Day: 28 July 2020

International building materials group, Kingspan, is acquiring all the sandwich panels and steel for construction units controlled by Romania’s Teraplast across Eastern Europe, Kallanish learns from a note.

The sale includes TeraSteel Romania, TerraSteel Serbia, Wetterbest, Cortina and TeraSteel Slovakia. Kingspan is expected to paysome €85 million ($97m) for the units once the deal receives all the necessary approvals.

The companies involved in the sale are leaders in their markets for the sale of sandwich panels as well as metallic roof tiles.

French construction sector activity has improved month-on-month in July after slowing heavily due to the pandemic crisis, according to a report from l’Institut National de la Statistique et des Études Économiques (Insee) monitored by Kallanish.

This month, many more construction businesses than in June have anticipated an increase in their future activity for the next three months. They are also less negative than in June regarding their activity over the past three months, mostly during lockdown. In July, the employment prospects for the next three months have improved again, after a low point in April-May, the report says.

Fewer business managers than in June have considered that their order books are less filled than normal. The corresponding balance of opinion is on the rise, moving closer to its long-term average. Given their present staff size, business managers consider that their order books provide 8 months of work, a little more the last month and significantly more than the long-term average of 5.7 months.

In July, more business managers than in April have reported an improvement in their cash-flow position. At the same time, fewer companies have reported a lengthening of payment periods from their clients, Kallanish notes. Otherwise, for the third consecutive month, more construction companies than in June have announced that they will increase their prices over the next three months, the report concludes.

thyssenkrupp group is no longer categorically excluding a total sale of its steelmaking activities, weekend reports claim.

So far, the ceo of the troubled German conglomerate, Martina Merz, had said she was seeking partnerships, but not a spin-off. This has changed, and she is now pondering an overall sale, too, Der Spiegel writes, citing insiders. The goup’s headquarters would not comment on the reports when contacted by Kallanish. It refers to the strategy paper issued in May, which stated that “we remain open for all options.“

In the months that followed, both Sweden’s SSAB as well as China’s Baowu were rumoured as interested parties. According to the recent reports, SSAB would be the favourite buyer of investor group Cevian, thyssenkrupp’s second largest stakeholder. Allegedly, the group’s main stakeholder, the Krupp Foundation, is coming closer to Cevian’s positions, Spiegel claims.

Union leader Jürgen Kerner of IG Metall, who sits on thyssenkrupp’s supervisory board, in other reports was quoted as speaking against a full-on sale. He brought up the possibility of a merger with Salzgitter AG. However, Salzgitter’s ceo Heinz Jürgen Fuhrmann, in the past has not been forthcoming to that idea, and kept emphasising Salzgitter’s independence.

Italian long steel producers have registered an increase in demand after an easing of the coronavirus-related lockdown, with market sources saying apparent demand is close to the same level as in June and July 2019.

“Demand is better than we expected, but we need to say that March and April are months lost forever, so yes, demand is OK, but overall, the first seven months of the year on average were lower [than last year]; and it is important to say is that margins are lower compared to July 2019”, an executive director from one of the main Italian long mils said.

Market sources pointed out that long producers more exposed to the automotive sector are suffering more than those, whose core business is long steel for the construction industry.

Sources say mills with automotive end users as their core customer base are reported to have a slightly longer summer maintenance on average than in August last year, with at least three weeks of stoppages. By comparison, mills that produce steel for the construction sector are likely to have stoppages of around two weeks, while some larger mills are only expected to stop for one week.

Feralpi, one of the main steel Italian steel long producers, is planning a temporary stoppage of just a week in August at its mill in Brescia, Northern Italy, having closed large volume orders for next month, Chairman Giuseppe Pasini confirmed to S&P Global Platts. Brescia has been one of the Italian regions hardest hit by the coronavirus outbreak, along with Bergamo and Milan.

A number of Italian long steel producers have secured large-volume orders from customers outside the EU, including to Canada, and some to North Africa, making their stoppages shorter.

Italian mills are expected to push for higher finished steel prices, after the summer maintenance stoppages to recover their margins. International scrap prices have also moved up, with early expectations of an increase for August monthly scrap settlements in Southern Europe, according to mill and recycler sources.

Platts assessed Southern Europe domestic shredded scrap at Eur240-Eur245/mt delivered for July, down from Eur245-Eur250/mt delivered in June. Platts assessed steel rebar FOB Southern Europe at Eur397.50/mt on July 24, unchanged on the week.

— Annalisa Villa, Viral Shah

European imports of hot-rolled coil rose 38% on the month to 527,483 mt in May, according to the latest data published by the European Steel Association, or Eurofer.

The shipments fell by 6% compared to March 2019, Eurofer data showed.

Imports originating from Russia surged ahead in May, rising by 106,358 mt month on month, or 84%, to 232,419 mt, resulting in Russia recapturing the top position in terms of volume supplied to the European Union.

Compared to May one year previous, Russian HRC volumes saw a three-fold increase.

Turkey, shipped 103,861 mt in May, an decrease of 27,145 mt on the month relegating Turkey into second position in terms of volume supplied.

