Day: 25 September 2020

ArcelorMittal Italia workers based in Taranto are planning to go on strike Sept. 24 as they want clarity about their future after production was halted across most of the Puglia-based site, union representatives told S&P Global Platts Sept. 22.

Since Sept. 21, the mill has suspended output from most of the cold-end units, while in the hot-end part, the company has reduced already low crude steel output even more, it said. At two of the four blast furnaces — No. 1 and No. 4 — daily production was cut 200 mt to 7,300 mt, its lowest ever.

In the cold-end part, the No. 1 galvanized line and the No. 1 cold rolling mill stopped production on Sept. 21, while at the No. 2 train mill, daily sheet production was cut to 15 from 21.

With these lines off, “we can basically say that the entire cold-end line is temporarily shut down, with the exception of rolling mill No. 1 and melting shop No. 2. According to ArcelorMittal, this is due to low demand while we think it is more of a political issue as demand for coils is picking up,” a union source said.

Union sources also said that since Sept. 14, 600 workers have been furloughed under a coronavirus-related scheme, making the total number of ArcelorMittal Italia employees furloughed 5,600. Around 8,000 workers are employed at the Taranto site.

Italian minister for economic development, Stefano Patuanelli, said Sept. 22 he was ready to meet the unions at their request.

Union representatives said the strike will be confirmed depending on the outcome of the talks, but they are still continuing to plan it.

On Sept. 21, the governor of the Puglia region, Michele Emiliano, was re-elected, a result that could be another reason, according to some industry sources, for the exit of ArcelorMittal from its purchase of Ilva as the relationship between the two was never good.

ArcelorMittal has an option to withdraw from the troubled plant in November. If it does, it could threaten the survival of the Taranto plant.

ArcelorMittal did not immediately respond to a request for comment.

— Annalisa Villa

Despite signs of a slight recovery for Germany’s mechanical and plant building industry, weak demand is likely to keep having a noticeable impact on production.

Incoming orders in the sector fell by -16% year-on-year in January-July, and production was down -14%, according to industry federation VDMA. “We therefore expect a -17% drop in production for the year 2020 as a whole,” Kallanish hears from its chief economist, Ralph Wiechers.

The industry is fighting against the consequences of the global coronavirus pandemic and against protectionism in international trade. Moreover, it is challenged by industrial changes, particularly noticeable in the automotive industry, Wiechers emphasises.

Average capacity utilisation fell well below the long-term average of 86%. Between January and July it dropped to 76.1%, its lowest since 2010, VDMA states. For 2021, VDMA economists assume the global economy will recover, albeit hesitantly and not necessarily without disruptions. They expect production to rebound by 2% next year. A prerequisite for further recovery is that the pandemic does not again paralyse markets and supply chains, VDMA notes.

A clearer definition of the new public-private partnership for troubled steelmaker ArcelorMittal Italia may be announced as early as October, Italian economic development minister Stefano Patuanelli has told unions. This comes as negotiations with ArcelorMittal are progressing, Kallanish learns from union representatives.

Workers at the Taranto site have implemented a series of strikes to protest over the plant’s near inactivity and the condition of the outdated and unreliable equipment. Unions, however, revoked the latest strike planned for 24 September after meeting Patuanelli in Rome on 23 September. Patuanelli also spoke about €3 billion ($3.5 billion) of total investment needed to modernise the plant, which should include European funds, Kallanish hears.

The Italian government has allocated €470m to becoming a shareholder in ArcelorMittal Italia, through its investment body Invitalia. The state is carrying out due diligence to determine the true value of the steelmaker, after which it will decide whether it becomes Ilva’s majority shareholder.

Meanwhile, ArcelorMittal Italia is pursuing upgrade works at the Taranto site and carrying out environmental tests. These will include further soil characterisations on the land using 3D conceptual and hydrogeological models. The aim is to collect further information to update ongoing containment works and to plan the mitigation works in the area, minimising the impact on the operation of the steelworks.

Italian energy company Eni Rewind, Eni’s environmental subsidiary, has been appointment to assist in the design of reclamation works in Taranto.

