Day: 17 August 2020

As a result of low steel prices and weak demand, distribution group Klöckner & Co recorded a significant year-on-year decrease in operating income in the second quarter.

The firm suffered a net loss of €111 million ($131m), compared with a net profit of €28m in the prior-year period. Revenue dropped by -30.4% to €1.171 billion on shipments that fell -27.6% to 1.07 million tonnes, Kallanish notes.

Klöckner & Co has continued to drive its digital transformation, and raised the share of sales generated via digital channels to 38%, compared with 29% in Q2 2019.

By way of project Surtsey, which was initiated at the start of the pandemic, Klöckner & Co has increased the automation of core processes. This has accelerated its transformation into a platform company and implementation of restructuring measures. The goal of the implemented measures is to achieve an overall improvement in earnings of more than €100m by end-2021 and simultaneously increase the share of sales generated via digital channels to over 50%.

“Our transformation strategy is taking effect,” Klöckner chief executive Gisbert Rühl told journalists during a conference call. “Thanks in particular to our Klöckner Assistant, we have succeeded in further accelerating the growth of our sales via digital channels.”

In Europe, the construction, mechanical engineering and, especially, automotive industries are ailing. In the US, construction, mechanical engineering, energy and automotive are also under pressure, the enterprise concludes.

In light of the global pandemic, Klöckner & Co is anticipating a substantial decline in steel demand in the relevant key European and US markets for 2020.

Salzgitter suffered large losses in the second quarter, with imports compounding the damage done by the coronavirus pandemic, the firm says in a report seen by Kallanish.

In its first-half-year report, the group bemoans that “…excessively generous quotas” for duty-free steel imports into the EU provided no protection whatsoever even before the advent of Covid-19. The share of these imports was even higher in Q2 due to slack demand for steel in the EU, Salzgitter claims. Most affected were steel strip as well as plate, whose imports have contributed to accelerating the erosion of prices.

For plate, this applied to conventional construction steels as well as higher grades. Around 40% of EU plate imports currently originate from Ukraine. Together with volumes from South Korea, North Macedonia and Russia, the four nations account for almost 80% of all non-EU imports.

Salzgitter’s consolidated revenue, including its Strip Steel, Plate/Sections, Mannesmann Tubes and Trading units, fell -32% year-on-year in Q2 to €1.523 billion ($1.8 billion). Total crude steel production fell by -25% to 1.27 million tonnes. Shipments of its Trading unit fell -29% to 747,000 tonnes, with unit revenue down -33% to €526m. The group’s net loss came to €101 million, down from the breakeven it reported in the corresponding 2019 quarter.

Italian rebar and wire rod maker Alfa Acciai plans to modernise its rolling mill in Brescia, Kallanish learns from Danieli, which is set to carry out the upgrade. The project is a response to increased demand for spooled bar-in-coil production, the technology supplier says.

The Brescia plant produces straight bars and spooled-bar-in-coil. At present, 130mm square billet feeds the two rolling lines, one for straight bar and one for spooler coil. The new layout configuration will allow for the simultaneous feeding of the two spooler units, maximising productivity even when producing small products, Danieli adds.

In addition to the new mechanical equipment, the upgrade will involve electrical and automation parts, Kallanish notes. The Brescia plant is one of Italy’s largest electric arc furnace mills. Alfa Acciai also owns the Catania-based Acciaierie di Sicilia, the only steel mill in Sicily; Ferroberica, which pre-shapes and assembles rebar at its sites in Vicenza Catania and Udine; and Brescia-based Tecnofil, a drawing mill for wire rod.

Alfa Acciai employs 1,100 workers for an annual capacity of 2.5 million tonnes.

Salzgitter reported a massive dip in production, sales and orders in the second quarter, especially from its activities in the automotive and energy industries. The fall was less hard for construction-related activities, although the bottom in this sector may yet be reached, the company says.

