Day: 19 June 2020

Konsorcjum Stali (KS), one of Poland’s top steel distributors, has delisted from the Warsaw Stock Exchange, Kallanish notes.

This follows an agreement last year by a group of KS’s shareholders to acquire the remaining shareholding of the distributor after their joint stake exceeded 90%.

KS’s consolidated revenue fell -7% on-year in 2019 to PLN 1.69 billion ($426 million) and net profit slumped -62% to PLN 16.5m.

According to the latest published volume figures, in the first half of 2019 KS’s steel product sales declined -5% on-year to 219,900 tonnes. In full-year 2018 sales rose 7% on-year to 682,000t, with domestic sales accounting for 99.45% of revenue.

The firm has three reinforcement fabrication plants with a combined capacity of 15,000 t/month. It also has two steel structures plants and a coil service centre. This is in addition to 13 sales offices around Poland. Its main suppliers are Celsa Huta Ostrowiec, CMC Poland and Riva Stahl.

ArcelorMittal Italia chief executive Lucia Morselli says the company intends to comply with the agreement signed on 4 March with the Italian government for the relaunch of former Italian steelmaker Ilva.

This is in response to the latest declarations by Prime Minister Giuseppe Conte and economic development minister Stefano Patuanelli that ArcelorMittal’s latest industrial plan for Ilva is “…unacceptable.” These comments triggered speculation that the steelworks could be nationalised through state financial body Invitalia (see Kallanish passim).

In a televised interview seen by Kallanish, Morselli says there was “…a good climate” at the meeting between the company and authorities earlier this week. The government becoming a shareholder in the steelmaker could be done in the presence of ArcelorMittal, and it would support the plant’s relaunch, she added.

However, the allocation of shares between the public and private partner has yet to be decided, Morselli continued. She also reiterated the need to make 3,150 redundancies and cut the former Ilva workforce from 10,700 employees to 7,500. She did not mention, however, the 1,600 employees on furlough from the previous administration.

The Covid-19 crisis has compromised future demand forecasts. “European steel production has decreased by -50% while 40% of steelmaking facilities are still closed in Europe,” Morselli explained.

ArcelorMittal Italia has asked the Italian government for a grant of €200 million ($225m) and a loan of €600m that the company will pay back in two years following the finalisation of the sale. Morselli also stated that the company is respecting the roadmap for the environmental plan, and by 2023 it will have invested €1.2 billion. “Ilva will be saved. It is already saved,” Morselli concluded.

Turkey’s largest integrated steel producer, Oyak Maden Metalurji Group (Erdemir), could reach full capacity in the coming weeks, depending upon market conditions, as the company’s Iskenderun-based mill, Isdemir, restarted production at one of its blast furnaces following maintenance work, S&P Global Platts learned from a company source on June 18.

The group’s first quarter crude steel capacity usage was around at 93%, Platts observed from the company’s Q1 report. Capacity usage of the company, however, fell in April and May, amid the COVID-19 pandemic and the maintenance work at the Isdemir blast furnaces that began in the second week of April.

Following the maintenance work, the company restarted the Isdemir BF in line with the recovery seen in steel markets as of the end of May, amid business normalization efforts globally, a company source informed Platts on June 18.

Erdemir Group could gradually reach full capacity again at its Erdemir and Isdemir works in the coming weeks, as the market sentiment harmed by the COVID-19 pandemic has begun to show strong recovery signs in recent weeks, especially in the domestic market.

Turkish mills’ hot-rolled coil pricing rose around $35-$40/mt in the last two weeks and offers exceeded $450/mt ex-works for domestic sales and $440/mt FOB for exports for August rollings. However, there were doubts among some market participants that Turkish mills’ new HRC offer prices will be accepted in export markets, especially in Europe, as domestic prices in the EU region were generally lower than Turkish mills’ current offer prices.

Isdemir is planning to disassemble its fourth blast furnace, which is currently closed, and to build a new one on the same site in 2021, as Platts has reported.

Isdemir produces hot-rolled coil, rebar and wire rod with a liquid steel capacity of 5.3 million mt/year. Erdemir Metalurji Group’s total crude steel production capacity is 9.1 million mt/year.

— Cenk Can

Beltrame, the largest European merchant bar quality (MBQ) bar producer, still sees a challenging 2020 ahead due to the “repercussions of the pandemic emergency,” but remains confident about maintaining its market leadership..

“Having gone through a crisis in the past, not without sacrifices but successfully, has taught us to protect our people as much as possible while continuing to create value,” said company President Antonio Beltrame.

Last year was characterized by three quarters of positive dynamics with extreme volatility in the fourth quarter during which the company confirmed the strength of its brand of products and services, Beltrame said.

Beltrame Group sales volumes in 2019 were in line with 2018 at over 2 million metric tons. The company last year posted net revenues down by 11.3% year on year to Eur1.1 billion and adjusted EBITDA of Eur74 million against Eur113.7 million in 2018.

Sales of merchant bars, the core business of the company, were in line with the previous year, despite recording a drop in profitability to Eur57.2 million compared to the Eur81 million registered in 2018. Sales volumes benefited from greater proximity to customers thanks to the production alignment created in Italian and French factories, according to the steelmaker.

There was a 3.5% increase in construction steel sales volume from Beltrame’s Swiss mill in Geralfingen, which saw reduced margins due to the reduction in commercial margins of the sector and energy costs. Profitability stood at Eur16.1 million (adjusted EBITDA), down from Eur24.3 million in 2018.

The crisis in the automotive sector impacted Beltrame’s special bar quality (SBQ) bar business at its Romanian mill in Calarasi, which recorded shipping volumes of 109,000 mt and sales revenues of Eur78.3 million, down from Eur102.6 million in 2018.

— Annalisa Villa

Dear Mr Hogan,

As it is of your knowledge, EUROMETAL is an association of distributors and steel service centres across Europe, our members are the national federations, or companies that work in the downstream steel activities. EUROMETAL is in full favour of fair trade, against artificial state support for companies, and we believe on the free competition as the vector that drives the best return for the society.

During these last years, especially these last quarters, we have seen many new regulations being issued by the European Commission (EC) regarding trade constraints against most imports of different steel products. We are very much aware that this is a well-known topic to you and your team. We understand the circumstances and the findings that took the EC to conclude with tariffs and trade restrictions in some of the cases. However, we are of the belief that there is a point in which we consider we should rise our voice to be heard.

We do not question that an industry that has such strategical weight as the steel production needs to be taken into consideration. But to our view, the EC should also be caring about the steel users and steel consuming industries. There will be no market for the steel production if there is not a market of consumers.

Among all these steel users and consumers there is a myriad of small and medium size companies that do not have the means to demand their particular issues to be resolved by the EC and your department, they have made their life and future based on the day-to-day competition, many times against big corporations that could enforce their power in the market to the very limits.

We trust in you to take into consideration the interests of all the steel users and distributors in order to protect the future of this industry, and to help us to secure a future for the communities we work at and for. Protecting the steel producers, even if needed in many aspects, is not the only way to defend the interests of all the Europeans. Only with a strong sector of steel end users and consumers can we consolidate the industry we need to look with hope to the future. We offer you our support to find a way forward.

Daniel Guinabert (Director General)                                   

Fernando Espada (President)