Day: 23 July 2020

The Egyptian government’s latest exemption decision for some producers like pipe makers, re-rollers and service centers from the 10% additional duty imposed on finished steel products on June 24, could support especially Turkish flats exports to that country, which have already risen notably this year, a general manager of a Turkish re-roller and a trading company told Platts July 22.

“As our Egyptian buyer’s costs rose unexpectedly with that duty decision, it could hit our exports to that country, ” the manager said, adding that the latest exemption decision will help them continue their shipments to that country.

“It seems that with the exemption decision only Egyptian traders will be subject to that duty. But, I heard that they also made an appeal to the government against that additional duty,” he said.

Drawing attention to the conflict between Turkey and Egypt regarding Libya the manager said the political relations between the countries are also important for the sustainability of trade activities.

Although Turkish mills’ rebar exports to Egypt remained low, due to a 25% duty, Turkish mills’ flat steel exports to that country increased notably year on year in the first five months of 2020.

According to Turkish Statistical Institute (TUIK) data, Turkish mills exported 228,000 mt of HRC to Egypt in the first five months of the year, sharply higher than 69,400 mt exported in the same period the previous year.

Turkey’s total HRC exports to that country totaled 287,585 mt in full-year 2019. But this export figure is also significantly higher than the 107,000 mt exported in 2018.

Turkish mills’ cold-rolled coil exports totaled 14,400 mt in the first five months of 2020, more than double year on year, while Turkish mills’ exports of coated coil in widths of 600 mm and above to that country totaled 29,600 mt in January-May 2020, higher than the 22,800 mt exported in the same period of 2019, Platts observed from the TUIK data.

— Cenk Can

Japan’s crude steel production amounted to 42.21 million mt over the January to June 2020 period, down 17.4% from a year earlier, data released July 22 by the Japan Iron & Steel Federation showed.

In June alone output fell 36.3% year on year and 5.5% from May to 6.59 million mt.

Hot-rolled steel production in H1 came to 37.15 million mt, down 17.5% year on year. In June, it was 5.05 million mt, 33.9% lower than in June 2019 and 2.7% than in May.

Production from blast furnaces in H1 was down 17.2% year on year at 31.68 million mt and 17.9% lower from electric arc furnaces at 10.53 million mt.

In H1 the proportions of crude steel produced from blast furnaces and electric arc furnaces were little changed at 75.0% and 25.0%, respectively compared with 74.9% and 25.1% in H1 2019.

The Japanese steel industry faces challenges as demand for steel products in the third quarter, is expected to be 17.28 million mt, down 24.3% on the year, the Ministry of Economy, Trade and Industry said July 8.

Demand from construction is expected to remain sluggish, the ministry forecast, together with manufacturing, but steel demand is expected to pick up as Japanese automakers gradually raise their production.

Domestic carmakers such as Toyota Motor and Mazda Motor, have announced steps to increase production from August. Toyota will ease its reduction of vehicle production in August, cutting by only about 3%, as opposed to 10% in July and 40% in June.

“The good news is, we have heard some of the vehicle and agriculture machinery producers planning to revert to normal productions in August,” a Japanese steel and scrap trader said. “This is at least some good news for potential steel demand to return from the slumps during Q2.”

During June, Japan’s manufacturing economy faced further challenges as a purchasing managers’ index survey showed sharp reductions in new orders, output and purchasing. The au Jibun Bank Japan Manufacturing PMI edged up slightly to 40.1 in June, from 38.4 in May. Despite the increase, manufacturing was still in contraction and therefore indicated a further deterioration in the health of the goods-producing sector. The au Jibun Bank Flash Japan Manufacturing PMI for July rose to a seasonally adjusted 42.6.

— Clement Choo, Samuel Chin

NLMK has completed the construction of a new on-site logistics centre and shipped the first batch of products to customers by road from its production site in Lipetsk, the company says. The centre will handle over 1 million tonnes/year of shipments.

Total investment in the project was approximately RUB 3 billion ($42.3 million), Kallanish notes. It covers an area of 30,000 square metres, can accommodate up to 70,000 tonnes of steel products and makes it possible to ship the entire mix of NLMK rolled products to consumers.

The new complex is equipped with an automated warehouse management system which will minimise the time required for steel product shipments, NLMK says.

“The key advantage of the new centre is its multimodality,” says NLMK vice president Ilya Gushin. “Our customers will be able to choose the type of transport that will deliver them NLMK products directly from the plant. This will cut costs and boost mobility at the same time.”

NLMK’s steel output and sales were impacted in the second quarter by declining demand in its traditional sales markets due to the Covid-19 pandemic (see Kallanish passim). Consolidated output of crude steel decreased to 3.9mt, down by -8% on-quarter and -3% on-year. However, second-quarter sales grew by 2% on-year to 4.4mt due to higher slab and pig iron exports, but on-quarter they declined by -3%.