Day: 26 October 2020

ArcelorMittal Italia has told unions it will extend temporary layoffs for a further 13 weeks starting from 16 November. The furlough extension has been granted by the government to all Italian companies in response to the Covid-19 crisis, Kallanish learns from union sources.

The new furloughs affect 8,140 employees including production workers, office workers and managers at the company’s main steelworks in Taranto. ArcelorMittal Italia told unions the extension is due to the effect of Covid-19, which continues to have an impact on orders and deliveries.

The Taranto works is still producing at minimum capacity. Commercial and distribution activities are also heavily reduced and a union source says the company will probably end the year with 3 million tonnes of crude steel production.

The company extended layoffs in July, then again in August and again in September (see Kallanish passim). Ordinary layoff schemes have overlapped with the new Covid-19 layoffs.

ArcelorMittal Italia declined to comment.

Meanwhile, as negotiations continue between the company and the government over the future of the former Ilva plant, press reports in Italy claim ArcelorMittal will maintain a majority stake in the mill. The government, which will invest in the new entity through its subsidiary Invitalia, is meanwhile set to take a 40% share.

Erdemir Group’s nine-month-through-September steel output remained roughly in line with the previous year, while sales declined slightly, the company says.

The firm’s output of crude steel across its two principal mills totalled 6.5 million tonnes, flat on-year. The Eregli plant’s crude steel output continued to increase after a series of blast furnace and other equipment repairs last year, gaining 22% on-year at 2.74mt. The Isdemir plant meanwhile reduced production by -11% to 3.75mt.

The group’s crude steel capacity utilisation was up 1 percentage point on-year at 91% in January-September, Kallanish notes.

Output of flat products in the first nine months declined marginally, by -1.5% on-year to 5.42mt, while long products output gained 2.1% at 0.77mt. Iron ore and pellet output also increased, adding 9.7% on-year at 1.54mt.

Nine-month sales of flat products declined -1.4% on-year to 5.4mt, with domestic sales volumes rising 1% to 4.4mt. Long products domestic sales rose 21% to 726,000t. Export sales volumes remained at 18% of total sales, totalling 1.1mt. Exports of flat products totalled 1.04mt.

Erdemir’s consolidated January-September sales revenue increased 4.4% on-year to TRY 21.94 billion ($2.76 billion), while profit halved at TRY 1.55 billion. Profitability slid -2.9pp to 19.7%.

The company increased its capital expenditure in the first nine months of the year by 72.8% on-year to $216 million, it says.

SSAB is holding preliminary talks with Tata Steel over a potential merger with its European business, according to a Bloomberg report citing people familiar with the matter.

The Swedish steelmaker declined to comment when approached by Kallanish, saying: “We do not comment on rumours.” A Tata Steel Europe representative responded: “We do not comment on rumour or speculation.”

The news comes following the collapse last year of the proposed merger between Tata Steel Europe and thyssenkrupp’s steel unit after it was blocked by the EU on competition concerns. This was despite both steelmakers offering significant concessions in order to make the deal happen (see Kallanish passim).

Thereafter, Tata Steel Europe announced a restructuring programme that entails the reduction of up to 3,000 jobs across Europe, in order to ensure continuing operation. Also included is the target to increase sales of high-value added products, and the reduction of procurement costs through better cooperation with other Tata Steel group companies. The situation has been further complicated by the Covid-19 pandemic this year.

Thyssenkrupp Steel Europe, meanwhile, said after the collapsed merger it was determined to shape its own future and regain competitiveness without a partner. The week before last, Liberty Steel confirmed it had made a non-binding indicative offer to acquire the steel unit of thyssenkrupp. In its third-quarter earnings call a few days later, SSAB said it was not engaging in bidding for the steel arm of the German group.

The World Steel Association reported 156.4 million tonnes of global steel output for September, a 2.9% increase compared with the previous year, according to data released Oct. 23.

China produced 92.6 million mt of crude steel during September, a 10.9% increase compared to the same time last year, while India produced 8.5 million mt, down 2.9% from last September.

Japan’s output totaled 6.5 million mt, down almost 20% on year and South Korea’s crude steel production for last month was 5.8 million mt, up 2.1% from September 2019.

Output figures were down across all major European producers, with Germany’s total production at 3 million mt in September, a yearly decrease of 9.7%. Italy produced 1.8 million mt, down 18.7% from the previous year, and France saw a fall of 20.1%, with total steel output at 1 million mt. Spain saw the most drastic decrease, with a total output of 0.9 million mt of crude steel, a year-on-year drop of almost 21%.

Estimated CIS production was at 8.2 million mt in September, down a minimal 0.3% compared with 2019 and Ukraine’s total production stood at 1.7 million mt, down 5.4% from last year.

In the US, September 2020 production figures totaled 5.7 million mt of crude steel, a decrease of 18.5% on year, while in Latin America, Brazil’s output stood at 2.6 million mt of output, up 7.5% from September 2019.

— Amanda Flint

The International Stainless Steel Forum (ISSF) is pleased to be able to share the following industry data following our October 2020 conference.

World stainless steel melting shop production which has been growing consistently over the 6 years prior to 2020. During the current year we have observed a significant fall in melting shop output (>9%) during the first 6 months compared to the equivalent period in 2019. The impact of the COVID 19 pandemic was most significant on our industry production in percentage terms in Europe, USA and Asia (excluding China).

The regional actual and forecast stainless steel consumption changes by product group which shows the current and expected future impact of the current pandemic on regional demand for stainless steel products.

The aggregated global view of the regional data described above.

Source and graphic: ISSF

15.10.2020 by Hans Diederichs