EU service centres see October shipments fall on-year
European steel distributors’ association EUROMETAL tells Kallanish that European Union (EU) distribution sector shipments dipped again while inventories grew year-on-year for flat products in October. Shipments also saw a strong fall in the multi product and proximity distribution sector.
Flat steel service centres (SSC) saw EU shipments dip by -7% y-o-y in October following a -3% fall in September. Despite this, shipments over the first ten months of 2016 have risen by 1% on-year. Stock volumes within EU SSC, when expressed in days of sales, noted 67 days in October 2016, compared with 61 days in October 2015, EUROMETAL says.
EU Multi-Product & Proximity Stockholding distribution, mainly involving longs, tubular products and stainless steel, also registered a decrease in shipments in all main product lines, except for plates, the association adds.
October shipments in this sector dipped by -10% y-o-y but showed have remained flat y-o-y for the first ten months of 2016. Stocks within the EU Multi-Product & Proximity Steel Stockholding Distribution sector, expressed in days of sales, reached 75 days in October 2016, EUROMETAL continues. This compares with 69 days during the same month in 2015.
EU service center shipments fell in October
Shipments by flat steel service centers in the European Union fell 7% year-on-year in October and stock volumes are increasing as a result, according to the latest data released by EUROMETAL.
The federation of steel, tube and metals distribution noted that in the third quarter of the year, shipments were down 3 % y-o-y, a negative turn after the market’s positive start in the first half of the year.
The data adds more supports to distributors’ complaints that the raft of higher mill offer prices has not reflected the demand situation – although of late some service center and stockholder sources have confirmed they are finding it easier to increase their outsell prices as end-users accept the longevity of firmer steel markets.
The year would still appear to have been a solid one so far in terms of sales volumes, with service center shipments growing 1% y-o-y in the first ten months of 2016 and in recent months at much higher sales prices.
Stock volumes within EU service centers are higher than they were last year with inventories – expressed in days of sales – at 67 days in October 2016, compared with 61 days in October 2015.
Traditionally companies will look to run down their stock levels towards the end of the year, preferring to hold cash in hand rather than assets that could lose value. Observers say it will be interesting to note whether this year there will be a change as many expect the market to remain firm for much of the first quarter of 2017.
Peter Brennan, PLATTS
EU investigation on Chinese HDG imminent sources say
The investigation by the European Commission on imports of Chinese HDG in Europe could be launched a soon as in the next couple of weeks, according to sources contacted by Kallanish.
As previously reported, Eurofer has been monitoring for over a year the imports of this product in the continent, with China and South Korea being the main players in the import market.
A source close to the matter noted that the official investigation could be launched ahead of 11 December. This is the final date for Europe to respond on the request by China to be granted market economy status, which could change significantly the process for launching new anti-dumping investigations.
A number of traders note that Chinese HDG importers have been very cautious during recent months as their offer prices remain in line with domestic European offers. One importer said that his company was doing “… moderate business,” adding that if the investigation is begun before the end of the year imports are likely to stop completely in Q1 2017 to avoid retroactive duties.
Werden in Europa die unabhängigen Stahl-Service- Center verdrängt?
Mailand. Der Stahlhandel in Europa wird sich weiter verändern. Vor allem die unabhängigen Stahl-Service- Center müssen um ihre Positionen fürchten.
Die Teilnehmer einer EUROMETAL-Konferenz in Mailand hörten aber auch positive Aussagen.
Die italienischen Stahl-Service- Center haben das konjunkturell bedingte Tief überwunden und sind mit ihren europäischen Mitstreitern bald wieder gleichauf.
Revista Infoacero Noviembre 2016
Pueden acceder a nuestra Revista Infoacero correspondiente al mes de Noviembre.
Les indicamos algunos de los contenidos de la misma:
- Opinión – D. Sergio Cobos de Castro – Presidente de la Zona VII y Miembro de la Junta Directiva de la UAHE.
