Day: 9 October 2020

Turkish welded pipe producers, which have concluded high volumes of sales to the EU since July, have filled the EU second-term quotas that started on 1 October, in one day. As a result, many European buyers have been obliged to pay the 25% tax on surplus material.

A Turkish pipe producer tells Kallanish: “We have filled the previous term quotas in 15 days. Considering this, I shipped the material to be delivered on 3 October, but it was too late… I barely believed that was true.”

“Most of our regular buyers have remained in a very difficult situation; I don’t think they will prefer Turkey for their future pipe sourcing,” says another producer.

Although Turkish mills have already started selling pipe for the third-term quotas, European buyers have slowed demand this week following their experience with the second-term quotas last weekend.

As a result, Turkish electric resistance welded (ERW) pipe made from S235 grade hot rolled coil prices have declined to $570-580/tonne fob Turkey theoretical weight.

Although there have been some sales to Turkmenistan, Georgia and the Middle East for ongoing projects, demand, in general, has remained low, following the EU’s slowdown this week.

HRC offer prices, meanwhile, stand mostly at $520-530/t ex-works in the Turkish market, down from $535-540/t a week ago. Almost all market participants expect HRC prices to further decline following the decreases seen in scrap prices.

German steel distributor Schwarzwald Eisen has taken over the two rebar operations of Stober, a wholesaler of building materials and sanitary equipment based in Karlsruhe.

Several weeks ago, Schwarzwald Eisen announced the takeover of one of Stober’s bending shops, in Kippenheim, Baden Württemberg state. “And we have just taken the second step,” with the acquisition of Stober’s rebar activities in Karlsruhe, Kallanish is told by Schwarzwald managing director Alexander Hatt. The acquisition included the takeover of Stober’s 50 employees across the rebar operations, he adds.

Schwarzwald Eisen is headquartered in Lahr in the Black Forest. In southwestern Germany it also operates steel distribution houses in Freiburg and Bad Säckingen. It previously acquired Westerwald Hürlimann Stahlhandel with three houses further north in the Rhineland region. This year, it will achieve a revenue of some €100 million ($117m), it says.

European steelmakers’ association Eurofer has called for the European Commission (EC) to go beyond the latest anti-dumping measures confirmed for stainless hot rolled coil from China, Indonesia and Taiwan.

In a note seen by Kallanish, the association welcomes the definitive duties imposed, but stressed the levels of duties are far too low compared with the calculated dumping margin.

“Although the Commission’s investigation clearly established that significant raw material distortions exist in China and Indonesia, the Commission has failed to lift the Lesser Duty Rule, and imposed final anti-dumping duties at the lower level of the injury margins,” says Eurofer director general Axel Eggert. “However, the dumping margins range from 17.7% to 106.5% for Chinese and Indonesian producers, so the effect of massive distortions has been ignored.”

Earlier this week Europe confirmed AD duties of 4.1-19% for stainless HRC imports from China, Indonesia and Taiwan. “Indonesia, China and Taiwan have a structural overcapacity problem. Their dumping has seriously harmed European stainless steel producers and these measures are necessary,” Eggert observes.

It is now important for the EC to be vigilant in regard to possible circumvention of the new measures in place, Eurofer adds.

Further duties could be imposed in relation to the ongoing investigation on stainless cold rolled coil imports from Indonesia and India.

“The recently opened investigation into imports of stainless steel cold rolled flat products originating in Indonesia and India will be another opportunity to enforce trade rules properly and send the right signal to third-country producers and their governments that deliberately ignore WTO rules and continue to build up excess capacity,” Eurofer concludes.

A third tender will be held for the sale of Polish plate mill Huta Czestochowa (HCz) after the winner of the previous tender, Sunningwell Steel Polska, failed to come to an agreement to buy the steelworks.

The Czestochowa district court tells Kallanish it dismissed a request from Sunningwell to amend the rules of the previous tender held in July, but does not specify what this request entailed.

Sunningwell won the previous tender and was readying to incorporate HCz into its steel holding (see Kallanish passim). This was set up in 2019 to operate steel assets acquired in Poland, Romania and potentially other Central and Eastern European countries.

The failure to reach a sale agreement, however, was the fault of Sunningwell, a court spokesman says, obliging authorities to call a fresh tender in which Sunningwell is not permitted to participate, according to Polish law.

The court has ordered the administrator to provide within 14 days new tender conditions for approval by the judge. It has also requested a new proposal for the leasing of insolvent HCz. Sunningwell has been leasing the plate mill since September 2019.

Sunningwell was the only company to make a valid bid in the July tender. Another bid came in from Liberty Steel-owned Corween Investments, which also participated in last year’s sales process for HCz. However, this bid came in after the deadline and did not contain the required deposit, resulting in it being rejected by the court.

Sunningwell did not respond before deadline to requests for comment.

At an industry meeting last month Sunningwell chief executive Marek Frydrych said the firm anticipated a profitable business from HCz as “…there is no plate in the market.” HCz’s order book for the fourth quarter is 170,000 tonnes, he added.

Electric arc furnace-based HCz has a 1.2 million tonnes/year capacity of heavy plate.

Governments across the world need to help accelerate a sustainable transition for the iron and steel sector, the International Energy Agency (IEA) said on Thursday.

The Paris-based agency recommended in its new Iron and Steel Technology Roadmap report the creation of a market for near-zero emissions steel, Kallanish reports.

