Day: 11 September 2020

MMSteelClub is an executive club for leaders and key decision makers within the international steel and metals industry. The concept behind MMSteelClub is to connect steel and metals industry professionals around the world and provide a platform to exchange ideas through exceptional interactive events; varying from gala dinners, golf tournaments, social gatherings, discussions and conferences. 

In 2020, MMSteelClub is hosting one of our largest events to date!

Steel, Metals and Mining Week 2020 will have more than 4.000 attendees.

Over 5 days, more than 100 presenters will animate about 31 sessions between Steel & the Raw material, Non-Ferrous & Base Metals and Mining & Precious Metals.

Featured Speakers for the UK & Europe session include Fernando Espada, President EUROMETAL and Alessandro Sciamarelli, Director Market Analysis & Economic Studies EUROFER. They’ll present the latest developments in European steel policy.

US automotive sales in August slid over 10% from the same period last year, but buying activity showed signs of recovery on a monthly basis, according to industry consultants.

Industry analyst Cox Automotive said sales reached a seasonally-adjusted annual rate (SAAR) of 15.2 million units in August, rising from an SAAR of 14.6 million units in July, according to a newsletter Sept. 9.

The higher buying activity in August marked the fourth month of continuous month-over-month improvement, Cox added.

Still, August numbers declined about 11% from August 2019.

However, Cox said dealerships did not benefit from a Labor Day boost in sales, with the holiday weekend falling fully in September this year as opposed to last year.

“All eyes now turn to watch September’s sales pace and volume, which will be important indicators of the recovery’s strength,” Cox said.

In a separate report, Cox senior economist Charlie Chesbrough said the selling rate in August demonstrates a base-level demand for new vehicles, but sales are still constrained by a number of factors.

“There are headwinds holding back sales — limited inventories, fewer cash incentives — and those likely suppressed some activity as potential buyers could not find what they wanted,” he said.

Consulting firm JD Power provided similar numbers for the US vehicle market with total vehicle sales in August estimated at an SAAR of 15.1 million units, according to a recent report.

On an SAAR basis, August sales were down from 17.1 million units in August 2019 but up from 14.6 million units in July, according to JD Power data.

Like Cox, JD Power said September will likely benefit from the full Labor Day weekend and its heavy sales promotion activity.

“The unusual gap between the August close and Labor Day weekend means there is the potential for higher-than-average promotional activity and, therefore, stronger sales,” Thomas King, JD Power’s president of data and analytics, said.

“Consumer demand coupled with any inventory improvement could help the industry take another step forward in the recovery.”

— Nick Lazzaro

The modernization enables the company to achieve a significant increase in efficiency, also improving the energy efficiency of the plant and reducing maintenance costs. The average shift output has been increased by five percent.

The modernization works lasted 35 days and were carried out during the 2019-20 winter shutdown in order to minimize disruption of production.

The modernization aims to increase the furnace throughput up to 160 mt of hot rolled coil per hour and to upgrade the combustion system, along with some other equipment.

The upgrade of the combustion system will reduce nitrogen oxide emissions and fuel consumption.

The completion of the project is scheduled for January 2021.

The European hot-rolled steel coils market remained firm Sept. 10, with returning automotive demand and extending lead-times expected to support prices, sources told S&P Global Platts.

The Platts TSI hot-rolled coil index was calculated Sept. 10 at Eur476/mt ($565.34/mt) ex-works Ruhr, unchanged on the day at its highest mark since March 25.

Cold-rolled coil gained Eur1.50/mt from Sept. 9 and was assessed at Eur532.50/mt ex-works Ruhr, a level last seen on April 23.

In Southern Europe, HRC added Eur0.50/mt on the day and was assessed at Eur471.50/mt ex-works South Europe, the highest since July 10 2019.

A Benelux-based trader said sentiment in the market was more positive after the recent price hikes from mills, with mill order books from the automotive industry “a lot better,” despite the fact that car sales were somewhat “contradictory.”

“Car sales in August were still 10-15% below that of the previous year, but the forecast for demand is much better. Mills are happy because their order books are filled until the end of the year for the automotive sector,” the trader said.

The same source however was unsure what the drop in iron ore prices would entail, as this is correlated to crude oil prices.

“Iron ore prices have come down and oil prices decreased by 10% in the last week, so this will have some effect, as when oil decreases, it suggests an economic slowdown,” the same trading source warned.

Platts assessed its IODEX 62% iron ore index at $126.30/dmt CFR North China Sept. 10, down $0.90/dmt on day. Firm demand from Asian steel producers saw the IODEX assessment reach $130.80/dmt on Sept. 3, its highest mark since January 2014.

The trader also said mills were planning to increase capacity, which would mitigate the longer lead times of 10-12 weeks currently present in the market.

“We missed some business because we were a little too high in our pricing, and lead times are so long, so it’s not been easy,” the trader lamented.

According to the source, 20 blast furnaces are scheduled to restart during the middle of September.

An Italy-based service center source said he was now bullish for the market with HRC increasingly likely to reach Eur500/mt EXW Italy in the short term.

“Everything is moving so rapidly, every day offers are withdrawn and then increased the next day by another Eur10 and imports are not a viable option so higher prices have to be accepted by the buyers,” he said.

“As a buyer myself I can see it is becoming difficult to source anything other than domestic material – stocks in the market are low and service centers have to buy every day.” Order intake in September has started well with better-than-expected August and July demand further reducing inventories at Italian service centers.

Continued strength in Asian markets is expected and this will support the recovery in Europe, the source said, adding, ” We could easily reach Eur500/mt for HRC in Italy if China continues to consume.”

— Len Griffin, Amanda Flint

A German steel merger between Thyssenkrupp and Salzgitter has been rejected by Salzgitter’s CEO Heinz Jörg Fuhrmann in an interview, the content of which was confirmed by Salzgitter to S&P Global Platts Sept. 10.

A tie-up between the two German companies has been the preferred option for Thyssenkrupp union members and employees as Thyssenkrupp searches for a partner or buyer for the struggling steel unit.

Fuhrmann however put an end to the discussions in a Reuters interview, saying there would not be any “advantages” in a merger and that even Thyssenkrupp as the biggest German steel producer and Salzgitter as the third biggest German steelmaker combined would not become a “champion” on the global steel market.

Salzgitter has repeatedly stressed the need for consolidation in the European steel market due to excess capacity while steel demand was stagnant, but said it would not be involved in any talks.

An option for future cooperation would however be the production of low CO2 pre material. Fuhrmann highlighted there would not be current plans to cooperate, but Salzgitter would be “open for meaningful approaches”.

Salzgitter and Thyssenkrupp currently own semis producer HKM together with France’s Vallourec.

Thyssenkrupp announced a revival of a possible steel merger in May without disclosing who the potential partners were. Merger talks between Thyssenkrupp and Tata Steel collapsed in 2019 and were seen as unlikely to be restarting as long as it remains uncertain what will happen to Tata’s Port Talbot mill in Wales.

Thyssenkrupp’s major shareholder Cevian endorsed Swedish steelmaker SSAB for a takeover or partnership with Thyssenkrupp earlier in July, saying the company would be “best suited” for the steel unit. Market speculations and media reports have been mounting ever since with sources saying that SSAB would be a likely — but not necessarily popular — candidate for a possible tie-up.

— Laura Varriale