METALLURGY IN BULGARIA 2016 - bami.bg · Eurofer (), World Steel Association (), Eurometaux () and other international organizations active in the field of the ferrous and non-ferrous

METALLURGY IN BULGARIA

2016

SOFIA, 2017

CONTENTS

SECTION ONE .................................................................................................................................... 6

ECONOMY IN 2016 ............................................................................................................................ 6 1. POPULATION, LABOUR MARKET, WAGES ...................................................................... 6 1.2. GDP, GVA, PRODUCTIVITY ............................................................................................. 11

1.3. ENERGY CONSUMPTION ................................................................................................. 15 1.4. FOREIGN TRADE EXCHANGE, IMPORT AND EXPORT OF GOODS ........................ 17 1.5. METALLURGICAL INDUSTRY IN EU AND IN BULGARIA ........................................ 21

SECTION TWO ................................................................................................................................. 24 FERROUS METALLURGY IN BULGARIA ..................................................................... 24

2.1. PRODUCTION OF FERROUS METALS AND ROLLED FERROUS METALS ............. 24 2.1.1. STEEL PRODUCTION IN EU AND IN THE WORLD FOR 2016 ................................ 24 2.1.2 CRUDE STEEL PRODUCTION IN BULGARIA ............................................................. 26

2.1.3. PRODUCTION OF ROLLED FERROUS METALS ....................................................... 27 2.2. TRADE TURNOVER AND CONSUMPTION OF RF METALS ...................................... 30 AND PRODUCTS ....................................................................................................................... 30

2.2.1. IMPORT OF SCRAP, RFM AND PRODUCTS ............................................................... 30 2.2.2. EXPORT OF SCRAP, RFM AND PRODUCTS ............................................................... 34

2.2.3. FOREIGN TRADE TURNOVER OF ROLLED FERROUS METALS AND

FINISHED PRODUCTS .............................................................................................................. 39 2.2.4. DOMESTIC SALES OF RFM AND FINISHED PRODUCTS ........................................ 40

2.2.5. REAL HOME CONSUMPTION OF STEEL PRODUCTS .............................................. 42 2.3. PRODUCTION AND CONSUMPTION OF REFRACTORY ARTICLES AND

MATERIALS ............................................................................................................................... 44 2.4. METAL CASTING ............................................................................................................... 46

SECTION THREE ............................................................................................................................. 48

NON-FERROUS METALLURGY IN BULGARIA ...................................................................... 48 3.1. PRODUCTION OF NON-FERROUS METALS ................................................................. 48

3.1.1. PRODUCTION OF ANODIC AND ELECTROLYTIC COPPER ................................... 48

3.1.2. LEAD PRODUCTION ...................................................................................................... 52 3.1.3. ZINC PRODUCTION ........................................................................................................ 55 3.1.4. PRODUCTION OF PRECIOUS BY PRODUCT METALS, ALLOYS AND

CHEMICAL PRODUCTS ........................................................................................................... 58 3.1.5. PRODUCTION OF ROLLED/PRESSED NON-FERROUS METALS ........................... 59

AND ALLOYS ............................................................................................................................ 59 3.2.1. IMPORT OF NON-FERROUS METALS AND FINISHED PRODUCTS ...................... 66 3.2.2. EXPORT OF NON-FERROUS METALS AND FINISHED PRODUCTS ..................... 68 3.2.3. FOREIGN TRADE TURNOVER OF NON-FERROUS METALS ................................. 70 3.2.4. SALES OF NON-FERROUS METALS AND R/P METALS .......................................... 72

3.2.5. CONSUMPTION OF NON-FERROUS METALS AND ALLOYS ................................ 73

MEMBERS AND MANAGEMENT OF BAMI .................................................................. 76

For 25 years the annual edition of the Bulgarian Association of Metallurgical

Industry (BAMI) has been giving an objective characteristic for the state and

changes in the production, trade and consumption of metals and metallurgical

products. It is intended for managers and experts in the companies BAMI-

members, but is also used by a wide range of external specialists.

The BAMI team prepared the "Metallurgy in Bulgaria 2016" thanks all heads

of member companies for the information provided on their activities and data

on their production and realization, as well the Ministry of Economy for the

assistance in the preparation of the import/export analysis.

Additionally to the data from national sources, in the publication there is

information used from external sources, such as Eurostat (www.Ec.europa.eu)

Eurofer (www.eurofer.eu), World Steel Association (www.worldsteel.org),

Eurometaux (www.eurometaux.eu) and other international organizations active

in the field of the ferrous and non-ferrous metallurgy.

http://www.worldsteel.org/

THE FOLLOWING ABBREVIATIONS HAVE BEEN USED IN

THE ANNUAL

ASSI - Average Social Security Income

AC - Apparent Consumption

BAMI - Bulgarian Association of the Metallurgical Industry

BCLA - Branch Collective Labour Agreement

BNB - Bulgarian National Bank

CEA - Classification of Economic Activity

CEE - Central and East Europe

C.I.S. - Community of Independent States (former USSR)

CR - Cold-rolled (rolled steel)

ETS - European emission trading scheme

GDP - Gross domestic product

GVA - Gross value added

HNFM - Heavy non-ferrous metals

HR - Hot-rolled (rolled steel)

ICSG - International Copper Study Group

ILZRO - International Lead and Zinc Research Organization

LME - London Metal Exchange

MF - Ministry of Finance

MSST - Minimum Social Security Threshold

NCEA - National Classification of Economic Activity

NF - Non-Ferrous

NFM - Non-Ferrous Metals

NRA - National Revenue Agency

NSI - National Statistic Institute

NSSI - National Social Security Institute

p.e. - petroleum equivalent

PP - Purchasing Power

RFM - Rolled Ferrous Metal (steel)

RHC - Real Home Consumption

DEAR LADIES AND GENTLEMEN,

It is my pleasure to present you Metallurgy in

Bulgaria in 2016 - the annual edition of the

Bulgarian Association of Metallurgical Industry.

For 25 years we are maintaining the tradition of

preparing and offering our members and partners an

yearly analysis of the production of ferrous and non-

ferrous metals and metallurgical products, and comparative data on the

economy of Bulgaria and the European Union as well.

With this edition BAMI is performing one of its main tasks - to be useful to its

members by collecting and providing specialized information about the general

development of the metallurgical industry, the achievements, the problems and

the changes made. It is one of our goals to be helpful assisting the companies

in the implementation of their programs and to introduce these to the

Bulgarian and European citisens. This is also a special part of the information

and communication policy of the industry, making visible the development,

the changes and investmenst in new capacities and modern technology for a

better working conditions and environmentale protection.

Today the metallurgical industry is a major sector of the Bulgarian economy.

As a result of the investments made, the companies achieved increased

capacity, better quality and competitiveness of their production - both metals

and metallurgical products, resulting in good positions on the EU and world

markets. This is crutial, considering the export orientation of the Bulgarian

metallurgy and its high dependence on the EU and world economy and on the

realization in third countries.

The past year 2016 was characterized by a changing political and economic

environment both nationally and internationally. Early elections were held in

the country, the emigration pressure from the Middle East and North Africa on

Europe continued, the problems with the metal prices and their downward

trend remained. Nevertheless the branch indicators are good, the metallurgical

production provided growth in value added, it has retaied high values and

significant share in the country's export, jobs were preserved.

The achievments are part of the goals set, the metallurgy continues its

development towards sustainability.

Finally I would like to thank everyone who has contributed to this publication.I

believe that the information is useful for the management and the metallurgists

in the country as well for our Bulgarian, European and foreign partners.

Yours faithfully,

ANTON PETROV Chairman of the Board

SECTION ONE

ECONOMY IN 2016

(SHORT REVIEW – BULGARIA, EU)

1. POPULATION, LABOUR MARKET, WAGES

The political and economic situation in Bulgaria, in the region, in Europe and in

the world in 2016 could be defined as relatively successful in economic terms

but very unstable from political point of view; a relatively sustainable for the

recent years growth was achieved. Military conflicts in the Middle East

continue, there are political turbulences in neighboring countries, the sanctions

against Russia remain. All these hinder stability and predetermine a significant

inflow of immigrants from the crisis regions to Europe and for the continuation

of internal migration processes within the member states, as well. Such a move

of people looking for better living conditions who are not creating gross product

and value added but are mainly beneficiaries of budget funds and social rights

has a negative effect on the European economy - it does not stimulate

development but is leading to crises, different in size and characteristics.

In this international environment the Bulgarian economy and industrial

producers are looking for realization and development opportunities. In the

country there are additional problems related to delayed reforms and policies in

key sectors - education, health, justice, regional and demographic development.

These factors are obstacles for growth and investmens – with a low rate of

development in 2016, too, such kind of growth is not enough to move closer to

the EU average indicators.

Demographic indicators for Bulgaria continue to decline, both in terms of

population size and in age and educational characteristics. In medium and

long term this is a very important factor for the country and its future. Modern

techniques and technologies require a high educational level of the workforce -

a determining factor for the sustainable development of the country. This can

only be achieved in a case of population growth, increasing the number of active

young people and their participation in economic life.

Figures for the last five years shown in Table 1.1 show a steady drop in the

population, for 2016 it is 52 thousand people. From the beginning of the

transition the trend has been negative. In the period 2000 - 2016 the population

is decreasing by more than 65 thousand on annual average. Since the beginning

of the 21st century the overall change in the number of the population is

large, the population decreased by 1,047 million people, as shown in Fig.1.1.

Table 1.1 Population by categories, thousand people

Population

groups:

2013 2014 2015 2016

X 1,000 % X 1,000 %

X 1,000

% X1,000 %

City/town

po population

5 291.6 73.0 5 267.5 73.1 5 227.1 73.1 5 204.4 73.3

Village

population

1 954.0 27.0 1 934.7 26.9 1 926.7 26.9 1 897.4 26.7

Males 3 524.9 3 502.0 3 477.2 3 449.9

Females 3 720.7 3 700.2 3 676.6 3 651.9

Total: 7 245.6 100.0 7 202.2 100.0 7 153.8 100.0 7 101.8 100.0

Source: NSI

The ratio urban-to-rural is 3 to 1, changing steadily to the benefit of urban residents.

Villages continue to be depopulated.

Figure 1.1

Population of Bulgaria, million people

Among all EU member states Bulgaria has the highest negative values in

natural growth. This explains the most unfavorable age profile of the

population. For 2016 the group of 15-24 year olds, i.e. the most promising

part of labor force in Bulgaria, has a share of 9.6% - the average for the

EU (28) is 11.1%. In the opposite - the age group over 65 in Bulgaria has a

high relative share of 15.8%, for the EU (28) the average value is 13.8%.

No single indicator of the demographic characteristics was improved over the

years and the country's crisis is deepening. This also creates an unfavorable

business environment and conditions for the development of the industry,

hinders the realization of new investment intentions by national and foreign

business.

Another demographic indicator relevant to quality and standard of life is the

average life expectancy of the population in a respective country. This indicator

is again below the EU(28) average and Bulgaria is at the last place among all

EU member states. According to NSI data the average life expectancy in the

EU(28) for 2015 is 80.6 years, for Bulgaria it is 74.7 years or the average

Bulgarian citizen lives 6 years less.

The citizens of Spain live the longest - 83 years, followed by the Italians with

82.7 years. In the neighboring Balkan countries the average life expectancy is

also higher - in Greece it is 81.1 years, in Romania 75 years, in Macedonia

75.5 years, in Turkey 78.2 years and in Serbia 75.3 years.

In line with the demographic characteristics, the labor market is also changing.

In Table 1.2 data are presented on the average annual number of employees

with labor and service contacts, on labor income and on some social parameters

for 2016.

Table 1.2

Average number of employed people, level of unemployment, inflation

Indicators

2013

2014

2015

2016

Average annual number of persons (national

calculations), in thousands

2 174.8 2 203.1 2 254.8 2 232.8

Average annual number of registered

unemployed, in thousands

436.3

384.5

305.1

247.2

Average annual level of unemployment

(NSI),%

12.9

11.4

9.1

7.6

Inflation/ deflation rate -2.0 -1.4 - 0.1 - 0.8

Average monthly wage of persons on labor

and service contracts in the country, BGN:

807

822

878

962

- public sector

- private sector

- incl. processing industry

839

796

668

888

800

700

926

863

761

984

954

846

Average monthly wage in activity 24

„Production of basic metals ”:

● ferrous metallurgy

● non- ferrous metallurgy

● metal casting

1 129

1 069

1 617

623

1 178

1 050

1 661

692

1 187

1 077

1658

740

1 246

1 131

1 724

792

Source: NSI

From the data about the employed people in 2016 and the changes compared

with previous periods the following conclusions could be drawn:

After 2013 the number of employees marks an increase that lasts for three

consecutive years – up to 2015. In 2016 there is a decrease in the number of

workers - by 23 thousand less compared to the previous year 2015. In

parallel the number of registered unemployed is also decreasing, respectively the

unemployment rate drops from 9.1% to 7.6%.

These data call for contradictory conclusions that are not giving a clear picture

of the the labor market‟s status. There is a decrease in the number of employed

persons, while the number of registered unemployed is also reducing. The

reason is due to the impact of other side factors, such as the negative growth and

the declining in the working population in Bulgaria, as well as the migration

outside the country of young people in working age. As a matter of fact the

labor market is worsening.

There is no clear long-term trend for growth of the average annual number of

employed persons despite the fall of the unemployment. The ratio between the

newly created jobs and the reduction of the existing ones is not positive, the

weak economic development does not create enough new jobs.

Over the whole period under review, the income of the employees under labor

and service contacts is increasing. The average monthly salary in the country in

2015 compared to the previous one is increased by 56 BGN and only for the

processing industry - by 61 BGN.

In 2016 compared to 2015, the increase in absolute value reached 84-85

BGN, it is a growth of ca. 10%. The salaries in the public sector are higher

than in the private, but there is a tendency for this difference to decline. In 2016

this difference was only 30 BGN on an annual basis, compared to 63 BGN for

the previous 2015. The public sector reported a smaller annual growth of 6%

compared to 11% in the private sector. In the processing industry the reported

growth was 11.2%, significantly outrunning the growth of the productivity.

The average salary and the average insured income in the metal and HRM

industry are still of the highest in the country. In 2016 the average salary in

the whole economic activity 24. Production of basic metals is 1.5 times higher

than that in the proceeding industry and only in the non-ferrous metallurgy -

more than 2 times.

According to NSI preliminary data for 2016 the average wage in non-ferrous

metallurgy (1 724 BGN) is higher than in the mining (1 377 BGN) and in

the energy sector (1 684 BGN).

The enterprises of the metallurgy and related industries, as well as all BAMI

member companies share common social values and policies by maintaining an

active dialogue with the partners of the national trade unions.

In the sector there are permanently operating Sectoral Collective Labor

Agreements (BCLA). In the last Agreement concluded for the period 2017 -

2018, the Minimum Wage for employees in the main proceedings was increased

by BGN 100 - a growth of 122%. Higher values have been agreed for other

additional payments and social benefits.

