AMKR turns to Czech coal to maintain production

ArcelorMittal Kryvyi Rih (AMKR) is experiencing difficulties in providing coking coal for coke production and pulverized coal preparation, the company tells Kallanish.

“The situation is not easy, but in general, we are coping with supplies, and this situation did not affect the production of iron and steel,” confirms the firm’s press office. “Since November, we have started purchasing coal from the Czech Republic, which will also allow us to diversify our risks. We hope that logistics tensions will subside from this month.”

AMKR did not specify the volumes of coking coal shipments from the Czech Republic.

In January-October, the Ukrainian steelmaker increased coke output by 13.4% on-year to 2.45 million tonnes, the company says. In October alone it produced 230,000t.

According to AMKR, it is difficult to assess how much the company will be affected by suspended supplies from Kazakhstan, following the deadly incident at its ArcelorMittal Temirtau sister company. Kazakh authorities will inspect all of Temirtau’s mines after the death of six miners at its Abayskaya coking coal mine due to a methane explosion.

Earlier, another Ukrainian steelmaker, Metinvest, also reported difficulties with the supply of coal and the production of coke at its enterprises. The company’s third-quarter coke production fell 9% on-quarter to 1.09mt and 3% on-year in the nine months to 3.46mt, mainly due to a decrease in production at Avdiivka Coke.

Merchant coke production decreased 15% on-quarter to 400,000t and 8% on-year in the nine months to 1.39mt.

Svetoslav Abrossimov Bulgaria

Automotive semiconductor shortages to ease in 2022: voestalpine

The automotive industry continues to suffer from semiconductor supply chain difficulties, with supply unlikely to ease before the middle of the next business year, says vostalpine chief executive Herbert Eibensteiner.

“However, it is important to note in this regard that the decrease in automotive production does not stem from a weakness in demand,” Eibensteiner told Kallanish during an online conference on Wednesday.

According to him, it is to expected that due to chip supply problems some areas will see a time lag in order call-ups for voestalpine’s products. “Our North American and Asian facilities were affected much less by the lack of semiconductors than the European ones,” Eibensteiner added.

Demand from the construction, mechanical engineering and consumer goods industries for voestalpine group’s products remains high. The company expects the railways segment to continue delivering good performance despite the usual seasonal weakening.

The energy sector has rebounded substantially of late, and this trend should continue throughout the second half of the business year 2021/22, the enterprise claims. Aerospace, too, is showing signs of a recovery.

Voestalpine also highlighted its efforts for future research into green hydrogen, in projects such as H2FUTURE at the site in Linz, and SuSteel in Leoben-Donawitz. The enterprise is also developing its “greentec steel” programme to decarbonise steel production from coal-based blast furnace production to EAFs.

Svetoslav Abrossimov Bulgaria

German steel software solutions firms SST, PSI unite

The provider of artificial intelligence solutions for steel mills Smart Steel Technologies (SST) has entered a partnership with PSI, supplier of production management solutions in the metals industry.

According to SST, three AI-based software solutions will be launched jointly in the areas of product-to-order reallocation, slab and coil classification, as well as to optimise liquid steel quality, and in particular temperature control. This cooperative effort will digitise applications at every stage of the steelmaking process – from the liquid phase to strip finishing, Kallanish hears from the Berlin-based firm.

“Our partnership with PSI Metals was established to maximise efficiency gains and associated cost savings in steel companies. The combination of PSI’s extensive production management know-how and SST’s profound AI expertise lifts evident synergies for everyone involved,” says chief executive Falk-Florian Henrich.

SST has designed AI solutions for the German mills of ArcelorMittal, and only in October announced it had opened an affiliate in the USA.

Christian Koehl Germany

Bottlenecks curb growth for German machinery makers

Germany’s mechanical engineering sector is upbeat about its performance in 2021 so far and about the prospects for 2022. Large-scale plant builders, especially, have recently secured major orders. However, companies are concerned about a shortage of steel and other materials for their purposes, Kallanish hears from their federation, VDMA.

