Day: 2 October 2020

The European Union has announced this week the opening of an anti-dumping investigation into imports of stainless cold rolled coil from India and Indonesia. The investigation was initiated following a complaint lodged by Eurofer, Kallanish notes.

The investigation will examine the period from July 2019 to June 2020.

According to Eurofer data, Indonesia could supply to Europe almost 150,000 tonnes of stainless CRC in 2020. In 2017 the country supplied only 15,000t. India, on the other hand, is expected to see its shipments into Europe reduce somewhat to just above 100,000t this year, having doubled them in 2014-2019 to over 120,000 t/year.

The EU already has anti-dumping duties on Chinese and Taiwanese stainless steel CRC.

The UK’s Department for International Trade has announced transitional trade measures due to Brexit. Accordingly, the country will apply its own quota tariffs against imports of 19 steel products, effective from January 1, 2021. The EU quotas are based on average imports for 2015-17 and the UK is expected to do the same, as SteelOrbis understands. The UK will also apply steel import quotas against the EU as they will not be in the same trade union after Brexit.

In the first quarter of 2019, Turkey exported 27,556 mt of HRC to the UK, while it exported 9,271 mt of the same product in the second quarter of 2019. In the remainder of 2019, Turkey did not export any HRC to the country. In the first half of 2020, Turkey exported 3,275 mt of HRC to the UK. According to the UK’s quota tariffs, Turkey has a quota of 23,602 mt of HRC for the first quarter of 2021 and 23,864 mt of HRC for the second quarter of the given year.

As for the rebar segment, Turkey exported 59,757 mt to the UK in the first quarter of 2019 and 20,266 mt of rebar in the second quarter of 2019. In June this year, Turkey exported 9,973 mt of rebar to the UK. In the remainder of 2019 and 2020, Turkey did not export any rebar to the country. As for the new quota tariff of the UK, Turkey has a quota of 16,297 mt of rebar for the first half of 2021 and 16,478 for the second half of 2021.

Turkey exported 26,126 mt of HDG to the UK in the first quarter of 2019, while it exported 31,439 mt to the UK in the second quarter of 2019. In the third quarter of 2019, Turkey exported 11,737 mt of HDG to the UK, while it exported 17,177 mt of the same product in the fourth quarter of 2019. In the first quarter of the current year, Turkey exported 3,028 mt of HDG to the UK, while it exported 12,805 mt of HDG in the second quarter of the current year.

Market sources expect that Turkey may have some issues when exporting HDG to the UK since the export volumes have occasionally been rather good for Turkish mills and now competition will be quite tough once Asian suppliers are in the market to sell to Europe. In the HRC segment, there are not many worries since the volumes were minor previously. Pipe makers in Turkey are not much concerned either, saying that the remaining volumes are sufficient, though of course having more freedom to sell would have been preferred.

With the new tariffs announced by the UK, the European authorities are expected to make some adjustments to the existing safeguard measures, valid in the EU, once the UK will be no longer a member, SteelOrbis understands.

Technology supplier and steelmaker Danieli expects the steel market to gradually recover in 2021, after a consolidation during the second half of 2020.

The Italian-headquartered company published its financial results for the year ended June 2020, confirming that while its steelmaking arm suffered a drop in revenue, its plant-making business was more resilient.

The plantmaking unit saw a 5% year-on-year increase in revenue in the fiscal year to €2.1 billion ($2.5 billion). Steelmaking turnover fell almost -40% to €660m. As a result, the plantmaking business increased net profitability by 91% y-o-y, while steelmaking marked a net loss of €10m. It is worth noting, though, that the supply of technology is usually impacted by crises with more of a delay compared to steelmaking.

Danieli is confident its technology supply unit will continue to benefit from the need of steelmakers to tackle CO2 emissions and improve the efficiency of their plants.

“The antidumping policies that have now been implemented by all the major steelmaking countries have sparked demand for new plants that also have to ensure low emissions for sustainable production in line with the tendency to reduce CO2 that today is required of each sector of industry and that will lead to many investments in innovative plants as soon as 2020 and in the years to follow,” Danieli says in a report seen by Kallanish.

For its steelmaking unit, the company notes the ABS Group sold around 1 million tonnes of products during the 2019-2020 year, a slight decrease over the year before. The goal for next year is to “…increase these volumes and bring ABS Sisak in Croatia back to full production capacity”, the company concludes.

Turkish pipe producers are reported to have ensured full capacity utilisation until the end of 2020.

Turkish pipemakers have concluded many sales to the EU after receiving inquiries from the bloc for the third quota term that will start in January. Most mills are consequently fully booked until the end of the year.

As a result of higher utilisation, Turkish electric resistance welded (ERW) pipe made from S235 grade hot rolled coil prices increased to $580-590/tonne fob Turkey theoretical weight. Even $600/t fob offers are available from some producers.

A Turkish pipe producer tells Kallanish: “EU buyers have returned much earlier than expected. We are still receiving inquiries that we are unable to respond to. I had to refuse a bid at $580/t from my regular customer in Portugal today.”

Another producer says he is looking for subcontractors to be able to respond to inquiries. “There is no reason to bemoan. Ok, we will have to wait until December to ship the material to the EU but at least we have ensured utilisation till then. I don’t understand why some producers are still unsatisfied. I cannot find a subcontractor; almost all producers are fully booked.”

Domestic demand for welded pipe in Turkey remains strong.

Swiss long products mill Stahl Gerlafingen will invest a two-digit million Swiss franc amount into the modernisation of its rolling mill, Kallanish has been told by the company.