Compared with Q2 2019, capacity utilisation dropped between -10% and -70%. “The slump in demand, from the automotive industry in particular, created a burden, while the construction sector proved to be stable,” Kallanish hears from the company.

The units that depend heavily on the automotive and energy consumer groups therefore saw order intake virtually halve on-year in Q2. For steel strip it dropped from 1.144 million tonnes to 641,000t, for tube from 344,000t to 178,000t.

The dip was less pronounced in the Plate/Section business unit, where the order intake went down by some -25% to 511,000t. For sections, the construction industry, as the key customer, proved to be robust in the first six months of 2020 on the back of existing projects. However, there is less willingness to invest in new construction projects, which will impact the second half of the year, Salzgitter predicts.

For the tubes business, the firm says the first signs of recovery materialised in June. Markets in the Far East, especially, which were the first to collapse from the Covid-19 pandemic, have recovered somewhat earlier than other regions.

Still, the company is very cautious with making a general performance forecast, citing further risks from currently unforeseeable trends in selling prices, input material prices and capacity developments. It anticipates a negative pre-tax result in the low to mid-triple digit million euro range.

Liberty Steel Group won the competition for French mills Hayange and Ascoval, originally part of British Steel, with the mills set to form the company’s first steel business in France.

Following the decision in July by the Tribunal de Grande Instance de Strasbourg to award Hayange to Liberty Steel, the French government gave its final approval for the deal on Aug. 14. Liberty Steel Group is part of Sanjeev Gupta’s GFG Alliance.

The assets will expand Liberty Steel Group’s rail business, which is currently comprised of a rail mill in Whyalla, South Australia. The acquisition will create an integrated GREENSTEEL rail business in France, the company said in a statement on Aug. 14.

Liberty’s GREENSTEEL model seeks to transform steel making through increased use of steel scrap recycling in Electric Arc Furnaces, or EAFs, application of low carbon and renewable energy sources to power industrial processes and use of hydrogen instead of coking coal as a reducing agent for iron ore through Direct Reduced Iron plants to remove CO2 emissions from steel making. The GREENSTEEL strategy is key to GFG Alliance’s aim to become carbon neutral by 2030.

“The acquisition will secure the future of the nationally strategic plants and their 700-strong workforce”, it said.

The Hayange plant, located in Moselle, France, manufactures over 300,000 mt/year of steel rails that it supplies to major infrastructure clients including France’s national rail operator SNCF and RATP, the operator of Paris’ metro system.

While the French rail market will remain its priority, with help from across the Liberty Steel network, Hayange may be able to grow rail sales across Europe and other markets.

The deal also rescues Ascoval’s plant in Saint-Saulve in northern France that was placed into an ad hoc receivership process last year. It uses EAF technology and is capable of producing 600,000 mt/year of steel blooms, billets and other forged products. Ascoval will supply Hayange with semis, together creating an integrated French GREENSTEEL rail business.

“We will revive both businesses …. connect them to bigger opportunities in the market, host downstream developments, and provide additional demand for Ascoval’s steel,” Sanjeev Gupta, executive chairman of GFG Alliance and Liberty Steel Group said on the acquisition.

“We intend to develop Ascoval as a GREENSTEEL hub and to drive Hayange into new markets through strong engagement with European rail operators seeking to make their networks carbon neutral.”

To enact its plan of building a rail and rail services business with international reach, and based on the GREENSTEEL model, Liberty had committed to providing an initial Eur65 million for its new assets.

— Ekaterina Bouckley

German steel stockholder Kloeckner is further driving its path to digitalization and wants to grow by taking over independent stockholders and digitalizing them, CEO Gisbert Ruehl told S&P Global Platts, Aug. 14.

During a press call on the company’s second-quarter results, Ruehl said online retailer Amazon would be a role model for core process automation and that Kloeckner buys from mills and sells to buyers through its own digital channels.

Asked by Platts which competitors would be suitable for a takeover and the timeline of such an undertaking, Ruehl said independent stockholders and steel service centers would be a good start and that there were and had been preliminary talks going on “here and there” when opportunities arose.

