Day: 29 April 2021

ArcelorMittal’s Italian subsidiary is to restart blast furnace No 4. at the Taranto steelworks in June, a company representative tells Kallanish.

Acciaierie d’Italia, the new joint venture between ArcelorMittal and the state-owned Invitalia, is boosting output amidst concerns over the current short supply of coils. This month ArcelorMittal has received the first €400 million ($483m) of new equity from Invitalia. The €400m investment from Italian authorities has been the object of a dispute between the two companies due to Invitalia’s failure to meet the payment deadline (see Kallanish 15 April).

At the moment the steelmaker formerly known as Ilva is not quoting for hot rolled coils. The representative says that BF No. 4 will add a daily 15,000 tonnes of crude steel output.

In February the company restarted blast furnace No. 2. In June the Taranto steelworks will be again producing with three blast furnaces (BF no. 1, 2, 4). Meltshop no.1 and BF no.4 were idled in March for maintenance works, Kallanish notes.

 ArcelorMittal last year signed a binding agreement with Invitalia to form a 50-50 public-private partnership to operate the Taranto steelworks (see Kallanish passim).

Natalia Capra France

The go-stop-go pattern of plate prices on their way up has brought many northwestern European distributors out of step, and they could be in for dire straits, market observers believe.

Plate prices started their rise with a considerable delay after coil in November and until year-end. The first two months of 2021 saw relative stability before another hefty surge kicked off, which by now has brought commodity grades (S235 as well as S355) to €1,000/tonne ex-works ($1,207/t) and possibly higher.

“The stockholders had waited pretty long. We then had the big hype in late 2020 when they were busy refilling, but then they were just as busy with selling profitably. But they did not expect another price wave, and certainly not the height it would reach,” a manager at a plate mill describes the situation to Kallanish. “Now they are facing elevated prices, very long lead times, their brief profits are being eaten up, and when the market drops at some point, they will be sitting on expensive purchases. This means they must act very cautiously these days.”

A buyer at a big stockholder agrees, noting: “We must be profitable now, to have a cushion when the price falls back down, which could easily mean by €400/t, and that could break the neck of many small enterprises.” Hence, his company has lifted sales in line with mill prices, not only for the sake of profit but also to discourage panic purchases.

Given the supply shortage at mills, which currently don’t take orders or give prices for the fourth quarter, many stockholders have restocking problems, which means a blessing for his company.

“We have a broad range, and we see many new customers come in for grades that they do not get elsewhere at the moment. In normal times, we sell 350-400 tonnes per day; now it is  easily 600 to 700,” he says.

Christian Koehl Germany

Due to rising coke prices over an extended period, some coking companies have achieved substantial profit growth in the first quarter. Prices still remain at high levels.

Shanxi Coking Group made CNY 451 million ($69.6m) in net profit in Q1, up 350% year-on-year, Kallanish notes. “In the short term, the supply of coke remains tight, and the price of coke shows a stable and strong trend, which has a good support for the company’s performance,” it notes.

Meijin Energy in Shanxi predicts that its net profit in Q1 was CNY 550-750m, returning to profits losses in the same period last year due to higher production and high coke prices.

September 2021 coke futures fell back after touching a high on 8 January, but then increased again rapidly since late March. It closed at CNY 2,683/tonne ($414/t) on Wednesday, approaching this year’s high of CNY 2,759/t.

Recently, inventories at coking companies have declined steadily amid strong demand. Some coking companies have reported bing unable to meet customers’ demand. The high operation rate of steel mills is expected to support the short-term prices of coke.

By Kallanish Team

India’s finished steel exports for January to March rose by 26% year on year to about 2.47 million mt, supported by higher exports to Europe, S&P Global Platts’ calculations showed based on data from the country’s Joint Plant Committee.

The increase in first quarter was backed by a surge in exports for March, which jumped more than 2.2 times to 1.29 million mt.

The share of March exports to Belgium, Italy, Spain and Hong Kong showed annual increases while shipments to Nepal, the UAE and Vietnam posted falls, according to the Ministry of Steel.

Italy led the destinations with a 22% share of the March exports, up from 12% the year before, while Belgium had a 16% share versus 4% while Spain rose to 5% from 1%. Hong Kong’s share of the March shipments expanded to 10% from less than 1% in March 2020.

The bulk of the March exports were made up of hot-rolled coil, which amounted to 676,200 mt, more than double against March 2020.

Overall, HRC exports in Q1 were 1.19 million mt, up 18.9% from Q1 2020 due to higher prices and demand in the EU.

Platts Metals Trade Review showed that so far in 2021, India had largely switched its “swing supply” focus to Europe. Northern European HRC prices were around $65/mt higher than Indian domestic HRC prices in early January. As of April 12, they were $300/mt higher. India has already exceeded its EU quota by around 40,000 mt this year but hopes the steel will be allowed in quickly given the coil shortage in Europe.

With the Q1 2021 data summed up, India was a net steel exporter for its fiscal year 2020-21 (April-March) with exports at 10.78 million mt, up 29.1% from the previous fiscal year 2019-20, while imports totaled 4.75 million mt, down 29.8% year on year.

For fiscal 2020-2021, HRC was the most exported steel product at 6.65 million mt, itself up by 38% from the year before.