The figure below (Fig.1.2) presents the employers costs per hour for labor in

BGN for employees under labor and service contracts in 2015 in the main

sectors of industry compared to the average costs of all economic activities in

the country. Shown are the same costs of the employers in the steel and non-

ferrous metallurgy and in the IT sector as the highest wage sector.

Figure 1.2

Labor costs, BGN for one working hour

Source: NSI

The highest and close in value are labor costs per hour in the energy sector,

information technology and non-ferrous metallurgy. Above average are also

these costs in the mining (almost 2 times) and in the steel industry (1.5 times).

1.2. GDP, GVA, PRODUCTIVITY

For ten consecutive years after Bulgaria became a member of the EU our

country is the last one on GDP/GVA per capita, including the Standard

Purchasing Power (SPP). The reported annual growth in the economic

performance does not change this position.

In 2016 the average real growth of the world economy is 3.1%, for the EU (28)

economy it is 1.9%; for Bulgaria the real growth is 3.4% (for 2015 - 3.6%),

according to MF data.

The real GDP per capita produced in 2016 in the EU (28) is 26 900 EUR, in

Bulgaria - 6 000 EUR, i.e. 4.5 times less. Among all EU member states only

Romania reports similar figures - 7 600 EUR , but in 2016 Romania is getting

ahead in the absolute value of GDP by 1 600 EUR per capita and the annual

growth compared to the previous period is higher - 5.6% for Romania and 5.3%

for Bulgaria.

For all other EU member states the GDP is ca.12 000 EUR per capita, in 11 of

them the values are above the European average - they are reaching ca. 30 000

EUR per capita.

After almost 8 years of GDP decline, in 2016 Greece recorded a small growth

of 0.6%, reaching a value of 17 000 EUR per capita and this is almost 3 times

more than that in Bulgaria.

Similar is the ranking of the EU member states' GDP per capita in standards of

purchasing power (SPP). For all years of the EU membership, incl. 2016

Bulgaria is at the lowest level and still below 50% of the average. For 2016

GDP on standard PP is only 48% of this in the EU (28).

According to NSI and EUROSTAT data for 2016 this indicator is for Romania

59%, for Poland - 69%, for Hungary - 67%, for Croatia - 59% and for the Czech

Republic - 88%.

Figure 1.3 shows the indicator GDP per capita in SPP in 2016 for all member

states as a percentage of the EU(28) average, assumed as100.

The top 11 countries in the chart which are above the European average (green

line) are actually those from Western Europe. The remaining below the average

SPP are the countries of Southern and South-eastern Europe. The difference

between the highest and the lowest values is about twice.

Up to now the support schemes implemented under different EU structural funds

and operational programs have not changed the position of Bulgaria in this

ranking (48%), and ten years after entering the EU this indicator remains the

lowest and below 50%.

In Romania after 2008 the GDP per capita in SPP is over 50%, reaching in 2016

59% of the EU(28) average.

To overcome these large differences, which are causing an internal migration

within the EU, a more active European regional development policy is needed.

Figure 1.3

GDP per capita in Standard Purchasing Power, EU(28)=100

Source: Eurostat, NSI

The values of produced in Bulgaria Gross Domestic Product and Gross Value

Added by some economic activities for the last four years are given in Table 1.3.

The Gross Value Added (GVA) is 79 937 million BGN and the Gross

Domestic Product (GDP) - 92 635 million BGN.

In 2016 the share of industry in the total GVA of Bulgaria is 23.8% and in

the GDP - 20.5%. For industry (manufacturing and construction) this share is

28% in GVA and 24% in GDP respectively. Agriculture produced a relatively

low rate - 4.4% of GVA and 3.8% of GDP in 2016 and for a second year there is

a decrease to be seen in the indicators compared to these in previous periods.

Gross domestic product, which is formed by the added value of the Bulgarian

economy (86.3%) and of taxes (13.7%) shows in recent years a constant growth

- in 2016 compared to 2015 the total increase is by 4 064 million BGN or

104.4 %. The growth is driven by increased value added (+3 391 million BGN)

in all economic activities (without agriculture) and services, as well as by

adjustments/taxes (+ 673 million BGN).

Table 1.3

GDP and GVA by sectors and groups, million BGN

Indicies: 2013 2014 2015 2016 *

% of

GDP

Gross Value Added (GVA) –

current prices, million BGN, incl

- agriculture and forestry

- mining and processing industry

- power generation, water and

sanitation (В-Е)

- construction (F)

--------------------------------------------

- trade, food, transport and

communications (G-J)

- finance, insurance, real estate and other

business services (K,L,M,N)

- public administration, education, public

healthcare (O-Q), others (R-U)

=============================

- adjustments/taxes

70 576

3 778

16 007

3 305

----------

18 679

16 262

11 097

======

11 395

72 608

3 823

16 501

3 225

----------

19 522

16 814

12 679

======

11 004

76 546

3 664

18 013

3 322

----------

20 937

17 705

12 905

=====

12 025

79 937

3 519

19 009

3 388

--------

22 039

18 806

13 175

======

12 698

86.3

3.8

20.5

3.7

------

23.8

20.3

14.2

===

13.7

Gross Domestic Product (GDP),

million BGN

GDP per capita, BGN

81 971

83 612

11 577

88 571

12339

92 635

12996

100.0

Source: NSI, * preliminary data

The latest official NSI data on production volume in value and other key

economic indicators are for the year 2015; in Table 1.4 they are shown for a

period of four consecutive years and by industry sectors.

Table 1.4

Key economic indicators

CEA 2008 / INDICIES 2012 2013 2014 2015

INDUSTRIAL PRODUCTION TOTAL 63 876 64 034 63 446 66 105

Mining/Sector В/

- produced output, million BGN 2 970 2 557 2 43З 2 435

- value added, million BGN 1 660 1 299 1 162 1 107

- employees, number 25 030 24 635 24 105 24 025

- value added per employee, thousand BGN 66.3 52.7 48.2 46.1

Processing industry /Sector С/

- produced output, million BGN 49 886 51 076 52 383 54 354




24. Production of basic metals

- produced output, million BGN

- value added per employee, thousand BGN.

incl. in the NF metallurgy, thousand BGN

7 390

71.6

115

7 436

38.8

68

7 310

52.3

94.7

7 412

56.8

119.9

Power generation /Sector D/

- produced output, million BGN 9 646 9 043 7 275 7 899



- value added per employee, thousand BGN. 87.9 101.3 78.0 98.6

Water supply, sanitation, waste management /Sector Е/

- produced output, million BGN 1374 1 358 1 355 1 417

- value added, million BGN 666 675 678 739



Source: NSI

The biggest share of the total output produced in the country is due to the

processing industry, including the metallurgical industry. In 2015 industrial

output was produced worth BGN 66 105 million, with BGN 2 659 million

more than in 2014.

Increased was mainly the production of the processing industry - by BGN 1 971

million, the contribution of the metallurgical industry was ca. 100 million BGN

of them. Power production accounted an increase of 624 million BGN and the

contribution of the water and waste management sector was 62 million BGN.

The indicators in the Table show a high relative share of the metallurgical

production, both in the volume of the processing industry (14%) and in the

total industrial production of the country - a share of 11.2% for 2015.

The value added per employee in the metallurgy for the last two years is

growing, following a drastic fall in 2012 as a result of the rising electricity

prices in the country and a decline in metal prices on the international markets.

Despite these unfavorable factors, the values are more than twice the same

indicator for the processing industry and for the water supply and waste

management sector, and exceed those of the mining.

The production of non-ferrous metals, alloys and products from them is one of

the most promising and high-performing industrial activities, which contributes

not only to the achievements of the Bulgarian economy, especially to export‟s

value, but also to the base industry key indicators of the EU.

As a result of the investments made and the high-tech development of the

non-ferrous metallurgy, the value added per employee reached in 2015

119.9 thousand BGN. According to NSI data, this is the highest indicator of all

industrial activities in the country, with sustainable growth and exceeding the

values in the energy sector.

The main technological and economic indicators in Bulgaria's non-ferrous

metallurgy are characterizing the activity as competitive and with

development potential, highly important for the national and the EU economy.

1.3. ENERGY CONSUMPTION

Metallurgical industry is characterized by high energy consumption due to high

temperature processes of the metal smelting and electrolytic refining. This

makes the metal production strongly dependent on national regulations and

policies, on the energy market and energy prices.

There are other factors that reduce the effect of these external dependencies

based on new modern energy efficient equipment and technologies. These

processes of innovative renovation of the productions are strongly represented in

the Bulgarian metallurgical enterprises and a constant goal in their investment

plans and policies

Energy intensive industries through their organizations at national level have

actively worked for several years to apply EU practices for compensation of

their costs due to the increased energy prices. As a result ORDINANCE № Е-

RD-04-06/2016 is adopted on the reduction the burden related to the costs

of energy from renewable sources. The supporting scheme is operative for the

period August 1, 2015 to December 31, 2020 and the amount is being fixed for

each pricing period.

In the last NSI energy balance for 2015 the industry reports total energy

consumption of 2 701 thousand tons of petroleum equivalent (p.e.) - it has an

increase of 95 thousand tons p.e. compared to 2014. By type of energy

resources the highest share has the natural gas - 917 thousand tons p.e. or 34%,

followed by electricity with 769 thousand p.e. and 28.5%. The remaining

quantities and shares are of other types of energy sources, such as solid and

liquid fuels, thermal etc.

The total consumption of energy resources in households is 82% of that in

the industry and amounts to 2 213 thousand tons p.e. , with a clear trend of

increased share of the consumed electricity (41.3%) on the account of other

fuels. The amount of household electricity consumption already exceeds that

from the industry by 146 thousand tons p.e. Households show low consumption

of natural gas and it is only 2.3% of their energy balance. High electricity

consumption is due to the existing cross-subsidization of prices for household

consumers by the industry and does not stimulate demand for other alternatives.

The implementation of policies and projects for changing in the energy mix is an

unrealized potential for improving the energy efficiency in households and for

reducing greenhouse gas emissions.

The total energy consumption in metallurgy is 243 thousand tons p.e. –

14 thousand tons p.e. less than in 2014 (257 thousand tons p.e.); it

represents 9% of the total industrial consumption in the country, the share in

the previous year was 10%.

The total energy consumption in metallurgy has decreased over the past

10 years more than twice. These changes are due to two main factors – the

closing of old productions and the realized innovations/investments in new

energy-efficient capacities and technologies.

In the two sub-sectors the total energy consumption is respectively 55% of the

non-ferrous metallurgy (133 thousand tons p.e.) and 45% (110 thousand tons

p.e.h) of the ferrous metallurgy.

Despite the improved energy efficiency, the consumption of electricity in the

ferrous and non-ferrous metallurgy (135 thousand tons p.e.) is higher than

that of other sectors of the Bulgarian industry and represents 18% of the total

industrial energy consumption. The chemical and food industries follow with

a share of 15% and 13%, respectively.

Natural gas (81 thousand tons p.e.) is mainly consumed in the ferrous industry

(61%) and in the non-ferrous industry it is used in the production of rolled

metals and products of non-ferrous metals and alloys. The share of the natural

gas used by the metallurgical industry in the total non-energy industrial

consumption for 2015 of the country is 9%, compared to 10% in the previous

period.

Figure 1.4 shows the dynamics of the energy consumption in total and

separately for the ferrous and non-ferrous metallurgies over the last five years.

Figure 1.4

Energy consumption in the metallurgy, thousand tons p.e.

The implementation of the best available techniques and technologies does not

change the energy intensive nature of the metallurgical processes. Therefore the

high share of metallurgy in the total volume of industrial production leads to a

higher energy intensity of the economy. This specific structure will remain in

the coming years, respectively the energy cost per unit of GDP will be higher

than the EU average.

1.4. FOREIGN TRADE EXCHANGE, IMPORT AND EXPORT OF GOODS

The metals and metallurgical products of ferrous and non-ferrous metals and

their alloys have a high value in the export of Bulgaria - for many years they

have a predominant place in the portfolio of the country for the markets of the

European Union and other regions of the world.

For export are all metallurgical products, such as rolled ferrous metals,

electrolytic copper, zinc, lead, rolled and pressed products from heavy and light

non-ferrous metals and various supporting industries, too.

Although such export characteristics have other sectors of the Bulgarian

industry, too, the foreign trade balance of the country in the goods exchange

shows a negative value. This deficit is decreasing in recent years but is still in

the order of some milliard BGN.

Data on Bulgaria's imports and exports over the past five years are given in

Table 1. 1.5. The values of imported and exported metallurgical products

(including metal waste) for the same period are also mentioned.

Foreign trade balance in the goods exchange, milliard BGN

Indicators: 2012 2013 2014 2015 2016

Import of goods, incl.

from EU (28)

-------------------------------------

- metal products

relative share, %

49.8

29,3

----------

3.3

6.6

50.5

30.2

----------

3.3

6.5

51.2

31.5

-----------

3.6

7.0

51.6

33.2

-----------

3.5

6.8

51.0

33.1

-----------

3.5

6.7

Export of goods, incl.

for EU (28)

-------------------------------------

- metal products

relative share,%

40.7

23.9

-----------

6.6

16.3

43.5

26.1

-----------

6.7

15.3

43.2

26.9

-----------

6.1

14.3

45.5

29.1

-----------

6.1

13.2

46.1

31.1

-----------

5.1

11.1

Foreign trade balance,

incl.

- matal products

- 9.1

+ 3.3

- 7.0

+ 3.4

-7.9

+2.5

-6.1

+2.6

-4.9

+1.6

Source: NSI, SITB; Customs statistics, NRA

As an indicator of competitiveness and growth of the Bulgarian economy, the

total goods export shows for 2016 an increase in value 600 million BNG

compared to 2015 (1.3%); the import of goods decreased by 600 million BGN

(less than 1.2%). As a result, the negative foreign trade balance decreased by 1.2

milliard BGN, reaching the lowest level of -4.9 milliard BGN over the last ten

years.

Metals and metallurgical products have maintained a high relative share for

years, which has reached 16-18% in the years before the economic crisis. As a

result of the declined production in the period of the crisis and thereafter and of

the fall in the metals prices on the world markets, this share changed reaching

13.2% in 2015 and 11.1% in 2016 respectively. Foreign trade goods turnover

formed a positive balance amounting to several milliard BGN and has

contributed to improving the country's foreign trade performance.

Figure 1.5 shows values of total exports and export by type of metals and

metallurgical products in the last years.

Figure 1.5

Export of metals and metallurgical products, million BGN

After 2011 the trade balance in the ferrous industry is negative, with a trend the

difference to increase both in value and in nature. The closure of large

metallurgical capacities limited the production of steel products and products by

type and range, so imports remain significant in order to cover the domestic

consumption.

