu, July 28, 1956, p. 5.
17 United Nations, Quarterly Bulletin of Steel Statistics, VII, No. 1 (Geneva, March, 1956) 121.
18 Handel Zagraniczny, No. 2 (1957), 27, 28; No. 3 (1957), 30; No. 4 (1957), 19-26.
19 Wiadomoki Statystyczne, No. 1 (1957), 2. There were twenty-five blast furnaces in 1955, about ninety Siemens-Mertens open-hearths and thirty-two electric furnaces.
20 Jerzy Gwiaździński, “Analiza efektywnosci inwestycji planu 6-letniego w hutnictwie żelaza,” Gospodarka Planowa, No. 7 (1956), 17.
21 Ignacy Borejdo, “Dorobek naszego hutnictwa,” Życie Gospodarcze, No. 14 (1954), 532.
22 See for instance, Wróblewski, op. cit., p. 543, who estimates that a 50-percent reserve is optimum for most rolled products to minimize costs and allow elastic adaptation to demand.
23 Gwiaździński, “Analiza … ,” op. cit., p. 17.
24 Centralnoe statisticheskoe upravlenie pri soviete ministrov SSSR, Narodnoe khozjaistvo SSSR (Moscow, 1956), pp. 62-63; Stanislaw Kawinski and Jerzy Zalewski, “Perspektywy rozwoju hutuictwa żelaza w latach 1956-1960,” Inwestycje i Budownictwo, No. 11 (1955), 4.
25 One Polish expert estimated that the blast-furnace coefficient might be cut in half if the ore charge were improved to Soviet standards (Ignacy Borejdo, “Kierunki postepu technicznego w hutnictwie,” Part I, Zjcie Gospodarcze, No. 1 (1956), 2). Experiments conducted before the war showed that the blast-furnace coefficient of the Kosciuszko mill could be reduced from 1.4 to 0.85 cubic meters per ton by raising the iron content of the ore charged from 30 to 48 percent, Cf. Z. Krótkiewski, “Nasz przyszly wieiki piec,” Hutnik, No. 1 (1946), p. 28.
26 American Iron and Steel Institute, Annual Statistical Report (1955), (New York, 1956), p. 37.
27 Gwiaździński, “Analiza efektywnosci … ,” p. 18. Fifty-ton open-hearths require 150 workers per heat, when eighty-four workers are enough to man the 185 to 370-ton hearths. (Ignacy Borejdo, Hutnictwo w planie 6-letnim [Warsaw, 1952], p. 64.) Note however that the Soviet open-hearths are above European average in size. The average tonnage of British basic open-hearths is about 120 tons.
28 Borejdo, Hutnictwo w planie 6-letnim, op. cit., pp. 46-49.
29 Jan Grabiński, “Rozwoj hutnictwa polskiego w dziesiecioleciu 1945-1955,” Inwestycje i Budownictwo, No. 7 (1955), 20.
30 Kawiński and Zalewski, op. cit., p. 6.
31 Ibid., p. 4; Borejdo, “Kierunki postepu … ,” op. cit. Parts I and II, bassim.
32 Kawiriski and Zalewski, op. cit., p. 4.
33 In 1956, Poland imported about 1000 tons of nickel, 285,000 tons of manganese ore, 11,000 tons of chrome ore, and 562 tons of various ferroalloys per year from the Soviet Union. Handel Zagraniczny, No. 4 (1957), 19.
34 Cf. J . Salcewicz, “Zagadnienie produkcji wysokogatunkowego koksu,” summarized in Hutnik, No. 2 (1955), 43, 44, and Hutnik, No. 7-8 (1955), 247.
35 Aleksander Szpilewicz and Bohdan Kalinowski, “O postep techniczny w przemysle koksochemic-Biyai,” Koks-Smola-Gaz, No. 1 (1956), 8.
36 By 1958, these three mills together are scheduled to produce over 2,300,000 tons of pig iron; they will then absorb nearly the total present output of first-quality blast- furnace coke. (For the development plans of the Lenin mill, see Tadeusz Krzyzewski, “Nowe metody pracy warunkiem wzrostu produkcji wielkich pieców,” Zycie Gospodarcze, No. 4 (1956), 134.)
37 Exports go almost exclusively to countries of the Soviet bloc (East Germany— 1,000,000 tons—the USSR, Hungary and Rumania).
38 The Soviet Union itself is very short of coking coals and is in no position to help Poland (Cf. M. Gardner Clark, The Economics of Soviet Steel (Cambridge, 1956), chapter 8).
39 As an approximation to marginal costs, the ratio of costs may be computed for the least efficient mines of coking coals and of steam-raising coals. It turc.s out that this ratio is also approximately two to one.
40 Kawinski and Zalewski, op. cit., p. 1.
41 Karol Bohdanowicz, “Rudy żelazne,” Życie Gospodarcze, No. 2 (1947), 71, and Przeglqd Zachodni, No. 1 (Poznan, 1947), 24.
42 Juliusz Mikolajski, “Skarb diabla Boruty,” Zv“e Gospodarcze, No. 23 (1956).
43 Centralny Zarzad Kopalnictwa Rud Zelaza, Cennik krajowych rud żelaza na rok 1956, Annex 2, p. 3; Jerzy Borysiewicz, System cen srodkow produkcji w przemyśle na przykladzie hutnictwa (Warsaw, 1955), p. 19. Class 2 hematite from Krivoj Rog is used as a standard and all other ore prices are “related” to this grade according to their respective metallurgical value.
