Day: 2 March 2020

German sections mill Stahlwerk Thüringen kept output steady in 2019 and plans to continue to invest up to €15 million ($17m) in the current year in both maintenance and upgrading equipment.

2019 internal expenditure included a new crane in the scrap yard, a renewal of the high voltage power feed at the electric arc furnace and a new rolling stand, Kallanish learns from the company. Despite a slackening economy, production was nearly on par with 2018, slipping back by only 15,000 tonnes to 791,000t. While 2018 was “… highly satisfactory,” 2019 also proved to be a “… good year” but remained slightly behind expectations, according to the management.

The mill’s order books are well filled, the management says, but notes that customers have become more demanding regarding different sizes of sections, which requires additional conversion time in the rolling mill.  The mill has also lost attractive customers among rig and pant builders for the oil industry in South America due to international trade barriers. On the other hand, it has increased sales to the USA, where last year it was the only candidate – together with a Swiss partner – that was licensed to supply railway sleepers.

Stahlwerk Thüringen is located in Unterwellenborn in the eastern German state of Thuringia. It had previously been owned by Arcelor and Gallardo before taken over by Brazil’s CSN eight years ago.

ArcelorMittal Italia and the Italian government are said to be close to signing a draft of agreement before the upcoming March hearing that will rule on the ownership of Italian former steelmaker Ilva.

So far unconfirmed reports suggest that the draft agreement contains a clause allowing ArcelorMittal to leave Ilva as from 1 November upon payment of a total of €500 million penalty ($552m). If the company however decides to stay it will have to pay €1.2 billion. According to sources close to the matter interviewed by Kallanish, ArcelorMittal is said to have conceded to making temporary layoffs instead of job cuts, although this is once again unsubstantiated.

Meanwhile over the past days a cloud of toxic smoke emitted from equipment at the Taranto site has created more pressures for the company. The mayor of Taranto Rinaldo Melucci has issued an injunction against the company and the former Ilva commissioners giving them 30 days to resolve the issue. If this is not resolved, the parties will have to shut down the equipment within 60 days, a source at the city hall confirms.

ArcelorMittal and the Italian government agreed on 7 February to postpone the tribunal hearing over the ownership of the former Italian steelmaker Ilva.  Just a few hours before the hearing was due to take place, both parties submitted a draft agreement and asked the tribunal to delay the ruling. The hearing has therefore been postponed to 6 March (see Kallanish 9 February).

The US Court of Appeals for the Federal Circuit on Friday denied an appeal filed by US steel importers challenging the constitutional authority of the Trump administration’s Section 232 metals tariffs.

In an opinion issued Friday, the court upheld a March 2019 decision by the US Court of International Trade that rejected the importers’ challenge, finding the court is bound by precedent established in a 1970s Section 232 oil case (Fed. Energy Admin. v. Algonquin). The court ruled the issue in the steel importers’ case is controlled by a portion of the Supreme Court’s Algonquin decision that declares Section 232 does not violate the nondelegation doctrine.

“We agree, and we therefore affirm,” the opinion by the appeals court states: “…The court’s ruling in Algonquin answers the question of the constitutionality of Section 232 presented here.”

The American Institute for International Steel (AIIS), plus two of its members, filed a lawsuit in June 2018 challenging the constitutionally of the 25% import tariff President Donald Trump’s administration issued on steel in March of that year under Section 232 of the 1962 Trade Expansion Act. At the time, the Trump administration also applied a 10% tariff on aluminum imports.

In its appeal, the AIIS looked to distinguish the steel tariffs from the Algonquin decision, arguing the statute only dealt with presidential authority to set import fees and did not address the constitutionality of the entire law. The court, however, said the AIIS “presented no persuasive explanation for distinguishing the tariffs at issue here from the license fees at issue there.”

The appeals court did note that five members of the Supreme Court have recently expressed interest in at least exploring a reconsideration of the delegation-doctrine standard.

“But such expressions give us neither a license to disregard the currently governing precedent nor a substitute standard to apply,” the court said in the opinion.

The Supreme Court in June denied hearing AIIS’ challenge to the Section 232 tariffs.

AIIS did not immediately respond to a request for comment Friday.

The American Iron and Steel Institute, which represents US domestic steelmakers, meanwhile, welcomed the court’s ruling Friday.

“Today the Court of Appeals rightly affirmed our strong belief, and the previous decision of the Court of International Trade, that the constitutional challenge to the Section 232 statute is without merit,” AISI CEO Thomas Gibson said in a statement. “This lawsuit by steel importers is a weak attempt to mask the fact that surging foreign imports have severely impacted the domestic steel industry and threaten our national and economic security. The court today affirmed that Congress acted within its constitutional authority when it authorized the president to take action to adjust imports that threaten to impair our national security. We have consistently maintained this fact and are pleased that the Court of Appeals agreed.”

— Justine Coyne