The non-ferrous metallurgy continued its development and changed the

appearance of the Bulgarian metallurgy. Nowadays it is characterized by a high

specialization in the production and processing of non-ferrous metals and alloys

and is giving a specific characteristic of the whole Bulgarian economy, and has

its contribution to the European Union's metallurgical industry. In the last years

foreign trade of non-ferrous metals has a positive balance of 3-4 milliard

BGN.

According to official BNB export data presented in Table 1.6 for the period

2012-2016, non-ferrous metals, with the exception of the last year, have the

highest value of all types of goods by individual groups. In 2016 there was a

decrease in the quantities and in values of the exported non-ferrous metals

(-1milliard BGN), as a result of which the value of the exported raw materials

for food production (mainly grain crops) became higher.

Table 1.6

Foreign trade – export by goods groups, million BGN

Goods groups 2012 2013 2014 2015 2016

Consumer goods, incl. 9432 10193 11219 12034 12286

Foods 1935 2130 2341 2603 2744

Cigarettes 422 420 442 407 285

Beverages 196 198 167 180 179

Clothes and shoes 2848 3038 3146 3115 3295

Pharmaceuticals and cosmetics 1371 1571 1816 1925 1888

Furniture 1463 1517 1722 1964 1967

Other consumer goods 1195 1319 1585 1841 1926

Raw materials, incl. 17535 18930 17840 18547 18071

Pig iron, iron and steel 1409 1209 1074 803 782

Non-ferrous metals 4483 4709 4364 4509 3504

Chemical products 676 608 655 741 679

Plastics, rubber 1077 1286 1404 1590 1614

Fertilizers 397 330 375 465 430

Textile materials 728 782 827 944 988

Raw materials for food production 3389 4517 3607 3498 3979

Wood and paper, cardboard 789 861 928 966 956

Cement 54 43 33 47 67

Tobacco 259 328 260 253 326

Other raw materials 4276 4256 4312 4731 4744

Investment goods, incl. 6831 7765 8415 9795 10867

Machines, apparatus 1960 2233 2364 2510 2523

Electrical machines 887 1072 983 1149 1208

Vehicles 728 802 802 939 1004

Spare parts and equipment 1682 2078 2247 2538 2660

Other investment goods 1574 1581 2018 2659 3470

Total non-energy stocks, incl. 33798 36888 37474 40376 41225

Total energy resources 6809 6620 5694 5012 4795

Petroleum products 5727 5680 4633 3735 3327

Other different of petroleum products 1082 941 1061 1278 1467

Other 16 51 66 82 89

Total export 40623 43559 43233 45470 46110

Source: BNB

The export of petroleum products is commensurate with export of metallurgy

and grain crops but due to the decline in international petroleum prices, values

are declining over the mentioned period. Despite the big export of the energy

resource stock group, its foreign trade balance was negative, amounting to

several (3-4) milliards BGN over the years.

1.5. METALLURGICAL INDUSTRY IN EU AND IN BULGARIA

Modern world is impossible without metals, alloys and products of them. They

are important raw materials in the value chain in all industry branches – energy,

renewable energy sources, investment machinery, electronics and electrical

engineering, transport, construction, informatics and telecommunications,

households, etc. Metals are high recyclable and this allows their multiple

processing and an almost endless cycle of use. Therefore they are in the focus of

the EU in implementing resource efficient policies and a move to a circular

economy.

Countries and regions with developed economy are trying to reduce their

dependence on external supplies and to provide important industries with own

metal raw materials. This is also the policy of the EU and of its member states.

Therefore metals are taking a significant share both of the EU(28) and of the

member states production. Through trade policy, the protection of European

markets is being implemented from unfair and subsidized imports from third

countries, which is already a problem for Europe's economy. Similar processes

are observed in many sectors and the import of metals continues to grow. A

reason for this is also the 'leakage' of production to other regions due to high

demands on European producers. Asia (mainly China), is the largest producer

of metals, with more than 50% of the world steel, copper, zinc and lead

production.

In this new economic environment, the EU has placed the renaissance of the

industry on the agenda. Policies and measures are taken to protect European

production from unfair imports of metallurgical products from third countries,

including China. Regardless of these, the value of output in activity

24.„‟Production of basic metals‟‟ for the whole EU(28) over the period 2011 –

2015 has decreased by EUR 57 milliard, a drop of more than 17%.

The output in metallurgy produced in 2015 in EU(28) is worth EUR 330.8

milliard, Bulgaria production was worth EUR 3.8 milliard, which represents

1.2% of the EU(28) total. Among the member states of the EU our country

occupies the 16th place in value of metallurgical production.

Germany is the largest producer of metals with a production worth EUR 92.4

milliard and a share of 28%, followed by Italy with a total production of EUR

55.3 milliard (17%), France (EUR 27 milliard) and Spain (EUR 24 milliard).

Other major producers are the UK (EUR 21.9 milliard), Belgium and Austria.

From the “new”member states Poland has the highest volume - EUR 10.7

milliard, followed by the Czech Republic with EUR 6.8 milliard. Close to

Bulgaria are Greece - EUR 4.2 milliard, Romania - EUR 3.8 milliard and

Slovakia - EUR 3.8 milliard.

The relative weight of steel and rolled ferrous metals is much bigger in the

structure of the EU metallurgical sector than that of the non-ferrous metallurgy.

Figure 1.4 shows this ratio for the EU (28) and Bulgaria, according to

EUROSTAT data for 2015.

Figure1.4

Structure of CEA 24.Production of basic metals in EU and in Bulgaria

In 2015 the produced ferrous metals and HRMs within the EU is worth 185.9

milliard EUR, 107.3 milliard EUR was worth the production of the non-ferrous

metals and of the casting – 37.5 milliard EUR.

Metallurgy in Bulgaria is highly specialized in the production of non-ferrous

metals and this trend has been growing over the years - in 2014 the non-ferrous

metallurgy has a relative share 82.4% and in the year 2015 it is 84.5%.

The total EU steel production shows a drop by almost 23% after the economic

crisis but still retains its second place in the world with a volume of 162

million tonnes in 2016. This is significantly less - only 20% of the annual

output of China with over 808 million tons crude steel.

The problems of the steel industry the European Union are related to the rising

electricity prices as a result of the implementation of climate policies

(Renewable Energy Sources, ETS) as well as liberalization of trade with third

countries, unfair and dumped imports of steel products from China, Russia,

Ukraine and others.

Being export oriented the Bulgarian steel industry is also influenced by these

processes - in the last five years the quantity of crude steel produced a decrease

by 35% is reported.

The produced non-ferrous metal, alloys and products of them in 2015 in

Bulgaria are worth 3.2 milliard EUR – a share of 3 % of the total EU production

under CEA 24.4.

The Bulgarian production of non-ferrous metals (copper, zinc, lead), HR non-

ferrous metals and alloys has a high contribution not only to the national

economy, but is having a high relative share of total EU production.

Values of non-ferrous metals and products produced by the EU member states

are as follows: Country

Value, milliard EUR Share, %

2014 г. 2015 г.

TOTAL EU(28), incl. 103.6 107.3 100

Germany 31.7 33.9 31.6

Italy 13.6 14.1 13.1

Spain 9.5 8.9 8.3

Belgium 8.1 8.2 7.6

France 7.8 8.9 8.3

UK 7.3 7.7 7.2

Sweden 4 4.3 4.1

Austria 4.2 4.6 4.3

Bulgaria 3.1 3.2 3

Greece 2.5 2.6 2.4

Poland 2.2 2.4 2.2

17 other countries 9.6 8.5 7.9

Source:Eurostat, April 2017

Bulgaria occupies the 9th

place in the EU production value ranking of non-

ferrous and precious metals. The non-ferrous metals produced by each of the

other 17 non-listed countries were worth around and below EUR 1 milliard.

As a result of reduced production and falling prices on the international markets

the value of non-ferrous metals produced in the EU in 2014 is decreasing by16

milliard EUR (13%) compared to 2011.

Data about the basic non-ferrous metals produced in 2015 show that the EU is

the third world producer of electrolytic copper and lead with a share of 16.5%.

The EU is the second largest producer of zinc with 15.0% of total world

production.

The Bulgarian metallurgy has a contribution for these prestigious places in the

world economy rankings - it provides 8.5% of the electrolytic copper and 15%

of anode copper in the EU; for block zinc this share is 4% and for lead - 5.5%.

Bulgarian metallurgy is restructuring and developing on the basis of the best

techniques and technologies towards competitiveness with a potential to be an

industrial pillar for the country's economy and a basis for the development of a

number of modern new industries.

SECTION TWO

FERROUS METALLURGY IN BULGARIA

2.1. PRODUCTION OF FERROUS METALS AND ROLLED FERROUS

METALS

2.1.1. STEEL PRODUCTION IN EU AND IN THE WORLD FOR 2016

Non-ferrous metals and alloys, rolled metal and their products are most widely

used in important industrial sectors and in the household. They are the main raw

material for the production of machines, equipment and tools, widely used in the

automotive and transport engineering, in construction and energy sector. The

capability of a national steel production to meet the domestic consumption is

important for any developed country, making the sector particularly sensitive to

fair international competition and market rules.

In 2016 the total world crude steel production is 1 630 million tons - compared

to 2015 it is reduced by 10 million tons (2.5%). For years incl. 2016, China

ranks first in terms of steel production (808.4 million tons) - this is 50.2% of the

whole world production. The EU(28) production is on the second place in

terms of volume - a little over 10%. Following is Japan - 105 million tons,

India - 96 million tons, the USA - 78.5 million tons and Russia with 71 million

tons. Within the European countries the largest producers are: Germany - 42

million tons, Turkey - 33 million tons, Ukraine - 24 million tons and Italy - 23

million tons.

Figure 2.1

Main world producers of crude steel, by countries, million tons, 2016

50.2%

10.1%

6.9%

6.5%

5.9%

20.4% China

EU

Japan

India

USA

Other

The world's largest steel producers are corporate structures; for 2016 they report

crude steel production, as follows:

1. Arcelor Mittal – 95.45 million tons

2. China Baowu Group – 63.81 million tons

3. HBIS Group – 46.18 million tons

4. NSSMC – 46.16 million tons

5. POSCO – 41.56 million tons

6. Shagang Group – 33.25 million tons

7. Ansteel Group – 33.19 million tons

8. JFE Steel - 30.29 million tons

The crude steel producer in 2016 in the EU was 162 022 thousand tons – 4 098

thousand tons less, compared to the production in the previous year – this is

a drop of 2.5%. The steel industry in the EU is reporting almost constant

decrease from the beginning of the economic crisis, with total annual production

decrease by more than 48 million tons compared to 2007. For the same period,

the number of employees in the sector was reduced from 403 thousand people to

319 thousand and this process continues - only in 2016 the number of employed

persons is 3 415 less than those in 2015.

The EU member states with a relatively high share of total crude steel

production are:

- Germany – 26 %

- Italy – 14.5 %

- France – 8.9 %

- Spain - 8.4 %

- Poland – 5.5 %

- Belgium – 4.8 %

- UK – 4.7 %

The closure of capacity for liquid steel in Bulgaria has placed our country in the

small producers' group, our production is comparable with this in Slovenia

(about 600 000 tons). Among the member states in the region, the production in

Greece is higher - over 1 million tons and in Romania - over 3 million tons.

From the “new” countries in Eastern Europe, more significant producers of

liquid steel are Slovakia – with about 5 million tons, the Czech Republic - over

5 million tons and most of all Poland - with an annual output of about 9 million

tons.

Bulgaria's share of EU liquid steel production in 2016 is 0.33%, maintaining the

2015 level.

Data mentioned above are taken from publications of Eurofer (www.eurofer.eu)

and of the World Steel Association (www.worldsteel.org).

http://www.worldsteel.org/

2.1.2 CRUDE STEEL PRODUCTION IN BULGARIA

Only “Stomana Industry” JSC is producing crude steel in the country. The steel

is produced in electric furnaces from scrap. In 2016 the quantity of crude steel

produced was 527.3 thousand tons – this is a decrease of 15.8 thousand tons

(2.9%) compared to 2015 (Figure 2.2).

Figure 2.2

Steel production in Bulgaria, thousand tons

After continuous casting the produced liquid steel passes for further processing

in hot rolling mill for flat and long products as well as different types of articles

from them.

The investment objectives and policies of “Stomana Industry” JSC are aimed at

improving of the production processes, protecting the environment and ensuring

better health and safety working conditions, installing of new facilities and

replacing parts of the equipment. The programs foresee a priority increase of the

production and assortment of rolled products, as well as extended use of sheet

metal.

In 2016 the company made investments worth BGN 12 million in the following

main directions:

1. "Depot for hazardous and non-hazardous industrial waste" has been

completed.

Starting the operation of this new installation, an extremely important

problem for the region and the country is solved, ensuring the safety storage and

disposal of different types of waste according to the best available techniques.

2. Installation for cutting of hot-rolled flat sheet metal

3. Completion of some stages of a 5S system

4. Reconstruction of a rolled metal production line

5. Software upgrade, water cycles improvement, fire safety etc.

2.1.3. PRODUCTION OF ROLLED FERROUS METALS

In Bulgaria producers of rolled ferrous metals (RFM) are „Stomana Industry”

JSC and “Promet Steel” JSC. Flat HR is produced only by „Stomana Industry”

JSC; long HR is produced by „Stomana Industry” JSC and „“Promet Steel” JSC.

Table 2.1

Production of rolled ferrous metals (RFM) by assortment, thousand tons

RFM assortment: Companies: 2012 2013 2014 2015 2016 2016/15

+/- 2016/15

%

HR long

“Promet Steel” JSC 235,8 381,0 343,6 329,1 417,1 88,0 126,7

„Stomana Industry” JSC 291,8 272,3 286,4 292,5 322,0 29,5 110,1 „Helios Metallurg” Ltd 15,4 26,4 34,0 0,0 0,0 0,0 0,0 Total: 543,0 679,7 664,0 621,6 739,1 117,5 118,9

HR flat „Stomana Industry” JSC 275,3 194,1 273,0 212,9 182,1 -30,8 85,5

HR metals

(total)

“Promet Steel” JSC 235,8 381,0 343,6 329,1 417,1 88,0 126,7

„Stomana Industry” JSC 567,1 466,4 559,4 505,4 504,1 -1,3 99,7 „Helios Metallurg” Ltd 15,4 26,4 34,0 0,0 0,0 0,0 0,0

Total: 818,3 873,8 937,0 834,5 921,2 86,7 110,4

Source: Company data

The total production of rolled ferrous metals (RFM) in 2016 in Bulgaria is

921.2 thousand tons; there is an increase by 86.7 thousand tons or 10.4%

compared to 2015.

Figure 2.3

Production of rolled ferrous metals (RFM), thousand tons

739.1 thousand tons of long rolled and 182.1 thousand tons of flat rolled steel

were produced in 2016 in the country. By the flat rolled steel a decrease by 30.1

thousand tons (14.5%) is reported and by the long rolled steel – an increase by

117.5 thousand tons (18.9%), compared to the previous year 2015. Data for the

last several years are shown in Table 2.4.

