Day: 2 August 2021

Acerinox and Técnicas Reunidas have agreed to jointly develop a plan for the decarbonisation process at the stainless steel producer’s Los Barrios plant in Cádiz, Kallanish notes. 

“The project will identify the decarbonisation technologies that are most suitable for each industrial sub-process, with special attention to electrification from renewable energies, green or blue hydrogen, bioenergies, or carbon capture and storage,” Acerinox explains. The plan aims to anticipate the new regulatory requirements by the EU.

“Based on the analysis, a roadmap will be designed, including medium and long-term objectives, to which the investment schedule to be assumed by Acerinox to achieve its decarbonisation objectives shall be adjusted,” the company comments. The schedule will be based on technological and business maturity criteria for each technology, as well as on the optimisation of Acerinox investment.

The Los Barrios plant has an annual production capacity exceeding 1 million tonnes of steel.

Técnicas Reunidas’ business is mainly focused on engineering projects, natural gas production and processing. It also includes the development of industrial plants for clean fuels and the promotion of advanced low-carbon technologies, such as green hydrogen, CO2 capture and waste recovery. The company has a presence in 25 countries.

Todor Kirkov Bulgaria

NLMK Lipetsk has received from Tenova the first batch of main process equipment for the construction of its new 450,000 tonnes/year capacity HDGL-5 continuous hot-dip galvanizing line.

This project, worth over RUB 12 billion ($164.4 million), will enable the production of thin high-strength steel with increased corrosion resistance. As a result, NLMK will provide the automotive, white goods, and construction sectors with steels for manufacturing lighter, stronger, and more eco-friendly products, the Russian steelmaker says. Process equipment installation is planned for the third quarter.

The contract with Tenova was signed in 2019 (see Kallanish passim).

Galvanized steel at NLMK Lipetsk is currently produced at four lines with a total annual capacity of 1.25 million tonnes.

NLMK said earlier this month Russian demand will stay supported in the third quarter on seasonal demand, boosted also by infrastructure projects. The group’s Q2 consolidated revenue grew 44% on-quarter to $4.14 billion, with sales in NLMK’s home markets rising 1% to 2.8mt.

Adam Smith Germany

Brazil’s Vale anticipates potential setbacks in its production during the rest of 2021 following temporary problems at some of its iron mines. However, company executives say the miner is still on track to improve its performance sequentially in the second half of the year, Kallanish notes.

Vale has revised down its 2021 production forecast from 350 million tonnes to 343mt due to licensing issues at some assets, as well as temporary restrictions on the disposal of mining waste at its Itabira mine.

“During Q2 our production capacity reached 335mt and we expect to operate with an average production of 1 million tonnes per day in the second half of the year,” Vale executive director Eduardo Bartolomeo said during a call with analysts. “So, we remain confident that we will achieve our production target for 2021.”

According to the company’s director of ferrous metals, Marcello Spinelli, if Vale does not add more volumes in H2, it will be producing at the low limit of its guidance.

“Currently, we are operating almost half of the Brucutu capacity, as well as having temporary tailings disposal restrictions due to limited disposal areas in Itabira and licensing issues at the Northern System,” Spinelli commented. “So, we are not saying that we are going to produce 400 million tonnes, we are saying that we have the conditions to increase capacity appropriately and are prioritising quality over volume as a business strategy.”

During Q3, Vale expects to unlock the conveyor belt at Vargem Grande, which should improve iron ore production by almost 6mt. The second crushers’ installation to process jaspilite ores at S11D and the start-up of Conceição’s filtration plant at Itabira is planned for Q4.

Todor Kirkov Bulgaria

US hot-rolled coil prices maintain levels on July 30 as service-center sources continued sharing steady activity levels despite elevated prices.

The daily Platts TSI US HRC index rose by $1.50 to $1,858.50/st on an ex-works Indiana basis.

“Activity is still strong,” a service center source said. “We are not struggling in moving material to end-users with a good margin but delays in shipments from our suppliers keep hurting us.”

The service-center source noted longer than a month in shipment delays from two of his suppliers and cited logistics issues, which made it more difficult to move products from farther mills.

A trader cited transactions from a Midwest mill at $1,850/st for September production. Those were displaced automotive volumes due to a slowdown at some assembly lines, caused by ongoing semiconductor issues.

“I do not see those displaced auto tons a game changer, at least not yet,” another service center source said. With disciplined approach on the supply side, he did not expect any drastic changes in pricing on the back of ongoing steady demand from end-users and upcoming planned outages. With strong demand outlooks through 2022 from his end-user, he was thinking of increasing his contractual supplies in 2022 from domestic mills.