- Evolución del Índice de Precios UAHE
- XII Fórum Productos Siderúrgicos – Barcelona, 20 de Octubre 2016.
- Subvenciones Tic para PYMES: Ayudas para la implantación de Sistemas Tic en las empresas de Madrid y Galicia.
ThyssenKrupp delivery problems tighten EU coil market
ThyssenKrupp’s European steel division has been hit by a “perfect storm” of events, which have left it struggling to meet orders and seen its offer prices stretch out beyond its competitors’, according to market sources.
Buyers have for months noted the German steelmaker was struggling to meet delivery commitments having suffered two fires which, sources have estimated, cost around 300,000 metric tons of production. A trader said one German service center had delays of six weeks for material due in week 41-42.
A relining of blast furnace B at TK’s affiliate Hüttenwerke Krupp Mannesmann (a 100 day reline that began in September) limited production at a time when the imminent reopening of the Sagunto galvanizing line near Valencia meant hot rolled coil would have to be redirected to act as feedstock for the Spanish mill.
The recommissioning of the 3.5 million mt/y galvanizing line was expected to help alleviate the tightness in the hot-dip galvanized coil market, but sources said the line’s capacity was instantly allocated to the thirsty automotive sector. “We approached ThyssenKrupp on the mill they reopened in Spain but they said all that galv is destined for auto,” a trader said.
A source at the German producer confirmed this, noting the reduction in import options for end-users. “Our galv line sold out instantly. The automotive companies need to buy more from the western Europeans. They all target to buy 10-15% from further afield but now they can’t,” he said, in particular noting anti-dumping tariffs for Russian cold rolled coil.
A number of market sources said ThyssenKrupp was also struggling from having oversold more generally in light of the increased need for domestic supply. Buyers quoted hot rolled coil offer levels from ThyssenKrupp as high as €595/mt ex-works, well in excess of the other major European producers.
“I hear that everybody is more or less at the €550/mt level: there’s one rumour that ThyssenKrupp sold too much around the time of EuroBlech (late October) when no-one was seeing these dramatic increases in coking coal costs, so they try now with remaining volume to make up for this. I can confirm that they’re at a higher price,” a source from another mill said.
While the ThyssenKrupp insider said the mill’s main problems were behind it, domestic supply in the European coil market remains acute with import options increasingly scarce, fuelling confidence that spot prices will increase further. However, fundamental demand remains flat leading service center and stockholder sources to question the sustainability of prices.
A ThyssenKrupp Steel Europe spokesperson confirmed a series of technical problems have disrupted deliveries, but said delivery delays are being managed. The company said it is currently investigating the restart of the Galmed galvanizing line in Spain but did not confirm it has reopened.
The spokesperson declined specific comment on pricing, but said: “In general, we still see big insecurities on the market that particularly result from the currently volatile raw material markets.”
Peter Brennan and Laura Varriale
EUROMETAL World Steel Distribution & SSC Summit [SAVE THE DATE]
EUROMETAL will convene its most important event, World Steel Distribution & SSC Summit, in Düsseldorf on 10-12 May 2017.
This event will be organized at HILTON Düsseldorf hotel.
It will start on Thursday 10 May 2017 at 18.00 hrs with inaugural speeches, followed by a meet and great reception.
The conference program will continue on 11 May 2017 with presentations during the whole day.
Finally the conference will end on 12 May with a site visit to strip electroplating specialist TATA Steel Hille & Müller, located in Düsseldorf.
Below you may find a first outline of the event flyer, including the planned conference program.
Finally, the flyer gives also a discreet hint on sponsoring opportunities related to this major event.
We offer three sponsoring alternatives: Platinum, Gold and Silver.
Sponsoring stands will be located just opposite to the conference room.
The meet and greet reception will happen inside the sponsoring area.
Schaeffler sells fine blanking business to Swiss tool maker
German automotive and industrial bearings supplier Schaeffler is selling its fine blanking business to Swiss tool maker Güntensperger in order to streamline its activities, the company said.
