FIMIGroup Acquires FRANCI Spa

FIMIGroup, a leading manufacturer of metal processing machinery, today announced the acquisition of FRANCI Spa, a leading Italian manufacturer in the field of design and construction of moulds and equipment for the automotive sector, production of mechanical components for industrial plants and hydroelectric power stations as well as special mechanical processing.

The acquisition, costing more than 7.5 million euros, has allowed the preservation of sixty workplaces, an industrial site of more than 10.000 covered sqm fully equipped with machine tools, directly facing the SS 36 state road which connects Lecco to Milan, offering the FIMIGroup a strategic asset able to guarantee the pursuit of its industrial growth path.

Source: fimigroup.it

Green steel needs to become cost-competitive

Resolving cost-related challenges will be key to decarbonising the steel industry and advancing the adoption of green steel, according to panellists at the Kallanish Green Steel Forum held in London on Tuesday.

“The only way to successfully decarbonise steel is to make green steel [cost] competitive,” says Giacomo Mareschi Danieli, ceo of Danieli Group.

Luciana Filizzola, director of sustainability and communications at Germany-based GMH Gruppe notes that high electricity costs in Europe hinder investments in climate-neutral technologies. Calling electricity prices in Germany a near “nightmare,” she adds that the current prices in the country are nearly five times higher when compared to countries like the US and China.

Moreover, only around 40% of the electricity currently produced in Germany is renewable, she says, adding, “We need much more renewable energy—this is a very tough problem for us.”

“Unfortunately, when we look ahead, we see the prices will continue to be high because soon, the primary routes will need green hydrogen, [which] needs green electricity, so demand is huge,” Filizzola explains. “We have no answers yet on where the renewable energy is coming from. This is very worrying.”

Echoing similar sentiments, Julian Verden, managing director of Europe at Stemcor Group and EUROMETAL board member, highlights the disconnect between end-users’ interest in green steel and the high costs of hydrogen technology, hindering the fuel’s widespread adoption in the steel industry.

“In Europe, if the average cost today [for hot rolled coil] is around, say €700-800, the cost for a pure hydrogen green might be €1,000 more—that’s really unaffordable,” he notes.

“What we need to do is persuade governments to provide electricity subsidies but also to provide the investment so that more money can be brought into technologies, which, although advancing very well, is still not there yet,” Verden adds. “Unless we can resolve that problem [of cost], we are not going to get anywhere.”

At the same time, Åsa Ekdahl, head of environment and climate change at the World Steel Association, stresses that while hydrogen will play a major role in decarbonising the steel industry, it is important not to forget other technologies. For example, electrolysis of iron ore, which, although less developed, “will have potential in the future.”

“In some places, biomass could be important, such as in Brazil. But there are also, combinations of these technologies that you can use,” she adds.

Reethu Ravi UK

kallanish.com

Prof. Roland Döhrn: Economic environment for steel sector remains challenging

At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis and with nearly 300 participants, Professor Roland Döhrn, independent researcher at the University Duisburg-Essen, shared his evaluations regarding European economic and steel trends.

 

The macroeconomic environment

Prof. Döhrn’s assessment of the global economy painted a picture of ongoing fragility, with growth remaining below long-term averages. Notably, world trade experienced a significant decline, attributed to factors such as the in-sourcing of services, rising trade restrictions, and escalating shipping costs. Moreover, inflation is still above target in many countries, and the inflation forecast for 2024 has been revised upward steadily.

Despite some optimism surrounding the US economy, characterized by a stronger-than-expected performance and robust job growth – and the absence of recession even in a year with presidential elections – challenges persist, said Roland Döhrn, particularly in China, where issues in the real estate sector and demographic concerns loom large. Moreover, China is witnessing a re-direction of trade by major trading partners, and it can benefit less from the adaptation of technologies.

