Day: 20 April 2021

Seaborne iron ore prices jumped to new highs on Monday as feared production restrictions were not announced. Scrap prices meanwhile have remained steady and markets for both steel and raw materials remain supported by strong demand.

The Kallanish KORE 62% Fe index gained $3.53/t to $178.15/dry metric tonne cfr Qingdao, a new record high. The KORE 65% Fe index leapt $7.07/t higher to $213.66/dmt cfr, and the KORE 58% Fe index increased $4.60/t to $156.07/dmt cfr. 170,000t of PB fines sold at $177.55/t with a laycan in 10-19 May, while 70,000t of Carajas fines, shipped on 12 April, sold at $216.3/t. 80,000t of Newman Lump also sold at a floating price.

On the Dalian Commodity Exchange September iron ore settled up CNY 10.5/t at CNY 1,062/t ($163.21/t), while on the Singapore Exchange May 62% Fe futures settled up $4.09/t at $176.32/t. The same contract for 65% Fe and 58% Fe futures meanwhile settled up $4.09/t at $211.04/t, and up $0.32/t at $154.51/t respectively.

Iron ore prices have been supported by the fact that production restrictions have not spread as feared. Lat week, traders had expected restrictions to be announced in Handan’s Wu’an but these did not materialise. Blast furnace output is in fact expected to increase as mills are completing maintenance periods.

In Tangshan, billet prices dropped CNY 20/t to CNY 4,940/t on Monday, after remaining flat over the weekend. Chinese scrap prices meanwhile have remained steady. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta was assessed unchanged from Friday at CNY 3,455/t.

Tomas Gutierrez UK

After ticking up in the first two months of the year, crude steel output in Italy skyrocketed in March according to data issued by local steelmakers association Federacciai.

Last month crude production increased by a staggering 68.8% year-on-year to 2.3 million tonnes, Kallanish notes. Output also increased significantly in the first quarter by 18.9% to 6.2mt.

According to a source close to the association, this is the result of increased demand for both flats and long products as Italian steel activity rebounds in line with the country’s post-pandemic recovery.

In full-year 2020 Italian crude steel production was 20.4mt, down 11.9% compared to 2019. Last year long product output fell by 9.5% to 11.1mt. Flats production fell by 15.9% to 9.5mt, Federacciai says.

Natalia Capra France

ArcelorMittal Construction Sweden has completed the acquisition of a panel production line, Kallanish learns from the parent group.

The line, based in Kungshamn, produces mineral wool panels for steel buildings, and adds to the existing profile production lines in ArcelorMittal Construction’s Swedish business. It was bought from Llentab, a manufacturer and contractor for steel buildings, and will be ArcelorMittal’s first panel production manufacturing capability in Scandinavia.

“We will continue to invest in the business here in Kungshamn and hope to create more job opportunities in the area,” ArcelorMittal Construction Scandinavia ceo Van Hoa Nguyen says. Production in Kungshamn will be run in close cooperation with Llentab, he adds. “We welcome ArcelorMittal as a ‘neighbour’ here in Kungshamn and look forward to continued cooperation with them,” saysStefan Eklund, ceo of Llentab Group.

ArcelorMittal Construction creates innovative building systems for a broad range of buildings and has a presence in 15 countries and around 2,000 employees.

Christian Koehl Germany

ArcelorMittal has started this week announcing to its European clients the intention to raise offers for all commodity grade long products by €30/tonne ($36.12/t).

The move was triggered by good demand in the market, low stocks across the supply chain and persistent high raw material costs.

It is understood the increases will be applied to all new monthly agreements for commodity grade products. Longer term contracts for higher specifications are also moving up, but at a different pace.

According to Kallanish rebar European indexes, both in Northern Europe and Italy this year’s peak level was reached at the end of January, after a six months rally started in July 2020. Lately prices have recovered somewhat their strenght, but volatility has been less than in Q4 2020.

Emanuele Norsa Italy

The European Commission has confirmed anti-dumping measures on imports of certain welded pipe products from Belarus, China and Russia for a further period of five years.

The subject products are welded tubes and pipes of iron or non-alloy steel of circular cross-section and external diameter up to 168.3mm, Kallanish notes. This excludes line pipes and casing and tubing pipes like those used in oil and gas exploration, and precision pipes with attached fittings used in civil aircrafts for gas conducting.

The EU imposed a definitive anti-dumping duty on imports of certain welded pipe from Belarus, China and Russia on 26 January 2015. It terminated proceedings against Ukraine-origin imports as a result of an investigation. Chinese pipe imports became subject to a 90.6% anti-dumping duty, Belarussian to 38.1% and Russian to 20.5%, except for OMK and TMK with a 10.1% and 16.8% duty respectively.

The review was requested back at the end of 2019 by the EU’s welded steel tubes industry defence committee. The investigation started in January 2020 and now the final verdict has been published in the official gazette.

Emanuele Norsa Italy

Gerdau will expand its specialty steel operations in Brazil during 2021 and 2022 through investments of Real 1 billion ($180 million), betting mainly on the automotive industry, it said April 19.

The allocations will be made in the three units that the steelmaker maintains in the country: Charqueadas, in the southern Rio Grande do Sul state, Mogi das Cruzes and Pindamonhangaba units, both in the southeastern Sao Paulo state.

Mogi das Cruzes will have its meltshop reactivated, after being idled since March 2019. It will operate with annual capacity of 180,000 mt of steel that will be rolled in Pindamonhangaba.

