ISTA petitions UK over Northern Irish steel tariffs

The International Steel Trade Association (ISTA) has written to UK cabinet member Michael Gove suggesting the 25pc import duty on non-European/UK steel into Northern Ireland is “grossly unfair” and puts its members at a disadvantage to European producers and traders.

The association also said it goes against the idea of a “level playing field” laid out in the European-UK free trade agreement. ISTA also said the Northern Ireland Protocol gives the government powers to introduce arrangements to negate the tariffs and it could use article 16 of the protocol to “introduce measures unilaterally to safeguard the market”.

Addressing an urgent question from Parliamentary Leader of the Democratic Unionist Party Jeffrey Donaldson in Parliament yesterday, Gove said the government was looking at ways for business to avoid paying the tariffs, “through either the quotas or appropriate rebates”. Industry participants have been told this could take six months or more.

Initially participants were told European steel sold into Northern Ireland would carry a 25pc duty. But this guidance has now been reversed, with European material having unfettered access with no quota or duty. Steel from Great Britain sold into Northern Ireland will be drawn down from the UK’s country quota under the European safeguard.

There has been a distinct lack of clarity over the situation for Northern Ireland’s steel imports, and customs arrangements, since the end of the Brexit transition period.

By Colin Richardson

EU steel can access Northern Ireland without duty

European steel can be imported into Northern Ireland without paying a 25pc duty, the UK government has said.

There will be no quota or duty for European steel, meaning it will have unfettered access to the country, contrary to previous advice from UK government agencies.

Material from the rest of the world will still have to pay the duty, while UK-origin material needs to use an “interim solution” to avoid duties — this involves additional paperwork and informing the Department for Business, Energy and Industrial Strategy of Great Britain-origin sales into Northern Ireland. There is no process to allow for Great Britain-origin steel to be imported into Northern Ireland and be registered against the UK’s quotas within the EU steel safeguard scheme, so the interim solution is required.

Some market participants suggested the EU had said late in December that shipments into Northern Ireland could not be drawn down against its import quota for the UK, leading to the imposition of the duty. After lobbying by industry, this has changed, meaning the UK can access the European quota for its shipments into Northern Ireland — Northern Ireland is, essentially, part of the EU, for customs arrangements. UK producers hope the EU quota for UK material will be extended to allow for this volume into Northern Ireland.

The UK would like to negotiate a different approach to the rest of the world duties going forward. These limit accessibility to third-country imports and give European producers an advantage into Northern Ireland.

The status of imports into Northern Ireland has been very unclear since the end of the transition period — some producers have pulled offers as a result awaiting further clarity.

By Colin Richardson

ArcelorMittal reveals Ilva’s new industrial plan

The new industrial plan for the relaunch of former Italian steelmaker Ilva involves an investment of €310 million ($377m) in 2021. It includes the remaking of blast furnace no.5, which has been idled since 2015, and a production ramp-up from the current 3.3 million tonnes/year to 5m t/y in 2021, Kallanish learns from unions.

In a meeting with unions at national trade association Confindustria’s offices in Rome, the new Ilva shareholders, Invitalia and ArcelorMittal Italia, presented a draft of the industrial plan.

The new plan that covers the period 2021-2025 includes the construction of an electric arc furnace. Production will be increased gradually from 5mt this year to 8mt in 2025. Each year from 2022 will see an investment of slightly over €400m, apart from the €300m that will be invested in 2025, sources confirm.

This year, blast furnace no.1 will work at 100% capacity, BF no.2 will be restarted next month and will run at 90% capacity, and BF no.4 will run at 85% capacity. Meltshop no.1 will be restarted on 15 January. However, meltshop no.1 and BF no.4 will be idled in March and April for maintenance works.

In December 2020 ArcelorMittal signed a binding agreement with Invitalia, the Italian state-owned company investing in Ilva. The parties have formed a public-private partnership (see Kallanish passim).

China ends 2020 with stronger steel exports

Chinese finished steel exports continued to tick higher in December, while imports dwindled further, preliminary Customs data show. 2020 saw China’s steel trade surplus shrink sharply, but 2021 could see another reversal, Kallanish notes.

In December, China exported 4.85 million tonnes of finished steel, up 3.5% year-on-year and 10.2% month-on-month. That brought China’s exports over full-year 2020 to 53.671mt, down -16.5% y-o-y.

China’s exports in 2020 shrank sharply from a peak over March-April as it became apparent that markets inside China were much stronger than those outside. 2021, however, is expected to see a slight reversal. The rest of the world is expected to see demand recover while Chinese demand has topped out. As a result, in the latest China Steel Intelligence report, Kallanish expects Chinese steel exports to recover to around 70mt this year.

China’s finished steel imports in December totalled 1.375mt, down from 1.854mt in November and 1.483mt a year earlier. The figure does not include semi-finished products. Over the full year China imported 20.233mt of finished steel, 64.4% higher y-o-y. Including semi-finished steel, however, the number is expected to be far higher. Over January-November 2020, China imported a total of 36.4mt of semi-finished and finished steel products, up 178.8% y-o-y.

Imports spiked over the summer as China’s stimulus measure drove demand to record highs and international prices fell below Chinese domestic prices. In 2021, however, Kallanish expects China to import around 20mt of steel in total, down -48.7% y-o-y. This is in part because of the increased relative strength of overseas markets. It will also be impacted by the import of ferrous scrap, which has been allowed since 1 January and will replace the need to import some semis.

Duferco eyes major Italy beam production centre

Duferco aims for its San Zeno Naviglio mill to become the most important centre of steel beam production in Europe.

The firm previously ordered from SMS Group a new medium sections rolling mill for the steelworks in northern Italy. Following commissioning, the works will reach a yearly output of 1.5 million tonnes of long products (see Kallanish passim).

“Our main goals are to set new standards in customer service, maximise the overall process efficiency and become the best-cost producer in Europe,” Duferco Italia Holding president Antonio Gozzi says in a note sent to Kallanish. “We are committed to making beam production more sustainable, meeting the highest standards in environmental protection and safety.”

Commissioning is planned for the end of 2022.

Thanks to the first green Power Purchase Agreement (PPA) that Duferco signed recently, the whole power supply for the new rolling mill will be covered by renewable energy.

An SMS “DataFactory” will also be built, combining the information from the product tracking system with all available data in the plant, from the sensor level up to the higher-level automation systems. In this way, a product genealogy will be created, which is the basis for digitalising the complete production process.

The mill will be equipped with the latest generation of Compact Cartridge Stand (CCS) tandem mill stands “Duferco will have additional productivity reserves and will be able to minimise the hydraulic power consumption. Moreover, the new tandem mill will be supplied fully prepared for low-temperature rolling, which will allow savings on valuable resources such as alloying elements. This is our contribution to cost effectiveness and a smaller carbon footprint,” says SMS executive vice president long products Thomas Massmann.

In December Duferco and former American partner Nucor signed the financial closing that ended their partnership in the joint venture for Duferco’s Italian operations. The Covid-19 pandemic and consequent cut in Nucor’s overall investment budget was at odds with Duferco’s intention to proceed with the €180 million ($218m) investment in San Zeno (see Kallanish passim). The plant currently has a 1m t/year production capacity.