“Geopolitical risks continue to exert pressure on global economic stability, as evidenced by the Matteo-Iacoviello geopolitical risk index” commented Prof. Roland Döhrn, “but it can still experience some surprises (as happened with the Russian war in Ukraine).” Within the European Union, modest growth and a slow recovery are anticipated, with GDP projections indicating a marginal uptick after a period of decline in several member states. However, uncertainties surrounding monetary policy and lingering doubts about economic prospects remain prevalent. Therefore, forecasts for 2024 have been revised downward and currently the European Commission seems to be more optimistic than professional forecasters.

The euro area grapples with less favorable monetary conditions, marked by multiple interest rate hikes by the European Central Bank (ECB) to combat inflation. Consequently, borrowing costs have risen, contributing to declines in property prices and an uptick in bankruptcies. GDP forecasts show a positive revision for Spain, while a negative one for Italy, France and – above all – Germany.

Inflation remains, according to Prof. Döhrn, a critical issue in the current economic landscape. Despite some signs of moderation, inflation persists at an elevated level. The European Commission exhibits in this case a more skeptical outlook compared to professional forecasters, suggesting potential heightened concerns regarding price stability. High inflation is increasingly translating into higher wages, with potential implications for economic and social dynamics.

 

The steel demand and the steel market

In the EU, while production in steel-using sectors has experienced only a moderate decline so far, recent trends in leading indicators paint a less promising picture. The economic environment for the steel sector is expected to remain challenging, with leading indicators suggesting a continued deterioration in the first quarter of 2024, particularly in steel demand within the construction sector, which is anticipated to contract.

Moreover, Prof. Döhrn explained how the global steel market experienced a mixed start to 2024, with production declining, remarkably in China, while showing modest growth elsewhere. In the EU, trends indicate a downward trajectory in crude steel production, coupled with volatile imports and a decline in apparent consumption for the second consecutive year. EUROFER’s forecasts offer a somewhat optimistic outlook, anticipating a rebound in steel consumption, interpreting the difference between growth of steel weighted production and apparent consumption as a stock cycle, but, according to Döhrn, the change goes beyond that.

One of the key challenges facing the steel industry is the decline in specific steel consumption, attributed to various factors such as advancements in energy-saving technologies and changing production patterns among steel users. “Distinguishing between cyclical and fundamental drivers of this decline remains a subject of ongoing inquiry” concluded Prof. Döhrn, “highlighting the complexity of the current economic landscape.”

Source: steelorbis.com

Anthony de Carvalho: Excess capacity makes decarbonization efforts more difficult

At the EUROMETAL Steel Day & YISAD Flat Steel Conference, held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis Mr. Anthony de Carvalho stated that steel overcapacity is having negative effects on markets and emissions, by causing the former not to function properly – due to bad organization in terms of resources and supply – and the latter to grow uncontrollably, having implications for the climate.

Analyzing the current steel demand situation, Mr. de Carvalho stated that the global steel demand situation is weak due to the slowdown in world economic growth, high inflation, and interest rates. Although global steel demand is slowly recovering, it is still not growing fast enough to keep up with the overcapacity growth rate.

On the other hand, de Carvalho noted, steelmaking capacity keeps rising mostly in technologies that emit higher CO2 on average than others. In the meantime, current trends are widening the gap between capacity and demand, which might result in a flood of relatively high-carbon steel exports in international steel markets in the next few years, with a squeeze on steelmakers’ profitability.

The OECD’s outlook for steel capacity expansion until 2026 sees Asian countries in the first place – especially ASEAN and India – with a growth of almost 90 million mt. The negative aspect is that around 65 million mt will still be produced using very polluting BOF technologies, whereas the rest of the world’s production is becoming more and more EAF-based.

The potential increase in capacity amounts to 158 million mt in 2024-26, and the gap between capacity and demand is more than 500 million mt. Last year, the global excess capacity – with China as the major producer – was equal to 504 million mt, which is higher than the combined production of major global steel producers and the global steel trade, that involved 282 million mt. If it keeps going like this, China risks wiping out all the other countries’ production in the global market, explained De Carvalho.