Maintenance, oxygen plans to affect Q2 output

Domestic prices in India could rise in Q2 as JSW Steel, Tata Steel and the Steel Authority of India Ltd., or SAIL, are expected to conduct planned maintenance programs, thereby lowering production.

Also, due to spikes in COVID-19 cases, local steelmakers were asked by the government to increase their production of liquid medical oxygen to meet a shortfall of the gas at hospitals.

Daily COVID-19 infections still exceed 300,000 cases as the country recorded 323,144 confirmed cases on April 27, a day after it posted 352,991 fresh cases, which broke its own global record for a fifth day running.

The steelmakers have increased their supply of liquid medical oxygen to more than 3,000 mt/day this week from an average of between 1,500 mt/day and 1,700 mt/day last week, the ministry said April 26.

As a result of the request, the Bhilai steel plant operated by SAIL, has been temporarily shut to boost its LMO production. The plant has a production capacity of about 3.15 million mt/year, of which 950,000 mt/year is steel plate.

Likewise, JSW Steel has reduced steel production as “saving lives is more important than producing steel and production can suffer for as long as the country is in need of any resource available with the company,” its chairman and managing director Sajjan Jindal said April 28. “JSW is already supplying maximum possible Liquid Oxygen from its plants and is one the biggest suppliers of medical oxygen in the country today.”

“Total LMO supplies during April 2021 is expected to be over 20,000 tonnes. JSW Steel is committed to augment the supply of liquid oxygen further in these critical times to save lives even by lowering the production of steel at its steel plants. We are leaving no stone unturned to push the supply of liquid oxygen to 1,000 tonnes per day in the interest of our nation,” the company told Platts on April 28.

— Clement Choo

The Ministry of Finance of China announced on 28 April that some steel products will see their export tax rebates canceled from 1 May. Most of these products were enjoying a full rebate of China’s 13% VAT on export. At the same time, another announcement from the Ministry shows that China is taking measures to boost steel imports in order to reduce domestic crude steel production.

According to the public document, export tax rebates for 146 steel products will be cancelled starting next month. In addition to alloy steel powder under HS code 7205.21.00, the HS codes of the steel products for which the tax rebates will be cancelled range from 7209.25.00 to 7307.99.00.

These products mainly include carbon steel cold-rolled sheets, coated non-alloy steel sheets, non-alloy bars and wire rods, coated non-alloy wire rods, hot-rolled stainless steel coil, sheets and plates, cold-rolled stainless steel coil, sheets and plates, stainless steel bars and wire rods, alloy-added hot-rolled coil, plates, alloy-added cold-rolled plates, coated alloy-added steel sheets, hot-rolled non-alloy and alloy-added rebar and wire rod, carbon and stainless steel pipes and sections.

Most of the steel products which have not had their rebate cancelled in the latest announcement, such as carbon steel HRC, have had rebates cancelled previously. Kallanish notes however that the export tax rebates for carbon and alloy steel cold-rolled coils (excluding sheet) and galvanized and galvalume coils have not been cancelled and so remain in place.

Customs data shows that in 2019 China exported 44.19 million tonnes of products to overseas markets under the HS codes which have had their rebates cancelled, down 6.08% year-on-year. This figur, then fell by 15.58% y-o-y to 37.31mt in 2020. In the first quarter of this year, export markets have performed strongly amid the global economic recovery. The export volume was 12.86mt with an increase of 29.78% y-o-y, exceeding the levels in the same period of the past three years.

In addition, another document from the Ministry of Finance removes import duties on pig iron, DRI, scrap, ferrochrome, carbon billet and stainless steel billet from 1 May. The export taxes on ferrosilicon, ferrochrome, high-purity pig iron and other products has meanwhile been raised by about 5%. ”The above adjustments are conducive to reducing import costs, expanding imports of steel resources, supporting domestic reduction in crude steel production, guiding the steel industry to reduce total energy consumption, and promoting the transformation and upgrading of the steel industry and high-quality development”, the Ministry says.

French miner Eramet is still looking for a buyer for its troubled French subsidiary Aubert & Duval’s (A&D). The company has recently turned down an offer for a takeover. “The sale of this asset, which is strategic to the aerospace sector, remains the Group’s preferred option in time,” Eramet states in its Q1 financial report.

Together with high-speed steel producer Erasteel, A&D is part Eramet’s high-performance alloys division. Turnover for the division stood at €155 million ($187) in Q1 2021, a 21% year-on-year fall. A&D registered a 27% y-o-y sales decline due to the crisis in the aerospace sector. Eramet expects global automotive output to increase this year but the aircraft industry is forecast to continue underperforming.

A&D has registered “a slow recovery” in aircraft orders in the first quarter but production in the sector remains well below pre-crisis levels. A&D’s energy and defence turnover grew by 40% y-o-y in the first quarter but the aerospace sector represents over 60% of its sales, Kallanish notes.

Sales are improving for high-speed steels and Erasteel says it is gaining market share. Order books are supported “by the development of new nuances or products adapted to the American market… Stable sales reflect the return of high-speed steel sales volumes to Q1 2020 levels.” Erasteel reported flat y-o-y sales at €41m as the automotive industry continues to recover. Global sales for light-duty vehicles were up 16% in Q1 2021 thanks to the fast Chinese automotive rebound. The transport industry represents over half of Erasteel’s sales.

Eramet’s first quarter 2021 turnover saw an 8% y-o-y growth reaching €838m, Kallanish notes.

Natalia Capra France