Day: 4 May 2020

Dear All,

Due to the current epidemiological situation of the new Coronavirus – COVID-19 that the World is going through, and as you will certainly understand, it has not yet been possible to establish a new date for the organization of the “EUROMETAL STEEL NET FORUM, LISBON”.

We aim to be able to meet the conditions for the event until March next year, and we will communicate the new date as soon as possible.

Therefore, regarding the registration fee paid, we expect to retain that amount for that next event registration. However, for those who want us to refund the amount paid, please send us your IBAN and bank details.

Please note that we are still in negotiations with the hotel so that the amounts already paid (both for the event and for the reserved rooms) remain on credit for the next event. To date we have managed to keep this credit until the end of the year, however we are trying to extend it until the end of March 2021. As soon as we have confirmation, we will communicate.

We are available for any necessary clarification.

Best Regards,

AÇOMEFER – Ass. Port. dos Grossistas de Aços, Metais e Ferramentas

Rua Filipe Folque, 67 – 5º 1050-112 Lisboa

Tel. 21 352 85 37

The Spanish steel sector saw exports slightly decrease year-on-year in 2019. These were impacted by the slowing of shipments to certain countries, says local steelmakers’ association Unesid in its latest report monitored by Kallanish.

“The deceleration was in line with that observed in the rest of the countries in the European Union. Germany, Italy and France have registered even lower volumes of shipments in 2019, which gave us an indication of the competitiveness of Spanish exports,” Unesid says.

During 2019, Spanish steel shipments fell by -2% y-o-y to 9.5 million tonnes. Long steel exports comprised 55% of this total, while flat products represented 29%. Exports of semi-finished steel, including tube and pipe, amounted to 16%.

In terms of volume, Spain reported a substantial decrease in six of its ten main export destinations, which made up 75.7% of the country’s overall steel shipments. 12-month steel exports to Italy fell by -7% y-o-y to 952,000t, while shipments to Germany declined -14% to 637,000t. Spain also saw its steel shipments to the UK and Belgium reduce by -5% and -15%, respectively to 667,000t and 349,000t, Unesid data show.

Deliveries to Morocco were 413,000t or -4% down, while the US absorbed 241,000t of Spanish overall steel shipments, -26% down on 2018.

Exports to France, however, rose by 3% to 1,844,000t. Shipments to Portugal, Algeria and Turkey were also up. The Portuguese market imported 1,158,000t (+10%) of Spanish steel products, while the Algerian and Turkish markets took 472,000t and 469,000t, respectively. Both of the latter volumes represented an increase of 2% on-year, Unesid adds.  

Spain was the world’s 17th largest steel producer in 2019. Spanish crude steel output reached 13,581,000t, down -5.2% on-year, according to worldsteel data.

The European Commission will bring forward its exceptional review of steel imports safeguards as EU steel producers struggle amid declining order books and a surplus of low-priced steel on world markets, market sources told S&P Global Platts Friday.

The commission said it would be investigating whether the current safeguard measures on steel imports would need to be modified due to the effects of the coronavirus on the European market, and announced a strict deadline of May 7 for any interested parties to submit their concerns regarding the pandemic’s impact on the quotas for review.

A representative of the European Commission was not immediately available for comment.

One source said it was possible the EU could impose emergency GATT (General Agreement on Tariffs and Trade) rules to restrict steel imports, with a revision likely to be implemented after the current import safeguard quota concludes at the end of the second quarter.

According to Article 21 of GATT, a World Trade Organization member will not be penalized for taking actions it considers crucial to the protection of its “essential security interests”, allowing the EU to exercise all measures of precaution, so long as actions are taken during a time of “emergency.”

The possibility of emergency import restrictions would be a welcomed decision from European steel mills eager to mitigate the effects of weakening demand on falling flat and long products prices.

The European Steel Association (Eurofer) and the European Steel Tube Association (ESTA) already announced their request for a 75% reduction in import quotas for Q2-Q3 of 2020 as added pressure from Chinese, Iranian and Russian steel exports mounts due to weak domestic markets.

Although a reduction in import quotas is a probable outcome of the decision, the cuts are not likely to amount to the 75% reduction requested by Eurofer, sources said.

