Day: 20 May 2020

Union action was expected to intensify from Tuesday at the major IJmuiden Netherlands plant of integrated steelmaker Tata Steel Europe, following the unexpected departure of company chairman Theo Henrar Monday.

Approximately 9,000 workers at the Tata Steel Netherlands (TSN) steel plant in IJmuiden walked out Monday after news of the chairman’s departure. Tata Steel Netherlands’ Central Works Council (CWC) Tuesday said in a statement that they expected a “hard confrontation with management in the coming months.”

Mill sources said that the industrial action in itself had little impact on production levels. However, the mill is already understood to be producing at below its full capacity as a result of COVID-19- related restrictions, and union action could reduce production further if jobs are cut.

CWC leaders said the company’s decision was “ill-considered” at a time of such market uncertainty brought on by the coronavirus pandemic.

An estimated 18.9 million mt of EU crude steel capacity has been taken offline during the COVID-19 pandemic as steelmakers vie for customers in a market slump that European industrialists have compared to the 2009 financial crisis.

Chairman Theo Henrar had played a key role in helping to guarantee the steel mill’s survival amid a severe market downturn that has resulted from restrictions imposed during the COVID-19 pandemic, representatives of the CWC said this week.

“The steel industry is very vulnerable right now — there is not enough liquidity and we are currently in the throws of dealing with the coronavirus.[This decision] is unbelievable,” a CWC spokesperson told S&P Global Platts Tuesday.

A Tata Steel Europe spokesperson said that Henrar’s departure was agreed “mutually” and that he would continue to support Tata Steel until the end of the year as an advisor.

A reduction in 1,250 jobs was announced by Tata Steel as part of its “transformation program” in March this year, after the European Union competition regulators decided to reject a merger with Germany’s ThyssenKrupp.

Tata Steel Europe announced in April that as a result of the pandemic, it would postpone its reorganization plans until after July 1.

— Amanda Flint, Diana Kinch

thyssenkrupp Materials Processing Europe has moved its Industries business unit from Leverkusen to a new site in Willich, further north in North Rhine Westphalia, Kallanish learns from the company.

The main focus of the location is the specialisation for segments such as manufacturers of profiles, furniture or equipment and apparatus construction. In addition to higher capacities, the steel service centre can now offer its customers an expanded product and service portfolio.

The service centre in Willich has five slitting lines and one cut-to-length line. Slit strip is now available in thicknesses from 0.4-7.0mm, widths from 7.0-1,600mm, and lengths of up to 6,000mm are possible in the sheet area. Compared with the previous site in Leverkusen, the company now has 20% more production capacity available.   

Thanks to the additional narrow strip centre offered on site, including pack winding, customer requests for strips in special lengths of up to 25 kilometres can be met, the company says. A new feature is a welding unit for stainless steel, which can be used to weld narrow strip up to 2mm in thickness.

Thyssenkrupp is seeking either a partnership or a sale for its Italian subsidiary, Acciai Speciali Terni (AST), Kallanish learns from the company.

Pursuing its restructuring strategy, the company is considering for certain assets “… the best prospects for the future – a place under the thyssenkrupp umbrella, in a partnership or outside the company. With this reassessment of the portfolio, we have taken some difficult decisions that were long overdue and will now implement them systematically. thyssenkrupp will emerge smaller but stronger from the transformation”, Chief Executive Officer Martina Merz said in a note sent to Kallanish.

Those businesses for which thyssenkrupp sees no sustainable future prospects within the group for various and very specific reasons will be managed separately. They will be combined in the Multi-Tracks segment under the leadership of Dr. Volkmar Dinstuhl, head of mergers and acquisitions at thyssenkrupp AG. For the segments Plant Technology, the stainless steel plant (AST) in Terni, Italy, including the associated sales organisation, Powertrain Solutions and Springs and Stabilisers, thyssenkrupp is seeking either divestment or a partnership.

Meanwhile the unions at AST as asking an urgent meeting with the government to discuss not only the future of Terni but also the state of the national specialty steel sector. “The supervisory board of thyssenkrupp considers Terni to be no longer strategic… AST is ending up as a sort of ‘bad company’ waiting to be sold,”, trade union Fiom-Cgil says in a letter sent to Kallanish.

thyssenkrupp (tk) has returned to highlighting its interest in finding an international partner for its steel business. Initial media speculation has already revealed to whom it might be talking.

Late on 18 May, the executives of the German conglomerate revealed the long-term strategy they had previously announced for the early summer. Following the recent sale of the Elevator division, the group intends to slim down much further, and to spin off more units. This will be the case for activities like Plant Technology, Powertrain Solutions, Springs and Stabilisers, Infrastructure, and Battery Solutions.

