Year: 2017

European steel service center continued to see sales accelerate in October with flat steel distributors increasing shipments by 8.9% year on year according to EUROMETAL, a distribution and trading association.

The strong performance helped year to date shipments outpace 2017, with sales in the first 10 months of 2017 up 0.9% on January-October 2016. Flat steel players continued to outperform the multi-product stockholding sector,where October shipments rose 5.5% on year, but shipments for the first ten months remained down 1.7% on 2016.

While stock levels have declined, the EU service center volume index closed at 111 in October, up on the 103 in October 2016 where 100 is equivalent to the average month in 2015. Much of this higher stock is as a result of the higher demand for galvanized flat steel.

Stock volumes of EU Multi-Product & Proximity Steel Stockholding Distribution noted in October 2017 at index of 101, up from 95 in October 2016.

Expressed in days of shipments, stocks of October 2017 levelled at 68 days, down from 71 days in October 2016.

Peter Brennan, PLATTS

• Steep rises in nickel stopped for the moment. Stimulus of electro-mobility is still very much far in the future. Even China is putting on the brakes because of debt reduction and environmental issues.
• But the market prognosis for 2018 still looking positive. World trade is growing again. Final demand for stainless steel is good. Deficits in supply are successively reducing LME stocks.
• China is investing more in electric arc furnaces. These are predestined to use scrap. Scrap is low in emissions and attractive. This is good for the environment and the economy.
• Glencore is forming a partnership with the teachers of Ontario which will focus on mining royalties. The teachers’ pension fund hopes for good returns. Glencore can build on its mining portfolio and profit from its marketing.

 oryx_commodity_news_08.12.2017

Sales by multi-product steel distributors and flat service centres both grew in October compared with last year. Nevertheless, the aggregated number for 2017 continues to show different developments, Kallanish learns from the European steel distributors’ trade body, EUROMETAL.

Service centres’ sales increased by 8.9% year-on-year in October; and they recovered by 0.9% y-o-y. overall during the first ten months of the year

Meanwhile multi-products distributors saw sales rise by 5.5% y-o-y in October, but the aggregated figure for 2017 remained negative, at -1.7% y-o-y.

Both service centres and multi-products distributors registered higher stocks at the end of October. The index for service centres rose to 111 at the end of October, compared with 103 a year earlier (2015 = 100). This has followed a substantial rise in stock volumes of galvanized flat products, EUROMETAL says.

The stock index for multi-products’ distributors also jumped 6 points to 101.

UK trading and distribution company, Stemcor, has continued to offload assets with the sale of OKS Otto Knauf GmbH, a steel service center based in Iserlohn, Germany.

OKS processes around 250,000 mt/year of galvanized, hot and cold rolled and stainless steel strip products, but was no longer seen as a part of Stemcor’s core business. The service center has been acquired by Fidelium Partners, a German investment fund, which said it plans to expand the business.

Rafal Grabarkiewicz, managing partner at Fidelium, said, “We want to give OKS the undivided attention it deserves, and will support the existing management team on its way to becoming an independent mid-market.”

Friedrich-Walter Düllmann, CEO of OKS, said, “I am convinced that Fidelium is the right partner to support OKS in implementing its growth strategy and we can now concentrate on expanding our service offering, the utilization of our facilities while strengthening our position as a regional leader in the steel services business, the entire management team and I look forward to leading the company into a successful, independent future.”

Peter Brennan, PLATTS

Moody’s has published a stable outlook for the steel sector in Europe in 2018, the analyst says in a note sent to Kallanish.

“Sustained demand, higher year-over-year profits and the success of antidumping measures should support European steelmakers’ credit metrics and underpin the stable outlook on the sector into 2018,” says a Moody’s Investors Service report.published on 8 December.

“Our 2018 outlook for the steel sector in Europe is stable on the back of expected growth in steel demand from the construction and auto industries. Economic expansion, as signalled by the sustained improvement in Europe’s PMI, and rising profitability, as steel spreads widen, are also key supporting factors for our stable outlook,” says the report author Moody’s vice president and senior credit officer, Gianmarco Migliavacca.

Moody’s expects that steel demand from the auto, construction and capital goods sectors will grow in 2018. Apparent steel consumption is also expected to grow by 1.5% in 2018, broadly in line with Moody’s 1.9% GDP growth forecasted for the EU.

