Month: January 2018

2018 is set to be quieter year for trade cases related to the import of steel products into the European Union. The authorities have concluded most of their recent investigations and have addressed the majority of the issues raised by local producers, Kallanish notes. Some new investigations nevertheless may yet be under consideration.

The main decision set to be taken by 10 February 2018 relates to the imports of HDG from China. The European Commission imposed provisional anti-dumping duties of 17.2-28.5% last summer (see Kallanish 11 August 2017), but definitive measures are still set to be confirmed. The duties apply to HDG from China, excluding the qualities specifically intended for the automotive sector.

Another interesting on-going investigation is that against the import of ferrochrome from China, Russia and Turkey. The anti-dumping investigation was begun in June 2017 following a complaint from trade association Euroalliages and a decision on provisional measures is expected by the end of March 2018. Low carbon ferrochrome is used mainly in stainless steel production.

Excluding the above ongoing investigations, all other open cases are related to expiry reviews of existing measures on a number of seamless pipes products from China, Ukraine and Russia.

In 2017 the main trade defence initiative from the European Commission has been the imposition of duties on imports of HRC from Ukraine, Russia, Brazil and Iran. The decision was significant in that it both reduced the possible sources for coils buyers in Europe, and introduced a different anti-dumping penalty, with a fixed value rather than a percentage of the price.

2018 is likely to be relatively calm in terms of trade cases in Europe. Industry sources note however that the increasing volumes of coils imported from India could well trigger a new investigation by the authorities. In addition, the issue of the possible circumvention of duties by countries such as Vietnam, which buy HRC from China and then export derived CRC and HDG, could also be investigated further.

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A consortium of Izostal and its majority shareholder Stalprofil has won a PLN 115.35 million ($33.43m) contract to supply coated DN 1,000 pipe to Gaz-System, with deliveries scheduled from 1 June 2018-28 February 2019. This will be used by the Polish gas pipeline operator to build the 55km Tworog-Tworzen gas pipeline.

The same consortium also won a PLN 92.52m contract to supply DN 1,000 coated pipe for the construction of the 40km Strachocina-Pogorska Wola gas pipeline by Gaz-System. This section will be part of the 700km Hermanowice-Pogorska Wola pipeline. Deliveries are scheduled for 1 June-31 July 2018.

Polish gas pipeline investments finally accelerated in 2017 after previously stalling despite widely-touted large-scale investment plans by Gaz-System. Besides the pipeline operator, investments by Polish oil and gas company Polskie Gornictwo Naftowe i Gazownictwo (PGNiG) are expected to generate pipe demand in Poland.

Earlier this week PGNiG named Izostal as one of the preferred bidders in its open tender for newly-produced casing pipe and tubing, as well as accessories for boreholes (see Kallanish 4 January).

UK stockholder Barrett Steel produced an improved set of year-on-year results in its latest company report monitored by Kallanish. The country’s largest independent steel stockist’s performance continues to be a bellwether for the state of the distribution sector in the UK.

In his statement, chairman James Barrett gives an optimistic outlook on prices for the company’s fiscal year ending 30 September 2018. He says that the company expects steel prices to continue to rise due to increased import and conversion costs in the steel supply chain. The impact of the Brexit vote has not had a material impact on demand in its traditional market of construction although the situation “… remains uncertain,” Barrett adds.

The year ended 30 September 2017 saw a general continuation of the steel price increases seen in the previous financial year due to cost pressures in steel supply chains. These cost pressures have been caused by negative currency fluctuations and increasing raw materials prices.

Stocks at the year-end increased from £55.5 million ($75.3m) to £63.2m. The group continues to follow the strategy of managing risk by insuring the debtor ledger, it confirms. Barrett Steel also implemented capital investments worth £4.5m during the year. These included investments in new processing equipment, IT developments and transport fleet upgrade.

Group turnover for the year increased by 14% to £292.7m. Profit before tax improved from £4.3m to £5.9m same basis, but gross margin fell from 33% to 30% due to price competition in the market, Barrett Steel confirms.

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