Traders welcome ArcelorMittal acquisition of Ilva

Traders active in southern Europe have welcomed the decision by Ilva’s administrators to appoint the ArcelorMittal/Marcegaglia consortium as the winner of the race to take over the Taranto-headquartered mill, Kallanish learns from sources.

“I believe it is good news as with this acquisition ArcelorMittal will occupy the space that would have been occupied otherwise by a new competitor in the European market,” a senior trader comments.

As reported, the other consortium bidding for the acquisition of Ilva was a joint venture lead by Indian steelmaker JSW, currently among the main suppliers of coil into Europe.

Traders in southern Europe believe that ArcelorMittal will work towards increasing the pricing power of European mills, while the boost in production will be limited. “I believe they will find it difficult to boost output at the blast furnace, but certainly they will focus on supplying the rolling lines located in Genova and Novi Ligure with slabs from their other operations in Europe to increase vertical integration further,” a trader notes.

ArcelorMittal earlier explained that it plans to boost the output of Ilva to 9.5 million tonnes of finished steel products in 2018, significantly above the 5.9mt sold by Ilva in 2016.

Another trader located in Italy concludes that independent service centres in the country might fear that prices from Ilva could increase slightly as a result of the integration into the ArcelorMittal group. However, on the imports front the Indian suppliers could increase slightly their aggressiveness and traders will have more space to offer alternatives to European supplies.

kallanish.com

German distributors’ sales fall in March, stocks remain high

Sales at German steel distributors saw a 19.1% month-on-month fall in April, whereas stock levels remained largely stable, reflecting the limited buying activity last month, latest figures from the stockholders’ association Bundesverband Deutscher Stahlhandel (BDS) show.

Sales amounted to 858,012 mt in April, of which long products saw an 18.7% drop from the previous month to 272,080 mt while flat products fell to 491,538 mt, down 21.2%. On a year-on-year comparison sales decreased 10.1%.

Stock levels for April, which showed fairly high levels over the past months compared to previous years, saw a slight drop of 1.2% from March to April at 2.4 million mt, but a y-o-y increase of 3.6%.

“Inventories are still high: stockholders say not only that they are full but also their external stocks are high and in the Ruhr area there is no more room to put anything,” said a source close to a mill.

Broken down by product, longs showed a 6.7% y-o-y increase to 860,229 mt and flat products grew by 6% y-o-y to 1.5 million mt. Other products showed a contrary y-o-y development, decreasing from 66,401 mt to 60,298 mt, thus explaining the rather modest overall y-o-y growth rate of 3.6%.

Sources in the flat steel market in particular told Platts that buying activity was limited in April while stocks remain high as steel service centers bought more than usual in Q4 and early Q1.

Figures for Q1 this year show that stock levels amounted to 2.44 million mt, up 8% on year and remaining fairly high compared to previous years. Average figures topping those levels were last seen in Q3 2014, when stocks stood at 2.51 million mt. However, sales volumes also grew on a quarterly comparison, rising 6.4% y-o-y to a monthly average of 963,284 mt. Similar averages were also last seen in 2014, when monthly sales levels reached 962,793 mt in Q1 that year.

Laura Varriale, PLATTS

Special report: EU steel mulls Asia-style digitization

Digitization the Asian way – with a swathe of the latest IT solutions rolled out across various sites in a matter of weeks – might not be suitable for Europe with its older infrastructure, plants and old-school workers. In addition, digitization itself is really only a transition period, overshadowed by the bigger movement called “Industry 4.0” in Germany, “Industrie du Futur” in France and “Catapult” in the UK, where the mastering of other processes and tools (e.g. automation, sensors, changing a workforce’s mindset) are just as important, S&P Global Platts heard during Eurofer’s recent European Steel Day 2017.

Limited funding, the increasing age of firms’ capital assets and personnel, a cautious approach to change, plus over-careful premeditation were cited as the key features preventing European steelmakers from making choices on IT solutions rapidly, as is the case in Asia.

“It’s much easier if you build a new plant in China where you start with an absolutely new technology. In Europe, the industry is comprised of mostly brownfield enterprises with existing IT technologies. We cannot replace them from one moment to another,” said Harald Peters, head of the Measurement and Automation division at VDEh-Betriebsforschungsinstitut (BFI) – the institute for applied research and development in steel technology.

European governments and companies should focus more on investing in infrastructure starting with fast internet access for all, according to Reinhard Bütikofer, a member of the European parliament’s industry research and energy committee.

The issue of insufficient investment activity and funds emerged repeatedly throughout the event. “The EU Commission has spent €20-22 million ($22.4 million-$24.7 million) on future-orientated projects over the last 10 years. It’s nothing if you want to create breakthroughs,” said Peters.

The Research Fund for Coal and Steel (RFCS) is the only EU government fund dealing directly with steel research. For European steel companies, it is difficult to get funding from other sources, some said.

