Day: 24 June 2021

Germany’s crude steel production in May rose 8.9% on the month to 3.66 million mt, German steel federation WV Stahl said June 22. Output in May was 42.7% higher from the year-ago month.

Crude steel output in Germany has surged due to higher demand and a backlog in orders, with production in May close to the monthly high in March, according to data from the Berlin-based steel producers group.

“Crude steel production in Germany is still pointing upwards,” WV Stahl said in a statement. The group represents steelmakers including ThyssenKrupp Steel Europe, ArcelorMittal, Salzgitter, SHS Group and HKM.

WV Stahl said from January to May 2021, crude steel production was up around 15% on the year to 17.2 million mt, while May’s annual gain was due to the effect of the coronavirus pandemic in the year-earlier period.

Blast furnace-based BOF steel production rose 11.2% on the month to 2.54 million mt in May, while pig iron production saw an 11.8% increase to 2.34 million mt.

Steel production by electric-arc furnace producers increased 4% from April to 1.12 million mt in May. Hot-rolled steel production was up 4.2% to 3.09 million mt in May, WV Stahl said.

— Hector Forster

Long steel products producer Riva Thy-Marcinelle in Belgium has suspended production following a fire at its Charleroi mill, market sources told S&P Global Platts June 23.

Riva Group — owner of the plant — declined to comment on the shutdown when contacted by Platts. the Riva Thy-Marcinelle mill has a design capacity of around 800,000 mt a year and produces wire rod, reinforcing bar and welded steel mesh, according to the company website.

The industry source said the incident impacted the the plant’s electric arc furnaces transformer and may require at least two weeks to resolve.

The European rebar and wire rod market is already tight, with prices impacted by higher demand. Northwest European domestic rebar prices have gained since April 16, when the Platts index stood at Eur620/mt ex-works. Platts assessed TSI Northwest Europe Rebar at Eur810/mt ex-works June 18, inching closer to the index’s highest level since July 23, 2008, when it sat at Eur815/mt ex-works.

“When the problem is a transformer it is unlikely that the mill can restart to produce before two to three weeks. It is very difficult to find materials and mills are very confident, safeguards make it impossible to import and scrap prices are high. Production is limited so if we want the products we just have to accept their prices,” another source with knowledge of the matter in Belgium told Platts.

“We were just informed that Riva had a fire, but we don’t know the full extent of its consequences,” said another Benelux-based distributor of steel.

As the mill is one of the major rebar producers in the European market, they expect rebar prices to react accordingly.

— Annalisa Villa, Rabia Arif

Flat steel stocks at German stockholders grew in May for the first time since August 2020 from historic low, according to data from German steel stockholder association BDS.

Average flat steel stocks in May rose 6.7% month on month to 1.1 million mt, still at comparatively low levels amid tightness in the market, making it difficult to stock up. Market participants told S&P Global Platts there has been a little bit more spot availability from volumes not taken by the automotive industry and stockholders saw the opportunity to buy more to build up stock.

Compared with May last year, stock levels were down 14.4%.

Average sales of flat steel in May fell 10.5% month on month to 488,920 mt, but rose 36% year on year, showing the recovery compared to the same time last year when the market was hit by demand slump during the first wave of the pandemic.

Contrary to flat steel, stock levels of long steel in May fell 1.3% month on month and 2.1% year on year to 809,053 mt. Sources said for some long products such as medium sections supply was tight.

Sales of long steel increased slightly by 0.5% month on month to 292,381 mt in May, increasing 15.2% year on year.

According to Platts monthly German steel sentiment survey published earlier this month, market participants expected inventory levels to remain low as mills get through months-long order backlogs, but they showed they were hopeful of a small boost in available capacity over the summer period.

The sentiment survey revealed participants still expected very low inventories at an index of 32 — 50 denotes stability — though this was higher than May’s index of 28.

Prices for long and flat steel in Northwestern Europe saw continued increases over recent months, though price rises have not been as rapid as before. The daily Platts assessment for hot-rolled coil EXW Ruhr stood at Eur1180/mt June 22, an all-time high, while the weekly assessment for rebar stood at Eur810/mt EXW Northwest Europe June 18, the highest price since June 2008 at Eur815/mt.

— Laura Varriale

Acciaierie d’Italia, the largest Italian flat steel producer, will be able to keep open its hot end, the steelmaker confirmed June 23.

The Italian State Council overruled on June 23 a decision by the Lecce regional administrative court, thus allowing the continuation of crude steel production at the Taranto plant. The decision put an end to months of uncertainty for the major player, in what is the second largest European steel market.

