Day: 10 August 2020

China saw its finished steel exports recover slightly on-month in July. Imports however continue to increase, and the country is expected to remain a net steel importer, Kallanish notes.

In July, China exported 4.176 million tonnes of finished steel, up from 3.701mt in June but still down -25% year-on-year, according to official Chinese Customs data. That brought exports over the first seven months of the year to 32.88mt, down -17.6% y-o-y.

With Chinese domestic steel prices high, export markets have been subdued this year. Now that domestic prices are increasing and domestic demand is expected to peak in the coming months, there is likely to be few opportunities to increase exports.

Finished steel imports meanwhile hit 2.606mt in June, up 38.8% month-on-month and around 210% y-o-y. Over January-July, finished steel imports are now 9.948mt, up 49.3% y-o-y and close to the 12.3mt imported over the whole of 2019.

These numbers do not include trade in semi-finished steel and so currently downplay imports. In June China imported 2.488mt of semis and those trade flows have remained strong. China officially became a net steel importer in June for the first time since July 2009. It is now expected to be a net importer for much of the second half of the year.

Outokumpu expects stainless steel deliveries to decrease -10% on-quarter in the third quarter due to seasonally low demand in Europe and the continued Covid-19 pandemic impact. The firm has accelerated its Long Products segment strategic review under new management.

The European stainless steel market remains challenging as a result of continuing import and price pressure, the steelmaker says. The planned maintenance work at the ferrochrome mill in Tornio, Finland is expected to have approximately €15 million ($17.7m) negative impact on the Q3 result.

Outokumpu’s consolidated Q2 deliveries fell -10% on-year and -11% on-quarter to 523,000 tonnes. Sales were down -17% on-year and -12% on-quarter to €1.4 billion ($1.66 billion), while net result was a €37m loss versus a €6m profit in Q2 2019 and €22m profit in Q1 2020, Kallanish notes.

In business area Americas, deliveries were down -20% on-quarter due to continued distributor destocking and the pandemic. Business area Europe’s result was burdened by lower deliveries, continued price pressure and high import penetration. As a response to lower demand, production has been adjusted with temporary shutdowns and shorter working hours in all operating countries.

Europe segment adjusted Ebitda slumped -59% on-year in Q2 to €30m but Americas segment adjusted Ebitda turned to positive €3m from negative €8m a year earlier.

In the Long Products segment, deliveries dropped -38% on-year to 40,000t, sales were down -36% to €119m and adjusted Ebitda fell to negative €4m from positive €6m a year earlier.

In the Ferrochrome segment, meanwhile, production fell -5% on-year to 123,000t, sales dropped -25% to €95m and adjusted Ebitda fell -23% to €24m.

In the first half of 2020 consolidated deliveries fell -8% on-year to 1.11 million tonnes, with sales down -11% to €3.04 billion. However, net loss halved to €15m.

Spain’s UGT Union said Aug. 6 it welcomed an agreement reached between automaker Nissan and striking workers at its Barcelona-based plant that confirms activity at the site until December 2021.

The two sides reached an agreement Aug.5 after a consultation period concluded June 30, that will avoid the immediate closure of the plant, UGT said.

The agreement will end a three-month strike by the workers, who will resume production at the end of August at the three sites concerned.

The Barcelona site has a capacity for 200,000 vehicles per year, but produced only about a quarter of that total in 2019.

During the COVID-19 pandemic, vehicle production fell to near zero across Spain, prompting Nissan to announce May 28 its intention to close its plant as part of a global restructuring plan.

The two sides will continue to seek a long-term solution, which could include a “re-industrialization” of the site, the union said.

— Gianluca Baratti

With the EC’s new quota regulation, Turkey could face a 58% on-year decline in steel exports to the EU region, Adnan Aslan, chairman of Turkish Steel Exporters’ Association (CIB), told local news agency Dunya adding that Turkish mills’ overall steel exports in the first half of 2020 fell 10% on year to 9.7 million mt, due to trade barriers and the pandemic.

“As EU reduced Turkey’s steel quotas, Turkish mills’ steel exports to the EU region could fall as much as 52%, while protection measures in the US, Morocco, Egypt and United Arab Emirates are also limiting exports to these countries,” Aslan said.

Turkish mills’ hot-rolled coil exports probably will be exempted from the new quota regulation, as the EU imposed a country-specific quota on HRC imports on July 1, instead of a global quota. Turkey’s HRC exports to the EU region could fall by as much as 1.2 million/mt year to 1.3 million mt/year.

However, as Chinese support packages raised steel consumption in the Chinese market notably, China’s partial withdrawal from the export markets could create an opportunity for Turkish mills, the CIB chairman observed.

Aslan is expecting a recovery in the Turkish steel sector especially with the support of strong domestic demand. “It is important to establish the required mechanisms to direct the home demand to the domestic market in this regard,” he noted.

— Cenk Can