Compared to May 2019, Turkish volumes are now 59% lower than the same month one year previous when 252,503 mt was shipped to the bloc.

Over the six-month period from December 2019, Turkish HRC volumes have averaged 139,967 mt per month while Russian volumes have averaged 147,732 mt over the same period.

South Korea, which occupied sixth position in April, more than doubled volumes shipped in May, increasing 30,301 mt month on month to 43,810 mt, elevating South Korea into third position.

India, which occupied fifth position in April, saw a substantial increase in volumes in May, up 19,044 mt month on month to 34,124 mt, putting India into fourth position.

— Len Griffin

China became a net importer of steel for the first time in 11 years in June, despite record daily crude steel production during the month.

This indicates the extent of China’s stimulus-fueled economic recovery, which has supported rising domestic steel prices, while other markets are still recovering from the impact of the coronavirus pandemic.

China imported 2.48 million mt of semi-finished steel products in June, comprising mainly billet and slab, according to state-owned media citing China Customs data released on July 25. Added to finished steel imports, it took China’s total imports in June to 4.358 million mt, surpassing June’s finished steel exports of 3.701 million mt. This made China a net steel importer for the first time since the first half of 2009.

Market sources said China’s imports of semi-finished steel will remain strong in July and August, while steel exports will remain low. This means China’s role as a net steel importer may continue for a while longer.

China produced 574 million mt of crude steel in 2009, and exported 24.6 million mt that year, China Customs data showed.

In June, China’s daily crude steel output hit an all-time high of 3.053 million mt/day, annualized at 1.114 billion mt, according to National Bureau of Statistics data. Mill capacity utilization is estimated at around 91% in June.

S&P Global Platts forecasts that China’s crude steel production will rise by 2% year on year in 2020.

In 2015, China exported a record 110 million mt of finished steel, putting intense pressure on global steel prices. Exports have trended down since 2016, and China looks likely to export less steel this year than last year’s 65 million mt.

China’s finished steel inventories at steel mills and in spot markets across 20 cities monitored by CISA, were about 10% higher on year by the end of June, indicating plentiful supply of steel.

Yet, the surge of imports was within market expectations as China was the first country to emerge from the COVID-19 lockdowns, therefore, its economic recovery and steel demand had temporarily outpaced overseas markets, soliciting inflows of steel.

More importantly, China’s monetary loosening and credit easing in the first half of 2020 have boosted the infrastructure and property construction sectors. Steel traders have embarked on some speculative buying in anticipation of a further liquidity boost that would drive up property and infrastructure demand in the second half of the year.

These two sectors account for more than 55% of China’s total steel consumption. Traders with plenty of cash flows have been more than willing to purchase from domestic and overseas steelmakers, even at the cost of holding on to climbing steel inventories. They have been waiting for the steel market to price in additional demand from infrastructure and property.

However, China’s strong steel imports may gradually ease in Q4, not only because steel demand in overseas markets is likely to recover, but also because China’s government has begun to address rising property market prices.

Property is not just a major steel consumer, but is also a crucial tool for credit creation in China. The country’s determination to rein in property prices may lead to slower credit easing, especially in Q4, denting domestic demand and also speculative buying from traders, some market sources said.

On July 24, China’s central government held a seminar with local governments from 10 cities, calling for measures to prevent capital from flowing into property illegally. These cities have witnessed the most noticeable property price rises over H1 2020.

— Analyst Jing Zhang, Analyst Yuelin Dai, Paul Bartholomew

Russian mining and steel company Severstal has obtained a certificate from GlobeCert AB, a Swedish company established for global certification of mainly reinforcing steel.

The new certification means Severstal, which exports about 10% of its rebar, will be able to expand its foreign sales volume and geography, especially within Scandinavia.

“The GlobeCert certification allows us to reach out to new consumers in the region able to provide profitability margin comparable to that we get in Russia,” said a Severstal spokeswoman.

The certificate confirms the compliance of rebar made by Severstal-owned Cherepovets Iron and Steel Works (CherMK) with NS 3576-3:2012, SS-EN 10080:2006 and SS 212540:2014 standards.

To provide the necessary mechanical properties to meet these standards, Severstal carried out several upgrades to rolling mill 250 at CherMK, which makes 10 mm-25 mm diameter rebar.

The certificate was awarded for rebar made in B500B, B500NC, K500V-T, K500S-T steel grades. It allows Severstal to sell the product in Sweden and Norway, as well as other Western European markets working under the same standards.

To date, Severstal has already been exporting rebar to Finland, Latvia and Germany, having previously obtained the respective required certification.

In the first half of 2020, the company sold a combined 38,000 mt to the three countries, up 2% year on year. The volume comprised 10% of its total rebar sales (373,000 mt) in the period.

“With exports usually less cost effective than sales domestically, where prices are higher and transportation expenses lower, we only target the closest and high margin markets,” the Severstal spokeswoman said. “Logistically and price wise, Northern Europe seems to be the most attractive of all export destinations.”

— Ekaterina Bouckley