Day: 25 February 2020

Nippon Steel Corporaton announced on 20 February it had reached agreement with Vallourec S.A. to increase its shareholdings in the French tube-maker through a rights issue, Kallanish notes.

Nippon Steel plans to subscribe to approximately 10% of Vallourec’s shares through the issue. Nippon Steel will invest up to €35 million in the purchase. The move is subject to the approval at Vallourec’s shareholders’ meeting on 20 April 2020. 

Nippon Steel hopes to enhance and accelerate cooperation with Vallourec and its profitable pipes and tubes business. The two companies have been cooperating on OTCG and they jointly operate subsidairies in Brazil, USA and Asia.

In 2016, Nippon Steel & Sumitomo Metal Corporation (NSSMC) invested €350m to increasw its share in Vallourec to 15% from 1.5%. In the same year, the two companies accelerated the VAM premium joint development programmes, and expanded the scope of cooperation to include industrialisation and enhanced customer service capabilities.

Russia’s vertically-integrated steelmaker Severstal is adding an extra 1 million tonnes/year of long rolled and drawn products to its product range. It is installing a new flexible drawing mill-170 at its principal Russian Cherepovets works, the company says.

The RUB 11 billion ($168.3 million) shop is set to produce wire rod ranging 5.5-18mm in diameter and round coiled bar of 20-32mm diameter. It is due for commissioning in the second half of 2022, Kallanish notes.

The shop will consist of a heating furnace, a hydraulic descaling line, an 18-strand two stands rolling and drawing line, Stelmor air cooling line, and a Garret winder line complete with versatile packing line. 

Severstal’s decision to install a versatile drawing mill capable of producing long products ranging from wire rod to coiled round bar in one aggregate is dictated by increasing volatility and competitiveness in the market. “The new plant will allow Severstal to considerably improve our long product and metalware supply chain, end to end,” Alexander Shevelev, general director, is quoted as saying.

Last year Severstal’s sales of long drawn and metalware products amounted to 563,000 tonnes and long rolled products sales were 1.23 million tonnes. Once the new mill is on stream, Severstal long and drawn product capacity will approach nearly 3mt of finished products.

Production of cars in Germany and vehicle exports both fell due to weaker global demand in 2019, according to national carmakers’ federation VDA.  

The total number of passenger cars produced in 2019 came to almost 4.7 million units, or a fall of -9%, Kallanish hears from VDA. Exports fell even more notably, by -14% to nearly 3.5 million passenger car units. As expected, the moderate performance has continued into 2020.  with an output figure of 341,600 units, the number of cars produced in January was -8% down on January 2019. So was the export figure, which dropped by -11% to 255,600 units.

VDA also says that German carmakers are expanding activities in the US, where they have boosted their local production. During the first eleven months of 2019, the German OEMs increased their production in the USA by 4% to 720,000 light vehicles, while total US production slumped by -4% in that period.

Liberty Steel has confirmed that some HRC supply issues are continuing this week at its Liège and Dudelange production sites. As a consequence, the market is witnessing a deceleration in deliveries of HDG from the mills, Kallanish understands.

“There are some intermittent production issues at one of our HRC suppliers, which are temporarily impacting deliveries to Liberty Liège-Dudelange. The team is working with all of our suppliers to mitigate the impact,” a spokesperson from Liberty Steel says.

Liberty Dudelange, in Luxembourg, is equipped with two HDG lines with the capacity of 620,000 tonnes/year and 2 electro-galvanizing lines with capacity of 360,000 t/y, of which 160,000 t/y are mothballed. The Tilleur site in Belgium can produce packaging steel with a capacity of 200,000 t/y, the Flemalle mill, also in Belgium is equipped with two HDG lines with the capacity of 950,000 t/y.

Last week Liberty Steel confirmed a $100m investment to improve the quality, performance and output of galvanised steel products at its Liege-Dudelange works, which will improve competitiveness, it says. Earlier last year the company’s ceo confirmed that the plan was to bring Dudelange’s HDG production close to full capacity.