“Green steel should be promoted by governments not only through regulations, but through public procurement requirements,” said IEA’s energy analyst Araceli Pales.

Steel is vital to modern economies and it’s global demand is expected to grow by more than a third by 2050, from current 1.9 billion tonnes to 2.5 billion tonnes.

The iron and steel sector accounts for 8% of the final energy demand and 7% of the energy sector CO2 emissions worldwide. Around 25-30% of industrial CO2 emissions come from steelmaking, with coal supplying 74% of the sector’s energy input.

To enable countries to reach their climate targets, governments and decision makers “should have 2030 firmly in mind as the critical window to accelerate the transition,” the IEA said.

“A plan must be put in place to deal with existing assets that acknowledges the decline in the CO2 intensity of production required just one investment cycle away,” the report said.

Policy portfolios will be diverse but governments need to support the demonstration of near-zero emission steelmaking technologies; accelerate material efficiency; and increase international cooperation and ensure a level global playing field.

ArcelorMittal Poland said Oct. 8 it will permanently close the blast furnace and steel plant in Krakow this month due to reduced demand caused by the COVID-19 pandemic.

“The COVID-19 pandemic has had unprecedented consequences for the European steel industry. Although demand in recent weeks has revived somewhat – mostly driven by inventory corrections – it is still considerably below pre-Covid levels,” Sanjay Samaddar, CEO of ArcelorMittal Poland said in a statement.

“This means we have to take some very difficult decisions, which will regrettably mean the closure of the blast furnace and steel shop in Krakow,” he added.

ArcelorMittal said high energy costs, rising carbon prices and a lack of emergency trade measures coupled with the European Commission’s recent decision to further increase the quota of tariff-free steel imports from outside the EU at a time of falling demand had also influenced the company’s decision.

“Taking all these factors into consideration, we have taken a decision to concentrate the production of hot metal in our two blast furnaces in Dabrowa Gornicza, to improve our cost competitiveness,” Samaddar said.

The company said the shutdown of the Krakow blast furnace and steel shop will begin this month and will last a few weeks. In 2018, the Krakow plant produced about one third of the company’s 5.2 million mt of crude steel in Poland.

Krakow’s furnace and steel shop were temporarily idled in November last year due to the market downturn. Since then, the majority of the affected employees have been either redeployed to other ArcelorMittal Poland plants or put into temporary unemployment. Samaddar said the company would work with trade unions to reach a compromise for affected workers.

The company’s coke plant in Krakow will continue to operate as well as two rolling mills, the hot dip galvanizing line and the new organic coating line. The company has invested about Eur 110 million in Krakow’s downstream operations over the last five years.

Slabs for the Krakow rolling mills will now be sourced from the Dabrowa Gornicza steel shop, where the company will invest Eur 40 million in debottlenecking projects.

— Adam Easton

Polish heavy plate mill Huta Czestochowa has been ordered by a local court to be put up for sale again via an auction or a tender after the previous takeover deal with investment company Sunningwell Steel Polska fell through over the payment for the mill, Dominik Bogacz, press officer at the local court in Czestochowa, said Oct 8.

“Sunningwell did not pay the money because the deed was not ready. There is no proper inventory of assets, which makes the transaction illegal. Hence, Sunningwell and the trustee have applied to the court to extend the term of the offer,” said Marek Frydrych, president of the board at Sunningwell.

According to Bogacz, the court rejected Sunningwell’s request to push back the payment of the price agreed at Zloty 220 ($58) million. At the same time, the court ordered the mill’s current bankruptcy trustee to call for a new tender or auction within 14 days.

The court also asked the trustee to address the issue of the Huta Czestochowa lease, which was granted to Sunningwell over a year ago and expired on Sept 19.

Bogacz added that Sunningwell would not be considered as a potential buyer in the future sale process as it was found unable to meet its financial obligations previously. Sunningwell’s president noted he was still interested in buying Huta Czestochowa.

According to local press, another company with interest in buying the Polish mill in the past was Corween Investment, part of the Liberty Group. The company was reported to have submitted an offer and made a pledge to pay Zloty 2 million ($530,000) over the initial asking price set at Zloty 220 million to beat Sunningwell’s bid. However, the offer came after the deadline and was not accepted.

— Wojtek Laskowski

The EUROMETAL Regional Meeting of the SSC of the Austria + BENELUX + Germany region took place online on October 8, 2020. The event initially scheduled for April 2020 was postponed for health reasons and was eventually converted into a webinar.

The event was moderated by Thomas Niederhofer Managing Director at Knauf Interfer Stahl Service Center GmbH and member of EUROMETAL Presidency.
After compliance rules and presentation of the latest EUROMETAL SSC Market Monitoring for Flat Steel Products, Mr Andreas Schneider from Stahlmarkt Consult presented short and medium-term prospects of the German steel market.

Securing the loading of flat products was presented by Ludwig Felser, Manager at ArcelorMittal Distribution Solutions with particular attention to sheets or coils fall from the truck and drivers or loaders injured.

The event was concluded by Mr Axel Sturm and Mr Tom Giebeler from Heinrich Georg GmbH about digitization and automation in the Service Centers from machine builder to process optimizer.

All presentations made at this meeting are available to EUROMETAL members in the login area Knowledge Center on eurometal.net.

The working group meeting was attended by 31 participants.