Figure 2.4

Production of flat and long rolled metal, thousand tons

Over the past two years the ratio long/flat rolled steel has changed in favor of

the long products. In 2016 this ratio was 80.2%/19.8%, whereas in 2015 it was

74% / 26%, respectively.

Figure 2.5

Production of flat and long rolled metal, 2016, %

The increase of 117.5 thousand tons by the long RFM is due to the growth

of the production volumes in both producing companies:

- “Promet Steel” JSC - 88 thousand tons more than in 2015;

- "Stomana Industry" JSC - the increase is 29.5 thousand tons.

Figure 2.6

Production of rolled ferrous metals (RFM) by companies, thousand tons

2.1.4. PRODUCTION OF ROLLED FERROUS METAL ARTICLES

Articles of rolled ferrous metals in Bulgaria are produced from own raw

materials - long rolled, as well as from imports from third countries - sheets,

strips and wire rod. The companies BAMI-members have produced in 2016

RFM in quantities given in Table 2.2 .

Table 2.2

Production of RFM articles by companies and assortment, thousand tons

Articles: Companies: 2012 2013 2014 2015 2016 2016/15

+/- 2016/15

% Steel pipes,

welded “PIH Industry“ JSC 44,5 0,0 48,8 48,0 50,8 2,8 105,8

Steel balls for

mills

"Stomana Industry" JSC 12,8 0,0 17,2 29,4 19,9 -9,5 67,7

“El Stomana” LTD 0,0 0,0 0,0 29,6 18,2 -11,4 61,5

Total 12,8 0,0 17,2 59,0 38,1 -20,9 64,6 Wire and wire

articles “ZHITI” JSC 12,6 0,0 13,2 12,0 13,1 1,1 109,2

Mine profiles "Stomana Industry" JSC 6,9 0,0 0,0 0,0 0 0,0 0,0 Total RFM articles 76,8 0,0 79,2 119,0 102,0 -17,0 85,7


After 2009 only welded steel pipes are produced and of the BIMI members

PIH Industries AD is a producer of these articles.

Steel balls for mills are produced by two companies BAMI-members -"Stomana

Industry" JSC and "El Stomana"LTD.

JTITI JSC is the main producer of wire and wire articles in the country.

Figure 2.7

Production of RFM products, thousand tons

2.2. TRADE TURNOVER AND CONSUMPTION OF RF METALS

AND PRODUCTS

2.2.1. IMPORT OF SCRAP, RFM AND PRODUCTS

The total quantity of rolled ferrous metals (RFM) and their articles, incl, scrap,

imported in 2016 is 2 076.8 thousand tons. Compared to 2015 there is an

increase of 226.7 thousand tons (12.3%). The import amounted BGN 2 112.7 million, by BGN 186 million more than

in the previous year. Table 2.3 shows the quantities of imports by goods groups

and illustrates that this increase is due to two items - semi-finished products for

the production of long rolled steel in “Promet Steel” JSC and import of welded

pipes.

105.5 thousand tons of scrap (pig iron, iron and steel) were imported in

Bulgaria in 2015. There is a slight drop compared to 2014 - by 10.3 thousand

tons. In recent years scrap imports have been declining, while between 2006 and

2010 the quantities were between 200 and 300 thousand tons each year. As in

previous years almost all scrap is imported from Romania (70%) and Serbia

(29%).

Table 2.3 Import of scrap, RFM and products, thousand tons

Goods: 2012 2013 2014 2015 2016 2016/15

+/- 2016/15

%

Non-alloyed - total 1201,2 1309,3 1233,5 1455,2 1545,2 90,0 106,2 Pig iron, ingots, granules,

powder 15,1 20,6 15,7 19,7 15,2 -4,5 77,2

Ferroalloys 21,1 14,3 16,5 13,8 11,4 -2,4 82,6

Scrap 113,5 93,3 115,5 105,2 94,5 -10,7 89,8

Semi-finished products 299,4 412,6 338,4 372,8 482,4 109,6 129,4 HR metal (coils and sheets) 359,9 383,4 361,9 492,2 511,0 18,8 103,8

CR metal (coils and sheets) 98,2 107,9 113,1 122,0 122,1 0,1 100,1

Rolled wire 113,4 128,0 114,3 118,2 120,5 2,3 101,9

Bars 113,0 90,0 97,3 141,0 113,9 -27,1 80,8

Profiles 67,6 59,2 60,8 70,3 74,2 3,9 105,5

Alloyed – total 60,8 68,9 75,5 72,2 83,9 11,7 116,2

HR and CR coils and sheets 35,3 38,5 43,0 39,8 43,5 3,7 109,3

Bars and profiles 25,5 30,4 32,5 32,4 40,4 8,0 124,7

RFM Products 215,9 288,5 664,2 322,7 447,7 125,0 138,7

Seamless pipes 33,0 49,6 30,1 28,2 33,8 5,6 119,9

Welded pipes 32,2 35,5 470,2 112,5 218,1 105,6 193,9

Coated sheets 120,9 129,7 133,4 154,1 168,3 14,2 109,2

Wires, ropes etc. 29,8 73,7 30,5 27,9 27,5 -0,4 98,6

Total 1477,9 1666,7 1973,2 1850,1 2076,8 226,7 112,3

Value, EUR million 903,2 924,0 1340,8 985,1 1080,2 95,1 109,7

Value, BGN million 1766,6 1807,2 2622,4 1926,7 2112,7 186,0 109,7

Source: Customs statistics, NRA

The import of pig iron over the last 5 years fluctuates between 15 and 20

thousand tons per year. 15.2 thousand tons were imported in 2016 - 22.8% less

than in 2015. Main suppliers are Ukraine, Russia and the Netherlands.

The import of semi-finished products used as raw material for the production

of rolled products in 2016 is 482.4 thousand tons – there is an increase of 109.6

thousand tons compared to 2015. Over 90% of the semi-finished products are

imported from Ukraine. The main consumer is “Promet Steel” JSC .

Figure 2.8

Import of scrap and semi products, thousand tons

The import of flat RFM in 2016 is 676.6 thousand tons – an increase of 22.6

thousand tons compared to 2015. In 2016 RFM was imported mainly from

Ukraine (73 %).

The imported long RFM in 2016 is 349 thousand tons - a decrease by 12.9

thousand tons ( 12.9 % ) compared to 2015.

Figure 2.9

Import of flat and long rolled metal, thousand tons

The imported wire rod in 2016 is 120.5 thousand tons, with a slight increase of

2.3 thousand tons compared to 2015. The main importers are as in previous

years Ukraine, Greece, Bosnia and Herzegovina and Turkey. It is to be

mentioned that the share of Ukraine is decreasing - from 69.4% in 2015 to

46.2% in 2016, at the expense of increased imports from Greece (23.2%) and

Bosnia and Herzegovina (15%).

The import of bars from non-alloyed steels in 2016 was 113.9 thousand tons,

decreasing by 27.1 thousand tons. Importers of these products are Ukraine

(40%) and Greece (33.5%).

The import of non-alloyed steel profiles is increasing by 3.9 thousand tons

compared to 2015 and was 74.2 thousand tons. The biggest quantities were

imported from Turkey - 32%, Romania - 14.8% and Luxembourg - 12%.

The needs of alloyed long and flat products are covered entirely by imports; the

quantities mark an yearly increase by ca. 10 %.

In 2016 the imported alloyed rods and profiles increased by 8 thousand tons

(25 %). Main importer is Russia (30 %), followed by China (26 %) and Ukraine

(10 %).

In total 447.7 thousand tons products of RFM were imported in 2016 - 125

thousand tons more than in 2015. This significant increase and the growth in

2014 as well are due to the supply of welded pipes for energy projects. Main

importers of pipes are UK (61.6%) and Germany (26%).

Figure 2.10

Import of metal products, thousand tons

The import of seamless pipes in 2016 is increasing slightly by 5.6 thousand

tons and is mainly coming from Romania (22 %), Germany (17.8 %), Ukraine

(19.2%) and Italy (13 %).

In 2016 the import of wire, ropes, cables and similar iron and steel products to

Bulgaria is remaining on the level of 2015 totaling to 27.5 thousand tons. These

products are imported mainly from Turkey, China and Russia.

An increase has been recorded in the import of coated sheet – 168.3 thousand

tons or by 14.2 thousand tons more than in 2015. After “Kremikovtzi” JSC has

wound up local consumption is covered by import solely - ca. 35 % are imported

from neighbouring Balkan countries – Macedonia, Romania, Turkey and 15.7%

from China.

Figure 2.11

Import of metal products by articles, thousand tons

The biggest share in the structure of metal products imports in 2015 is this of

welded pipes - 48.7%. Traditionally, due to the increased consumption and lack

of production in the country, the coated sheet has a significant share, but

compared to 2015 it drops from 47.7% to 37.7%.

2.2.2. EXPORT OF SCRAP, RFM AND PRODUCTS

Data on the export of FM articles for the last five years incl. 2016 and the

changes to 2015 appear on Table 2.4.

The total exported quantities of scrap, ferrous metals and articles in 2016

amount to 1 312.4 thousand tons, compared to 2015 there is an increase by

144.13 thousand tons or by 12.3%.

The export of metal articles (excluding scrap) in 2016 totals 1 017.4 thousand

tons compared to 928.6 thousand tons in 2015, or the increase is by 142.6

thousand tons (7%).

The trend of a continuous decrease in the export of ferrous metals and their

products was halted in 2016. This is due to the growth in the production and

7.5 %

48.7 %

37.7 %

6.1 %

seamless pipes

welded pipes

caoted sheet

wire, ropes etc.

export of long products (from 480.7 thousand tons in 2015 reached 576.5

thousand tons in 2016), as well as to the increase (by 70.4 thousand tons) in the

export of metal products

In terms of value the export of scrap, RFM and products is amounting

1 031.2 BGN million in 2016, by 46.2 BGN million (4.7 %) more than during

the previous year.

Table 2.4

Export of scrap, RFM and products, thousand tons

Articles: 2012 2013 2014 2015 2016 2016/15

+/- 2016/15

% Non-alloyed - total 1577,1 1417,5 1224,4 937,5 1007,2 69,7 107,4 Pig iron-ingots, granules,

powder 1,3 2,2 1,9 0,8 26,2 25,4 3275,0

Ferroalloys 2,6 3,9 4,3 2,4 1,3 -1,1 54,2 Scrap 730,7 611,0 399,0 239,7 241 1,3 100,5 Semi- finished products 14,3 11,7 6,3 2,3 4,6 2,3 200,0

HR metal (coils & sheets) 307,0 246,6 291,1 240,5 208,6 -31,9 86,7 CR metal (coils & sheets) 10,5 16,9 14,9 16,9 17 0,1 100,6 Rolled wire 47,5 49,8 39,3 27,5 15,7 -11,8 57,1 Bars 416,6 431,0 423,3 371,7 457,5 85,8 123,1 Profiles 46,6 44,4 44,3 35,7 35,3 -0,4 98,9

Alloyed - total 8,1 15,5 39,1 48,6 52,6 4,0 108,2

HR and CR coils and sheet 2,8 2,1 2,8 2,8 4,5 1,7 160,7 Bars and profiles 5,3 13,4 36,3 45,8 48,1 2,3 105,0 RFM products 115,5 118,8 132,9 182,2 252,6 70,4 138,6

Seamless pipes 2,6 2,7 2,8 1,8 2,5 0,7 138,9

Welded pipes 97,7 100,5 116,0 168,8 224,8 56,0 133,2

Coated sheets 9,0 7,6 7,5 6,2 11,4 5,2 183,9 Wires, ropes etc. 6,2 8,0 6,6 5,4 13,9 8,5 257,4 Total, thousand tons 1700,7 1551,8 1396,4 1168,3 1312,4 144,1 112,3

Value, EUR million 784,0 668,5 622,7 503,6 527,3 23,7 104,7

Value, BGN million 1533,4 1307,5 1217,9 985,0 1031,2 46,2 104,7


The export of flat and long RFM is shown in Figure2.12.

The drop by the flat RFM is 30 thousand tons (11.5 %) coming to 230.2

thousand tons.

The basic export destination of the flat rolled metal in 2016, as in the previous

years, are the EU(28) member states – 66.7% of the exported quantities. A

smaller part of the export ca. 30% goes to neighbouring Balkan countries, non

member states of the EU - Turkey, Macedonia, Serbia and Albania.

The export of long RFM in 2016 totals 556.5 thousand tons, by 75.8 thousand

tons more than in 2015 (an increase by 15.8%).

Figure 2.12

Export of flat and long rolled metal, thousand tons

The export of non-alloyed steel bars in 2016 was 457.5 thousand tons and

increased by 85.8 thousand tons compared to the previous year or by 23.1%.

Non-alloy steel bars are mainly exported to neighboring Balkan countries - over

55% for Romania, and 13.3% for Macedonia, Serbia and Turkey. The export of

non-alloyed steel profiles remain at the level of 2015 and about 65% of the

products go to EU countries.

Figure 2.13

Export of metal products, thousand tons

For more than 5 years the trend continues of increasing the export of metal

products - mainly welded pipes (Fig. 2.13). In 2016 it reached 252.6 thousand

tons and shows a significant growth of 38.6% (70.4 thousand tones) compared to

the previous year. The basic destination of the RFM products exports are the

EU(28) countries – ca. 90%.

The welded pipes have the main share of the exports of RFM products - 89% in

2016. The remaining productions have a smaller share, both in total production

and in exports.

Figure 2.14

Export of metal products from RFM, thousand tons

Figure 2.15 shows the import and export of flat rolled steel for the period 2012-

2016 - the import is significantly higher than the export and in 2016 it is 3 times

bigger. The difference in quantities is increasing due to the increase of imports

(over 3%) and the drop of exports (11.5%).

Figure 2.15

Import and export of flat rolled metal, thousand tons

In the case of long products (Fig. 2.16), as opposed to the flat ones, export is

higher than import due to the domestic production capacities. In 2016, the export

grew by 75.8 thousand tons and the import decreased by 12.9 thousand tons,

respectively export is 1.5 times higher than import.

Figure 2.16

Import and export of ling rolled metal, thousand tons

Over the last 5 years both import and export of metal products is increasing and

in 2016 their growth is more than 2 times compared to 2012.

Figure 2.17

Import and export of metal products, thousand tons

In 2016 the import of basic types ferrous metals products are higher than exports

and for this year the trade balance is negative. Total imports of all products

exceeded exports by 765.3 thousand tons.