For the current full-year 2021, the association confirms its forecast of real production growth of 10% compared to the previous year. “Without the material shortages, even higher growth would be possible,” says VDMA president Karl Haeusgen. “As is the case in all industries, the supply chain difficulties for some preliminary products will continue to be felt for some time. But order books are still well filled, and we expect sales from these orders to be booked with some delay.” For 2022, VDMA expects a further increase in production of 5% in real terms.

An exceptionally high contribution from large-scale plant business filled the order books of the machinery engineering industry in September. Orders in this month increased by 65% in real terms year-on-year. Orders from abroad almost doubled. VDMA does not specify if this includes orders for metallurgical plant builders, which are represented in its division for large-scale plant building, AGAB (ArbeitsGemeinschaft GrossAnlagenbau).

While a singular month could be an outlier in this business, an upward trend has indeed been seen throughout the year. In the first nine months of 2021, plantbuilders recorded a real increase in incoming orders of 36% y-o-y. In the three-month period from July to September, the order increase was up to 50% y-o-y.

One development addressed with concern by VDMA is the drifting apart of the two economic powers USA and China. Almost half of German mechanical engineering companies source components from China or the USA that are critical for their own production. These are primarily electronic components and parts, but also raw materials such as steel and castings. “There is a risk here of being pressured by China or the USA in the event of trade disputes,” Haeusgen observes. “Companies therefore know they have to act.”

In a survey, one third of the companies polled say they intend to opt for a “forward strategy”, meaning they will increase their own investments in the USA and China, for example, by setting up or expanding local production.

Christian Koehl Germany

European stainless coil prices rise

European stainless steel hot and cold rolled coil supply remains under pressure this month, with prices increasing due to higher month-on-month alloy surcharges for November and increasing base prices from European mills, sources tell Kallanish.

Final demand and consumption remain strong. All European coil producers are now quoting lead times between April and June 2022, depending on customer and contract. European stainless HRC is offered at €3,900-4,000/tonne ($4,520-4,636) delivered on average for March and April delivery. Stainless CRC contracts for European material are hovering at €4,100/t delivered on average, including alloy surcharges, depending on material quality and volumes.

Imported stainless coil from Asian countries is said to be waiting at Italian ports to be discharged on 1 January when quotas are renewed. The entire European value chain is slowed by long lead times at European mills, but margins remain high for both coil and flat products, with good profits both upstream and downstream. Stocks of flats and tubes are reported to remain relatively low in Western European countries.

The short supply and increasing prices are forecast to last through the end of the year and first quarter of 2022, sources believe.

Natalia Capra France

EUROMETAL data confirms distribution dip in September

The latest data issued by European distributors association Eurometal confirms the negative growth trend reported in the segment in September.

After a series of positive months, September shipments of strip mill products from service centres dropped 5.5% year-on-year. Multiproduct distributors saw their shipments decrease by 7% y-o-y.

“All products had a negative trend, except plates, tubular products, stainless steel and other alloy steels,” Eurometal tells Kallanish.

Despite the September downtrend, the figures for the first nine months of 2021 remained positive, with SSC flats shipments up almost 15% y-o-y and stockholders’ shipments up almost 9% y-o-y.

Emanuele Norsa Italy

Japan asks for Section 232 deal

Japanese trade minister Koichi Hagiuda has asked the USA to exempt Japan from Section 232 tariffs on steel and aluminium imports, according to the Ministry of Economy, Trade and Industry (Meti). This follows the recent signing of the US-EU trade deal.

US commerce secretary Gina Raimondo will visit Japan, Singapore and Malaysia from 15 November to reaffirm US commitment and strengthen economic ties with allies and key partners, the government said last Sunday. On the same day, US trade representative Katherine Tai will arrive in Tokyo.

It is expected two US officials will discuss with Japanese officials a possible review of the USA’s 25% tariffs on steel imports and 10% tariffs on aluminium imports. These are the so-called Section 232 tariffs introduced by the administration of former US President Donald Trump, Kallanish notes.