“As a steel industry, we tried to apply several times to Manufacturing the Future (a program run by UK government agency, EPSRC, investing £800 million/year ($1.03 billion) in engineering and the physical sciences) because they have much more money than RFCS – one call at Manufacturing could fetch double the RFCS funding we have for one year, ” Peters said. “But it turns out that if you want to get this funding, you have to achieve 35% energy savings with your proposed solution: it is impossible to do this with one technological change or application, as the steel industry is already running at near- optimum. The message is that we need more instruments for funding research.”

“Germany has led the way in this area with Industry 4.0. Its steel workers have been very constructive in their attitude with regard to digitization and the government is putting money on the table to push digitization, but if you compare this with what the Chinese are doing, that’s [the latter] a hundredfold [larger],” Bütikofer said.

Andreas Goss, CEO of ThyssenKrupp Steel Europe, said he had been to Asia many times and one thing was clear to him. “Even without contemplating it, they are embracing digitization as a way of life. I don’t want us to fully replicate this, but as we are facing a competitor who acts in this way we must at least ponder and make a decision to what extent we want to go that way,” Goss said.

Peters shared his own encounter with sorting out Chinese-style digitization. “One Chinese company ordered an IT solution for a research organization and asked for it to be ready in two weeks. After two weeks, it requested of the organization: ‘Please roll out your IT solution across our many different sites.’ That’s the difference; in Germany, we think again and think once more again, trying to foresee the consequences and in the meantime the others [Asians] are just doing it,” he said.

That said, Francisco Verdera Mari, director at the European standardization body CEN CENELEC, cautioned against doing things with the same vigor and speed. “Technology companies, selling to steel companies, are often driven by the solutions that they sell. It’s important to see exactly which solutions steel companies and steel buyers need and then develop the case for these specific IT applications. Otherwise, there is a risk of investing a lot of money in technology that is not adapted to our sector needs and leaves us without a result,” he said.

According to Mari, more study may be needed. “We are facing completely new challenges. Industry 4.0 is beyond just digitization: the steel sector has been digitalizing processes for a long time, but now new elements are being introduced such as sensors talking to sensors,” he said. “And who knows if data obtained by sensors is not going somewhere else, maybe to an industrial spy, a competitor, a tax authority or someone who wants to know what you are producing. There are still many issues with regards to cyber security and functional safety.”

Ekaterina Bouckley, PLATTS

ArcelorMittal-led JV is winning Ilva bidder, sources say

Am Investco, the joint venture led by ArcelorMittal with Marcegaglia and Intesa SanPaolo, is the winning bidder for Ilva, Italy’s largest steel company, sources told S&P Global Platts on Friday.

Ilva’s special commissioners — Corrado Carrubba, Piero Gnudi and Enrico Laghi — made the decision Friday morning and later informed Italian Economic Minister Carlo Calanda.

It is understood AM Investco was selected despite lingering anti-trust concerns, as ArcelorMittal is already the largest steelmaker in Europe. The special commissioners had recently asked the two JVs competing for Ilva to extend the validity of their tenders until March 31, 2018, as well as to not alter the economic terms of their offers, guaranteeing investment plans to which they’ve already committed, and to not modify their plans for the structure of the new company.

Acciai Italia, the other JV involving JSWSteel, Arvedi, Luxottica and Cassa depositi and Prestiti, did not agree to the extension, while Am Investco did. Now, the Italian government must give its official approval and the deal will need to clear anti-trust hurdles, as well.

As previously reported, Am Investco and Acciai Italia submitted binding offers to financial advisor Rothschild on March 6. Neither bidder disclosed its offer price, but according to published reports, Am Investco pledged €1.6 billion ($1.72 billion), while Acciai Italia was said to have bid €1.2 billion, along with a cap-ex commitment of €3 billion.

Annalisa Villa, PLATTS

A Made in Steel il meeting di Eurometal

L’associazione europea delle aziende del commercio dell’acciaio si confronta a Made in Steel

RHO (MI) – La competitività per le aziende del commercio dell’acciaio passa attraverso la forza delle dimensioni.

Questa è una delle tesi emerse durante il meeting di EUROMETAL, l’associazione europea del commercio di acciai e metalli non ferrosi, che si è svolto a Made in Steel.

Focalizzato sugli centri servizio dell’Europa meridionale, il convegno ha necessariamente posto l’accento sull’Italia, evidenziando come, nel mondo dell’acciaio, «non si sia ancora giunti a quel livello di concentrazione che caratterizza invece molti altri settori, dal farmaceutico all’alimentare – sottolinea Cesare Viganò, vice presidente di Eurometal e chairman del SSC Southern Europe Work Group -. L’esperienza della joint venture tra l’italiana CLN e ArcelorMittal dimostra come un player di grandi dimensioni possa essere protagonista sul mercato, anche quello più competitivo».