A Benelux service center source was optimistic that the review outcome would deter import buyers and “prop up” domestic prices in the short term depending on the cuts made, although he remained skeptical of the likelihood of a 75% reduction.

“75% from Eurofer seems like a lot, maybe it’s [more] 25-50% but it’s speculation. The step is necessary, as some mills are really suffering. Situation could be compared with problem in oil – the capacity cuts are smaller than the drop in demand,” he said.

A German steel service center source, however, said a 50-75% reduction in the import quota was a reasonable possibility, considering the European market has declined by approximately 50% as a result of the coronavirus.

Further declines in European steel production are expected as mills’ new order bookings have declined by nearly 75%, Eurofer told Platts last month.

An Italian mill source also said that the European Commission’s imminent review of the quotas would mean “imports will not have any big chances in the near future.”

One European plate mill said it was unrealistic to achieve the 75% quota reduction, but said the quotas should be reduced to be in line with the drop in demand of “15-20% at the moment.”

“The main thing is to eliminate the annual increase in the quota and the redistribution of the residual quota to the countries who have exhausted theirs. Due to the last two points, Ukrainian producers increased their export of plate by 20% and their share in the Polish market has grown to nearly 50% while demand has fallen. I think this is unacceptable because everyone knows Ukraine is dumping due to low cost of natural gas, [less burden of] environmental protection [compared with the EU] and cheap labor,” the mill source said.

A UK-based trader also held a more critical perspective of the import restrictions and said there were parties on both the domestic and import side of the issue with strong arguments, making it difficult to predict any outcome on the market.

“I suppose the market has shrunk so it’s not unreasonable to reduce import quotas a bit, but I doubt a 100% ban or even 75% reduction is reasonable,” he said.

The trader also expected the spread between import and domestic prices to widen as buyers and sellers factor the quota risk into their pricing.

A North European mill source praised the European Commission’s decision to fast-track the review, and said the lobby from the steel industry has been “very strong” given the damaging effects of the coronavirus on the wider market.

Although countries such as Korea and Japan were less disruptive as they sold “quality product at market prices,” it was Vietnam, Russia, Turkey and China “massively damaging” the market.

“We should see people now choosing not to buy imports due to the quota risk for July, and this will push up the backwardated price structure over spot [prices] to 3-4 months. I expect June-July prices to be Eur20-30/mt higher as a result of limitations on imports” the mill source said.

While the imminent review of the European Commission will weigh heavily on the market in the coming days, domestic suppliers remain confident in their ability to provide quality material for their customers on a short-term delivery basis.

“The request to reduce quotas will help of course – but there is optimism for domestic material with shorter lead times. There are already some gaps in inventories, so customers are more interested in quick delivery than in price, they just want to know if we have it, so the pressure on price is not so high,” a German distribution source said.

— Amanda Flint, Wojtek Laskowski, Len Griffin

UK vehicle output tumbled in March according to the latest report by trade association SMMT monitored by Kallanish.

British car production fell by -37.6% in March as the coronavirus crisis shut factories. Output for both UK and overseas markets was down, by -36.8% and -37.8% respectively.

A new independent outlook by Auto Analysis has revealed at least an £8.2 billion ($10.2 billion) cost to the industry if car factories remain closed until mid-May.

British commercial vehicle (CV)output fell by -41.8% in March, as coronavirus lockdown measures cause plant closures nationwide.

Production fell for both domestic and overseas markets, down -43.4% and -40.6% respectively.

A new SMMT survey reveals that 42.1% of CV manufacturers think recovery from the crisis will take at least 12 months. The association also says that production figures for March incorporate estimates for a very small proportion of plants where final data is not yet available.

French crude steel production plunged year-on-year in March. This follows a hike in January and a decline in February, Kallanish learns from data released by the Federation Française de l’Acier (FFA).

Crude steel output declined by as much as -24.3% y-o-y in March to 813,000 tonnes. This is down from 1,382,000t in March 2019, the association says.

Over the first quarter French crude steel output also fell significantly y-o-y, by -13.7% to 1,114,000 tonnes/month. This is down from 1,291,000 t/month in January-March 2019, FFA says.

Before the coronavirus pandemic, 2019 output dipped by -6.1% on-year to 1,204,000 t/month. This was down from 1,282,000 t/month in 2018, which in turn fell from 1,292,000 t/month in 2017, the FFA says.