“But we are not ruling anything out,” Ruehl said. There have been reports in the past stating that Kloeckner might be eyeing German steelmaker Thyssenkrupp’s distribution arm Materials Services, but Ruehl has repeatedly highlighted that the unit would be too big to be taken over by Kloeckner alone. He added M&A would be a topic for next year under the leadership of incoming ex-Thyssenkrupp CEO Guido Kerkhoff who will take up Ruehl’s role on September 1.

Although Kloeckner was able to drive steel sales through its digital platform further, shipment volumes went down 27.6% year on year to 1.1 million mt in Q2 due to the impact of the coronavirus and related lockdown measures.

For the second half of 2020, Kloeckner expects real steel demand to drop 20% in its biggest customer regions, the US and Europe. Kloeckner sees an increasingly negative outlook for the energy industry in the US, and the automotive and shipbuilding sectors in Europe. The only positive – albeit marginal — outlook is expected for the shipbuilding industry in the US.

The restructuring program that started in March will reduce the overall workforce of Kloeckner by over 1,200 employees, of which 50% will be cut due to digitalization. The company will further close 19 sites as part of network optimization initiatives, most of these are in France.

— Laura Varriale

Die Kaltwalzwerke und die gesamte Stahl und Metall verarbeitende Industrie bekennen sich zu den Klimazielen des Pariser Abkommens. Die Erreichung der ambitionierten Vision eines klimaneutralen Kontinents gelingt nur mit einer starken, in Zukunft emissionsarmen europäischen Stahlindustrie und robusten industriellen Wertschöpfungsnetzwerken, die in Europa Wohlstand und Arbeitsplätze sichern und die Klimaziele durch Innovationen erreichen.

Die Stahlindustrie ist für den Standort Europa unverzichtbar und im Rahmen der Standortpolitik nachhaltig zu erhalten und zu pflegen. Die nachgelagerten Verarbeitungsstufen – so die Stahl und Metall verarbeitende Industrie – und weitere Akteure in der Lieferkette sind in den letzten Jahrzehnten aber nach der Zahl der Arbeitsplätze und der volkswirtschaftlichen Bedeutung gewichtiger geworden und sind im Transformationsprozess ebenso wirkungsvoll zu unterstützen.

Klimaschutz ist eine Aufgabe aller Staaten. Durch ein weltweit abgestimmtes, hohes Ambitionsniveau beim Klimaschutz können global vergleichbare Wettbewerbsbedingungen für die Industrie hergestellt werden. Bisher ist nicht absehbar, dass ein solches Level-Playing-Field, auch nicht auf der Ebene der G20-Staaten, mittelfristig erreicht werden kann. Daher hat die Präsidentin der EU-Kommission im Zusammen­hang mit der Präsentation ihres Green Deal für Europa am 11. Dezember 2019 angekündigt, „für ausgewählte Sektoren ein CO₂-Grenzausgleichssystem vor[zu]schlagen, um das Risiko der Verlager­ung von CO₂-Emissionen zu mindern“. Das System soll sicherstellen, dass in den Importpreisen die CO₂-Kosten besser wider­gespiegelt werden.

Nach unserer Einschätzung könnten umfassende Grenzausgleichsmaßnahmen unter bestimmten Voraussetzungen geeignet sein, Wettbewerbsnachteile, die den EU-Unternehmen durch hohe Klimaschutzstandards entstehen, auszugleichen. Das Risiko einer Abwanderung energieintensiver Branchen oder Produktion in Regionen mit niedrigeren Klimaschutzstandards (Carbon-Leakage) ist unbedingt zu verhindern. Dabei ist aber sicherzustellen, dass der für die exportorientierte europäische Industrie überlebenswichtige freie und regelbasierte Welthandel nicht gestört wird. Grenzausgleichsmaßnahmen müssen deshalb den WTO-Regeln entsprechen und Retorsionsmaßnahmen wichtiger Handelspartner müssen ausgeschlossen werden.