“Spot availability is tight,” a Midwest service center source said. “Customer activity over the last couple weeks has been a little soft. I think it can be attributed to a typical summer lull as well as some of my customers reporting trouble passing on increases.”

The third service-center source put the market was at $1,880-$1,900/st and did not anticipate a major change in prices in August.

— Ali Oktay

Special and stainless steelmaker Aperam expects the current positive environment in its markets to persist during the second half of the year, which should be the best second half in the company’s history, the Luxembourg-based company said in its Q2 results report July 30.

CEO Timoteo Di Maulo said in the company’s earnings statement that the second quarter already had produced a record result “for which Brazil and [he Services & Solutions segment] were major drivers….. Europe also improved significantly as the price environment has now fully normalized on the back of the economic recovery and more effective protection against dumping.”

Di Maulo added, “while restocking-driven demand, stretched global supply chains, and positive effects from higher raw material prices will eventually fade, we expect the positive environment to persist during the second half of the year.”

Steel shipments rose to 481,000 mt in Q2, mainly of stainless and electrical steels, up from 376,000 mt in Q2 2020, the company said. Net profit surged to Eur213 million ($253 million) in Q2, from Eur21 million the same quarter a year ago.

Sales revenue rose to Eur1.27 billion from Eur818 million a year ago on substantial price increases, while adjusted EBITDA jumped to Eur545/mt, from Eur130/mt, it said.

Net debt as of June 30 fell to Eur1 million from Eur56 million at the end of Q1.

In preparation for its next phase of growth and specialization, the company is investing in its Brazil hot rolling mill to drive growth in high-value stainless products, it said.

“Brazil delivered its best quarter ever in Q2 on the back of an excellent demand environment and a positive seasonality,” the company said in its statement.

Aperam has a flat Stainless and Electrical steel capacity of 2.5 million mt/year in Brazil and Europe. It produces stainless and special steels from low-cost biomass (charcoal made from its own certified forests). In addition to its industrial network, spread over six production facilities in Brazil, Belgium, and France, Aperam has an integrated distribution, processing, and services network.

In 2020, Aperam had sales of EUR3.62 billion and steel shipments of 1.68 million mt.

— Diana Kinch

Scrap futures contracts on the London Metal Exchange fell in the week to July 29, while monthly trading volumes surged

S&P Global Platts assessed the July scrap contract down $4.50/mt week on week to $487/mt July 29, while the August contract dropped $9.50/mt to $488.50/mt. The September contract lost $8.50/mt on the week to $487.50/mt, while October fell 25 cents/mt to $494.50/mt.

The contango structure for the July-August portion of the forward curve softened, while September was in a slight backwardation to August. This suggests futures traders hold expectations that physical prices may recover slightly or stabilize over August and September trading, following a sharp drop over July.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) fell $10.50/mt on the week to $469.50/mt CFR Turkey July 29, as Turkish mills continued to lower prices for further August shipment cargoes, amid ample cargo availability and a limited timeframe to conclude remaining August shipment sales.

“I think there are limited mills who are looking for bookings…Others are waiting for a further drop to $450-$460/mt CFR,” a Turkish agent said.

“European collection costs are high, but the Americans killed the market, so waiting for a miracle means wasting time,” a second agent said. “Nobody knows if tomorrow another American sells at $465/mt CFR — can the Baltic sellers take this risk? I don’t think so.”

However, the later-dated September-October portion of the LME scrap forward curve switched to a strong contango on the week, suggesting that futures traders expect physical prices to start gaining strength while moving into the fourth quarter.

Weekly LME scrap futures trading volumes over the week to July 29 totaled 57,850 mt, down from 75,980 mt last week. The July month-to-date levels jumped to 219,600 mt, compared with 159,410 for the whole month of June.

Near-term rebar futures for July also dipped on the week, while the August to October contracts saw sharp gains. This meant the contango structure for the July-August portion of the forward curve also strengthened, while the August-September portion of the curve shifted into a contango from a soft backwardation on the week.

This suggests that futures traders may expect physical rebar prices might gain in the near term.

Platts assessed the July contract down $3.50/mt on the week to $725.50/mt July 29, while August gained $4/mt to $739.50/mt. The September contract rose $11/mt on the week to $744.50/mt, while the October jumped $10/mt to $744.50/mt.