Stahl Gerlafingen, which belongs to Italian group Beltrame, makes wire rod, rebar and merchant bar. The modernisation of the combined rolling mill will allow for endless rolling of wire rod and rebar, which is not possible with the current equipment. Its replacement is expected to cost CHF 5 million ($5.45m), with additional investment required into as-yet-unspecified work.

According to chief financial officer Lukas Stuber, this product group accounts for 80% of the company’s revenues. After modernisation the mill will be more productive and more energy-efficient, he says.

This will be the first step of a modernisation programme that spans over 2021-2023, Stuber says. This will include the construction of a new hall and the demolition of several dilapidated buildings.

Cesare Viganò, head of ArcelorMittal CLN in Italy, believes the European coil market will stabilise in the fourth quarter after the price spike registered since the end of July.

The executive spoke during a webinar organised by Siderweb. He noted that the rapid increase of prices in the Italian and European markets was supported by the recovery of prices and demand in China. This was added to by the pick-up of demand in Europe and the lack of import opportunities for buyers.

The market now seems to be stabilising, but it is expected to hold until the end of the year as most European mills are already accepting orders for deliveries in the beginning of 2021.

“In September we have seen for the first time the activity in Europe back to pre-Covid levels,” Viganò said. “We hope this positive trend will continue into Q4, but at the moment most signals indicate a stabilisation of the market.” Global raw material prices have corrected slightly, he added.

The automotive sector has during recent weeks seen a quick rebound and some supply chain problems due to the lack of availability of material in the market.

According to Kallanish price series, northern European hot rolled coil prices recovered some €80/tonne since the end of July, while Italian prices jumped even more, by €120/t. Cesare Viganò said the recovery was also possible due to the lack of import options for buyers. He noted that European imports of coils during the first eight months of the year were down over -30% year-on-year. Italy nevertheless saw imports drop more than other EU countries, with imports down over -50% y-o-y.

Europe’s largest merchant bar producer Beltrame just closed a deal with special steel producer Ori Martin to sell carbon steel beams produced by Ferrosider, a long steel producer owned by Ori Martin, company executives from both the mills told S&P Global Platts on Oct. 1.

Under terms of the arrangement, effective Jan. 1, 2021, Beltrame will handle the sales of some 200,000 mt/year of Ferrosider beams. Ferrosider has a rolling mill in Ospitaletto (Brescia, North Italy) with a design capacity of 230,000 mt of beams and special steels.

Beltrame will sell the sections while Ori Martin will continue investments to expand production of special quality steel at the mill.

Ori Martin bought Ferrosider in 2018 from the Stefana family. Ori Martin, is one of the leading Italian special steel producers and in 2019 the company closed the year with positive results. Sales revenues rose to Eur583 million, up by 1.5% on year and EBITDA was Eur78.8 million (equal to 13.5% of sales).

The total investments made by the group in 2019 amounted to approximately Eur32 million, including a new reheat furnace in the Ferrosider mill.

During May, ORI Martin acquired 100% of the shares of Sapes Spa, while in October it acquired ORI Martin Deutschland GmbH (100%), ORI Martin France Sàrl (100%), Trafileria Lariana Drawing Steels Spa (70%) and Lariana Annealing Steels Srl (70%).

Beltrame’s 2019 shipments rose 1.6% to 2.06 million mt of finished products with production that increased across all its sites with the exception of the French LME mill whose production fell to 506,767 mt from 510,922 mt. At the main AFV site in Vicenza, Italy, production rose to 796,657 mt from 788,037 mt. In the Swiss mill of Gerlanfingen, production increased to 636,600 mt from 623,714 mt, while the site in Romania (Donalam) saw production of 124,341 mt, up from 108,205 mt.

— Annalisa Villa

The UK will have its own steel import safeguards measures from Jan. 1, 2021, similar to those already put in place by the European Commission, according to a document released by the UK Department for International (DIT) trade on Sept 30. The new import quota rules mirror those of the EC insofar as they will be quarterly and on a country-by-country basis, but according to market sources they are a bit confusing as important issues have not been addressed in the document. The document does not specify for example what the quotas will be and is not clear yet also whether or not quotas will be allocated to products originating from the EU and if the EU be treated as one ‘country’ or as 27 individual countries.

As in the EC measures, the new UK measures stipulate that where the relevant quota is exhausted for a specific country, imports from that country can access the residual tariff-rate quota for the same product category. This provision shall only apply during the last quarter of each year of application of the definitive tariff-rate quota.

The EU based its quotas on average imports for the period from 2015 to 2017, and this is also expected to be the case for the UK quotas: however, this was not specified by the government document neither.

ISTA, the UK trade steel association, said it is seeking clarification on the above issues and has expressed concerns that the volumes could not be enough to supply the UK demand and said that it would have preferred a system of global rather than quarterly quotas.

ISTA also said that some products specifically for the UK will be tight, in particular reinforcing bar, organic coated, galvanised steel, hot rolled plate, hot rolled that are mainly from China and that are currently under dumping duties that are expected to stay in place. But again if the dumping duties will stay in place or not is not clear neither.

As uncertainty can threat imports, ISTA has asked the UK government also to put in place a “shipping clause”, similar to the one already in place in the EU , in which if materials is on its way, should be not be attributed to the tariff quotas, or subject to the additional duty specified. “We reiterate that import transactions can take some five months to fulfil from initial inquiries to final delivery. As a result, some commitments have already been made and it is necessary to continue to sign contracts now – even though UK quota levels are unknown – for deliveries in period one 2021. To assist the steel business and end-users with regard to deliveries after 1st January 2021, we urge the Government to confirm that a ‘shipping clause’ will be applied when the new UK quotas are introduced,” Brian Paterson, ISTA Chairman, stated in a letter send to Simon Walker, Chair-designate Department for lnternational Trade and seen by S&P Global Platts.

— Annalisa Villa