Table 2.5

Foreign trade balance of ferrous metals products in 2016

Production:

Export,

thousand tons

Import,

Thousand

tons Difference

Semi-finished products 4,6 482,4 -477,8

Flat HRM 230,2 676,6 -446,4

Long HRM 556,5 349 207,5

Finished products 252,6 447,7 -195,1

Scrap 241 94,5 146,5

Total 1284,9 2050,2 -765,3


The balance differs for different groups, as follows:

- semi-finished products – over the years the foreign trade balance is

negative and Bulgaria is a net importer of semi-finished products for processing

in metallurgical enterprises;

- flat-rolled and RFM products – in 2016 the import also exceeded the

export, respectively by 446.4 thousand tons and 195.1 thousand tons, due to

missing or limited in the assortment capacities;

- long RFM and scrap - in 2016 the export is higher than the import,

respectively by 207.5 thousand tons.

In 2016 the export of metallurgical production only, without scrap is 1043.9

thousand tons, and the import – 1 955.7 thousand tons, i.e. the foreign trade

balance is negative. Compared to the previous year the negative balance is

increasing due to a decrease in exports and a rise in imports -from 586 thousand

tons in 2015 it reaches 911.8 thousand tons in 2016.

2.2.3. FOREIGN TRADE TURNOVER OF ROLLED FERROUS METALS AND

FINISHED PRODUCTS

Data on the foreign trade turnover of FRM (excluding pig iron, ferroalloys and

scrap) in terms of nature for the last five years are given in Table 2.6.

The total turnover of RFM in 2016 is 2 299.3 thousand tons - by 167.4 thousand

tons higher than in 2015. This increase is due both to the growth in imports - by

119.3 thousand tons and to the increase in exports - by 48.1 thousand tons.

However, the overtaking import growth rate in 2016 worsens even more the

negative RFM trade balance reaching 716.7 thousand tons. This is the highest

value for the indicated period, showing a trend for increasing imports, despite a

certain increase in exports of Bulgarian companies.

The turnover of RFM products in 2016 makes 700.3 thousand tons. In recent

years there was an increase both in the import and the export of RFM products

but the trade balance remains negative – the import exceeds the export by 195.1

thousand tons.

Table 2.6

Foreign trade turnover of RFM and finished products, thousand tons

Products of RFM and articles 2012 2013 2014 2015 2016 2016/15

+/- 2016/15

%

Rolled ferrous metals - import (incl semis) 1112,3 1250,0 1161,3 1388,7 1508 119,3 108,6 - export (incl semis) 850,5 815,9 858,3 743,2 791,3 48,1 106,5 Total turnover 1962,8 2065,9 2019,6 2131,9 2299,3 167,4 107,9 Balance (export-import) -261,8 -434,1 -303,0 -645,5 -716,7 -71,2 111,0

RFM products - import 215,9 288,5 664,2 322,7 447,7 125,0 138,7 - export 115,5 118,8 132,9 182,2 252,6 70,4 138,6 Total turnover 331,4 407,3 797,1 504,9 700,3 195,4 138,7

Balance (export-import) -100,4 -169,7 -531,3 -140,5 -195,1 -54,6


2.2.4. DOMESTIC SALES OF RFM AND FINISHED PRODUCTS

In 2016 the total sales of RFM and finished products are 1 312.7 thousand tons.

The realization is increasing by 113.1 thousand tons (9.4 %) compared to 2015

due to the increased export – by118.5 thousand tons (12.1%). The domestic

sales are decreasing slightly – by 5.4 thousand tons (2 %).

Figure 2.18

Realization of RFM products, 2014-2016

The total realization growth of the flat and the long RM increased by 6.8% in

2016 as compared to 2015. The growth of exports grew by 48.1 thousand tons in

2016, as compared to 2015 and the domestic market - by 16.9 thousand tons.

More significant is the increase in the long rolled FM - the export grew by 75.8

thousand tons and the local market - by 15.8 thousand tons.

The total realization of the RFM products is also growing – by 48.1 thousand

tons only due to the increased export - by 70.4 thousand tons. The quantities for

the domestic market are decreasing by 22.3 thousand tons.

Table 2.7

Realization of ferrous metals production

Production Export Domestic market Total realization

2015 2016 2015 2016 2015 2016

Semi-finished products 2,3 4,6 0,0 0,0 2,3 4,6

Long RFM 480,7 556,5 184,3 200,1 665,0 756,6

Flat RFM 260,2 230,2 21,9 23,0 282,1 253,2

Total RFM 743,2 791,3 206,2 223,1 949,4 1014,4

Articles 182,2 252,6 68,0 45,7 250,2 298,3

Total 925,4 1043,9 274,2 268,8 1199,6 1312,7

Source: Company data, Customs statistics and NRA

The production of the ferrous metallurgy in Bulgaria is traditionally export-

oriented. In 2016 the ratio export/domestic market was 79.5%/20.5%. This ratio

emphasis once again that ferrous metallurgy in Bulgaria is export-oriented.

Figure 2.19

Realization of RFM products, 2016

2.2.5. REAL HOME CONSUMPTION OF STEEL PRODUCTS

The Real home consumption (RHC) of RFM and products is formed by the sum

of the realization on the domestic market and the import. Data on RHC in 2015

and 2016 are presented in Table 2.8. In 2016 RHC of steel products is growing

by 129.3 thousand tons compared to the previous year and amounts 1 742.1

thousand tons.

The RHC of flat and long products has a real growth of 26.6 thousand tons. The

consumption of long products is increasing slightly, the RHC growth of flat

products is 23.7 thousand tons. The RHC growth total for the long and flat RFM

is mainly due to the increased domestic realization - by 16.9 thousand tons.

A significant growth is to be seen in the RHC of metal products – by 102.7

thousand tons (26.3 %) due to the almost doubled import of welded pipes

(105.6 thousand tons) and the increased delivery of coated sheets.

Table 2.8

Real home consumption (RHC) of steel products, thousand tons

Products: 2015 2016 2016/2015

Home sales Import Total Home sales Import Total Difference % Long RFM 184,3 361,9 546,2 200,1 349 549,1 2,9 100,5

Flat RFM 21,9 654,0 675,9 23,0 676,6 699,6 23,7 103,5

Total RFM 206,2 1015,9 1222,1 223,1 1025,6 1248,7 26,6 102,2

Products of RFM 68,0 322,7 390,7 45,7 447,7 493,4 102,7 126,3 Total 274,2 1338,6 1612,8 268,8 1473,3 1742,1 129,3 108,0

Source: Customs data and NRA (Import)

Company data (Domestic realization)

Figure 2.20

Real home consumption, 2015-2016

The consumption of steel products is also expressed by the so-called apparent

consumption (AC) calculated by the formula:

AC = (M + I) – E, where

AC – apparent consumption (in thousand tons)

M – manufactured steel products (in thousand tons)

I – imported steel products (in thousand tons)

E – exported steel products (in thousand tons)

(excluding pig iron, ferroalloys and scrap)

In 2016 the apparent consumption (AC) of steel products in Bulgaria is 1 457.2

thousand tons, compared to 2015 the AC is growing by 88.2 thousand tons. The

situation by the different product groups is as follows:

- long RFM - the AC is growing by 28.8 thousand tons;

- flat RFM – the AC is growing too – by 21.8 thousand tons

- products of RFM – the AC is growing by 37.6 thousand tons .

Table 2.9

Apparent consumption of steel products, thousand tons

Year Production Import Export AC APCC

2007 2111,2 1745,7 1748,0 2108,9 301,2

2008 1941,1 1341,8 1210,7 2072,2 296,0

2009 1081,3 700,2 941,2 840,3 120,0

2010 964,5 734,6 854,4 844,7 112,6

2011 1194,4 1040,6 1164,9 1070,1 145,4

2012 895,1 1028,8 951,8 972,1 133,5

2013 945,1 1125,9 923,0 1148,0 157,6

2014 1016,2 1487,1 984,9 1518,4 210,8

2015 953,5 1338,6 923,1 1369,0 191,4

2016,incl. 1023,2 1473,3 1039,3 1457,2 205,2

- long RFM 739,1 349 556,5 531,6 74,9

- flat RFM 182,1 676,6 230,2 628,5 88,5

- finished products 102 447,7 252,6 297,1 41,8

Source: Company data (production), Customs data (import and export)

The apparent per capita consumption (APCC) is another interesting indicator.

In 2016 the APCC of steel product is 205.2 kg, compared to 2015 it is increasing

by 13.8 kg (7.2 %).

The APCC in Bulgaria for the 2016 is 65.9 % from the average for the EU (28)

– it was 63 % for 2015. The countries with the highest APCC in the world in

2016 are:

- Republic of Korea – 1 130.2 kg/capita

- Taiwan/China – 782.1 kg/capita

- Check Republic – 634.7 kg/capita

- Germany – 499.5 kg/capita

- China – 492.7 kg/capita

- Japan – 492.6 kg/capita

- Austria – 469.6 kg/capita

In Bulgaria in 2016 the AC and the RHC of steel products are growing (Figure

2.21) respectively by 7.2 % and 10 %. In 2015 the difference between the two

figures was 243.8 thousand tons and in 2016 it is 284.9 thousand tons,

influenced by various factors, such as stocks (with producers or importers), re-

exports etc.

Figure 2.21

Real consumption and apparent consumption of steel products, thousand tons

There is a trend within the EU(28) for increasing both of the real and of the

apparent consumption of steel products. The apparent consumption for 2016

total for the union is 156 408 thousand tons (an increase of 4 884 thousand tons

compared to 2015).The real consumption for 2016 marks 155 112 thousand tons

– by 6 624 thousand tons more compared to the previous year.

2.3. PRODUCTION AND CONSUMPTION OF REFRACTORY

ARTICLES AND MATERIALS

The production of refractories and refractory materials is an activity directly

related to the metallurgical industry. The main suppliers of refractory materials

for lagging and coating the furnaces and aggregates for casting, storing and

spilling of the liquid metal are the companies "Shamot” JSC and "Refran" Ltd.,

both are BAMI-members. Data on the refractories and refractory materials

produced by them are given in the figure below.

Figure 2.22

Production of refractory materials, tons

The total quantity of refractory materials produced in 2016 by both enterprises

reports a drop by 815 tons (23.5%). The output of "Shamot” JSC remains close

to the level of the previous year, while in Refran Ltd. there was a decrease by

782.6 tons (40%). The enterprise is restructured, diversifies its activities in other

areas by using EU funding to implement the following projects:

- Program for appropriate and safe working conditions – Operational

program „‟Human resources development‟‟

- Development of the Managing Capacity and Growth of SMEs -

Operational program "Innovation and Competitiveness".

The total value of both projects comes to 350 thousand BGN, the

implementation period is 2017 - 2018.

The refractory materials produced by companies of BAMI-members are mainly

directed to consumers within the country, the production is realized on the

domestic market.

2.4. METAL CASTING

According to the national classification of economic activities (NCEA 25.5)

casting of ferrous and non-ferrous metals and their alloys belongs to the general

sector 24.Production of basic metals. Capacities for metal castings are operating

in the country producing for the domestic market and for export. They are

producing parts for equipment, connecting elements etc. providing spare parts

in the form of castings or machined parts for different sectors of the economy

and for households.

Metallurgy and metal casting have common characteristics regarding the

technologies, processes and equipment used, and determine common problems,

tasks and objectives of the enterprises and so bringing their activities into one

unified code of the standard classification. The Bulgarian Association of the

Metallurgical Industry is including the indices of the metal casting into the

sector key indicators, in accordance with the European and world practice.

BAMI-members reporting under classification of economic activities 24.5.

Metal casting are: “Berg Montana Fittingi” PJSC, “BMB Metal” Ltd, “Casting,

Forging Mashinery Complex” Ltd., “Chugunoleene - Parvomay” AD and “GES

Trading” Ltd.

“Berg Montana Fittingi” PJSC is specialized in the production of fittings for

export in EU member states. The company is developing successfully, ensuring

high quality of its production, investing in new machinery and equipment, in

better working conditions and environmental protection.

„IPO” Ltd. - in the town of Karlovo is producing single, small and middle-

sized series of ferrous and non-ferrous metal parts with primary treatment or

complete machining. Good quality is the basis for achieving high growth in the

production which is mainly for the Bulgarian market. The company is

performing repair activities in companies from the basic industries incl.

metallurgy.

“BMB Metal” Ltd. is organizing and managing the production of castings

coming from the pig iron cast factory in the town of Ihtiman and the “Cast and

forge machine-building complex” in Radomir. The companies are restructuring

their production and updating the technologies and equipment. In 2016 there is

a positive turn to recover the casting production in Radomir. 72 % of the

production is realized on the domestic market and 28 % was for export to third

countries. In 2016 the company produced 594 tons ferrous metals casts;

investments were made amounting 2.4 million BGN.

According to NSI data, the production activity 24.5.Metal casting-indicators

mark the following values and a relative share of the total CEA 24. Production

of basic metals:

24.Basic metals 24.5.Casting %

Output produced, million BGN 7 412 193 2.6

Employees, number 11 915 3 694 31

Employer's labor costs for

1 working hour by employees, BGN 6.61 10.78

The share of the employed in the casting capacities of the total number of

employees under activity 24. Production of basic metals is 31%, the output

produced by them has a relative share of 2.6%. Employers' labor costs per

employee per hour are also lower than those in basic metallurgy (61%). These

indicators are influenced by factors such as the still low exploitation of the

casting capacities, the unfinished reconstruction of organization, technology and

equipment aiming improvement of productivity and quality.

The total production in 2015 of the EU(28) under CEA activity 24.5 Casting of

metals is worth 37.6 milliard EUR. This makes 11.4% of the total production

under CEA 24.Production of basic metals.

For Bulgaria this indicator is 2.6%, more than four times lower.

SECTION THREE

NON-FERROUS METALLURGY IN BULGARIA

3.1. PRODUCTION OF NON-FERROUS METALS

In 2016 the non-ferrous metallurgy is characterized by a well developed and

competitive stable production. The significant production capacities and the

limited domestic consumption continue to identify the sector as export-oriented,

with good market positions in world trade.

3.1.1. PRODUCTION OF ANODIC AND ELECTROLYTIC COPPER

Anodic and electrolytic copper in Bulgaria is produced only by “Aurubis

Bulgaria” JSC. The company is member of Aurubis AG - a leading integrated

world group in the copper industry (over 1.1 million tons of copper

cathodes/year and a variety of copper products), and ranking as the world leader

in processing of copper.

The copper production plant of “Aurubis Bulgaria” JSC is placed in the

Srednogorie region. It was build in 1958 and consists actually of four production

units: metallurgy, cathode copper refinery, production of sulphuric acid and

enrichment factory .

After the privatization of the company in 1997 large investments over BGN

1 billion for the modernization and the environment protection were made.

In 2016 under the planned „Aurubis Bulgaria Spectrum 2018‟ investment, worth

EUR 180 million, the „Repair 2016‟ project was completed, too. It will secure

the normal functioning of the basic equipment during the next ten years. During

the overhaul eleven aggregates were completely changed (melting furnace,

utilization tank, etc.). This investment is worth EUR 45 million.