Durante l’incontro di Eurometal si è parlato anche delle norme antidumping, pensate dall’Ue per contrastare la concorrenza sleale sui prodotti siderurgici.

«È giusto guardare con attenzione all’effetto che questi interventi hanno e potranno avere sullo scenario comunitario – evidenzia il direttore generale dell’associazione di categoria Georges Kirps durante il convegno -. Ricordiamoci però che già quindici anni fa l’Unione Europea utilizzò strumenti simili per limitare gli ingressi di merce sul continente».

Durante il meeting (sono intervenuti anche Emanuele Norsa di Kallanish Commodities e, per un saluto, il presidente di Assofermet Roberto Lunardi), sono anche stati approfonditi alcuni aspetti del “White Paper” di Eurometal, vademecum del settore commerciale dell’acciaio.

Stefano Martinelli, siderweb.com

ArcelorMittal Cln bilancio positivo della Jv

Viganò: «la joint venture con Itla Bonaiti sarà invece operativa dal primo luglio»

RHO (MI) – «La distribuzione da centro servizio coils ha vissuto un primo quadrimestre caratterizzato da volumi di vendita sostanzialmente stabili rispetto al 2016, consuntivando una buona marginalità unitaria, soprattutto grazie al prezzo di ingresso favorevole dei coils da processare, acquistati durante il quarto trimestre 2016».

Così lCesare Viganò, Managing Director della joint venture ArcelorMittal Cln Distribuzione Italia, commenta a Made in Steel l’inizio dell’anno.

«La buona performance in termini di marginalità è però purtroppo terminata nelle ultime settimane, con una marcata contrazione dovuta all’effetto combinato di prezzi di entrata maggiori ed ai prezzi di vendita da SSC più bassi».

L’ingegner Viganò traccia poi un quadro della JV siglata nel 2015 con ArcelorMittal «che in questi primi mesi del 2017 ha consuntivato i medesimi trend della distribuzione, anche se con una minore attitudine speculativa in fase di acquisto coils – afferma -. Stiamo tuttora cercando il miglior equilibrio possibile tra volumi e prezzi di vendita, per difendere i valori necessari di marginalità, a copertura dei costi complessivi di funzionamento. In termini generali, a circa due anni dalla partenza della JV, siamo soddisfatti del cammino fatto, seguendo finora le tappe previste dal business plan iniziale, che ha ancora circa dodici mesi per il suo completamento nelle varie aree di attività».

L’ing. Viganò riserva poi uno spazio per commentare l’acquisizione del ramo d’azienda di Vertek /Condove della ex Lucchini: «Stiamo procedendo secondo i tempi e le modalità previste dall’accordo – dichiara -, che vedrà come prima fase l’ufficializzazione di un bando della Procedura, teso alla vendita degli assets produttivi, che ricordo non essere stati acquistati dal Gruppo CLN. Infine, stiamo completando l’iter che ci porterà alla creazione della JV Itla Bonaiti, leader nel settore della rilaminazione degli acciai ad alto carbonio/legati, dopo avere esaurito le fasi di due diligence e la stesura degli accordi di governance. Ad oggi, prevediamo per il primo luglio l’inizio della attività della JV».

Stefano Martinelli, siderweb.com

Ilva sale hits new obstacle: reports

The long drawn-out process for the sale of troubled Italian integrated steelmaker Ilva has hit a new problem according to reports from mainstream Italian media sources.

Kallanish understands that executives from the European Commission sent a letter in early April to warn the participants in the bidding process that the authorities will look carefully at possible antitrust issues. This letter has raised some concerns as one of the two bids on the table is led by the largest European and global steelmaker, ArcelorMittal, as reported.

In response to the letter from the Commission, the administrators are reported to have asked the two consortia currently involved in the bidding process to allow further delay in making the decision. The delay could mean shifting the deadline to the first quarter of 2018, but this possibility has not yet been confirmed.

According to local newspapers, a new delay can only be possible if the bidders accept this formally and agree to maintain their bids in the months leading up to the decision.

As reported, the market was widely expecting the administrators to announce the winner of the bidding process for Ilva by the end of June this year.

Section 232 hearing brings global issues to Washington

A who’s who of the global steel industry spoke Wednesday in Washington, DC, regarding the US’ launch of an investigation into the security needs of the domestic steel industry, Kallanish reports.

The so-called section 232 investigation hearing featured comment from a variety of US steel mill executives – including executives from US Steel, Nucor, ArcelorMittal USA, Steel Dynamics Inc and AK Steel – as well as trade groups and representatives from the governments of China, Russia and the Ukraine.

