Klöckner’s largest shareholder secures 30%

Within a matter of days of its public takeover offer, the main shareholder in Klöckner & Co SE has secured 30% in the German steel distribution group.

Swoctem, the investment vehicle of entrepreneur Friedhelm Loh, issued a voluntary public takeover offer at the beginning of last week for the distributor’s whole issued share capital (see Kallanish 13 March). Klöckner’s board welcomed the fact that Loh’s announcement underlines his interest in KlöCo’s long-term development, it said in a statement.

Two days after the offer announcement, Klöckner’s shareholder structure sites showed that Swoctem was now at 30%, up from the slightly above 25% it had held since 2016. According the German Press Agency, dpa, the increase in holding occurred already on the first offer day. It cites Loh as saying he does not intend to take an absolute majority in the steel distributor. His stake of 30% has not changed since 15 March.

Christian Koehl Germany

Benteler secures low-carbon steel from thyssenkrupp

Benteler Automotive has secured a long-term supply of climate-friendly Bluemint Steel from thyssenkrupp Steel for the production of vehicle components. Both companies have signed a corresponding memorandum of understanding, Kallanish learns from Benteler.

For Bluemint Steel, a proportion of the coking coal in the blast furnace process is replaced by pre-produced sponge iron or specially prepared scrap steel. Additionally, the cooperation between tk Steel and Benteler will be intensified from 2026. At that point, the steel will be made through the planned direct reduction-submerged arc furnace production route, which will be fuelled by green hydrogen and green electricity.

Benteler has set itself the goal of achieving net zero emissions for Scope 1, 2 and 3 (upstream) by 2050. By 2030, the company aims to have halved its production-related CO2 emissions and reduced Scope 3 emissions from purchased goods by 30%. Its Steel/Tube Division is aiming to achieve CO2 neutrality by 2045 through increased energy efficiency, green electricity and climate-neutral starting material.

In addition, Benteler Steel/Tube itself produces “green steel” for customers in an electric arc furnace at its Lingen steel works. However, the production volume there is not sufficient to cover the group’s needs.

Christian Koehl Germany

Zaporizhstal eyes output increase with blast furnace restart

Ukrainian flat steel producer Zaporizhstal, partially owned by Metinvest, is taking blast furnace No.2 out of forced hot preservation. It has been idle since March 2022 amid the Russian invasion of Ukraine.

The firm will thereby return to operation with three blast furnaces, Kallanish notes. Last April, blast furnaces No.3 and No.4 were put back into operation.

BF2 is currently being blown in and will reach its planned production capacity in the first ten days of April. With three blast furnaces, the productivity of Zaporizhstal’s blast furnace shop will increase to 8,000 tonnes/day of pig iron, the enterprise claims.

According to the company, during the period of forced hot conservation of BF2, specialists from the blast furnace shop and engineering services of Zaporizhstal carried out a comprehensive study, maintenance and repair of the main components of the unit.

In particular, mechanical and electrical equipment, as well as the furnace air heaters were revamped, and a technical inspection and testing of gas cleaning equipment was carried out.

“The launch of the blast furnace was preceded by thorough work to ensure production with sufficient volumes of raw materials,” says Zaporizhstal general director Roman Slobodyanyuk. “Today, we have a solution that will allow us to increase production, and at the same time increase contributions to state budgets and attract foreign exchange earnings to Ukraine’s economy.”

In January-February, the plant produced 209,200t of steel, down by 67.4% on-year, and pig iron output was down 61.5% to 291,600t (see Kallanish passim). Rolled steel production decreased by 65.3% to 174,200t.

Zaporizhstal operated at 50% of its capacity in 2022 due to logistical restrictions amid the war.

Last year, it launched the production of eight new types of cold rolled coil and hot rolled coil, which were previously produced at Metinvest’s destroyed Mariupol enterprises – Azovstal and Ilyich Steelworks.

Svetoslav Abrossimov Bulgaria

Union criticises UK budget lack of steel support

The Unite Union has expressed its disappointment over the recent UK budget announcement not containing more support for the steel industry, calling on Prime Minister Rishi Sunak to ensure the sector’s competitiveness.

This comes as reports circulated of Tata Steel UK potentially closing a blast furnace at Port Talbot in July. Last July, Tata Group chair Natarajan Chandrasekaran warned that some UK sites might be closed in 12 months without government support towards decarbonisation.

In January, the government was reported in talks with both Tata Steel and British Steel over £300 million ($367m) in funding each for this purpose, but a deal is yet to be agreed, and some sources say the figure falls short of the steelmakers’ expectations.

“The government has legislated to reduce emissions to net zero by 2050. This means that to maintain UK steel production in future there needs to be proper support to transition from coke furnaces to new technologies using electricity or hydrogen,” Unite says in a note seen by Kallanish.

“This will require billions of pounds of investment. While it is welcome that the government is now reportedly preparing £600 million of sector support, this is small beer compared to countries like Germany and the US that have already provided billions of pounds worth of public investment. We now need adequate funding in the UK and we need it tied to job protection guarantees. Intervention is essential but cannot be about rescue packages that only end up helping investors, while jobs disappear,” it adds.

The government must also ensure UK infrastructure projects use UK-made steel, while high energy costs must be tackled to ensure UK steelmakers’ survival, it concludes.

Adam Smith Poland

Polish construction grows faster than expected, housing disappoints

The Polish construction sector grew faster than expected in February, thanks to infrastructure projects, but residential housing continued to perform poorly. ING Bank says this trend will continue in the coming months.

According to figures from Poland’s Central Statistical Office (GUS), construction sector output rose 6.6% on-year in February, and by 10.6% versus January. This is versus the on-year growth consensus of 2.1%. The increase was thanks to 21.5% on-year growth in civil engineering construction and a 4.3% increase in speciality construction.

The growth is likely to be “the effects of finalising infrastructure projects in the last settlement year of the old EU [funding] perspective,” ING senior economist, Poland Piotr Poplawski says in a note sent to Kallanish.

Meanwhile, in the first half of last year, the number of housing units under construction was historically at its highest levels, but as demand declined, it began to decelerate rapidly. “The current supply of apartments from developers is able to cover the current demand for almost a year. Therefore, developers are completing projects already started, but not starting new ones,” Poplawski explains.

“The construction situation in the coming months is likely to be a product of the still unfavourable situation in housing and the completion of projects, from the old EU perspective (when local government authorities rushed to finish projects to use all of the remaining EU money),” he continues.

“The prospect of the government’s launch of mortgage support programmes may even weaken demand for housing in the near term … until the programme’s launch, among households hoping to take advantage of government support. In contrast, the experience of previous EU perspectives shows that the last settlement year is conducive to relatively high activity in infrastructure construction,” Poplawski concludes.

CMC, which has a long steelworks in Poland, said in January that after a strong period, Polish residential activity is showing signs of a slowdown due to rising mortgage interest rates (see Kallanish passim). Although Polish mortgage origination declined meaningfully over the last several months, programmes are being developed to support first-time homebuyers, which should attract more market activity by mid-2023, it added.

Adam Smith Poland