Schaeffler’s blanking business based in Romanshorn, Switzerland, part of the company’s industrial division, has 20 fine blanking lines and processes strip steel and non-ferrous metals. The business generated CHF 50 million (€46.6 million) of revenue in the previous business year. The details of the transaction were not disclosed, but the takeover is scheduled for finalisation in the first half of 2017.
The move is part of its cost savings measures through consolidation of plants in Europe and Americas. “The sale of the fine blanking activities is an important first step towards a concentration on our core competencies and portfolio optimization,” said Klaus Rosenfeld, CEO of Schaeffler.
While Schaeffler was able to continue its growth trend in Q3 (ending 30 September 2016), it was hampered by its industrial division. Whereas revenue in the automotive division grew by 2.6% year-on-year to €7.7 billion in the first nine months of the year, the industrial division saw a revenue drop of 7.1% y-o-y to €2.3 billion, hit by a weak industrial market in all regions. The industrial division accounts for 22.8% of Schaeffler’s revenue. Nevertheless, the company expects positive effects from steel price increases.
Laura Varriale, PLATTS
IMS S+B Distribution to restructure 2017: sources
German special steel service center IMS Schmolz+Bickenbach Distribution is to undergo further restructuring and cut up to 105 jobs, according to local sources.
“It is well-known that the there is something in upheaval and that the company is in a restructuring phase. There are a lot of things on the plate right now,” the company told Platts on Monday, without giving further information.
According to local media, the service center will drop the Schmolz + Bickenbach branding and will be divided into five individual entities in the beginning of next year, which will entail a reduction of the workforce by 105. The service center was bought by French special steel distribution group Jacquet Metal Service (JMS) last year.
In its latest financial results report, JMS said: “For 2016, the division is focusing mainly on integrating and turning around the business of Schmolz+Bickenbach Distribution.”
Sales of engineering steels fell by 4%, as JMC cited “difficult” market conditions in Germany and a decision to no longer offer certain products designated as non-strategic.
Laura Varriale, Platts
EUROMETAL IBERIA: EU steel consumption to stagnate in 2017, Eurofer exec says
European steel consumption will stagnate in 2017, the head of economic studies at Eurofer told delegates at the EUROMETAL Iberia conference in Portugal on Friday November 11.
Speaking at the EUROMETAL Steel Net Forum Iberia in Porto, Jeroen Vermeij said that European steel consumption will not grow year-on-year in 2017, in contrast with a forecast year-on-year growth of 2.20% in 2016.
This is a conservative forecast, Vermeij said, reflecting a weak economy and the tendency of what little market demand there is to be fulfilled by existing capacity and imports rather than new orders.
Apparent steel consumption in the first half of 2016 grew by 2.60% year-on-year while imports grew about 11% year-on-year, Vermeij said.
The growth outlook for next year is stagnant, he said, because private consumption, which has been the main driver of steel consumption in 2016, will not be able to compensate for low public spending and low private investment.
The automotive sector is the only industrial sector in Europe operating at pre-crisis production levels. All others, including residential construction, are still slowly recovering, he said.
In the third quarter of 2016, Europe’s GDP grew by only 0.40% year-on-year, and market conditions in Europe are not likely to improve.
Investors, however, are not only deterred by a weak market, but by geopolitical instability and high risks, Vermeij said, pointing to how the refugee crisis and Brexit have provided shocks to the European Union, threatening financial stability, trade deals and the Schengen agreement.
However, despite the bleak outlook, market sentiment remains positive, Vermeij said.
And Georges Kirps, director general at EUROMETAL, was more optimistic about steel consumption in 2017.
“The German economy is still booming,” Kirps said, “[and] I think European steel consumption growth will be somewhere between one and two percent.”
European industrial production has so far reflected this sentiment, increasing 1.10% year-on-year in the third quarter.
Lorenzo Holt, Metal Bulletin