Two main views emerged from the domestic groups represented at the hearing. Domestic primary steel producers espoused the need for strong protectionist measures to ensure stable steel supply and national security, while domestic steel traders and end-users said distorting US involvement in the global market will limit topline growth and possibly spark retaliatory measures from other countries.

“As one of the most open markets in the world, the United States is often the target of dumping by steel producers from countries around the world. In many cases, these foreign producers are also subsidised by their governments,” says American Iron and Steel Institute (AISI) ceo Thomas Gibson. AISI represents the bulk of domestic primary producers.

“To date, the US steel industry has relied on our trade laws to seek to address the impact of unfairly traded steel imports in our market,” he adds. “While the anti-dumping and countervailing duty laws have provided some relief, because the resulting orders are necessarily country and product specific, they leave openings for steel products not subject to orders to continue to surge into our market.”

Gibson’s testimony was countered by international trade counsel Gary Horlick of the American Institute for International Steel, which represents US importers.

“Finally, it is impossible to ignore the certainty that other countries will retaliate against US exports,” says Horlick in his testimony. “Let’s start with the obvious – the United States is the largest exporter of military equipment in the world, selling over $20 billion annually in recent years. But we have competitors for almost all our products – Russia is second, for example. This affects not only the jobs that are dependent on exports, but the entire economics of our defense base. The economics of great airplanes like the F-35 or the F-22 do not work unless they are sold to some of the same countries whose steel this proceeding might limit from entering the US.”

Horlick also noted that the US is relatively poor in iron ore, and domestic production cannot be indefinitely sustained without resorting to iron ore imports. Pro-actively shutting off steel imports could ultimately hurt national security if retaliatory iron ore export restrictions are eventually imposed by targeted countries.

NASS Steel Industry Safety and Health Awareness Day – 21st June 2017

Wednesday 21st June 2017
EEF Technology Hub
3, Nexus Point, Gavin Way, Birmingham B6 7AF

The National Association of Steel Service Centres (NASS) in conjunction with the Health and Safety Executive (HSE), Wolverhampton City Council and EEF, The Manufacturers Association are hosting our annual Safety and Health Awareness Day (SHAD) aimed at tackling common health and safety issues in the Steel Service Centre and Stockholding Industry.

WG Training Ltd. will be talking to delegates about managing safely with particular focus on communication and impact. NASS will be looking at changes in the revised HSG 246, written in conjunction with the HSE and Wolverhampton City Council which will be the main point of reference for HSE Inspectors investigating Steel Service Centres facilities going forward.

The HSE will also give an overview of The HSE Inspection Campaign for 2017 and the HSE agenda for metals manufacturers for 2017, with a brief look at FFI and sentencing.

EEF and SHE Ltd. will be looking at identifying and negating hazards during lifting operations including Safety Codes of Practice for various types of cranes and mobile equipment, the use of chain and rope and sling identification, safe working loads and use of crane controls.

The HSL will be looking at falls from vehicles with consideration for negating trip hazards and root cause behaviour. Understanding the science behind slips and trips makes it easier to identify the true cause of a fall and prevent future incidents and this session will be highlighting successful interventions that offer a great starting point for organisations looking to reduce falls.

All sessions will involve practical demonstrations or case studies in a group scenario to give delegates an opportunity to share and learn.

The fee for this event is £50 for NASS Members and £65 for non NASS Members

Invitation to NASS Safety and Health Awareness Day 2017 – PDF

For further information and to book your place, please contact:
Joy Graham joy.graham@nass.org.uk
or follow the link NASS Safety and Health Awareness Day 2017

The Supreme Spanish Court of Justice obligates the Ministry to recognize the French Quality Mark NF for ribbed bars.

After more than 4 years of administrative procedures and legal disputes with the Technical General Secretariat of the Ministry of Public Works to recognize the French Quality Mark NF ( international and of maximum prestige ) for ribbed bars, the Supreme Court has concluded the subject.

The continued refusal of the Technical General Secretariat (in clear breach of the EU Court of Justice Sentence in 2012 and of European Regulations 764/2008 and 765/2008) generated a long process that ended in two Sentences of the Superior Court of Justice of Madrid ( Spain ) in 2014.

The Ministry appealed to the Supreme Court of Spain, which led two other Sentences in 2017, condemning the Administration and the possibility of any subsequent appeal.

Both Sentences obligate the Technical General Secretariat of the Ministry of Public Works to recognize the French Quality Mark NF for ribbed bars , used for the reinforcement of concrete.

The economic advantages of the NF Mark Recognition for ribbed bars are recognized in the Spanish Structural Concrete Standard (EHE-08): Reduction of safety coefficients in the structural calculation and Reduction of quality control tests, which represents a significant saving in cost and time

Rafael Bueno

Technical Manager

ASIDAC (Importers and Distributers Association of Steel for Construction)

gptecnica@gpacero.es

www.asidac.es