EU-funded infrastructure projects in Central and Eastern Europe (CEE) are forecast to require over 100,000 tonnes of steel in 2017 and around 200,000t annually from 2018 to 2021, according to CRU.

The EU is expected to accelerate this year distribution of $275.5 billion of funds to the eleven CEE member states, of which $58.5 billion are allocated specifically for infrastructure projects. Nearly all of these funds are seen being spent, thereby boosting regional steel demand which fell around -20% in 2016.

2017 is the half-way mark of the current 2014-20 funding period of the European Structural and Investment Funds. Poland will be the biggest beneficiary of the infrastructure projects, followed by Romania, the Czech Republic, Slovakia and Hungary. However, only a small share of the funds has been spent so far, mainly due to the time needed for selection, approval, and planning of suitable investment projects.

“We expect that the majority of funds will be allocated on projects by the end of this year and that disbursement will accelerate significantly in 2017 before reaching full speed in 2018,” CRU research analyst Yannick Stiller says in a note seen by Kallanish. “We expect that the EU-funded infrastructure projects in CEE will consume about one million tonnes of steel products in the course of the next five years – mostly rail and rebar but also structurals such as shapes, plates, H and sheet piling.”