In 2016 ended the project to buy and install a turbo generator for an active vapor

pressure reduction after the utilization tank 49 bar to 4 bar; completed is the

construction of a new deposit station for the sediments from the treated waste-

water and gases according to all legal ecologic norms.

In 2016 the building of a waste-water station for fayalite was started.

Data about the treated concentrates and scrap included into the production of

anodic and electrolytic copper for a period of five consecutive years (2012 –

2016) are shown on table 3.1 and fig 3.1.

Table 3.1

Processed unwrought materials in the production of anodic and electrolytic

copper

2012 2013 2014 2015 2016 Difference

2016/2015

+/- %

Concentrates, tons 976 718 1 227 926 1 165 484 1 203 248 1 055 636 -147 612 87.7

- copper contents,% 24.14 24.06 25.20 24.57 23.69 -0.88 96.4

- metal contents, tons 235 822 295 435 293 718 295 690 250 080 -45 610 84.6

Incl. in imported 157 169 220 128 221 299 223 942 179 507 -44 435 80.3

in local 78 653 75 307 72 419 71 748 70 573 -1 175 98.4

Scrap (purchased), tons 56 104 60 320 62 280 56 168 51 768 -4 400 92.2

Source: Company data.

1 055 636 tons of copper concentrate have been processed in 2016 – by 12.3%

less than in 2015; they contain 250 080 t copper. The ratio between the included

imported and local concentrates in 2016 is shown in Figure 3.1. The share of the

local concentrates is growing by 3.7%.

Figure 3.1

Processed concentrates, tons of metal

The quantities of processed copper are 17.2% from copper in the raw materials

and its share in the common shift is going down in the last three years.

The quantities of anodic and electrolytic copper produced during the period

2012 - 2016 are shown on Table 3.2 and Fig. 3.2.

Table 3.2

Production of anodic and electrolytic copper, tons

Product 2012 2013 2014 2015 2016 Difference

2016/2015

+/- %

Anodic copper 325 220 354 294 381 024 348 406 296 804 -51 602 85.2

Electrolytic copper 226 728 229 604 233 274 229 723 216 428 -13 295 94.2


Due to a the large-scale renovation of the main metallurgical facilities in the

factory in 2016, smaller quantities of copper concentrates and copper scrap were

processed. As a result, reported is a decline in the production of anodic copper

by 14.8% and the electrolytic copper by 5.8%.

Using the sulfur contained in the concentrates, 1 074 467 tons of sulfuric acid

were produced - by 12% less than in 2015, due to the smaller quantities of

processed copper concentrates.

Figure 3.2

Production of anodic and electrolytic copper, tons

In 2016 the world production of refined copper increased by 1.9% to 23.3

million tons.

The world production of electrolytic copper by regions is presented in Table 3.3

and Fig.3.3.

Table 3.3

World production of electrolytic copper, thousand tons

Region

2014

2015

2016

Difference

2016/2015

+/- %

Asia 11 656 12 004 12 682 678 105.6

America 5 155 5 217 5 189 -28 99.5

Europe 3 794 3 757 3 726 -31 99.2

Africa 1 357 1 382 1 234 -148 89.3

Other 509 510 478 -32 93.7

Total 22 471 22 870 23 309 439 101.9

Source: ICSG

Data show that Asia continues to hold the biggest share in the world production

(54.4%), with a 20.6% higher growth rate (5.6%) compared to 2015 (3.0%,

respectively), followed by America with a share of 22.3% and a decrease of

0.5%. Europe ranks third with a share of 16.0%, also reporting a 1% decline.

Figure 3.3

World production of electrolytic copper (by regions), 2016, %

The relative share of electrolytic copper produced in Bulgaria in 2016 is 0.93%

of the world production and 8.01% of the EU(28) production. For 2015, the

numbers are 1.01% and 8.49%, respectively. Regarding the anodic copper, the

Bulgarian production has a share of 1.56% of world production and 13.2% of

54.4%

22.3%

16%

5.3% 2.1%

Asia

America

Europe

Africa

Other

EU production, which shows that the Bulgarian copper industry has good

positions in world production.

3.1.2. LEAD PRODUCTION

In Bulgaria, metallurgical capacities for the production of lead ingots and lead

alloys have been built, both on the basis of primary raw materials (concentrates)

and lead-containing wastes.

“KCM”JSC is the only enterprise in the country and a leading company in

Southeastern Europe and the Black Sea region with a specialization in the

production of lead and zinc mainly from primary raw materials. The company is

part of “KCM”JSC, one of the biggest industrial groups in Bulgaria and a key

participant in the economic life of the country.

In 2016 the enterprise continued to realize an investment project "Technological

renewal and expansion of production" coming to a total value of more than BGN

260 million. Only in the past year the invested funds are BGN 10 813 thousand.

The accents in the investment activity in 2016 are:

- Reconstruction of a warehouse for lead raw materials;

- Modification of „Installation for washing and extraction of powders from

the steel industry‟;

- New drying tower in TU „Frying and sulfuric acid‟;

- Activated cleanser of cobalt and nickel.

Data on processed primary and secondary raw materials for lead production are

shown in Table 3.4. and Fig. 3.4.

Table 3.4

Processed raw materials in the production of lead, tons


2016/2015

+/- %

Metal in concentrates 57 123 60 917 67 190 61 908 61 358 -550 99.1

Incl.: in imported 42 757 44 931 51 729 45 452 41 670 -3 782 91.7

in local 14 366 15 986 15 461 16 456 19 688 3 232 119.6

Processed waste (imported) 14 574 12 341 11 824 20 604 11 235 -9 369 54.5


In 2016 lead concentrates were processed which contained 61 358 tons of lead.

Lead in local concentrates grew by 19.6% and their relative share in the total

volume already exceeds 32% (26.6% in 2015).

Figure 3.4

Processed concentrates, tons of metal

In the production of primary lead 11 235 tons of lead waste were used, which

represents 15.5% of the total raw material balance (25% in 2015).

Lead produced from secondary raw materials, mainly from battery‟s waste, has

an increasing share of the total quantity. In the country there are capacities for

efficient processing of these raw materials to block metal, alloys or other end

products (“KCM”JSC, “Monbat Recycling” PJSC and “El Bat” JSC).

Data on the production of primary and secondary lead, including battery alloys

in the period 2012 to 2016, are presented in Table 3.5 and Fig. 3.5.

Table 3.5

Lead production, tons of metal


2016/2015

+/- %

Lead - primary 68 438 71 668 73 064 70 252 69 256 -996 98.6

- “KCM”JSC 68 438 71 668 73 064 70 252 69 256 -996 98.6

Lead - secondary 17 718 19 074 20 330 26 637 31 561 4 924 118.5

“Monbat Recycling”PJSC 14 603 14 904 15 530 16 231 16 581 350 102.2

“El Bat” JSC 3 115 4 170 4 800 10 406 14 980 4 574 143.9

Lead - total 86 156 90 742 93 394 96 889 100 817 3 928 104.1


The produced lead (primary and secondary) is growing steadily over the last five

years and in 2016 it exceeds 100 thousand tons with a growth of 4.1%.

The increased production is entirely due to the processing of larger amounts of

battery‟s waste, the largest contribution to this has “El Bat” JSC (over 4500

tons).

From the processing of secondary lead raw materials (incl. batteries), the three

plants produced over 40 thousand tons of lead and lead alloys, which represents

more than 40% of the total production in the country.

Figure 3.5

Lead production – total, tons

The world lead production by regions and the largest producer countries for the

past three years are presented in Table 3.6 and Figure 3.6.

Table 3.6

World lead production, in thousand tons

Country/Region 2014 2015 2016

Difference

2016/2015

+/- %

Asia 6 627 6 620 6 827 207 103.1

- inc. China 4 704 4 700 4 665 -35 99.3

- incl. Republic of Korea 639 641 831 190 129.6

America 2 156 1 999 2 070 71 103.6

- incl. USA 1 128 1 050 1 123 73 106.9

EU (28) 1 700 1 755 1 752 -3 99.8

- incl. Germany 380 378 347 -31 91.8

Other 477 469 485 16 103.4

Total 10 960 10 843 11 134 291 102.7

Source: ILZSG

Asia has the biggest relative share of the world production (61.3%), which

presents a growth by 3.1%. This is due to the increased production in the

Republic of Korea, while in China, the world's largest producer of lead, the

production is almost at the level of 2015. America is following with a share of

18.6% and a growth by 3.2%. The EU (28) ranks third with a share of 15.7%.

Within the EU(28) traditionally Germany has the biggest relative share of

production - 19.9%, but in 2016 the production in the country decreased by

8.2%. UK ranks second with 18.2% and Italy has a share of 12.5%.

Figure 3.6

World lead production (regions), 2016, in %

The total quantity of lead produced from primary and secondary raw materials

in 2016 in Bulgaria represents 0.905% of the world production and 5.75%

of the EU(28) production. For 2015 these figures were 0.91% and 5.52%

respectively. By volume of the total lead Bulgaria ranks eighth from the EU

producer countries.

3.1.3. ZINC PRODUCTION

“KCM”JSC in Plovdiv is the only enterprise for processing of zinc concentrates

and various zinc containing semi-products and secondary raw materials to zinc

ingots and zinc alloys.

As byproducts of this processing a number of other rare and precious metals and

chemical products (sulfuric acid, cadmium, tellurium, bisulfate etc.) are

obtained.

61.3%

18.6%

15.7%

4.4 %

Asia

America

EU 28

Other

The data about processed metal contained in local and imported concentrates

and the input of secondary raw materials/scrap in the production of zinc are

shown in Table 3.7 and Figure 3.7.

Table 3.7

Processed raw materials for the production of zinc, in tons


2016/2015

+/- %

Metal in concentrates, incl.: 56 017 66 894 66 685 68 043 63 011 -5 032 92.6

- import 47 022 54 902 55 386 57 260 51 596 -5 664 90.1

- local 8 995 11 992 11 299 10 783 11 415 632 105.7

Processed imported scrap 10 203 11 363 13 193 11 983 16 802 4 819 140.2


Concentrates containing 63 011 tons of zinc were processed in 2016 - by 5 032

tons (7.4%) less of the previous year. Zinc in local concentrates grew by 5.7%

and its relative share in the total amount of used concentrates exceeded by 18%

(15.8% in 2015).

Figure 3.7

Processed concentrates, in tons of metal

Compared to the previous year the utilized quantities of byproducts and wastes

from external sources were significantly higher - by 4 819 tons more and their

share in the total batch increased from 15% in 2015 to 21.1% in 2016.

Zinc production data over the last five years are shown in Table 3.8 and Fig. 3.8.

Table 3.8 Zinc production, in tons


2016/2015

+/- %

Zinc - total 73 558 75 830 76 293 75 095 75 811 716 101


75 811 tons zinc were produced in 2016 - 716 tons more compared to the

previous year, mainly due to the increased waste quantities.

Figure 3.8

Zinc production in 2016, in tons

Table 3.9 and Figure 3.9 show the world zinc production by regions and the

biggest producer counties, their relative share and the increase/decrease

compared to the previous year.

Table 3.9

World zinc production, in thousand tons

Country/Region 2014 2015 2016

Difference

2016/2015

+/- %

Asia 8 660 8 833 9 035 202 102.3

incl. China 5 807 5 860 6 274 414 107.1

EU (28) 2 070 2 084 2 005 -79 96.2

incl. Spain 512 509 510 1 100.2

America 1 759 1 779 1 682 -97 94.5

incl. Canada 648 683 687 4 100.6

Other 1 020 955 951 -4 99.6

Total 13 509 13 651 13 673 22 100.2

Source: ILZSG

In 2016 zinc production in the world remains at the 2015 level. Asia has the

biggest relative share of the world production (65.5%) and a growth of 2.3%. Its

production directly depends on the production of China - the world's leading

zinc producer, with a share of 45.9 %. In 2016 China reported a 7.1% growth.

The EU(28) ranks second with a share of 14.7%, but with a decline by 3.8%.

Spain (25.4%), Finland (14.7%) and the Netherlands with 14.2% have the

biggest share of the EU production. America is following with a share of 12.3%

of the world production, but with a decline by 5.5%, resulting mainly from the

reduced mining in the USA and in Mexico.

Figure 3.9

World zinc production (by regions), in 2016., in %

The relative share of zinc produced in Bulgaria represents 0.55% of the world

production and 3.8% of the total EU(28) production. In the EU ranking of

zinc producing countries, Bulgaria is on the 9th

position (11th

in 2015).

3.1.4. PRODUCTION OF PRECIOUS BY PRODUCT METALS, ALLOYS AND

CHEMICAL PRODUCTS

The output of precious metals, byproducts and chemical products is determined

by the content and quantities of processed primary raw materials (concentrates).

An important part of the technologic processes in the production of the basic

non - ferrous metals (copper, zinc and lead) is the recovery of the useful metallic

and nonmetallic components concentrated in the waste technologic gase or in

the solid byproducts. Their treatment generates byproduct metals or various

67%

15%

12 %

6%

Asia

EU 28

America

Other

commercial chemical products that raise the effectiveness of the basic

production and at the same time helps to protect the environment.

Data about the production of precious and byproduct metals, alloys and

chemical products are presented on table 3.10.

Table 3.10

Production of secondary, precious and byproduct metals, alloys and chemical

products (tons, kg)


2016/2015

+/- %

Cadmium ingots, t 360 411 382 344 362 18 105.2

Silver, kg 46 523 55 637 50 200 37 955 52 526 14 571 138.4

Silver products, kg 5 889 5 474 4 838 2 785 2 445 -340 87.8

Gold, kg 341 278 278 211 212 1 100.5

Gold products, kg 26 26 32 41 82 41 200.0

Tellurium, kg 2 472 5 014 4 932 4 046 4 479 433 110.7

Sodium sulfate, t 1 750 1 846 1 520 1 372 342 -1 030 24.9

Sulfuric acid, t 1100835 1352588 1309063 1340843 1209594 -99 469 90.2


The table reveals that in 2016 the quantities of silver, gold and the

accompanying metals (cadmium and tellurium) are going up due to the content

of these metals in the processed primary and secondary raw materials in

“KCM”JSC. Sulfuric acid has the biggest share of the production of all

byproducts obtained within the metallurgical processing of copper, zinc and lead

primary materials. The quantities produced in 2016 are by 9.8% less than in the

previous year.

3.1.5. PRODUCTION OF ROLLED/PRESSED NON-FERROUS METALS

AND ALLOYS

The metal processing industry in Bulgaria is very well developed. From copper,

zinc, lead, aluminium and their alloys different articles with a higher value

added (sheet, strips, foil, pipes, profiles etc.) are produced.

Data on the production data for the period 2012-2016 are presented in Table

3.11 and Fig. 3.10 and Fig. 3.11.

