Day: 13 July 2020

The International Stainless Steel Forum (ISSF) has released figures for the first three months of 2020 showing that stainless steel melt shop production decreased by 8.0% year–on–year to 11.7 million metric tons.

Source: ISSF

The total throughput of the Port of Antwerp fell by 4.9% in the first half of the year compared to the same period in 2019.  After a strong first quarter, the port experienced a decline in the transhipment of all flows of goods, with the exception of the container sector.  Despite the impact of the coronavirus crisis on global production and logistics chains and a pandemic-driven drop in demand, the port remained 100% operational.

Container traffic status quo

Container traffic increased in the first quarter of the year, but felt the effects of cancelled sailings from April onwards. Nevertheless, for the period January-June 2020, container traffic recorded a slight increase of +0.4% in TEUs compared to the same period last year (with April and May 2019 as absolute record months).  The number of calls made by vessels decreased, but this was compensated by a higher average volume per vessel and by additional calls on top of the normal sailing schedules.  Notable climbers in this special period were the transhipment of pharmaceutical products, e-commerce and health foods.  At the beginning of June, the port also welcomed the world’s newest largest container ship, the HMM Algeciras with a capacity of 23,964 TEU.

Slight recovery in breakbulk sector in June

Since mid-2019, global trade issues continue to adversely affect goods flows in the conventional breakbulk sector. This has culminated in an overall 29% decrease for the period January-June compared to 2019, with inbound and outbound flows being affected to the same extent.  The throughput of iron and steel, the most important freight group within this sector, experienced its best month of 2020 in June but a total decrease of 33.1% for the first six months of this year.

The automotive sector was already struggling in 2019 with the introduction of stricter rules on passenger car emissions in Europe and this trend continued in 2020. From March onwards, the coronavirus crisis only compounded this situation: less exports of new European cars, less supply of new Asian cars and downtime in the second-hand market due to travel restrictions.  As a result, the total RoRo throughput fell by 21.8%.

Bulk cargo declined due to reduced demand for energy

While the transhipment of coal continued to grow in the first quarter, it came to a standstill in the second quarter. This resulted in a 13.1% drop in dry bulk transhipment in January-June 2020 compared to the same period last year.  This decrease is partly attributable to the growing supply of green energy, which reduced the need for coal, partly by reduced demand for coal from the steel sector and partly by a strong second quarter in 2019. Fertilisers, which represent the largest share of dry bulk volumes, grew slightly (+1%) compared to January-June 2019.

Liquid bulk decreased by 7.5% compared to the first half of 2019 because of the coronavirus crisis, which wiped out demand for oil products, combined with price wars.  Thanks to the gradual lifting of the coronavirus measures and the recovery of the oil price, fuel throughput increased in May and June.  Moreover, chemicals decreased by 8.9% compared to the first six months of 2019, mainly due to reduced demand from the automotive sector.

Seagoing vessels

Over the past six months, 6,797 seagoing vessels called at Antwerp, representing a decrease of 5.6% compared to the same period in 2019. The gross tonnage of these vessels fell by 7.9% to 193 million.

Port of Antwerp grants postponement of payment

Following discussions with the Antwerp port community about the consequences of the coronavirus crisis, the Port Authority decided to grant a postponement of payment for the shipping and inland navigation dues and for the domain concessions.

Impact coronavirus and prospects

For the third quarter, while the Port of Antwerp is still expecting blank sailings, it is also seeing the first signs of recovery and an upturn in the European economy.  The Port of Antwerp is making every effort to continue to ensure the efficient functioning of the port.

Source: Port of Antwerp

The European tube and flat stainless steel market is struggling with low prices despite orders from distributors having picked up slightly in recent days, service centres and re-rollers tell Kallanish.

The market for stainless flat and tube products is still feeling the consequences of the global health crisis and weak demand from end-use sectors. With stocks very high in most European countries, destocking and uncertainty are still hampering sales.

