Day: 16 July 2020

The latest EUROMETAL figures on sales from European steel service centres and multi-products distributors confirm the difficulties faced by the distribution sector. While May saw a slight recovery compared with April, performance continued to be weak.

For flat steel service centres (SSC), January-May shipments were down -20.8% year-on-year. In May alone the drop was -38.5% y-o-y, after a drop in April of -51.9% y-o-y.

The slowdown in shipments significantly raised stocks at EU SSC, reaching 102 days of sales in May, compared with 70 in May 2019, Kallanish notes.

A slightly better performance was recorded for multi-products distributors, registering a fall in shipments of -13.6% y-o-y during January-May. Rebar shipments were higher than in the same period of last year, confirming the better performance of the construction sector compared with other areas of business.

Multi-products distributors also saw their stocks fall to 88 days of sales in May, compared to the 101 days of sales registered in May 2019.

“We are still experiencing a moment of great uncertainty,” Alessadro Banzato, president of the Italian steelmaker association Federacciai said on July 15 during a meeting of the group in which he was confirmed for another two years at the helm.

“The two key steel industry [markets], cars and construction, are still in extreme difficulty with very worrying numbers, so it is difficult to say today if we will experience a substantial recovery in the coming months, also because the effects of the various measures implemented by the government are not visible yet.”

On July 15 Anfia, Italy’s automotive Industry association, said that from January to June just 584,052 new cars were registered, a 46% decline from the same period of a year ago.

According to Federacciai’s data, in the first five months of the year Italian steel output stood at 8.3 million mt, down 21% on year. Italy, Europe’s second largest steel producer after Germany, did worse compared to the rest of Europe. In the first five months of the year, EU(28) production stood at 58.3 million mt, down 17.3% on the same period of the previous year.

According to market sources, the Italian steel market is in a “stabilization” mode with mills working to balance demand and supply while pushing for higher steel prices to offset costs. After a positive start to 2020, HRC gaining some 6% between January and February to a year to date high of Eur458/mt EXW South Europe on March 2, the COVID-19 crisis and subsequent lockdowns drove European steel prices lower. From the March high, HRC prices fell 14% reaching Eur387.50/mt at the start of July – price levels last seen in August 2016.

Federacciai is part of Confindustria and has about 130 associated companies that manufacture and transform over 95% of Italian steel production. The Italian steel sector has about Eur40 billion in annual sales and employs about 70,000 workers direct and indirectly.

— Annalisa Villa, Len Griffin

Turkish producers have welcomed The US Court of International Trade’s (CIT) July 14 ruling that US President Donald Trump’s decision to impose additional duties on imports of Turkish steel under Section 232 of the Trade Expansion Act of 1962 was in violation of the law, saying this decision could contribute to trade relations between the countries.

“The US court’s latest decision once again approved that additional duties imposed on imports of Turkish steel were against objective law rules, and were politically motivated,” Veysel Yayan, general secretary of Turkish Steel Producers’ Association (TCUD), told S&P Global Platts on July 15.

President Trump raised Turkey’s steel tariff rate from 25% to 50% in August 2018 under Section 232, amid increased political tension between the countries due to the detention of a US religious leader. Turkey’s tariff rate on steel was later dropped back to 25% in May 2019, amid some developments in relations between the countries.

“The duties which were paid unfairly in that ten-month period should be refunded following the US court’s latest decision,” Yayan told Platts, adding that the US should also lift Section 232 tariffs on Turkey, like a few other countries, to reach the goal of $100 billion in trade between the countries, previously set by Turkish President Tayyip Erdogan and US President Donald Trump.

As the court’s decision also removed the concerns of Turkish producers and US importers about another tariff increase in new dealings, the general secretary is expecting a recovery in steel trade between the countries.

Some recovery in Turkish mills’ steel shipments to the US have already been seen this year. Turkish mills’ rebar exports to the US reached 226,750 mt in the first five months of 2020, sharply higher than just 18,400 mt exported in the same period of 2019, Platts observed from the Turkish Statistical Institute (TUIK) data.

Turkish mills’ rebar shipments to the US fell to just 108,300 mt in all of 2019, down from 305,800 mt in 2018, due to the Section 232 tariff, as reported.

The general secretary of TCUD also told Platts on July 15 that he is pretty sure customs duties could be soon impose on steel imports from the EU in response to the EU’s imposition of additional measures against imports of Turkish steel. “The Turkish government stated its intention about it,” he said.

Turkey informed the World Trade Organization on May 25 about possible duties against EU steel, as Platts has reported. But no presidential decree about it has been published yet, despite Turkish steel producers’ demands.

— Cenk Can