Table 3.11

Production of R/P non-ferrous metals and alloys, tons

Product 2012 2013 2014 2015 2016

Difference

2016/2015

% +/- %

R/P NFM and alloys 61 971 65 462 63 940 57 353 57 700 39.6 347 100.6

incl. copper 40 440 44 445 42 298 41 329 46 649 32.0 5 320 112.9

brass 6 136 6 762 7 628 8 437 11 051 7.6 2 614 131

zinc 15 395 14 255 14 014 7 587 - - -7 587

R/P aluminium - Total 67 642 76 875 83 886 83 184 87 976 60.4 4 792 105.8

Incl : “Alkomet” JSC 53 947 60 960 64 790 64 894 65 646 45.1 752 101.2

“ETEM Bulgaria” JSC 13 000 14 609 18 023 17 300 21 122 14.5 3 822 122.1

“PIH Industry”JSC 695 1 306 1073 990 1 208 0.8 218 122.0

Total: 129 613 142 337 147 826 140 537 145 676 100.0 5 139 103.7


In 2016 the total quantity of R/P non-ferrous metals is growing by 3.7% mainly

due to the increased production of aluminum R/P. Its relative share of the total is

continuously increasing over the last three years and is reaching now 60.4%.

The main domestic producer of HNFM articles and their alloys is “Sofia Med”

JSC. The company is a part of the industrial group “Halcor” Greece

incorporating companies of the “Viohalco” holding, producing rolled and

pressed articles of copper, copper alloys and copper cables.

“Sofia Med” JSC is producing a wide range of rolled and pressed articles

(sheet, strips, circles, discs, rods, bars, profiles etc.) used in the construction,

machine-building, electrical engineering and other sectors of the processing

industry.

Figure 3.10 shows the produced quantities of rolled and pressed HNFM from

2012 to 2016 by types.

Figure 3.10

Production of R/P HNFM, tons

Table 3.11 and Fig. 3.10 illustrate that in 2016 the total production of R/P

copper increases by 12.9% - the rolled increases by 23.6% and the pressed by

1.5%. The products of brass and zinc are only rolled. The rise by the rolled brass

is 31%. During the year no zinc rolled was produced. The ratio between copper

and brass R/P produced in 2016 is 80.8%/19.2%.

Rolled products are 64.8% of the total HNFM production.

In Sofia Med AD 11 174 tons of imported scrap was processed - by 43.4% less

than in 2015.

In "Sofia Med" JSC an investment projects worth BGN 7.8 million was

realized in 2016. In order to expand the assortment a line for continuous vertical

casting of oxygen-free copper wire has been put in operation. The new capacity

will increase the production efficiency and improve the product quality.

The main producers of aluminum R/P are “Alcomet” JSC - Shumen, “Etem

Bulgaria” JSC - Sofia and “PIH Industry” JSC - Rousse.

Figures illustrating the production of aluminum R/P by enterprises are presented

in Table 3.11, and Fig. 3.11 shows the total production.

Figure 3.11

Production of alluminuim R/P, tons

“Alcomet” JSC is the biggest company specialized in the production of pressed

(pipes, rods and profiles) and rolled (strips, sheet and foil) aluminium and

aluminium alloys. The company has stable positions in the production of

alluminuim foil and is keeping ¼ of the EU market.

In 2016 the company produced 65 646 tons R/P metal - an increase by 1.2%

compared to 2015. Alcomet's products take a share of ca. 75% of the total

amount of aluminum R/P in the country.

The ratio between rolled and pressed is 68%/32% (in 2015 respectively

65.7%/34.3%), the increase by the rolled products is due to the modernization

and the increased capacity of the rolled production.

For the modernization of the production capacities and implementation of

new technological solutions in “Alcomet” JSC investments were made for

BGN 9.9 million. In 2016 the company announced its new investment program

for the period 2016 - 2017 worth ca. EUR 40 million. It will cover the three

production plants - casting, roller and press. It foresees the annual capacity of

Alcomet to reach 100 000 tons, the efficiency of production to be increased and

the technical and technological parameters of the processes to be improved. By

purchasing of new equipment the quality will be improved and the

manufacturing mix will be expanded, including products for the automotive,

pharmaceutical and packaging industries.

In the past year 5 588 tons of aluminum waste was processed in the plant (by

9.2% less than in 2015).

"Etem Bulgaria" JSC is producing long (pressed) products - different types of

aluminum profiles and architectural constructions, mainly door and window

frames and facade elements for buildings. For several years the company has

added to its portfolio also automotive products, which already are ca. 30% of

the production. As a result, the total production of the company for the last five

years is increasing by 60%.

In 2016 the share of "ETEM Bulgaria" JSC is 24% of the total amount of

aluminum R/P (respectively 20.8% in 2015). Compared to the previous year the

production is increased by 3 822 tons (22.1%).

The constant and sustainable development of the company is due to the annual

investments made for the modernization and expansion of production capacities,

which resulted in a growth of the capacity and of the assortment. Projects

amounting to BGN 7 million were realized during the past 2016.

“PIH Industry” JSC is the only company in the country producing welded

aluminum pipes. 1 208 tonnes were produced in 2016 – by 22% more than in

the previous year.

3.1.6.UTILIZATION OF NON-FERROUS METAL WASTE

Waste of non-ferrous metals present an important raw material for the

metallurgic production. Their processing to final articles leads to a considerable

improvement of the economic and the environmental protection indices of the

companies and to reduction of energy consumption.

Data on the processed waste from non-ferrous metals (metal content) for the

period 2012 – 2016 by the companies members of BAMI are presented in Table

3.12.

Table 3.12

Processed non-ferrous metal waste, tons

Waste Total

Difference

2016/2015 2012 2013 2014 2015 2016

+/- %

Copper 80 655 75 183 78 576 75 903 62 942 -12961 82.9

Lead 35 575 33 516 34 317 46 754 44 230 -2 524 94.6

Zinc 10 203 11 363 13 193 11 983 16 802 4 819 140.2

Aluminium 15 615 15 682 15 717 18 277 14 615 -464 97.5

Total metals 142 048 135 744 141 803 152 917 138 589 -14328 90.6


The table illustrates that the total quantity of processed waste in 2016 decreased

by 9.4%. Copper and lead waste are respectively by 12 961 tons and by 2 524

tons less than in 2015. Aluminum waste used for recovery also drops but by

only 464 tons. Only the zinc waste shows a significant increase by 40.2%.

3.2. TRADE EXCHANGE AND CONSUMPTION OF NON-

FERROUS METALS

The raw materials of non-ferrous metals over the entire added value chain are

subject of the stock exchange and are traded at prices of the international

markets, generally of the London metal exchange (LME). Changes of rules

between different countries and regions such as imposing of taxes, embargos or

quotas have also their impact on the metal prices and change the relation

between demand and supply.

The Figures below show the dynamics of the prices of the basic metal ingots,

which Bulgaria has produced in the period January2016 - December 2016,

taken from the official publications of LME. The Figures illustrate the big

fluctuations in prices for this one-year period.

Figure 3.12 Prices of el. copper (USD per ton)

Fig.3.12 shows the price

dynamic of the electrolytic

copper. The graph shows that

from the beginning of the year

till the 4th quarter of 2016

prices are running at lower

levels - between 4 500 and

5000 USD/ton. Only at the

end of the year an increase

coming up to 30% over the

previous period is seen.

Figure 3.13 Prices of lead (USD per ton)

The price changes of metal

lead are shown in Fig. 3.13.

The graph shows that lead

prices are also at relatively

low levels from the beginning

of 2016. A smooth rise started

in August. The difference

between the maximum and

minimum monthly average

price of lead for the specified

period is about 600 USD/ton

which is a change of 35%.

Figure 3.14 Prices of zinc (USD per ton)

The prices of zinc ingot are

shown on Fig. 3.14. After

the drop in the end of 2015

down to 1 500 USD/ton

electrolytic zinc, from the

beginning of 2016 prices are

increasing smoothly. For the

one-year period the

difference between max and

min price per ton is over

1 000 USD, which is a

change of more than 50%.

It follows from the above,

that in 2016 the price dynamic of industrial non-ferrous metals is significant. It

is influenced by the political and economic situation all over the world. In this

dynamic and competitive environment Bulgarian copper, zinc and lead

production companies have good market positions. Lower metal prices have led

to a decrease in the value of production and in the relative share of non-ferrous

metals in the country's export.

3.2.1. IMPORT OF NON-FERROUS METALS AND FINISHED PRODUCTS

The quantites of imported non-ferrous metals, alloys and finished products

during the last five years are shown in Table 3.13.

Table 3.13

Import of non-ferrous metals and finished products, tons

Items 2012 2013 2014 2015 2016 Difference

2016/2015

+/- %

Copper, total, incl. 82 051 81 300 86 161 85 908 93 052 7 144 108.3

Anodes 58 1 504 924 211 127 -84 60.2

Catodes, alloys, blanks 6 815 13 921 13 812 12 211 20 498 8 287 167.9

Scrap 64 561 56 040 60 453 59 728 49 543 -10 185 82.9

Bars and profiles 4 371 4 415 5 006 5 411 5 632 221 104.1

Wire 3 779 2 600 2 782 4 783 13 613 8 830 284.6

Sheet and foil 1 145 1 521 1 416 1 594 1 292 -302 81.1

Pipes 1 322 1 299 1 768 1 970 2 347 377 119.1

Lead, total, inc. 23 103 34 932 29 262 25 181 35 463 10 282 140.8

Ingot and alloys 21 064 23 536 12 439 8 394 16 482 8 088 196.4

Scrap (pure) 1 660 11 050 16 660 16 484 17 827 1 343 108.1

R/P metal 379 346 163 303 1 154 851 380.9

Zinc, total, incl. 10 030 4 323 9 660 6 491 3 896 -2 595 60.0

Ingot and alloys 6 876 2 765 8 746 5 322 3 243 -2 079 60.9

Scrap 602 630 504 610 148 -462 24.3

R/P metal 2 552 928 410 559 505 -54 90.3

Aluminium, total, incl. 123 030 150 621 135 148 150 548 158 162 7 614 105.1

Ingot and alloys 86 090 105 738 94 982 108 968 116 066 7 098 106.5

Scrap 1 582 1 742 1 607 2 917 1 533 -1 384 52.6

Bars and profiles 16 166 17 727 16 770 17 648 19 458 1 810 110.3

Wire 4 925 3 732 3 190 3 562 4 309 747 121.0

Sheets and strips 8 582 10 010 11 992 10 696 9 837 -859 92.0

Foil 4 801 5 442 5 453 5 040 4 863 -177 96.5

Pipes 884 6 230 1 154 1 717 2 096 379 122.1

Total, tons 238 214 271 176 260 231 268 128 290 573 22 445 108.4

Value, EUR million 775.3 753.5 742.0 792.0 739.6 -52.4 93.4

Value, BGN million 1 516.4 1473.7 1 451.3 1 549.0 1 446.5 -102.5 93.4


The metals and metallurgical products included in the Table actually form the

import realised in the sector and reflect real quantities and values by basic

groups.

The data show that in 2016 imported are 290 573 tons of non-ferrous metals and

their products worth BGN 1 446.5 million. Compared to 2015 the volume of

imports grew by 8.4% measured by natural indicators but in value it decreased

by BGN 102.5 million.

The structure of the import of non-ferrous metals and their products by items is

presented on Fig. 3.15.

Figure 3.15

Structure of the import of NF metals and products (ingots, R/P metal

and scrap) by items

The import of aluminium ingots (not produced in the country) takes up

more than 73% ot the total quantity in the group of aluminium and

aluminium products and over 40% of the total import of non-ferrous

metals and producs into the country. It is used as a basic raw material for the

production of aluminium products and articles. In 2016 the import of

unprocessed aluminium increases by 6.5 %. About 35% of the aluminium ingots

are imported from EU countries, 30 % come from Russia and Turkey, and 19%

from Mozambique. The import of aluminium products is growing by 4.9% -

they are imported from the EU (65.3%), 24% are from Turkey and 10.7% - from

other countries.

The biggest share in the group copper and copper products takes the import of

copper waste, coming up to 53.2%. Copper waste is used as an efficient and

32%

12%

1%

55%

Copper

Lead

Zinc

Alluminium

environmental friendly raw material for the production of electrolytic copper

and copper end products. They hold a share of 17% from the total non-ferrous

metal imports in the country (22% in 2015). Ca. 60% of the waste is imported

from the Balkan countries. Refined copper and copper alloys are mainly

imported from Russia (40.6%), 46% from Balkan countries (Serbia, Turkey and

Macedonia) and only 7.9% from EU member states. Deliveries in 2016 grew by

67.9%. 40.4% of the copper products are imported from the EU and 59.6%

from other countries - their import grew by 66.3%.

In the group lead and lead products the import of metallic lead waste (scrap) is

50.3% of the total quantity in this group and over 6% of total import of non-

ferrous metals and their products. It is used as a raw material for the production

of lead and lead alloys. 73% of the supplies are from Romania. Compared to

2015 the import of lead waste grew by 8.1%. The import of unprocessed lead

(ingots) incl. lead alloys is almost doubled in 2016. The biggest quantities were

imported from Republic of Korea (58.3%) and Russia (17.2%), only 17.6%

came from EU.

The import of unprocessed zinc is constantly decreasing over the last three

years. As compared to 2015 it is reduced by 39.1 %. The domestic consumption

is fed mainly by the local production – ca. 70%. The import originates quite

exclusively from EU member-countries (97.9%).

3.2.2. EXPORT OF NON-FERROUS METALS AND FINISHED PRODUCTS

Data on the export of non-ferrous metals, finished products and metal waste

(scrap) by types for the period 2012 – 2016 are presented in Table 3.14.

The total export in 2016 amounts to 586 760 tons, worth BGN 4 010.1 million.

Compared to 2015 the total quantity shows a decrease by 64 061 tons ( 9.8%).

As a result of the lower prices and of the reduced quantities exported metal and

products, the drop in export value is significant – 22%.

The structure of the export shows that Bulgaria, besides being a producer and

netto exporter of metal ingots (copper, zinc and lead) exports also considerable

quantities of products (profiles, sheet, strips, foil etc.) with a high value added.

Because of the small needs of the country and the modern processing capacities

a large part of these products is primarily export-oriented.

In 2016 the export of electrolytic copper is reduced by 11.5%. Ca. 39% of the

quantities sold are directed to the EU countries and 39% go to China and

Turkey. The sales of P/R copper (sheet, strips, rods etc.) are directed mainly to

the EU countries (82 %). As compared to 2015 the export of copper products

goes down by 10.3 %.

In 2016 the export of lead is decreasing by 4.1 %. 41.4 % of lead ingolts are

exported to EU member countries and the remaining quantities - mainly to

neighbor countries (Turkey, Serbia, Mazedonia).

