Day: 17 March 2020

German steel purchasing cooperative Nordwest Handel with its steel sub-division Stahlverbund Phoenix is strengthening partnerships in other European countries.

An initial strategy meeting with French specialist trade partners was held in Paris at the beginning of February, headed by Nordwest’s Vincent Wicker, who was appointed project manager Steel Western Europe in September. Around 20 people discussed the activities of the Phoenix group, Kallanish learns.

In addition to expanding the number of trade partners for Phoenix group, a further goal is to increase the supplier portfolio, the company notes. “Compared with Germany, the share of private SMEs in the steel market in France is considerably lower. However, the importance of medium-sized companies is growing increasingly,” Wicker says.  

The strategic orientation was further defined and worked out together with the French partners, so that volumes will continue to be bundled. At the beginning of last year, the tonnage was already increased, Nordwest says. The German cooperative also plans another meeting with its Polish cooperation partner ESG, at which further measures for joint market development will be discussed and promoted.

Workers at ArcelorMittal Italia’s former Ilva plant in Taranto have cancelled the strike they had announced last week until 22 March, a trade union source confirms to Kallanish.

The strike began on Friday last week and was supposed to last for 10 days at the Taranto steelworks. Workers complained about the poor measures at the steelworks to fight the spread of coronavirus (see Kallanish 16 March).

However, “… after a meeting with ArcelorMittal Italia last week, workers were reassured and decided with the company to introduce further measures to fight the coronavirus contagion. At the moment there are no cases within the company but workers in the steel sector are afraid to go to work which has caused so many companies to shut down in Italy. During the meeting with the workers ArcelorMittal Italia has been absolutely open-minded regarding further measure and will do everything in its power to protect the company from the virus spread,” the representative tells Kallanish. He adds that the company is reducing its activity and production.

Italian steelmaker and longs’ producer Riva Acciaio is shutting down production at its steelworks Italy, Kallanish learns from trade union sources.

The company will carry out a cleaning process on its equipment to fight the spread of coronavirus. “This follows a request from workers who have concerns about catching the virus because of the inevitable proximity with other workers despite the instructions from the Italian ministry of health having been carefully applied by the company,” the source says. He adds that Riva will temporarily lay off workers this week until 23 March.

This adds to a long list of Italian long producers who have halted production and are temporarily laying off workers. Rebar makers Iro, Alfa Acciai, Feralpi and Valsabbia have closed their steelworks together with sections’ producers Lucchini RS and Duferdofin-Nucor, Kallanish notes.

European carmakers are curbing production as the spread of the coronavirus accelerates, while steel associations linked with the automotive sectors, in the worst hit European country so far, Italy, are asking for EU joint decisions.

“After having put in place all the government measures to prevent and contain the spread of the epidemic, we can see that there is no margin for the closure of production plants, except by a joint decision of all EU countries, in particular, Germany and France,” ANFIA, the Italian Association of the Automotive Industry said Monday. “The possible closure of Italian plants for 15 days is only feasible if that decision is jointly taken by the German and French governments for their respective countries”, the association stated.

Germany is the top importer of Italian automotive components with a 20% share of Italian exports, while France is in second place with 11%.

Fiat Chrysler Automobiles said Monday that its subsidiaries FCA Italy and Maserati were suspending production across most of its European manufacturing plants through March 27. France-based PSA Group also said it was suspending production at its main European production sites. Germany’s Volkswagen is reducing production in Iberia.

“We agree that the problem is a European problem not only an Italian [one]it is true that Italy. [Italy nas] been hit badly so far by the coronavirus with unfortunately more deaths, but if we look at it from an industrial perspective, it is a European problem as the production lines are global,” Riccardo Benso, head of the Italian steel association Assofermet, which represents the steel stockholder and distribution chain, said.

Benso said that some of the main stockholders were still working but were limited in their deliveries, due to the new trade measures at the borders. He underlined how everyone was working to contain the virus and that there would be a hit to the economy for a period of time. But he said that if the slowdown was a “collective slowdown, it will be more sustainable for everyone and that also in the end, thanks to all the large economic stimuli that are starting to be put into place, a recovery will also happen.”

— Annalisa Villa

German steelmaker Salzgitter will stop production at its special steel plant in Lombardy, Italy, temporarily this week as the coronavirus pandemic worsens, but sees no current effects on production or logistics at other sites, it said Monday.

Also, the start-up of one of its blast furnaces in Germany, which has been idled since last summer, will depend on the state the market. The restart was envisaged for mid-2020.

During a streamed briefing Monday on the company’s 2019 results, CEO Heinz Joerg Fuhrmann said the shutdown of the Italian plant would be done “in an orderly manner” over the course of this week.

The Lombardy plant, which produces stainless tubes, is located in one of the regions in Italy worst affected by coronavirus.

When asked by S&P Global Platts about disruptions in production and supply at mills and customers in Germany amid that country’s increased measures — such as introducing border controls over the weekend, Fuhrmann said there were none for now.

“We are not seeing any problems in the supply chain at the moment,” Fuhrmann said, adding future developments cannot be predicted.

No coronavirus impact at German sites

Fuhrmann said, however, that one of Salzgitter’s employees had contracted COVID-19 and colleagues of the employee were in isolation.

A German cold-roller said there were no current disruptions in the market but, looking at how steel demand in Italy has decreased due to shutdowns at car plants, there will be more reduced shifts at German companies supplying the automotive industry.

Salzgitter temporarily idled one of their blast furnaces last summer as a response to a decrease in steel demand.

As a result, crude steel production at the company dropped 6% to 6.6 million mt in 2019.

Production down on slow demand

Production of rolled steel at the flat steel division decreased 2.1% in 2019.

Rolled steel production decreased more heavily at the plate/section division where production shrank 17% in 2019 to 1.89 million mt, mainly due to lack of demand for plate.

Looking ahead, Salzgitter’s galvanizing line, which is under construction, and will produce “premium steel” for the auto industry was planned to be opened in 2022, while the treatment line for heavy plate will be opened in 2021.

— Laura Varriale