Day: 22 June 2020

A few days after the approval by the EU member states of the latest changes to the steel safeguard measures, Daniel Guinabert and Fernando Espada, respectively general manager and president of EUROMETAL, have complained in the letter about the EU’s lack of attention towards steel users and steel consuming industries, warning, “There will be no market for
steel production if there is not a market of consumers”.

EUROMETAL said it believes that protecting steel producers, “even if needed in many respects, is not the only way to defend the interests of all 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,” the association concluded.

Production at Tata Steel’s Dutch plant in IJmuiden was halted for about 24 hours June 19 as the workers staged a strike at the flat steel producer, the company confirmed to S&P Global Platts.

The strike started during the night shift June 18, halting liquid steel production at the site, which has steelmaking capacity of 7.3 million mt/year. The mill produces hot-rolled, cold-rolled and hot-dip galvanized sheet.

A Tata Steel spokesperson said the company would be trying to limit disruption to deliveries.

“We have taken all measures to ensure uninterrupted supply of steel products to our customers, including taking material to off-site locations when appropriate. As a pan-European company, we also have more than one supply route which we will use this if, and when, appropriate,” the spokesperson said.

Dutch workers are fearing they will have to take more job cuts than the UK branch of Tata’s European steel business. While they have been criticizing lack of enough investments into the Dutch works, the sudden departure of company chairman Theo Henrar in May has also been a catalyst for strikes and increased tensions.

“We want the profits that we have made for years, which are channeled to the UK, to be invested in IJmuiden,” said trade union Federatie Nederlandse Vakbeweging (FNV) in a statement.

A reduction in 1,250 jobs was announced by Tata Steel as part of its “transformation program” in March this year, and in April, the company said it would postpone its reorganization plans until after July 1 due to the coronavirus pandemic.

Workers are planning further action if the Tata Steel management fails to meet their demands of promising that no additional jobs would be cut and that Tata Steel Europe would not be sold. In 2019, Tata Steel Europe and Germany’s Thyssenkrupp called off their planned steel merger after failing to get approval from the European Commission.

Tata Steel also has an integrated steel mill in Port Talbot, UK, with an annual capacity of around 5 million mt of liquid steel/y. The strike is the latest confrontation between Tata Steel workers, unions and the company’s management.

— Laura Varriale

Turkish mills’ steel exports to the European region fell by 1.2 million mt year on year in the first five months of 2020 to 2.3 million mt, down from 3.5 million mt exported in the same period the previous year, mostly due to trade barriers and the COVID-19 pandemic. Turkish mills will focus more on export destinations like South East Asia, West Africa and Latin America in the coming months, said Adnan Aslan, chairman of Turkish Steel Exporters’ Union (CIB).

Drawing attention to the EU’s recent protection measure moves, Aslan also noted that they will continue to use all their legal rights against the EU’s moves.

The European Commission recently launched anti-dumping and countervailing duty investigations into imports of certain hot-rolled flat products from Turkey, following a request by European steel association Eurofer, as Platts has reported.

Turkey informed the World Trade Organization on May 25 that custom duties could be imposed on steel imports from the EU in response to the EU’s imposition of additional measures against imports of Turkish steel.

Turkey has 30 days to suspend, change and impose the stated additional duties following the notice, according to article 8.2 of the Safeguard Measures agreement. Turkish market sources are expecting a presidential decree in this regard to be published within a week.

Turkish mills’ overall steel exports volumes declined by 17.8% in the first five months of 2020, due to pandemic, however some recovery has started in export volumes as of June amid normalization efforts in trade globally.

“Due to the pandemic, we have entered a new period specific to supply chain. In that period, it is hard to export to the whole of the world as before. While we are giving more priority to our domestic sources, we should also pay sufficient attention to exports. In this regard, we will focus on export markets like South East Asia, West Africa and Latin America, where steel demand is rising,” Aslan said.

Drawing attention to the historically high level of liquidity and the low level of interest rates, the chairman of CIB also said: “Action plans by countries to change shrinkage to growth during the COVID-19 pandemic are inevitable.”

— Cenk Can

After weeks of a buying freeze due to the coronavirus pandemic, the Moscow steel market is recovering, allowing Russian steel producers to seek price hikes, sources said June 19.

The rebound is particularly visible in rebar, which after “two lost months” is seeing buyers coming back to restock, a trader said.

In April-May, when the Moscow area was impacted the most by COVID-19 and construction activity was stopped or restricted, rebar prices fell Ruble 3,500/mt ($50/mt) to Ruble 25,500/mt ($367) CPT Moscow, without VAT, according to S&P Global Platts’ weekly assessment.

But on June 19, Platts put its rebar assessment at Ruble 26,400/mt, up Ruble 900/mt.

“The demand is gradually returning in the domestic rebar market amid phased withdrawal of the self-isolation regime,” a rebar producer said. He cited recent sale prices at Ruble 33,000/mt CPT Moscow, with VAT, or Ruble 26,400/mt, without VAT.

Two buyers confirmed the transaction prices for June contracts at Ruble 33,000/mt ($475/mt), adding that offers for July went up to Ruble 33,500-34,000/mt ($482-$489/mt), CPT Moscow, with VAT.

Compared to rebar, hot-rolled flat products demand was picking up more slowly, explained by high inventories still held by stockholders and end-users. Therefore, the price rebound in the flats market has been modest so far.

On June 19, Platts’ weekly HRC and HR sheet assessments were at Ruble 31,150/mt and Ruble 31,750/mt, CPT Moscow, without VAT, respectively, both up Ruble 150/mt week on week.

The new asking prices for HRC from one Russian producer were pegged at Ruble 38,000-38,500/mt ($547-$554/mt) CPT Moscow, including 20% VAT, a large volume buyer said. He expected sales to close at Ruble 37,500-38,000/mt.

A Moscow-based trader cited the latest HR sheet prices at Ruble 40,500/mt ($582/mt), including VAT. A distributor noted that prices over Ruble 40,000/mt ($575/mt) were not workable yet as this was the level paid by end-users in the retail market.

He expected purchases from Russian mills to close at Ruble 39,500-39,800/mt ($568-$572/mt) CPT Moscow, including VAT. He estimated there was still potential for prices to climb another Ruble 1,000-1,500/mt ($14-$22/mt).

— Wojtek Laskowski