As reported on Feb. 13, the Lecce regional administrative court said that Acciaierie d’Italia (at that time ArcelorMittal Italia) had to shut all hot-end operations within 60 days at its Taranto plant to curb emissions. ArcelorMittal, then the main shareholder, appealed against this decision to the Italian State Council.

“The hope is that now with this decision it is possible to establish a ‘legal’ and ‘political’ starting point from which to restart the industrial activity of the site, without any further situations of uncertainty that have characterized the operation and management of the most important industrial site of our country,” Alessandro Banzato, president of Italian steel federation Federacciai told Platts June 23.

“We welcome the decision of the Court, Italy is a major transformer market so we need a strong domestic player in particular in a period when it is not so easy to find materials,” Paolo Sangoi, the new president of ASSOFERMET Acciai, the Italian service center association, told Platts. “This is a very important decision because it puts an end to uncertainties on the future of the former Ilva and it will mark a new beginning for the company that can now put in place a serious green industrial plan.”

Acciaierie d’Italia released a statement June 23 in which the company said “that it is ready to present its proposed plan for the ecological transition of the Taranto plant with the aim to produce green steel.”

The company did not elaborate on its future green plan, but according to union sources, a series of investments are expected to make Taranto one of the main green steelmakers in Europe, including a larger than usual EAF, capable of producing around 2 million mt/year. Acciaierie d’Italia declined to comment further when questioned by Platts about its green plans but a spokesman underlined that the “most advanced green technologies” will be put to use.

Acciaierie d’Italia used to be the largest steel producer in Europe. At its peak it used to produce 10 million mt/y of crude steel with five blast furnaces, but it was also considered one of the main steelmaking polluters in Europe. Italian magistrates said in 2012 that said it had to be cleaned up or shut down, starting one of the longest court cases in the industry’s history. Two brothers of the Riva family, once the steelmaker’s owner, were in May sentenced to 22 and 20 years in jail, respectively.

Acciaierie d’Italia is currently working with only it’s No. 1 and No. 2 blast furnaces. No. 4 has been temporarily shut for maintenance and should restart by July. it was supposed to restart in mid-June but due to a battery issue the restart had to be postponed. The company is targeting 5 million mt of crude production by year’s end.

Each blast furnace has a design capacity of 1.8 million-1.9 million mt/y of crude steel, but they are not operating at capacity. Blast furnace No. 5, the largest in Europe with a production capacity of around 3.5 million mt/year, was idled in 2015. Blast furnace No. 3 has a capacity of about 2 million mt/y of crude steel but was idled in 1994 and is to be dismantled.

The Italian market consumes around 12 million-13 million mt of coils annually, market sources told Platts. Last year, according to Federacciai, the country produced about 20 million mt of crude steel.

The Italian market is reported stable with prices that have started to decrease slightly, after having recently reached their highest-ever.

Since the beginning of the week, hot-rolled coil prices have fallen by Eur10 to Eur1,130/mt south EU ex-works, according to the Platts index.

“Buyers are now in waiting mood, but this news about Ilva is such good news because although stocks are higher than before it’s still not easy to find materials,” a source from a large Italian service center said. “Prices went down a bit in the wake of the downturn of the Chinese and Vietnamese prices downturn. Italy imported few material from Vietnam and this is a bit of domino effect that we can see now in the market.”

— Annalisa Villa

European domestic steel sections prices gained for another week through June 23, as sources cited fresh deals amid limited supply and transportation issues.

S&P Global Platts’ European medium sections price (category 1, S235 JR) was assessed at Eur1,012.50/mt delivered June 23, up Eur32.50/mt week on week, reaching its highest level in 24 years.

One Benelux-based distributor source cited a deal for 1,000 mt at Eur1,025/mt delivered as most mills continued to hold back offers. “We could buy a small quantity, as the mill was offering limited tonnage and the rest of the mills are still out,” he told Platts.

“Demand is still very strong. Prices are moving up almost on a daily basis,” he said, highlighting transportation issues in the domestic market: “All of Europe is booming like crazy so logistics is not good. Trucks are not available. Normally the availability was same or next day, but now it is taking around three days to one week and even that at completely different price levels. Transportation prices have increased 40%-45% from earlier levels.”

Another distributor source in the Benelux region reiterated the logistics constraint: “There really is a lack of transport. It’s difficult to get trains, trucks, or barges. Material is not coming in as it should. We expect this logistics issue to continue until the end of September.”