ArcelorMittal Italia also completed the replacement of converter exhausts at meltshop no.2 during the August summer break.

Crude steel production in the 64 countries reporting to the World Steel Association (worldsteel) inched up 0.6% on-year in August to 156.2 million tonnes, the first growth since March. China, Vietnam and Turkey were again the main actors behind the growth, but production also recovered in more countries, Kallanish notes.

China and Vietnam saw production hikes of 8.4% and 33% respectively to 94.85mt and 2.32mt. Indian, Japanese and South Korean output, however, fell -4.4%, -20.6% and -1.8% respectively to 8.48mt, 6.45mt and 5.8mt.

The EU28 saw output slump -16.6% to 9.32mt, with German output down -13.4% to 2.83mt. Italian and UK production, however, rose 9.7% and 11.2% respectively to 939,000t and 566,000t.

Turkish output continued its recovery, rising 23% in August to 3.24mt.

US production slumped -24.4% to 5.59mt but Brazilian output was up 6.5% to 2.7mt.

CIS production fell -6.2% to 7.93mt, with Russian output estimated to have dropped -4.6% to 5.55mt and Ukrainian production down -5.7% to 1.83mt.

Global steel output in January-August nevertheless still dropped -4.2% on-year to 1.19 billion tonnes.

For antitrust reasons worldsteel no longer produces a monthly global capacity utilisation ratio. Information on capacity can be found on the OECD website, worldsteel says.

ArcelorMittal Bremen has restarted its blast furnace No.3, which was already idled before the outbreak of Covid-19 in October last year. The decision has been taken partly due to a recovery of demand, but also to compensate for the ongoing reline of a blast furnace in Ghent, Belgium, Kallanish learns from a spokesman.

Bremen’s two blast furnaces together have a capacity of 3.6 million tonnes/year of pig iron. BF3 is the smaller one which accounts for about one third of production, or some 3,500 tonnes/day.

Its restart will contribute to an overall increase of pig iron and crude steel production in Germany, which in August was again notably lower than in August 2019. Crude steel output totalled 2.82 million tonnes, -13% down year-on-year, according to steel federation WV Stahl. The dip was more pronounced for oxygen route steel (-16%) than for EAF route steel (-6%).

From January through August, crude steel production sank by -17% on-year to 22.71mt.

In August this year, Germany’s crude steel output decreased by 13.2 percent year on year to 2.83 million metric tons, according to the information provided by the German steel federation Wirtschaftsvereinigung Stahl (WV Stahl). In the January-August period, crude steel production in Germany declined by 16.5 percent year on year to 22.71 million mt. Crude steel production in Germany remains on a downward trend and there are no signs of stabilization of output.

Germany’s pig iron output amounted to 1.82 million mt in August this year, down 15 percent, while decreasing by 19.1 percent to 14.26 million mt in the January-August period, both year on year.

The country’s hot rolled steel output decreased by 13.2 percent to 2.40 million mt in August, while declining by 15.8 percent to 19.86 million mt in the first eight months, both compared to the respective periods of the previous year.

According to the Turkish Steel Producers’ Association (TCUD), the European Steel Association (EUROFER) has requested the registration of hot rolled coil (HRC) imports from Turkey as antidumping measures could be retroactively applied against the imports. 

The preliminary decision of the EU antidumping investigation regarding imports of Turkish HRC will be announced by December 23, while preliminary measures would come into force in mid-January. The retroactive duties may concern the period from mid-October onwards, as SteelOrbis previously reported.

EUROFER stated that, if the increase in hot rolled flat product imports continues without retroactive measures, inventories will increase significantly before the implementation of the temporary measures.

Hot rolled coil imports from Turkey are also subject to a tariff quota which is applied quarterly, while there is an ongoing countervailing duty investigation against the same product from Turkey. In the January-July period, Turkey exported 1.16 million mt of hot rolled coil to the EU.