 

Impacts of excess capacity on world steel markets

In a study released on Friday, March 1, the OECD illustrated an empirical model to study the impacts of excess steel capacity on the world steel markets, which can be summarized with a quote from Mr. de Carvalho: “Excess steel capacity is causing non-sustainable profitability levels, and the steel industry needs better operating profit ratios in order to improve low-carbon steelmaking.” In the above mentioned study, the OECD also hypothesized what would have happened if global excess capacity had not surged, concluding that utilization rates and revenues would fall at the beginning, but in the end they would be at healthy levels – higher than the actual ones.

 

The preliminary results of the study show that steel stock prices also fell below predicted values in most cases, indicating a negative impact on profitability.

To conclude, global excess capacity is causing steel producers to have lower aggregate domestic market shares, a decrease in domestic utilization rates, reduced revenues and profits, as well as inconclusive impacts over other countries’ steel exports.

 

The changing nature of excess capacity

De Carvalho explained that the carbon intensity of excess capacity is also growing and at the same time trade policies are increasingly focusing on the carbon footprint. That is why excess capacity is hitting the steel industry with a wrong timing, as the latter is trying to focus on decarbonization. This could lead to accelerating government subsidies to support green steel in impacted countries, policies aiming to boost domestic supply of raw materials, and a greater focus on raw materials on the pathway through decarbonization.

Last year, the GFSEC signed a new three-year mandate and started a substantive work aimed to handle this problem, also outreaching to non-member Asian countries who want to participate, as the overcapacity issue is affecting them as well.

In the third quarter this year, the GFSEC will hold a ministerial meeting to develop tangible options to address overcapacity.

Source: steelorbis.com

Veysel Yayan: Turkey’s exports expected to increase in 2024

At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Dr. Veysel Yayan, secretary general of the Turkish Iron and Steel Producers’ Association, shared his opinions on the performance of the global and Turkish steel sectors and his expectations from the future.

Dr. Yayan presented a general outlook for Turkey’s steel sector in his talk. He said the steel sector in Turkey has shown a different trend compared to the general economy. Turkey’s general economy in 2022 and 2023 recorded 5.6 percent and 4.5 percent growth increases respectively, while the steel sector contracted by 12.9 percent and 4.0 percent for the respective years. Meanwhile, global capacity utilization rates fluctuated between 75.0 percent and 80.0 percent in recent years, while Turkish steelmakers’ average capacity utilization rate in 2023 was 56.8 percent. He said that this rate should move up to as least 70 percent in the future.

Stating that the poor performance of Turkey’s steel sector was caused by the actions of China, which has had a negative impact not only on Turkey but also globally, Dr. Yayan commented “China faced pressure from global countries as it increased its exports between 2010 and 2015, resulting in Chinese steelmakers decreasing their capacities until 2020. However, more competitive and modern capacities were put into action and its capacities are expected to increase by 40 million mt despite the green transformation endeavors. That’s why China will remain a threat for the steel industry even though it has opted for stable production rates.”

Yayan said that the outlook for Turkey’s steel sector in the coming months has changed and trade activities in the sector remained strong. Finished steel consumption in Turkey increased by 17.1 percent in 2023. While flat steel production was lower than long steel production, flat products were consumed significantly more than long products, and imports accounted for 48 percent of total consumption. According to Dr. Yayan, the production of flat products will increase provided that regulations are implemented to boost domestic supply.

Yayan also expressed his opinions on decarbonization efforts in Turkey, stating that the decarbonization process in Turkey was an unfair one, mostly due to Turkey being subjected to the same safeguard duties as countries such as China, Vietnam, Taiwan and South Korea, even though Turkey is considered as a peer to EU countries in terms of the green transformation. “The EU sees Turkey as a threat and this hurts both sides. It will take some time for Europe to see this,” Yayan said.

