Day: 24 February 2021

The European Commission says it has decided not to impose preliminary anti-subsidy duties on Turkish-origin hot rolled coil imports, Kallanish learns from an official statement.

The Commission launched the anti-subsidy probe into Turkish HRC last June (see Kallanish passim). The investigation will now continue with the aim of establishing whether to impose definitive measures by the beginning of the third quarter.

Last month the Commission imposed provisional anti-dumping duties of 4.8-7.6% on Turkish HRC imports, in a separate investigation. The decision to skip preliminary anti-subsidy duties, therefore, is set to be welcomed as a relief for EU importers and Turkish exporters, who are hoping to avoid further restrictions to their trade.

In 2020 Europe imported slightly more than 1.7 million tonnes of Turkish HRC, the lowest level since 2016. In 2018 and 2019 imports surpassed 2.7m t/year, according to Eurofer data.

After two difficult years, production in the German machine tool industry is expected to recover in 2021, with revenue to rebound by 6% year-on-year to €12.6 billion ($15.3 billion), Kallanish learns from federation VDW.

The automotive industry, in particular, the largest customer for machine tools, is benefiting from the upswing in China, VDW notes. Electronics, food processing, logistics and parts of the medical technology sector did good business during the crisis anyway. In Europe, too, investments are expected to rise again by 10% after a hard slump, chairman Heinz-Jürgen Prokop states.
 
In 2020, orders fell 30% due to the coronavirus crisis, following a decline of the same magnitude a year earlier. All other key figures also slipped deep into the red in 2020: production was down 31%, exports down 29% and domestic sales down 33%.

In 2019, capacity utilisation was still more than 88%, but fell to below 72% in 2020, comparable to the level of the financial crisis in 2009. The hoped-for upward movement for the current year is thus starting from a low level, Prokop cautions.

VDW notes that business against Asian competitors could become more difficult in the future. “Member companies are reporting great price and time pressure from Chinese clients,” Prokop says. In addition, intra-Asian trade is to become more permeable with the recently concluded RCEP agreement. This will intensify competition with Japan and South Korea in the Chinese market.

As the Chinese government is striving for greater independence from technology imports, many VDW members have established subsidiaries in China at an early stage.

French stainless steel producer Aperam says the coming months will remain challenging for the sector but it expects better results this year compared to 2020, Kallanish learns from the company’s 2020 financial report.

Last year sales decreased by 14.5% versus 2019 to €3,624 million ($4,404m), mainly due to lower shipments and lower prices. Steel shipments in 2020 also decreased by 6.1% to 1.6 million tonnes.

Ebitda stood at €343m in 2020, compared to €357m in 2019. This is due to lower demand that also resulted in a very competitive pricing environment in Europe, and a negative inventory valuation, Aperam says.

However, thanks also to its “Leadership Journey” cost reduction programme, performance greatly improved in the fourth quarter. The combined benefits of a strong mix in Brazil, tight cost control and some economic improvement in Europe enabled the company to achieve “the best fourth quarter result since the 2017 peak despite still challenging market conditions”, the report continues.

The company’s Q4 sales increased to €916m versus €841m in Q3. Volumes benefitted from seasonal factors and the economic recovery in Europe while Brazil was seasonally weaker. Steel shipments remained stable at 431,000t in Q4 compared to Q3 as volumes in Europe picked up. The improvement was based on a better mix in Brazil, higher capacity utilisation in Europe paired with slightly higher prices, inventory valuation gains and cost improvement.

H2 Green Steel and EIT InnoEnergy will develop a “giga-scale” green hydrogen-fueled steel production facility in northern Sweden, with sales targeting large European automotive manufacturers, the companies said Feb 23.

Production will begin in 2024 and by 2030, with annual production capacity of 5 million mt of CO2-free flat steel products, the companies said.

The plant will produce steel though the direct-reduced iron method, an H2GS spokeswoman told S&P Global Platts.

The site will be located in Sweden’s Boden-Lulea region, which offers ready access to cheap renewable energy, high-quality iron ore, a port and expertise in metallurgy and steel production, the companies said in separate statements.

Green hydrogen refers to hydrogen derived from renewable energy sources.

The H2GS Initiative is the first flagship project of the European Green Hydrogen Acceleration Center, spearheaded by EIT InnoEnergy with the support of Breakthrough Energy. EGHAC aims to developing an annual Eur100 billion green hydrogen economy by 2025 that could create half a million direct and indirect jobs, EIT InnoEnergy said.

“The H2 Green Steel initiative has the scale, ambition, innovative business model and implementation team to become a flagship of Europe’s position at the forefront of the transformation of energy-intensive industries,” EIT InnoEnergy CEO Diego Pavia said.

Carl-Erik Lagercrantz, H2GS and Northvolt’s chairman, said the plan is aimed at accelerating the transformation of the European steel industry.

“Electrification was the first step in reducing carbon dioxide emissions from the transportation industry,” Lagercrantz said. “The next step is to build vehicles from high-quality fossil-free steel.”

Henrik Henriksson, currently CEO of Swedish commercial vehicle-maker Scania, will lead the company. By investing in and partnering with H2 Green Steel, Scania is advancing towards emissions-free products across the whole value chain, that company said.

“A Scania truck weighs about six tons and five of those are steel, which today unfortunately is produced with a substantial carbon footprint,” said Anders Williamsson, that company’s executive vice president and head of purchasing.

H2GS is in the process of closing its series A equity financing of Eur50 million from investors including EIT InnoEnergy, Vargas, Scania, SMS group, BILSTEIN GROUP, Cristina Stenbeck, Daniel Ek, Altor Fund V, and IMAS Foundation, H2GS said.

The total financing for the first phase of the project amounts to approximately Eur2.5 billion, which will be raised through a combination of equity and green project financing. Morgan Stanley, Societe Generale and KfW IPEX-Bank, are acting as financial advisors to H2GS. Sweco is advising in the engineering and permit process, H2GS said.

An important source of inspiration for the initiative is the groundbreaking HYBRIT project and its founders SSAB, LKAB, and Vattenfall, H2GS said.

The global steel industry accounts for 7%-8% of the planet’s CO2 emissions.

— Annalisa Villa