Turkish physical rebar export prices dropped $10/mt on the week to $715/mt FOB July 29, as scrap prices softened and a lack of demand pushed workable levels lower. Sources, however, reported a disconnect between regional mill offers, as Marmara mills cited higher offer levels compared to Izmir or Iskenderun mills.

The daily outright spread between Turkish export rebar and import scrap was assessed at $245.50/mt July 29, up 50 cents/mt on the week.

Rebar futures weekly trading volumes this week on the LME totaled 10,930 mt, sharply up from 4,150 mt last week and their highest level since the week ending July 8, when trading volumes totaled 11,980 mt.

— Rabia Arif, Viral Shah

ArcelorMittal and the Canadian government announced July 30 a planned C$1.756 billion ($1.41 billion) investment in decarbonization technologies at ArcelorMittal’s Dofasco plant in Hamilton, Ontario, which includes the installation of a new electric arc furnace and direct reduced iron facility.

The investment will reduce annual carbon dioxide emissions at the Dofasco mill by roughly 3 million st, or about 60% of emissions, within the next seven years, ArcelorMittal said.

“This means the Hamilton plant will transition away from the blast furnace-basic oxygen furnace steelmaking production route to the Direct Reduced Iron (DRI)-Electric Arc Furnace (EAF) production route, which carries a significantly lower carbon footprint,” the company said.

The planned investment includes a 2 million st/year capacity DRI facility and an EAF facility capable of producing 2.4 million st/year of steel. Modification of the existing EAF facility and continuous casters will also be undertaken to align productivity, quality and energy capabilities between all assets in the new footprint, the company said, with the DRI and EAF expected to be in production before the end of 2028.

Currently the Dofasco facility has three blast furnaces and one EAF. Roughly 4.5 million st of flat-rolled carbon steel shipments come from Dofasco annually, according to the company’s website.

The investment is contingent on support from the governments of Canada and Ontario, the company said.

Canada’s federal government said July 30 it will invest C$400 million in the project, and the company is in discussions with Ontario’s government regarding its support, ArcelorMittal said.

“This is the first significant decarbonization project we have announced outside Europe and again reflects ArcelorMittal’s determination to lead the decarbonization of the steel industry,” ArcelorMittal CEO Aditya Mittal said in a statement.

The project is part of the company’s new global groupwide target of 25% reduction in its global carbon emissions intensity by 2030, which was announced July 29.

— Justine Coyne

The European hot-rolled market continued its summer lull with some slight weakening due to an absence of spot trading activity, sources told S&P Global Platts July 30.

Although domestic European spot activity is quiet, buyers were heard looking toward imports, with one cold-roller reporting offers ex-Turkey at Eur975-980/mt CIF Antwerp, slightly lower than earlier in the week when he bought material.

The problem import buyers are facing is the risk of a 25% duty that will need to be paid once the material is customs cleared and the quota filled and the cold-roller source said they were likely to store the material at the port until the next quota period.

According to EU Customs data July 30, the current quota balance for Turkish HRC stood at 156,433 mt, with 47% of the initial balance remaining. Material waiting to be allocated was at 1,218.7 mt.

An Italian supplier said import offers for large volumes would be offered as low as Eur900/mt CIF Italy.

While Germany remains hampered by damages to rail tracks in the Ruhr area due to flooding, one source said there might be some temporary solution to the rail tracks in the next few weeks.

“It’s just impossible to transport anything, that is the main problem,” said a source.

Thyssenkrupp confirmed to Platts July 29 that the force majeure was still on-going due to transport issues, as is the case with most companies that have been severely hit by the effects of flooding. NLMK La Louviere lifted its force majeure, which was caused by a fire.

The daily Platts assessment for HRC on an EXW Ruhr basis was assessed at Eur1,165/mt, down Eur5/mt on-day July 30, while the EXW Italy assessment was assessed at Eur1,060/mt, down Eur3/mt.

— Laura Varriale

En el siguiente enlace pueden acceder a la edición de Julio de nuestra revista  INFOACERO

A continuación destacamos algunos de sus contenidos:

1.     Opinión – D. Roberto González – Presidente UAHE. 

2.     Evolución del Índice de Precios de Productos Siderúrgicos – UAHE

3.     Información Asociativa: XVII Fórum de la Distribución de Productos Siderúrgicos (Castelldefels, 28 Octubre),  Jornada UAHE (Madrid, 25 Noviembre).

4.     Colaboraciones – Artículo ASCEM.

5.     Formación UAHE: Curso sobre registro retributivo– Septiembre . Formación Calidades del Acero- Octubre

6.     Programa Steel Net Forum Iberia en Lisboa, 30 Septiembre