Turkey’s crude steel production and flat steel consumption registered increases in January 2024, moving up by 24.7 percent and 33.6 percent, respectively, while flat steel exports increased more than flat steel imports. Yayan said he understood these changes as a strong positive for Turkey’s steel sector, stating that the indicators for February are even more hopeful. In 2024, Turkey’s steel exports are expected to increase and its crude steel production may exceed 40.4 million mt.

Source: steelorbis.com

Ayhan Uçar: Scrap will be more valuable during green transition, Turkey may face scrap supply issues

At the first session of EUROMETAL Steel Day & YISAD Flat Steel Conference, held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Ayhan Uçar, procurement manager of Turkish steel producer Tatçelik, commented about the current situation in the steel industry and shared his expectations.

Stating that his company has an annual production capacity of 1.5 million mt at its three production plants in Ereğli, Mr. Uçar stated that the company’s galvanized steel capacity will increase with the commissioning of a new line with an annual 650,000 mt capacity in June this year, in addition to the existing 800,000 mt of galvanized steel capacity. The new line will enable Tatçelik to coat steel up to 4 mm thick and produce galvanized steel with widths over 1,600 mm. Adding that Tatçelik exports steel to more than 70 countries, he said that the company’s export percentage will increase to 60-70 percent this year, compared to 40-50 percent last year. In addition, as the company aims to meet its energy needs with its own electricity production, Uçar said that Tatçelik has invested over €60 million in solar and wind power plants.

He pointed out that Turkey’s flat steel production and consumption in 2023 totaled 13.68 million mt and 19.68 million mt, respectively, while indicating that 48.2 percent of flat steel consumption was met by imports despite duties and the production capacities in Turkey. The country’s exports decreased especially for hot rolled coil and cold rolled coil, he noted.

Meanwhile, anticipating that the population increase in India, where steel consumption was lower previously, will result in a hike in steel consumption, Uçar said he expects India to become the main steel supplier for Europe, with the higher steel production in the country.

Stating that energy, iron ore and coal prices will decline with the approaching summer season, the Tatçelik representative said that steel demand, which will move sideways in the next two to three months, will increase from the middle of the third quarter this year with the start of new and postponed projects. Saying that the scrap will be more valuable in the medium-to-long term amid the green transition, Uçar noted that Turkey, which produces steel via electric arc furnaces, may face scrap supply issues. In addition, regarding Turkey’s ongoing antidumping investigation into HRC from four countries, Uçar commented that the potential dumping margins could widen the gap between local and global prices, pointing out that the gap between the prices increased to $100/mt with the hike in duties.

Source: steelorbis.com

Hakan Aran: Worst period for inflation in Turkey is over

At the EUROMETAL Steel Day & YISAD Flat Steel Conference, held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis, Hakan Aran, general manager of of Turkish bank İş Bankası shared with the participants his evualation of the effects of global inflation on the Turkish economy and his recommendations for the steel industry and possible solutions.

Mr. Aran started his speech by saying that economic plans were completely disrupted by the Russia-Ukraine war in 2022 and the February 6 earthquakes in Turkey in 2023, and he said that he wished that this year, which is the 100th anniversary of İşbank, would be a more comfortable year for the market. Stating that one of the main reasons for global inflation is the way the 2008 crisis was resolved, Mr. Aran underlined that issuing too much money into the market as a way out of this crisis and then resorting to monetary expansion, and also given the impact of the pandemic, led to global inflation. He stated that Turkey lost control of inflation by twice and being “stubborn” about its economic policy. Aran said that they expect the next two years to be economically difficult after 2023 when inflation was on the agenda as the first problem. “The global economic congestion will continue for the next two years. However, do not be pessimistic about the 4.5 percent monthly and 67 percent annual inflation announced yesterday. The worst period is over. The period between May 31, 2023, and May 31, 2024 will be remembered as the historically worst period in Turkey in terms of inflation, impacted by the general elections in May 2023. We think that we will close this year with annual inflation of 40-45 percent. The tight monetary policy implemented will be further strengthened by the decisions to be taken in fiscal policy in April, and this will contribute to the achievement of medium-term inflation targets. In this regard, we estimate that annual inflation will decrease to 22-25 percent by the end of 2025, and again to 10 percent by the end of 2026,” Aran said.