Some European flat stainless steelmakers continue to produce at full capacity and are adopting very aggressive commercial strategies. “Unless Aperam and Outokumpu implement some stoppages to cut overcapacity, demand for stainless in Europe will not resume,” a coil buyer believes. Other mills in Europe, however, have reduced output by some -40% in the past weeks. Producers are still facing poor order levels and short delivery times.

Eastern European countries are currently driving demand in Europe, together with Scandinavia. Germany is particularly sluggish. The country is facing massive destocking and poor orders from service centres and distributors, sources indicate.

French activity is slowly picking up, while Italian stainless flats and tubes consumption has fallen by an average of -25% year-on-year in the second quarter. Prices for both tubes and re-rolled flat products have lost €50/tonne on average in June and more falls are expected.

Stainless hot rolled coil in Europe is at €1,650/t ($1,866) delivered on average this month. Cold rolled coil is at €1,780-1,800/t delivered on average, down some €30/t ($33.8/t) month-on-month, sources suggest.

European suppliers of flat products are expected in the short term to be successful in somewhat widening the spread between local finished steel prices and input costs. This comes after they reached a record-low level, Andreas Schneider from Stalhmark Consult explained during a webinar organised by EUROMETAL. 

According to the analyst’s calculations, in June this year spreads for hot rolled coil produced through the blast furnace route in Europe fell to below €200/tonne ($226). Back in 2017/2018 these were stable at above €300/t, before starting a steady descent in the fourth quarter of 2018.

“Assuming raw material prices will not change drastically from the current levels, my assumption is that prices for flat products in Europe cannot go lower,” Schneider said. He added that he forecasts a stabilisation with a small upward movement.

Spreads will rise by some €10-20/t, possibly taking the HRC spread to above €200/t again, he continued.

According to Kallanish price series, HRC transaction prices in northern Europe remain under pressure despite attempts by local mills to raise their offers by as much as €50/t. Prices remain at around €400/t base ex-works, the lowest level registered since Q2 2016.

The Port of Marseille in Fos-sur-Mer saw some positive signs in steel and breakbulk traffic towards the end of June. Exports of steel products rebounded by 2% on June 2019 after the quiet period of European lockdown, Kallanish learns from the port authority.

In the first half of 2020 the port saw overall traffic fall by -15% due to the global pandemic. In 2019 it had a turnover of over €169 million ($190m) and total traffic reached 79 million tonnes. Last year it received 257,721 tonnes of metallurgical products, while 109,154t were shipped from the port.

To stimulate the recovery, the Port of Marseille Fos Supervisory Board has decided to maintain its €57m capital expenditure for this year and support its customers affected by the health crisis. This includes increasing container terminal capacity and implementing the Fos-Graveleau rail link project, which consists of connecting more container terminals to improve train traffic.

French exports of flat and long steel to non-EU countries fell -33.1% on-year in March to 101,000t, after declining in January and February (see Kallanish passim).

The slump in consumption and standstill in production during the pandemic has led to a decrease in bulk steel imports at the French port of Marseille Fos in the first half of 2020, the French port authotity said July 10.

The halt in vehicle sales caused a 23% drop in car import and export flows at the port in H1, leading to a 23% reduction in bulk steel imports compared with the same time last year. The port did not give a volume.

In the first half of 2019, the total throughput of dry bulk metallurgical products at the port was 188,796 mt.

The port reported a slight recovery towards the end of June, with steel products and breakbulk exports bouncing back by 2% and 6% year on year, respectively.

“The Port of Marseille Fos has never stopped operating, which has helped to mitigate the effects of the crisis,” Chairman of the Management Board of the Port of Marseille Fos Herve Martel said. The Port accommodated an average of 18 cargo vessels a day during the lockdown compared to 25 during a normal period.

To attract more business, the port is offering a 50% reduction in port dues for the container sector for four months from September 2020.

The port had a tumultuous first half of the year as port workers staged large scale strikes in January as part of the anti-government movement in France which led to steelmaker ArcelorMittal declaring force majeure at its Fos Sur Mer plant at the time as port yards quickly reached maximum capacity and raw material supply became critical.

— Laura Varriale