Day: 18 December 2020

Severstal forecasts that the rise in world steel prices will last for about another three months, says ceo Alexander Shevelev.

 “I believe that the shortage in the steel market will drive prices up for some time to come,” Shevelev says. “However, sooner or later the market should be balanced: the deferred demand will end, the supply will react to the rise in prices. Most likely, this will happen on the horizon of three months.”

Indeed, prices made a leap and are now at almost 10-year highs, Shevelev notes. He explained the growth by several factors, the main of which are good demand in China, high prices for raw materials, low inventories against the background of the fact that there were expectations of new lockdowns. Another important factor, he said, was the unprecedented low bank deposit rates in Russia and in the world.

“Given the devaluation, people have no choice but to invest in purchases – housing, cars, household appliances, which logically leads to an increase in demand and hence prices for steel,” Severstal’s ceo concludes.

When asked about the proposal by Russian pipe producers to introduce much higher export duties on scrap, he said that the situation is difficult, Kallanish notes.

“The steelmakers are experiencing a serious shortage of ferrous scrap, because many companies have not fully formed winter stocks and scrap steel shortages have already triggered a more than 25% increase in scrap prices during the fall, with prices continuing to rise,” Shevelev said. “Any government measures restricting the export of scrap metal could help stabilise the situation.”

The utilisation of Severstal’s pipe division in 2020 was not complete due to a decrease in market demand; at the moment it is reduced by -30%-50%, he observes.

“Taking into account our export plans and the fact that our Izhora Pipe Plant won the tender for the supply of 320,000 tonnes of LDP for Gazprom, we see that we will be able to ensure almost 100% capacity utilization in 2021.”

Acerinox has named Fernando Gutiérrez González as its new ceo for Europe.

The executive will take the role from the beginning of 2021, reporting to the coo of the group, Hans Helmrich.

Gutiérrez González has been part of the Acerinox group since the early 2000s. In 2018 he was named head of strategies and raw materials. He has worked closely for many years with the London Metal Exchange.

The European Commission is closing on provisional anti-dumping duties for HRC imports from Turkey, Kallanish learns from sources in the market.

According to documents circulating in the market, sent to interested parties involved in the investigation process, the provisional duties should be set at 4.8-7.6% depending on the supplier. The lowest level of duties should be imposed on Habas material, while Colakoglu should have the highest duty. Erdemir is expected to face a provisional duty of 5.4%, sources noted.

A final decision on provisional measures is expected to be officially announced in mid-January. At that stage it will also be clear how these will be applied retroactively.

The decision to impose provisional anti-dumping duties on hot rolled coil imports from Turkey may only leave one mill, Habas, being able to supply HRC to the EU, “…like Severstal is the only mill that can supply from Russia,” market sources told Kallanish in the wake of the news circulating in the market on Thursday. 

Habas’ prices are traditionally the lowest out of all Turkish mills, due to a number of quality and terms specifics. It received a lowest provisional duty rate of 4.8%, as compared to 7.6% given to another prominent Turkish exporter Colakoglu. Both mills were selling in the export market in the last quarter, with buyers taking on the “…importer of record” status in case duty is implemented, at a 3-5% rate. Given the increasing prices, and a higher than expected duty, sources calculate at least a $30/tonne discount needed on Colakoglu material at current price levels to be able to compete. And considering prices are rising almost daily, this discount will widen too, they note.

Colakoglu ceo Ugur Dalbeler told Kallanish that in the company’s experience, the EU commission is no different in its approach to the US DOC. “

The US set us a duty in 2017, we worked in the courts for three years and zeroed it,” he says. He adds that the calculation methods appear to have been distorted, and appear to be protecting particular companies by any means. “We have seen how much the EU has contributed to the issue in the last two years. We have expressed our concerns, and we hope the commission’s hesitation in replying will disappear. No company deserves these rates. We will continue to persevere,” he adds.

Indeed, in the EU there is a strong push from buyers to preserve the historical Turkish trade. Turkish imports guarantee competitive quality, delivery times and pricing, one tells Kallanish, emphasising the current paradigm of a shortage of material from domestic suppliers. Turkish counterparts were moderate about the situation, suggesting the two mills will simply replace each other in export and domestic markets, with Habas selling more to Europe and Colakoglu – in the domestic and non-EU markets. 

Offers to the EU are at $740/t fob ($800/t delivered, duty paid) from the mill and $750-760/t fob from traders. It is understood the producer is about to revise its offers upwards again, being one of a few mills that are able to deliver to Europe in April, and considering the leading European producer’s price increase to €700/t ($859/t) on Thursday. Asian supply is available at $800-820/t cfr, but for May delivery, and Russian at $810/t cfr for Northern European distribution hubs for late April/early May loading.

The European Commission is to impose an anti-dumping duty of 4.6%-7.8% on imports of some Turkish steel products, the CEO of major Turkish steelmaker Colakoglu told S&P Global Platts on Dec. 17.

The EC launched an anti-dumping investigation into imports of certain hot-rolled flat products from Turkey in mid-May following a request by European steelmakers group Eurofer.

“The EU Commission latest duty decision is another step to block imports from Turkey,” Colakoglu CEO Ugur Dalbeler, said. “As long as Turkey will not respond to the EU with counter measures, it seems that they will continue their moves in this regard.”

According to the EC’s decision document, seen by Platts, Colakoglu is subject to the highest provisional duty of 7.6%, while Turkey’s largest integrated steel producer, Erdemir Group (Erdemir and Isdemir), has a duty rate of 5.4%.

Habas has the lowest duty at 4.8%, while Borcelik and Agir Haddecilik will face a duty of 5.9%. All other Turkish companies will have a provisional duty of 7.6%.

The EC said in November that imports of hot-rolled flat steel from Turkey would be subject to registration from Nov. 13 as part of its anti-dumping investigation, meaning retroactive duty also can be applied from this date.

The EU is Turkey’s main HRC export market and the duty decision could limit Turkish mills’ exports.

Despite quotas and safeguard investigations, Italy remained Turkey’s main HRC export market over January-October at 785,500 mt, according to Turkish Statistical Institute (TUIK) data. The total was lower than the 867,100 mt in the same period of 2019.

Spain became Turkey’s second-biggest export destination in the first 10 months of 2020 at 308,700 mt, again sharply lower than 516,600 mt a year earlier.

The EC has not formally confirmed its intention to impose the duties.

— Cenk Can

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