Regarding its steel activities, tk did not announce anything new. It aims to sell the Italian stainless plant AST Terni, and seeks either the sale or closure of its heavy plate production in Duisburg. On a general level, tk says it is preparing for a standalone development within the company for its Steel division, but at the same time is continuing to explore possible partnerships and consolidation options.

Meanwhile, Reuters and Handelsblatt have already quoted insiders as saying that the companies tk is talking to are Sweden’s SSAB, China’s Baosteel, and, again, Tata Steel. When contacted by Kallanish, tk’s press office declined to comment on the reports.

In other media sources, trade union IG Metall was cited as approving the group’s plan in general. However, for the Steel division, it favours a solution which would leave the ownership of the mills in German hands.

Regarding its steel & materials distribution business in the Materials Services division, thyssenkrupp says it sees consistently good development potential. For this division as well as for Industrial Components (Forged Technologies and Bearings), tk will continue to develop these businesses on its own in the future.

Construction growth provides a positive outlook for steel demand in most countries of Southeast Europe (SEE), according to Bulgarian long steelmaker Promet, part of Ukraine’s Metinvest.

The situation in Serbia, Bulgaria and Romania is improving despite global demand being hampered by the Covid-19 pandemic, a Promet official tells Kallanish. “Our company had some 30-40% more production in March and April,” she says. “The situation is improving and we are expecting even higher demand in the near future.”

Demand is coming mainly from construction projects, such as the Hemus highway in Bulgaria. “In Serbia the market is booming because different construction projects are stepped up by the government with the upcoming general election in June and the end of the measures against Covid-19 in May,” the representative says.

Romania is also enjoying strong steel demand thanks to construction projects. A Russian mill is heard by traders to have concluded a rebar sale to Romania on Monday at $375-380/tonne fob Black Sea. The tonnage was not specified. Offers could reach $400/t in the near future.

In the more specialist steel segment, Beltrame’s Romania-based Donalam plant recently completed a €4 million ($4.3m) investment into a special steel bar treatment line (see Kallanish passim). This will allow the company to offer steel bar products with increased added value. Given the volatility in the global steel market, the company’s target for 2020 is to maintain its market share in Europe by identifying new business niches, it says.

Shipments by Brazilian independent flat steel distributors and service centers in April fell 37.6% year on year to 165,900 mt, recent data from Inda, the national flat products distributors association, showed.

Shipments fell 37.5% month on month, the data showed.

April’s domestic purchases from mills decreased 20.8% year on year to 179,100 mt, according to Inda. Domestic purchases fell 34.3% month on month.

Flat product inventories at the Brazilian distribution network amounted to 860,100 mt at the end of April, up 1.6% from the end of March, while the inventory-turnover average closed April at five months of supply, the data showed. Normal levels would be around three months of sale.

April flat steel imports by distributors totaled 56,500 mt, a 37.9% slump year on year. When compared to March, imports fell 3.5%.

For May, Inda expects shipments to increase about 5% and purchases from mills to decrease about 15% compared to April.

— Priscilla Antunes

Spain’s Gestamp saw decreased revenues during the first quarter of 2020 due to the Covid-19 pandemic, the company says in its quarterly report monitored by Kallanish. Gestamp is a major supplier of components to the global automotive sector.

As a result of the current situation, the group’s plants, with exception in China, saw gradual shutdowns during the second half of March, beginning from Europe, and extending to North and South America. Some of these operations were restarted and the company expects a gradual re-opening of most of the facilities during the coming weeks.

“The implementation of operational efficiencies and labour flexibility measures have allowed the company to have a satisfactory first-quarter performance. We expect to improve our results throughout the rest of the year. Activity levels in some of our plants in April are already in line with foreseen targets,” Gestamp says.

During Q1 2020 the global automotive sector saw a production decline of -23.2% on-year, while Gestamp’s performance fell -6.1%. “This quarter has been impacted by the unprecedented challenge of the Covid-19 pandemic and Gestamp has been able to outperform the market as a result of new projects and its lower exposure to Asia versus that of global production volumes,” the company confirms.

Gestamp`s total net revenues amounted to €2.01 billion ($2.19 billion) in Q1, or -7.3% less y-o-y. North America was the only region that saw an increase in sales. These were up by 7.5% over Q1 2019 at €495.0 million.  

During the first three months of 2020 the company posted a net profit of €14.0m, or -65.6% lower than the same period of last year. Ebitda fell by -22.6% to €192.6m y-o-y on the same basis.