The source also expects steel long products prices to remain strong in the near term as mills have continued to report strong orderbooks. However, he expects some price correction in September as the market usually experiences low demand during the fourth quarter. The source cited a tradable value for category 1 medium sections at Eur980/mt delivered.

One European mill source cited mill offers at Eur1,000/mt delivered for category 1, adding that deals were also booked at Eur1,000/mt delivered, though for low quantities. “The orderbooks for all mills are extremely strong. July production is fully booked for us and the German mills,” he said, adding that it is thus perfectly normal to see a slight slowdown in demand, but “nothing to be concerned about.”

— Rabia Arif

Fimi Group has bagged an order with Russia’s NLMK, the Italian equipment maker tells Kallanish.

Fimi will install two cut-to-length (CTL) lines for high-strength steel at the NLMK plant in Lipetsk, capable of processing material up to 25mm thick.

The agreement provides for the supply of a slitting line of 1,850mm x 2.0mm and a levelling and CTL line of 1,850mm x 3.0mm.

The CTL line for high-strength steel will be the first ever line to be installed in Russia capable of processing material up to 25mm thick, a Fimi representative says. Installation is scheduled for the first quarter of 2022, the source adds.

Fimi Group is partnering with US-based Janus Automation with the aim of gaining market share in the North American market and is also pursuing its strategy to reach markets such as Germany and Switzerland, as well as the CIS region (see Kallanish passim).

Natalia Capra France

Anti-dumping measures on coil imports into Europe could see further changes in the coming months, as additional investigations are expected.

Market sources tell of rumours circulating of an imminent EU investigation into Turkish and Russian hot-dip galvanized coil. The investigation has not yet been announced, but market participants hear it is ready for launch.

According to official data, second-quarter EU safeguard quotas for category 4a metallic coated sheet – not used in the automotive sector – have been 83% exhausted. 4b quotas – specifically for the automotive sector – have been less used, except for the UK, China and South Korea, which have almost exhausted their respective quotas.

Russia and Turkey do not have specific country quotas allocated for either of the sub-groups. Nevertheless, both have seen their HDG sales to Europe jump since 2016, according to Eurofer data. Turkey could this year supply over 1.2 million tonnes of HDG to the EU; in 2016 it was slightly more than 80,000t. Russia should close the year with sales of some 450,000t, up from less than 40,000t in 2016.

A trader confirms to Kallanish that everyone is expecting an investigation into Turkish and Russian HDG to be announced soon. He adds that Russian steelmakers are also trying to convince the European Commission to review the existing AD duty on Russian cold rolled coil, but the Commission is unlikely to accept their request.

Emanuele Norsa Italy

Ukraine’s Metinvest is exploring the possibility, together with Danieli, to build a new hot rolled coil plant in Italy, Kallanish notes.

“The project involves the construction of a new production facility in Italy, where Ukrainian slabs will be rolled into hot-rolled flat products,” Metinvest general director Yuri Ryzhenkov said at a press conference in Kiev on the company’s 15th anniversary on Wednesday.

“We already have two factories in Italy, where flat-rolled products are produced from Ukrainian slabs … Metivest is seriously considering building a new hot coil mill and we are negotiating with the potential owners of the site, and with Italian officials,” he added. “However, we did not make a final decision on this project and it is now at the pre-feasibility stage, but the construction of a plant is planned.”

The steelmaker’s strategy involves producing semi-finished product in Ukraine and then rolling it into high-quality finished products in target markets, said Ryzhenkov. “Italy is one of this key target markets for us and one of the main importing markets in the EU,” he concluded. Metinvest plans to make an official statement about its final decision for this project in the future.

The new plant should be built in the industrial area of Trieste, in the town of Muggia. The Friuli Venezia Giulia region officially approved last month a letter of interest received from the town of Muggia and the local economic development association for the construction of the new steelworks.

Danieli president Gianpietro Benedetti told Italian press that project is estimated to have a value of between €600-700 million ($716-835m) for a capacity of 2.5 million tonnes/year, and provide over 400 new jobs.

Earlier this month, Metinvest announced the beginning of construction of a new cold-rolled, galvanised and colour-coated coil production facility at its Ilyich Steelworks in Mariupol (see Kallanish passim).

The plant’s capacity will be 1.6m t/y. Total investment will exceed $1 billion. The company intends to complete the project by 2025. The group signed a contract with Danieli to supply the equipment.

Metinvest decreased consolidated crude steel production in the first quarter by 2% on-year to 2.13mt. Hot metal output however rose by 3% to 2.15mt.

Natalia Capra France , Svetoslav Abrossimov Bulgaria