44 40 to 50 percent of the ore is in powder form which tends to choke up furnaces or go up the flue without reducing the iron. Cf. M. Gardner Clark, The Economics of Soviet Steel, pp. 152, 154 and Hutnik, No. 2 (1955), 45.
45 In early 1954, over 20 percent of the pig iron and 18 percent of the crude steel poured was rejected for excessive sulfur or silica impurities. Stanislaw Olenski, “Hutnictwo zelaza w pierwszym pó1roczu 1954 roku,” Zycie Gospodarcze, No. 17 (1954), 646. These statistics cover only about two-thirds of output.
46 Even the ultra-modern Lenin mill was occasionally loading unbeneficiated ore of 33- percent content in 1955, at the expense of the durability of its equipment. Hutnik No. 1 (1956), 31.
47 Notatnik Agitator a, No. 17 (1956), 22.
48 Juliusz Mikołajski, loc. cit. and Adamczyk, op. cit. p. 5. The main factor in the high costs of domestic ores beside the poor quality of deposits is low labor productivity (sixty tons of iron content per man year), caused in turn by adverse geological conditions and lack of mechanized equipment.
49 Borejdo, “Kierunki postepu … ,” op. cit., p. 2.
50 A stock of 1,500,000 tons of scrap was available soon after the war. Cf. Wola Ludu, May 23, 1952, “Złom zelazny i metale kolorowe.“
51 S. O. “Problem surowców zelazodajnych,” Gospodarka Planowa, No. 1 (1948), 20.
52 Stanislaw Tochowicz, “Trudności produkcyjne w stalowniach na tie konieczności zuzywania dalej ilości surowki,” Hutnik, No. 4 (1955), 113.
53 Borejdo, “Hutnictwo w planie 6-letnim,” op. cit., p. 282.
54 The average charge was made up of 545 kilograms of pig iron and 540 kilograms of scrap per ton of steel. Cf. Gwiaździński, “Analiza efektywnofci … ,” pp. 21, 22 and “O konieczności zmian … ,” p. 3.
55 These data comprise workers in steel mills (114,000 in 1955), in iron ore mining and in manufactures of finished steel products (wire, nails, etc.).
56 Zycie Gospodarcze, No. 24 (1956), 3.
57 The excessive number of supervisory personnel at the Nowa Huta works was apparent from a detailed study of their manning tables and a comparison with a modern American mill with a similar layout. These tables were kindly made available to Professor M. Gardner Clark and to myself at Nowa Huta in May, 1957.
58 Gwiaździński, “O konieczności zmian … ,” p. 1.
59 Gwiaździński, “Analiza … ,” op. at., pp. 22, 23. Toward the end of the Six- Year Plan, the value of investment works in process in the Ministry of Metallurgy came to twice the value of current sums invested during the year. The avera ge gestation period was then approximately two years. Cf. Czeslaw, Babinski, “O bledach w metodologii planowania inwestycji przemyslowych i budownictwa,” Part I, Inwestycje i Budownictwo, No. 2 (1955), 13.
60 A varying level of direct subsidies in the steel prices of different years may distort these ratios. To correct for this bias, the average cost of steel rails may be substituted for the price of plate in column four of Table VI. The ratios of column five derived from these costs increased from 1.5 in 1949-1950 to 5.0 in 1955-1956.
61 All auxiliary investments except workers’ housing and community projects are covered in the investment statistics published by Gwiaździński.
62 Gwiaździński, “O koniecznosci zmian … ,” p. 5.
63 Ibid., and Trybuna Ludu, July 25, 1956.
64 Gwiaździński, “Analiza efektywnosci … ,” p. 18.
65 Ibid., pp. 23, 24.
66 Ibid., pp. 23, 24.
67 The Lenin works were built on the basis of Soviet documentation and technical assistance. The Bierut mill was expanded and reconstructed exclusively with Polish plans and execution.
68 Gwiaździński, loc. cit., p. 22.
69 Gwiaździński, “O konieczności zmian … ,” p. 5. The present Five-Year Plan (1956 to 1960) does not call for the construction of any new steel mills. The latest policy in the effort to cut down investments in heavy industry and to improve the consumers’ lot is to delay the modernization of the old mills and to concentrate all efforts on the completion of works already launched in the Lenin, Bierut and Warsaw mills.
70 During the Six-Year Plan, obsolescence was de facto introduced by depreciating equipment according to a time period shorter than its expected physical durability.
71 Gwiaździński, “Analiza efektywnos'ci … ,” p. 21.
72 This scale of profitability is borne out by a detailed analysis recently carried out by the Department of Economic Research of the Economic Commission. Cf. M. Rakowski, “Z problemów badań efektywności produkcji eksportowej,” Gospodarka Planowa, No. 2, (1957), 22.
73 According to the official index, the total value of production in the machine-building and equipment industry (including armaments) rose 5.9 times from 1949 to 1955. (Rocznik Statysiyczny, 1955, p. 84.) However, double counting of semifabricated and finished products has caused the index to overstate the growth of the industry.
74 Stanislaw Kuzinski, “Niektóre dysproporcje szesciolatki w naszym przemysle,” Noive Drogi, No. 9 (1956), 5.
75 On the crucial shortage of nonferrous metals as a factor in holding down the expansion of the machine-building industry, see Stanislaw Wróblewski, “Zagadnienie metali niezelaznych w przemyśle maszynowym,” zycie Gospodarcze, No. 21 (1951).
76 They will seem particularly unprofitable if the planners decide to raise the overt or implicit rates of interest and allowances for obsolescence. Such a policy would reflect the growing concern of the government for compensating the people rapidly for their present sacrifices.