Sharing his evaluations and suggested solution for the steel industry, Aran stated that China turned to exports as a result of the contraction in domestic demand, affecting the export sales of all other countries, and surpassing Turkey in the European market. He underlined that Turkey’s steel exports decreased and its imports increased in 2023, and that production lagged behind consumption in both the flat and long product segments for the first time since 2012. Stating that he expects this situation to be reversed in 2024 and 2025, Mr. Aran said, “In this difficult period, it is important to focus on projects related to energy and labor efficiency and to see this congestion as an investment opportunity. The smartest thing for the Turkish steel industry to do would be to combine energy efficiency with green transformation and implement the requirements of the carbon border adjustment mechanism that will start in 2026, thus not being affected by a possible tax on exports and being able to participate in competition while demand is recovering,” he said. At this point, the İş Bankası official said that his bank has created an investment loan and with its own resources to ensure that production and investments in Turkey do not stop and to prevent exports from decreasing. In this context, he stated that investors can obtain a loan of TRY 100-800 million from the bank with a two-year grace period, a 10-year maturity period, 20 percent of which will be financed from the equity capital of the buyer and 80 percent of which will be financed by the bank, at 35 percent interest. Aran underlined that, in this way, the next two years can be well utilized in terms of investments.

Source: steelorbis.com

Flat steel sector comes together at EUROMETAL & YISAD Steel Conference

At the EUROMETAL Steel Day & YISAD Flat Steel Conference held at Istanbul Marriott Hotel Asia on Tuesday, March 5, in cooperation with SteelOrbis and with nearly 300 participants, Metin Tayfun İşeri, chairman of Turkey’s Association of Flat Steel Exporters and Manufacturers (YISAD), and EUROMETAL board member Alexander Julius, made the opening speeches.

Tayfun İşeri stated that safeguard measures have shaped the last five or six years of global iron and steel trading. While producers were considering globalization before, they have now started to focus on regionalization. According to Mr. İşeri, the Section 232 measures that entered into force with the approval of the former US President Donald Trump in 2018 led to the regionalization, and the EU had to bring in quotas on steel trading in line with this, though reluctantly. US producers took advantage of this period, the YISAD chairman said, by making more investments than before, commissioning over 10 million mt of new steel capacities and replacing old facilities with new and modern ones. Even though the EU fell behind, they have started to invest in green production and electric arc furnaces as part of the Carbon Border Adjustment Mechanism, and the EU governments have funded their local producers. In the meantime, İşeri said, the geopolitical unrest in the Middle East that began towards the end of 2023 changed and affected trading despite the opportunities. After the Suez Canal was shut down and the Panama Canal limited the number of vessels passing through, many issues surfaced. He added that several factors such as inflation and high interest rates will continue to affect demand this year.

The second welcome speech was given by Alexander Julius, EUROMETAL board member and managing partner of macroMETAL. He talked about the mission of Eurometal, giving some organizational details, including scope of their operations. He also added that Turkey is a precious source for the steel industry in Europe.

Mr. Julius added that EUROMETAL is very glad to have Turkey as a partner, as it is one of the major steel exporters to the EU. Although last year the steel export volume of Turkey to the EU was down 36 percent due to safeguard duties, AD duties and energy costs, in 2023 Turkey was still the second-biggest source of steel imports for the EU, with a total of 3.33 million mt. Furthermore, Turkey is very committed to the decarbonization issue, with 72 percent of Turkish steel production being EAF-based. Thus, its advanced technologies in this field make it a big player in the steel industry and a great supply partner for EUROMETAL.