Hagiuda says these measures are having a devastating effect, and he has asked the US to take action. The Japan Iron and Steel Federation said on 2 November that the recent agreement between the US and EU will result in a comprehensive relaxation of measures in the form of a tariff-free quota for EU steel. The steel industry of Japan, which he notes is an ally of the US, will be put behind the EU in terms of export competitiveness to the US.

By Kallanish Team

Klöckner to open second site in Mexico

Distribution group Kloeckner Metals Corp. has announced the ground-breaking celebration for a new facility located in Querétaro, Mexico, to be completed in spring 2022.

Servicing the automotive and other metals-supplied industries, Kloeckner Metals Querétaro will supply hot-rolled pickled and oiled, cold rolled, galvanized and coated steel, ultra-high-strength carbon steel, aluminium, and stainless steel. It will feature a 72-inch slitter capable of processing a thickness range of 0.010”-0.250”. It will be laid out for a maximum coil weight of 80,000 pounds, a maximum tensile stress of 261 KSI (1,800 MPa), and a maximum yield stress of 195 KSI (1,300 MPa).

The facility is built to supply automotive, HVAC, and appliance manufacturers, alongside metal forming stampers and telecommunications and electronics enclosure builders, Kallanish learns from the American unit of German-based Klöckner & Co. Apart from its supply services, the house will also partner with customers on value-added programmes in both processing and the supply chain, Klöckner adds.

After 17 years servicing Mexico out of Kloeckner Metals Monterrey, located in Apodaca, Nuevo Leon, Kloeckner Metals Querétaro will be the group’s second facility in Mexico. Strategically located in the centre of the country, it will benefit from a dedicated rail spur serviced by Kansas City Southern de Mexico, the company notes.

Christian Koehl Germany

Reuter replaces Schnitzer as BIR Ferrous Division president

Denis Reuter has been appointed Bureau of International Recycling (BIR) Ferrous Division president, replacing Gregory Schnitzer of Sims Metal Management.

Reuter is chief operating officer at German scrap merchant TSR Recycling, Kallanish notes.

BIR president Tom Bird says: “I am delighted to welcome Denis to the BIR Executive Committee, and I am certain that he will greatly contribute to BIR’s roadmap for the years to come. Having worked with him on the Ferrous board I am confident that he will prove to be a great asset.”

In a BIR webinar last week McKinsey & Company’s Dr Steven Vercammen said the push to reduce carbon emissions will create a large opportunity to grow scrap’s share in current steelmaking raw materials beyond its 30% average. Scrap prices are likely to disconnect from iron ore and coking coal prices as a result.

Adam Smith Germany

US-EU deal could create more trade cases: Irepas

The US-EU trade agreement could boost EU rebar and wire rod exports to the US, although the quotas are unlikely to be large, says the International Rebar Exporters and Producers Association (Irepas). On the other hand, it suggests trade is going to become even more regional.

Potential US-bound shipments could bring relief to EU mills suffering from costly energy but, besides the size of quotas, US-demanded product specifications do not suit EU mills, and high freight costs will restrict shipments, Irepas says.

The deal confirms protectionism is here to stay. “The US and EU are forming a new structure to trade to each other and to leave others out,” Irepas says in its latest short-range outlook sent to Kallanish. The increased regionalisation of trade will affect the whole supply chain. More trade cases, also even for downstream products, can be expected to be filed, the association observes.

Overall, lead times are back to normal, energy and logistics are the main issues affecting steelmakers, and underlying demand in Europe and North America is solid and expected to remain good in 2022, Irepas says. The Chinese market weakness could slow its imports and hit general sentiment.

Congestion in shipping and at ports is also hampering business. “Any contract that was done in the second quarter now faces huge shipping costs, thus making the contract unprofitable,” Irepas observes.

“The outlook for the global long steel market for the next quarter is satisfactory and surprisingly stable. There is a lot of downtime being scheduled for November and December, and important new capacities will be coming on to the market in 2022. It will be critical to see if these new capacities will find new customers,” it concludes.

Adam Smith Germany