The largest share of investments will go to Pindamonhangaba for a new continuous caster. The new equipment is slated to be operational in August of 2022.

Last year, the steelmaker produced 661,000 mt of specialty steel in Brazil. The estimate for this year is 880,000 mt, which may reach 1 million mt when the plant is at full capacity.

In total, Gerdau’s specialty steel division produced 1.42 million mt in 2020, including its units in the US.

Despite the current low utilization of the 5 million mt/year installed capacity of car manufacturers in Brazil, which is currently at about 40%, Gerdau remains confident about the sector, but is also betting on improvements in the machinery, equipment and wind power segments. Currently, the automotive sector represents 70% of Gerdau’s sales of specialty steels.

— Adriana Carvalho

US raw steel capability utilization increased the week ended April 17, rising to 78% from 77.6% the previous week, the American Iron and Steel Institute reported April 19.

Production increased by 0.5% to 1.77 million st during the week ending April 17, up from 1.761 million st the previous week, according to the data.

Last week’s production was up 42.7% compared to the same week a year earlier, when capability utilization was at 55.4% and production totaled 1.24 million st.

Adjusted year-to-date production through April 17 totaled 26.703 million st, with a capability utilization rate of 77.1%. The total is 0.1% higher than the 26.665 million st produced during the same period last year, when the utilization rate was 73.7%.

Last week’s production totaled 164,000 st in the Northeast, 603,000 st in the Great Lakes region, 183,000 st in the Midwest, 747,000 st in the Southern district and 73,000 st in the Western region.

The tonnage data is estimated, compiled from weekly production data provided by 50% of domestic producers combined with monthly production data for the remainder.

— Ingrid Lexova

Liberty Steel, part of the GFG Alliance industrial group, played down media reports April 19 that missed interest payments on a GBP 7 million ($9.79 million) loan from the Scottish government to its Dalzell steel plate in Motherwell could impact its UK steel business.

“Our arrangements with the Scottish government are confidential. We can confirm that Dalzell has been operationally strong this year and we are up to date with our vendor payments,” a Liberty Steel spokesman said in an emailed statement.

The plant in Motherwell is understood to be operating normally, with no impact on production.

Some European steel prices are at multi-year highs amid a supply-demand mismatch.

Last week the European plate market saw further increases as buyers continued their restocking activities and absorbed offer hikes by suppliers with more increases expected to come, sources told S&P Global Platts April 16.

One Italian supplier said prices were at Eur810-820 EXW Italy for heavy plate grade S235, with current lead times in May to June.

The weekly Platts plate assessment for Northern Europe increased Eur30/mt to Eur855/mt EXW Ruhr April 16, while the Southern European assessment went up Eur25/mt on week to Eur805/mt EXW Italy.

A spokesperson for Scottish Enterprise, the government agency which made the loan to Dalzell, said in an emailed statement that the agency recognizes “the challenging environment for businesses in Scotland right now and also the significant economic benefit Liberty Steel brings in terms of jobs, the supply chain and the future safeguarding of Scotland’s steel industry.

“We and our partners continue to work closely with Liberty Steel to explore avenues of support for the business. We are in discussion with Liberty Steel on repayment of the loan funding. Debt forbearance is not uncommon in the current market.”

The agency did not confirm whether the missed interest repayments were related to the collapse last month of Greensill Capital, GFG Alliance’s main financier.

— Diana Kinch

European hot-rolled coil prices were heard slightly higher April 19 as coil prices continue to inch up further to the level announced by ArcelorMittal last month, with buyers still contending with an acute steel shortage, and no further signs of increased capacity, sources told S&P Global Platts.

Although the market remains firm on the expectation prices will increase further, doubts remain about whether mills can deliver spot volumes to their customers.

“I’m not happy about this, the industry is struggling, and if steel becomes so expensive and above this [price] limit, buyers will not be able to work anymore,” A European mill source said.

The same source said the automotive industry was creating the dire situation on HDG, as they were heard to still be achieving material at lower, previously agreed prices.

“Only the expensive deals are the ones being made on a quarterly basis and spot,” a European mill source said, “they are carrying the weight of the actual situation.”

the same source said that customers that usually booked through service centers were contacting his mill directly to try and place orders, though they were unsuccessful due to the shortage of material.

“Steel mills are still out of the market; if you get something the price is very high, but you still take it,” a steel service center source said. “We are in contact with 12-13 different steel mills and none of them can offer anything.”

In the Italian market, an Italy-based mill source said HRC transactions were not above Eur920-940/mt ex-works Italy, and said if buyers had a need for material, they would have to pay more.

The mill source said buyers were in a “wait and see mode” before taking a position for July-September allocations.

— Amanda Flint

The materials distribution unit of Germany’s thyssenkrupp group has further expanded its sales activities for rare earths, signing an offtake agreement with new Australian company Hastings Technology Metal.

The agreement gives thyssenkrupp Materials Services exclusive marketing rights to up to 70,000 tonnes of rare earth carbonate for a period of 10 years, Kallanish is told.

This includes in particular the highly sought-after magnetic metals neodymium and praseodymium, the company notes.

In the first five years of planned production from the end of 2023, Hastings will supply around 9,000 t of rare earth carbonate per year to tk Materials Trading. In the second half of the contract term, the volume will be around 5,000 t/y.

“This offtake contract with a leading global player is demonstrating the commercial and technical strengths of the Yangibana rare earths project, primarily its high NdPr,” says Hastings ceo Charles Lew.

Christian Koehl Germany