Source: steelorbis.com

 

Some of the press articles that emerged from this event:

EUROMETAL visited service centers in northern Spain

The Director General of EUROMETAL, Ricardo Silva, visited last week the long products service center and proximity multi-product stockholding distributor TIRSO CSA in Santander and the Tata Steel Layde flat service center in Durango.

During the visit to the TIRSO CSA facilities, it was possible to meet and exchange with the president of the Spanish federation of distributors UAHE and member of the EUROMETAL presidency, Roberto Gongalez.

TIRSO CSA covers the distribution of certified steel products and custom supplies, by performing oxyfuel cutting, plasma cutting, longitudinal cutting, drilling, shot blasting and painting of steel parts and structures. Equipped with modern cutting lines, it has an area of ​​25,000 m2, of which approximately 12,000 m2 are under cover. The company is present in Cantabria, Gran Canarias, Tenerife and Asturias.

During the meeting, it was possible to address the context of steel distribution in Spain but also to reflect and prepare the meeting of the National Federations members of EUROMETAL, to take place later in the year 2024.

© tirsocsa.com

 

The visit to Durango allowed us to meet with the managing director of Tata Steel Layde and president of EUROMETAL, Fernando Espada.

Layde managing director told us about the long history of this Bizkaia service center in northern Spain and the various processes such as slitting lines, cut-to-length, pickling, annealing, skinpass, cold rolled services and sendzimir rolling technology supplying to different and demanding sectors like automotive, industry, construction, home appliances and furniture.

© layde.es

This meeting also made it possible to prepare the first meeting of the EUROMETAL presidency, to be held on April 11, 2024 in Santiago de Compostela and address various pending issues related to the day-to-day life of our federation.

China may continue to be a threat to global steel industry in 2024: TCUD

China may continue to be a threat to the global steel industry in 2024, including the Turkish steel sector, due to the possibility that it could continue focusing on export markets with subsidized prices arising from insufficient growth in its own market, Turkish Steel Producers’ Association said in a statement.

Stiff competition by China in some of Turkey’s main export markets restricted Turkish mills’ market shares in 2023, while low-priced inflows from China into the Turkish steel market pressured domestic mills’ steel pricing and output, the association said in a statement seen by S&P Global Commodity Insights Feb. 29.

The rise seen in steel imports from China was despite the anti-dumping (AD) investigation opened by the Turkish Ministry of Trade on Oct. 31, 2023, against imports of hot-rolled coil from China, India, Japan and Russia.

The result of the investigation, which is expected to be announced in the coming months, could limit import volumes in 2024, according to industry sources.

Meanwhile, Turkey’s crude steel production fell 4% year on year in 2023 to 33.7 million mt, TCUD data showed, owing to slow demand and stiff import competition that pressured Turkish mills’ prices and output.

Turkish steel producers, however, are aiming to exceed the 15.2 million mt steel export volume in 2022, which is also expected to support their output volumes.

Turkey’s steel exports already increased notably by 23% on the year to 895,000 mt in January, the recent TCUD data showed.

“The rise in high quality steel investments in Turkey in recent years, like stainless steel, armor steel as well as railway wheels, supported January steel exports,” the association said.

Turkey’s flat steel exports increased substantially by 89.1% year on year to 348,000 mt in January, while long steel exports rose only 2% to 537,000 mt due to shipping disruptions in the Red Sea, TCUD noted.

According to TCUD data, the steel export/import coverage ratio of the Turkish steel industry rose to 61.6:100 in the first month of 2024 from 55.1:100 a year prior amid the rise seen in export volumes.

The association is expecting the increase in Turkish mills’ steel exports to continue in the coming months, with interest rate cut expectations in the EU as of the second quarter of 2024 to support steel demand in Turkey’s main steel export destination.

Slowed demand both in the domestic and export markets, however, has put pressure on Turkish mills’ steel pricing in recent weeks.

Platts last assessed the Turkish HRC steel price at $680/mt ex-works Feb. 23, down $10/mt on the week in a slow market, according to S&P Global data.

Author: Cenk Can

spglobal.com