Grenzausgleichsmaßnahmen müssen die gesamte Wertschöpfungskette einbeziehen

Grenzausgleichsmaßnahmen müssen die gesamten Wertschöpfungsketten und Warenströme in den Blick nehmen und einbeziehen. Es ist nicht ausreichend und würde zu Verwerfungen führen, wenn lediglich die Roh­stoffe am Anfang der Wertschöpfungsketten vor dem internationalen Wettbewerb geschützt würden. Wir unterstützen daher nachdrücklich den Vorschlag Frankreichs, der eine Grenzabgabe auf alle Waren vorsieht, die emissionsintensive Materialien enthalten und auch eine Entlastung für den Export dieser Waren beinhaltet. 

Wettbewerbsfähigkeit der Stahl und Metall verarbeitenden Industrien in Europa erhalten

Bei einem Materialkostenanteil von ca. 60% ist die Kaltwalzindustrie sowohl auf wettbewerbsfähige Vormaterialpreise als auch auf wettbewerbsfähige europäische Vormateriallieferanten zwingend angewiesen. Eine Beschränkung des Grenzsausgleichsmechanismus allein auf den Import von Rohstoffen wie Stahl oder Aluminium würde sich durch die politische Verteuerung der Importe – und damit einhergehend auch durch die Verteuerung von in Europa erzeugten Rohstoffen – negativ auf die Wettbewerbsfähigkeit der Verarbeitungsstufen in Europa auswirken und zu einem Investitions-, und Job-Leakage führen.      

Unternehmen in Drittländern würden zudem angereizt werden, den Stahl im eigenen Land zu verarbeiten und anschließend die fertigen oder halbfertigen Produkte, auf die kein Grenzausgleich angewendet wird und die regelmäßig mit höheren CO₂-Emissionen belastet sind, in die EU zu liefern. Europäische Hersteller hätten dadurch nur eingeschränkt Zugang zu Stahlimporten aus Drittländern und kämen für die eigenen, innerhalb der EU hergestellten Produkte, unter steigenden Import- und Wettbewerbsdruck. Um die Rohmaterialen ohne CO₂-Kosten zu beziehen, könnten diese Unternehmen zukünftig gezwungen sein, ihre Produktion und die damit verbundene Wertschöpfung sowie Arbeitsplätze aus der EU hinaus zu verlagern.

Die Kunden der mittelständischen Kaltwalzwerke könnten nicht zuletzt angereizt werden, ihre Produktion in Drittländer zu verlagern, um die Kostennachteile in den Vorleistungen zu vermeiden. Viele europäische Kunden der Stahl und Metall verarbeitenden Industrie, wie z.B. der Automobilbau und der Maschinenbau, produzieren bereits in Drittländern und könnten diese Standorte erweitern.

Petitum

Die Kaltwalzindustrie fordert für den Fall der Einführung eines Grenzausgleichsmechanismus einen umfassenden Wettbewerbsschutz, der alle Verarbeitungsstufen emissionsintensiver Materialien einschließt. Nur so kann das Risiko der Carbon-Leakage-Verlagerung auf die nachgelagerten Verarbeitungsstufen verhindert und ein Schutz von Arbeitsplätzen und Unternehmen in den Wertschöpfungsketten der Stahl- und Metallverarbeitung gewährleistet werden. Ein Schutz nur für ausgewählte Sektoren würde deutlich zu kurz greifen.

Der Beitrag stammt von Martin Kunkel, Geschäftsführer Fachvereinigung Kaltwalzwerke e.V. www.fv-kaltwalzwerke.de

Der Gastkommentar spiegelt die Meinung des Autors wider, nicht notwendigerweise die der Redaktion von marketSTEEL.

Foto: Fachvereinigung Kaltwalzwerke e. V., Martin Kunkel

Autor: von Dagmar Dieterle