EU anti-dumping measures against a number of countries, including China, will strengthen European steelmakers’ pricing power into 2018. However, steel imports into the EU will continue to rise moderately despite tariffs as countries outside the tariffs’ scope continue to export steel into the EU, the analyst adds.

Steelmakers’ operating profitability will be supported by high spreads, as well as utilisation rates at the upper end of Moody’s 75%-85% range for a stable outlook and ongoing cost savings. Higher profits should enable steel manufacturers to further de-lever.

Merger and acquisition in the sector is likely to rise on the back of higher valuations in today’s more stable market, the analyst adds. However, current oversupply is unlikely to shrink until further consolidation had occurred. Indeed, capacity is unlikely to fall in the next 18-24 months despite ArcelorMittal’s purchase of Ilva and thyssenkrupp’s joint venture with Tata, Moody’s warns.

EUROMETAL has now now finished the final draft of a EUROMETAL White Paper regarding Challenges Facing the Future of Flat SSC Business.

The draft of the White Paper has been progressively completed, starting in a regional meeting of German speaking SSC in January this year, being progressively completed with inputs gathered at SSC meeting Southern Europe, regional meetings in Central Europe and in Northern Europe, Steel Distribution Summit and last SSC meeting of German speaking SSC in October this year.

It includes contributions and findings by major business consultancies.

Considering all this, we guess and hope that the White Paper might bring founded insights about potential developments and new avenues to be considered in future by European SSC business.

The White Paper is available to EUROMETAL members on www.eurometal.net in the login area “KNOWLEDGE CENTER”

For logins, members may contact office@eurometal.net.

The EU Commission, Parliament and Council have agreed the reform of the trade defence system this week. Some vital changes to the existing rules have been made in order to speed up the process. This could potentially give way to higher anti-dumping duties, mainly for the steel sector, Kallanish learns from statements and sources.

According to the agreement, the investigation period for the imposition of provisional measures will be shortened from nine to seven months. In addition, for cases related to steel and other raw materials and energy, the so-called ‘lesser duty rule’ could be reduced, giving way to higher duties.

“The changes agreed to the EU’s anti-dumping and anti-subsidy regulations will make the EU’s trade defence instruments more adapted to the challenges of the global economy. They’ll become more effective, transparent and easier to use for companies, and in some cases will enable the EU to impose higher duties on dumped products,” the European Commission comments.

The Commission also explains that “… the EU will adapt its lesser duty rule and may impose higher duties. This will apply to cases targeting imports of unfairly subsidised or dumped products from countries where raw materials and energy prices are distorted.”

Eurofer, the European steelmakers’ association welcomed the agreement, but noted nevertheless that the new system is not as ambitious as previously hoped. “On balance this agreement is welcome given that it will speed up the process and should, in principle, help deliver more effective anti-dumping duties,” Axel Eggert, director general at Eurofer says. “With the final approval of the new Non-standard Anti-Dumping Methodology (NADM) expected by the end of 2017 the EU will have moved some way towards having, at long last, an overall trade defence regime better suited to current global challenges.”

During recent years, the EU has targeted a number of steel-related imports to apply duties aimed at defending continental producers from unfair competition. Nevertheless the slowness of the decision process as well as the limitation of imposing high duties due to the existing lesser duty rule have been often criticised by European steelmakers.

8 Meinungen dazu veröffentlicht das Magazin “stahlmarkt” 12.2017 in seinem jährlichen Stimmungsbarometer.

Dass sich Geschäftsmodelle zusehends ändern, lässt sich auch für den Stahlhandel nicht abstreiten. Die Unternehmen sind herausgefordert und werden aktiv. Hier die Ergebnisse aus den Antworten von acht Kennern der Branche:
Die Zusammenarbeit muss effizient und transparent gestaltet werden. Die Optimierung der internen und externen Prozesse ist entscheidend. Eine Reduzierung des gebundenen Kapitals und die Vereinfachung der Einkaufsvorgänge sind z. B. Vorteile. Neue Vertriebs- und Beschaffungskanäle werden entstehen. Die Logistik wird von der Digitalisierung profitieren.
Die Meinung zu Online-Shops, Portalen und Online-Plattformen ist unterschiedlich. Einige Händler bauen ihre eigenen Online-Shops auf, andere würden eine übergeordnete Plattform präferieren.

Mehr dazu im Magazin »stahlmarkt« 12.2017, S. 8 ff.
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