Table 3.14

Export of non-ferrous metals, products and scrap, tons

Items 2012 2013 2014 2015 2016 Difference

2016/2015

+/- %

Copper, total, incl. 334 357 384 110 371 935 385 745 320 834 -64 911 83.2

Anodic copper 70 347 121 281 116 252 118 755 75 585 -43 170 63.6

Electrolytic copper 202 912 199 741 196 880 209 554 185 485 -24 069 88.5

Scrap 12 318 10 760 8 488 7 176 7 176 0 100.0

Bars and profiles 18 866 21 754 18 800 19 888 19 582 -306 98.5

Wire 3 103 1 115 1 169 635 6 107 5 472 961.7

Sheet, strips and foil 26 761 29 433 30 297 28 996 26 758 -2 238 92.3

Pipes 50 27 49 741 141 -600 19.0

Lead, total, incl. 64 543 73 834 83 152 81 045 77 791 -3 254 96.0

Ingots 64 354 73 576 83 056 80 865 77 527 -3 338 95.9

R/P metal 129 113 79 82 85 3 103.7

Scrap (pure) 60 145 17 98 179 81 182.7

Zinc, total, incl. 75 968 70468 76 609 72 535 74 044 1 509 102.1

Ingots 57 768 54 272 60 879 62 920 73 202 10 282 116.3

R/P metal 16 015 14 843 14 347 8 267 176 -8 091 2.1

Scrap 2 185 1 353 1 383 1 348 666 -682 49.4

Aluminium, total, incl. 94 327 103 813 112 150 111 496 114 091 2 595 102.3

Ingot 5 866 6 465 7 874 7 073 4 422 -2 651 62.5

Scrap 25 579 22 766 23 584 22 351 24 153 1 802 108.1

Bars and profiles 21 459 24 982 28 720 30 358 31 686 1 328 104.4

Wire 10 423 386 258 154 -104 59.7

Strips and sheet 13 959 16 711 17 288 14 785 13 737 -1 048 92.9

Foil 19 377 23 733 23 993 26 512 29 765 3 253 112.3

Pipes 8 077 8 734 10 305 10 159 10 174 15 100.1

Total 569 195 632 225 643 846 650 821 586 760 -64 061 90.2

Value, EUR million 2 600.1 2 717.2 2 562.8 2 628.9 2 050.3 -579 78.0

Value, BG million 5 086.9 5 314.4 5 012.4 5141.7 4 010.1 -1 132 78.0


The export of unprocessed zinc (ingots) increased in 2016 by 16.3 % because

the domestic consumption is constantly decreasing. The main market are the EU

countries - 53.4 % and the rest goes to Balkan neighbor countries (Turkey,

Serbia and Mazedonia).

75 % of the export in the group of aluminium is taken by R/P aluminium. In

2016 the export grows by 4.2 %. The most significant increase (by 12.3%) is

recorded by foil. More than 95% of the R/P aluminium is destined to the EU

countries.

Aluminium and aluminium alloys produced from secondary raw materials

take 3.9 % of the total quantity of exported aluminium. In 2016 the export of

these products is decreasing by 37.5%.

The biggest share in the export of secondary raw materials keep aluminum

waste and copper scrap. In comparison to 2015 the exported quantities of

aluminium waste increased by 8.1%, the export of copper scrap remains at the

same level.

The main part of the aluminum waste (over 77%) has been exported to the EU

countries.

The biggest importers of copper scrap from Bulgaria are China – 30.5%,

followed by Turkey – 20% and the EU countries – the rest.

Tables 3.13 and 3.14 allow the following conclusions to be drawn about the

trade exchange in 2016:

The export of non-ferrous metals and products of them still

exceedes their import over 2 times, despite the fact that in 2016 the

imported quantities grew by 8.4% and the export decreased by

9.8%.

In terms of value the export decreased by BGN 1 132 million

(22 %) due to the lower prices of metals and to lower quantities of

some traditional products from the country export list;

Although the volume of imported non-ferrous metals and metal

is increased, in value terms it decreased by 6.6%.

It follows from the foregoing that the Bulgarian non-ferrous metallurgy,

both in terms of quantity and value, keeps a positive trade balance

independently from the changes in production and prices.

3.2.3. FOREIGN TRADE TURNOVER OF NON-FERROUS METALS

Generalized data on the import and export in the non-ferrous metallurgy are

shown in Table 3.15 and Table 3.16.

Table 3.15

Foreign trade turnover of non-ferrous metals, tons

Indices 2012 2013 2014 2015 2016

Difference

2016/2015

+/- %

Import 238 214 271176 260 231 268 128 290 573 33.1 22 445 108.4

Export 569 195 632225 643 846 650 821 586 760 66.9 -64 061 90.2

Turnover

total 807 409 903401 904 077 918 949 877 333 100.0 -41 616 95.6

Balance 330 981 361049 383 615 382 693 296 187 -86 506 77.4


The data in Table 3.15 show that in 2016 the total quantity of exported and

imported non-ferrous metals that form the foreign trade turnover decreases by

41 616 tons (4.4%).

The reasons are the export drops of the copper (anodic and electrolytic), of the

lead ingots and of R/P of HNFM and the decreased import of copper waste as

well. In the same time the import is increasing by aluminium ingots, lead and

their alloys and some copper products. As an end result the balance in terms

of quantity shows a decrease with more than 86 thousand tons.

In terms of value the foreign trade turnover is also on decrease (by 18.4%), as a

result of the export drop and the lower value of the import. However the balance

is keeping positive with a value of BGN 2 563.6 million favorable effecting the

foreign trade balance of Bulgaria.

Table 3.16

Foreign trade turnover of non-ferrous metals, BNG million

Indices 2012 2013 2014 2015 2016

Difference

2016/2015

% +/- %

Import 1 516.4 1 473.7 1 451.3 1 549.0 1 446.5 25.5 -1 025 93.4

Export 5 086.9 5 314.4 5 012.4 5 141.7 4 010.1 73.5 -1131.6 78.0

Turnover

total 6 603.3 6 788.1 6 463.7 6 690.7 5 456.6 100.0 -1234.1 81.6

Balance 3 570.5 3 840.7 3 561.1 3 592.7 2 563.6 -1029.1 77.4


3.2.4. SALES OF NON-FERROUS METALS AND R/P METALS

Table 3.17 and Fig. 3.16 present a company information on sales of Bulgarian

production of non-ferrous metals and R/P products for the period 2012 - 2016.

Data show that in 2016 the sales structure changed in favor of the local market,

accounting for 12.1% of the total sales (10.9% in 2015). The export accounts for

87.9% of the metallurgical production (89.1% in 2015).

Table 3.17

Sales of non-ferrous metals and R/P metal, tons

Products Sales 2012 2013 2014 2015 2016

Anodic

copper

Home market - - - - -

Export 67 651 121 282 116 209 118 573 70 793

Total 67 651 121 282 116 209 118 573 70 793

Electrolytic

copper

Home market 33 500 32 889 35 166 28 006 29 033

Export 194 500 194 820 191 383 208 150 185 006

Total 228 000 227 709 226 549 236 156 214 039

Lead Home market 24 664 23 327 20 611 21 473 27 793

Export 58 297 67 717 72 355 75 714 71 731

Total 82 961 91 044 92 966 97 187 99 524

Zinc Home market 16 106 19 081 17 681 12 692 6 690

Export 54 643 52 545 55 952 57 618 70 615

Total 70 749 71 626 73 633 70 410 77 305

R/P NFM Home market 1 733 1 842 1 450 1 563 1 619

Export 60 150 64 887 62 999 55 890 56 174

Total 61 883 66 729 64 449 57 453 57 793

Aluminium R/P Home market 8 538 8 071 7 537 8 616 8 054

Export 57 020 68 092 76 437 73 931 78 553

Total 65 558 76 163 83 974 82 547 86 607

Source: Company data,

Electrolytic copper - 86.4% of the sales are realized on the international market

and 13.6% remain for home consumption. The sales on the home market

increased by 1 027 tons, respectively the final home consumption increased in

2016 (Table 3.18).

Lead and lead alloys - 72.1 % of the sales are realized on the international

markets, the rest of 27.9% are for the local market. In the last three years there is

a trend for increase of the quantities sold at the local market.

Zinc – the export increased and is 91 % of the production, 9% are sold on the

home market. In 2015 the ratio was 82% /18 %.

R/P NFM - in 2016 deliveries for the home market remain on the level of the

previous year – only 2.8 % of the total sales. The production is mainly sold on

the international market.

R/P aluminium – total sales of all three producer companies are increasing by

4.9 %. The R/P aluminium sales on the home market decreased and is coming to

6.5% and the export is increasing – its share is respectively 93.5 % .

The structure of general sales of basic and R/P metals for the last five years

according to company data is presented on Figure 3.16.

Figure 3.16

Figure 3.16 shows that the NF metallurgy in Bulgaria is a sector with a

clear export orientation as the export exceeds many times the sales on the

home market.

3.2.5. CONSUMPTION OF NON-FERROUS METALS AND ALLOYS

Table 3.18 illustrates the real home consumption (RHC), as formed by the sum

of sales of non-ferrous metals on the home market according to data supplied by

the Bulgarian producers and the import reported by the Customs Agency and the

NRA from 2012 to 2016.

In 2016 ca. 61 % of the home consumption of the basic non-ferrous metals

(copper, lead and zinc) are covered from the national production and the share of

imported metals is 39%. The real home consumption (RHC) increased by the

copper and the lead and by zinc it decreased almost two times.

Table 3.18

Real home consumption (RHC) of non-ferrous metals and rolled/pressed NFM, tons

Items Origin 2012 2013 2014 2015 2016

%

Electrolytic

copper Local production 33 500 32 889 35 166 28006 29 003 58.6

Import 6 815 13 921 13 812 12211 20 498 41.4

Consumption 40 315 48 810 48 978 40217 49 501 100.0

Lead Local production 24 664 23 327 20 611 21473 27 793 62.8

Import 21 064 23 536 12 439 8394 16 482 37.2

Consumption 45 728 46 863 33 050 29867 44 275 100.0

Zinc Local production 16 106 19 081 17 681 12692 6 690 67.4

Import 6 876 2 765 8 746 5322 3 243 32.6

Consumption 22 982 21 846 26 427 18014 9 933 100.0

R/P NFM Local production 1 733 1 842 1 450 1563 1 619 6.2

Import 13 548 11 109 11 545 14620 24 543 93.8

Consumption 15 281 12 951 12 995 16183 26 162 100.0

R/P aluminium Local production 8 538 8 071 7 537 8616 8 054 16.6

Import 35 358 43 141 38 559 38663 40 563 83.4

Consumption 43 896 51 212 46 096 47 279 48 617 100.0

Source: Customs statistics and NRA (import) and Company data (home sales ).

In 2016 the real home consumption of rolled/pressed non-ferrous metals

increased by 61.7 %, almost by 10 000 tones, coming entirely from the increased

import. The share of the local production for 2016 is only 6.2 %. The import

covers 93.8 % of the needs.

The home consumption of aluminium R/P increased also by 2.8 %. Deliveries

from local producers to the domestic market decreased by 6.5% in favor of the

imports.

One other index is the apparent consumption (AC) of the non-ferrous metals and

R/P produced in the country in tones, which for 2016 is presented in Table 3.19.

The apparent consumption AC is presented as the total of the production P plus

the import I less the export E of the same production.

Table 3.19

Apparent consumption of non-ferrous metals and R/P products in 2016, tons

Articles P I E AC

Electrolytic copper 216 428 20 498 185 485 51 441

Lead, incl/ alloys 100 817 16 482 77 527 39 772

Zinc, incl. alloys 75 811 3 243 73 202 5 852

R/P of NFM 57 700 24 543 52 588 29 655

Aluminium R/P 87 976 40 563 85 516 43 023

Source: Customs statistics (for the export and import) and Company data (for

the production)

The data about the AC and RHC show some differences due to the influence of

other factors but the trends of consumption compared to the year before are

identical by both ways of determination.

By the electrolytic copper and the lead the apparent consumption increased by

ca. 60 % and by zinc a decrease is shown by 33.5 %.

Compared to 2015 the apparent consumption by R/P non-ferrous metals has an

increase more than two times. By aluminium R/P there is the same trend – the

AC increased by 8.1 % compared to 2015.

Data in Table 3.19 show that the existing capacities and the produced volume of

the basic non-ferrous metals and their alloys significantly exceed the needs of

the Bulgarian industry and the demand of the local market. This determines the

great export potential of the Bulgarian non-ferrous metallurgy and Bulgarian

producers of basic non-ferrous metals and metal products as net exporters on the

international market.

MEMBERS AND MANAGEMENT OF BAMI

FULL MEMBERS

“Metalco” PJSC “Aurubis Bulgaria” JSC

“Stomana Industry” JSC “Alcomet” JSC

“Sofia Med” JSC “KCM 2000” JSC

“Etem Bulgaria” JSC “KCM” JSC

“Promet Steel” PJSC “KCM Technology” PJSC

“Evrometal” Ltd “ KCM Trade” LTD

“BMB Metal” Ltd “KCM Industrial Service”

“CFMC” PJSC “Metalurgremont 21” JSC

“EL BAT” JSC “Metalsnab Bulgaria” JSC

“Gorubso – Karjali”JSC “EMC Distribution” LTD

“IPO” Ltd “Monbat Recycling” PJSC

“Tchugunoleene Parvomay JSC “Shamot LP 2007” LTD

“Polimetimportexport” LTD “ El Stomana” JSC

“Kometech” LTD “Refran” Ltd

“Rudmetal” JSC “Stam Trading” JSC

“Ognjanovo K” JSC “DZM 1” Ltd

“Org factor” LTD “Armex Trade” PJSC

“Ges Trading” LTD “Komotech-Co” Ltd

“Berg Montana Fittingi”PJSC “Kovintrade Bulgaria” PJSC

„ZGP ” LTD “Layer” PJSC

ASSOCIATED MEMBERS

University of Chemical Technology and Metallurgy, Sofia

Technical University, Sofia

Technical University “Angel Kantchev”, Russe

MEMBERS OF THE EXECUTIVE BOARD, CORPORATE

BODIES:

“Aurubis Bulgaria” JSC “KCM 2000” JSC

“Monbat Recycling” PJSC “ZGP” Ltd

“Evrometal” Ltd “Refran” Ltd

“Metalco Bulgaria” PJSC “Ognjanovo K” JSC

“Metalsnab Bulgaria” JSC “Alcomet” JSC

“Promet Steel” PJSC “EMC Distribution” Ltd

“Gorubso – Kardhali”JSC “Shamot EL PE 2007” Ltd

“Polimetimportexport” Ltd

CHAIRMAN OF THE BOARD – ANTON PETROV

EXECUTIVE DIRECTOR - Politimi Paunova

ADDRESS:

1309 Sofia

205 Aleksander Stambolijski blvd.

Tel./Fax: +359 2/ 920 37 39

+359 2/ 920 40 47

E-mail: [email protected]

Website: www.bcm-bg.com

mailto:[email protected]

http://www.bcm-bg.com/

METALLURGY IN BULGARIA 2016 - bami.bg · Eurofer (), World Steel Association (), Eurometaux () and other international organizations active in the field of the ferrous and non-ferrous

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