UK-based steelmaker British Steel has stated that the company is in a good place to make a significant contribution to the UK’s economic recovery from the effects of the Covid-19 pandemic. The company said it can play an important role in major infrastructure projects like HS2 with its high quality rail and construction steel, as it has experience of supplying projects of this scale.    

“In partnership with government, stakeholders, customers and suppliers, we can help revive the economy – locally and nationally,” Ron Deelen, CEO of British Steel, said.  

The company, including its assets in both the UK and the Netherlands, was taken over by China’s Jingye Group in March this year, as SteelOrbis previously reported.

Six months following its takeover by Chinese private-sector steelmaker Jingye Group, British Steel is developing new products to support the UK’s infrastructure drive, CEO Ron Deelen said Sept. 24, without giving further details of the planned product launch.

It is also embracing more flexible ways of working, entering more markets and investing in its assets to modernize plant and improve performance, the CEO said.

The 3 million mt/year crude steel capacity company has maintained stable production throughout the COVID-19 pandemic and is fully operational, in ironmaking, steelmaking and all rolling mill operations, a spokesman said.

“Britain needs to build for the future and we can play an important role in major infrastructure projects like [high-speed rail project] HS2, which needs large quantities of high-quality products like our rail and constructional steel,” Deelen said in a statement. “The benefits of UK manufacturers being at the heart of HS2, and similar ventures, will be felt far and wide. For example, every 1,000 mt of steel produced in this country creates work for 10 people – directly and in the supply chains and communities in which we operate.”

Previously owned by Greybull Capital, British Steel entered compulsory liquidation in May 2019 and was purchased by Jingye in March. It is the UK’s second-largest steelmaker behind Tata Steel, and has primary blast furnace production at Scunthorpe Steelworks and rolling facilities at Skinningrove and Teesside in the UK. It produces construction steel, rail, wire rod, special profiles and semi-finished steel products.

At the time of the takeover, Jingye pledged to invest GBP1.2 billion ($1.53 billion) into British Steel, including improvements to production infrastructure, with the construction of an electric arc furnace in Teesside, creating 800 jobs in the area.

According to S&P Global Platts data, the company produces 96% of the UK rail network’s steel rail, with Network Rail alone taking 100,000 mt/year. Other major customers are JCB, Caterpillar and South Africa’s Robor.

The former British Steel’s assets in France – the Hayange rail mill and special steels producer Ascoval – were recently sold to GFG Alliance’s Liberty Steel Group.

— Diana Kinch

The European Steel Association (Eurofer) has filed a registration request against HRC imports from Turkey that could make retroactive any duties set in the dumping case opened by the European Commission (EC) four months ago, S&P Global Platts learned from Veysel Yayan, general secretary of the Turkish Steel Producers’ Association (TCUD), on Sept. 24.

“Eurofer knows no limit in protectionism,” Yayan commented.

The EC launched an anti-dumping investigation into imports of certain hot-rolled flat products from Turkey in mid-May following a request by Eurofer. The preliminary decision in the investigation is expected to be announced on Dec. 23 to be imposed on Jan. 14, 2021. The measures could be retroactively implemented in mid-October.

Eurofer also filed a complaint at the end of May with the EC requesting a countervailing duty (CVD) investigation against allegedly subsidized hot-rolled coil imports from Turkey, as S&P Global Platts has reported.

Due to the COVID-19 pandemic Turkish mills’ steel exports – particularly HRC – to their traditional export market, Europe, had already declined notably in the first seven months of the year. This decline could accelerate in the coming months due to the EU’s imposition a country-specific quota on HRC imports as of July 1, instead of a global quota. The anti-dumping and countervailing duty investigations could deepen this decline.

According to Platts calculations from the latest Turkish Statistical Instute (TUIK) data, Turkish mills shipped around 1.3 million mt of HRC to the EU region in January-July 2020, amid the pandemic, annualized to 2.2 million mt.

Turkey shipped more than 3 million mt of HRC to the EU region during the 12-month period to July 2019. But, with the new quota system, Turkish mills can only ship 1.37 million mt of HRC to the EU during the July 2020 to July 2021 period, a sharp on-year decline in export volumes.

— Cenk Can