Day: 17 August 2021

NLMK has extended the suspension of production at BOF shop No.2 at its flagship Russian Lipetsk works until 21-23 August to enable additional works on the oxygen distribution unit, the company says in a statement sent to Kallanish.

The BOF shop No.2 was halted after the pipework supplying oxygen to the shop was damaged in an incident on 9 August. The repair works were supposed to take 48 hours, with around 46,570 tonnes crude steel output loss based on its nameplate capacity of 8.5 million tonnes/year in 2020.

The BOF No.2 oxygen supply was eventually reinstated after five days, but the need for further infrastructure enhancements was identified, postponing the full relaunch. The firm is yet to provide full output loss volume.

The newly reconstructed BOF shop No.2 is projected to produce 10m t/year once the equipment and processes are fully established. It has been producing at the initial capacity of around 8.5m t/y thus far this year. Enabled by reconstruction, dust emissions at BOFshop No.2, which produces around 60% of Liptesk’s crude steel, are reduced by 2.5 times.

Katya Ourakova UK

EU finished steel imports surged 44% on-year in the second quarter to 2.5 million tonnes, reflecting improved demand across the EU and the low base effect, says European steelmakers’ association Eurofer. Intake from Russia and Turkey rose 38% and 7% respectively, while supply from Ukraine soared 106%.

Flat and long product intake rose 46% and 34% respectively in Q2. Hot rolled wide strip was the most-imported product at 939,000t, followed by hot-dip galvanized coil at 506,000t. Long products represented 21% of imports.

EU exports to third countries slumped 30% to only 494,000t, with flats and longs declining 33% and 24% respectively. Exports to number-two market the US fell only 3%, but those to number-one market Turkey dropped 40% and to number-three market Switzerland by 19%. Exports to China fell 37%.

The EU’s total steel product trade deficit (finished plus semis) amounted to 1.3 million tonnes/month over Q2, mostly due to the “exceptional” rise in imports in May and June, compared to 912,000 t/m in Q1, Eurofer observes in its latest quarterly report sent to Kallanish. For finished products, the Q2 trade deficit was 1.7mt versus 367,000t in Q1.

The biggest trade deficits were with Russia (364,000t), Ukraine (243,000t) and Turkey (232,000t). The trade position with Turkey had improved from Q1 2019 to Q4 2020, reaching an all-time low of 21,000t. However, the trade deficit with Turkey has started to increase again since Q1 2021, reaching 232,000t in Q2, Eurofer says.

Adam Smith Germany

July data shows Chinese demand fell further from June, and that steel output fell on-year for the first time in 2021. Demand has been hit by weak construction activity in excess of the normal summer slowdown, and reduced output has not yet been enough to match the reduction in consumption, Kallanish notes.

At 86.79 million tonnes, crude steel output was down 8.4% year-on-year, and 7.55% month-on-month in July, according to the National Bureau of Statistics (NBS). Over the first seven months, crude steel output is now only 8% higher at 649.33mt, after increasing 11.8% over the first half.

Apparent steel demand was also down thanks to the lower output. Apparent demand was at 78.781mt in July, down 13.49% y-o-y and 6.63% m-o-m. Over seven months, at 588.77mt, apparent demand is now up 5.82% compared to this time last year.

The growth in inventory levels slowed down in July, but did not stop, and the inventory rate deteriorated significantly. Adjusting for inventory change, end user demand was down 7.9% y-o-y, and fairly constant m-o-m at 76.99mt. Taking into account the longer month however, end user demand was down 3.26% m-o-m at 2.484m t/d. Over the first seven months, end user demand is 7.54% higher on-year at 557.397mt. This also meant the July 2021 inventory rate (inventories/demand) was up from 107.5% last month and 100.62% in July 2020, at 111.14%.

Tomas Gutierrez UK

EU27 apparent steel consumption rose 0.9% on-year in the first quarter to 36.3 million tonnes, reflecting further recovery from last year’s Covid-19 shock, while domestic EU deliveries rose 1%. Imports from outside the EU meanwhile fell 2.5%, the ninth consecutive quarterly drop, says European steelmakers’ association Eurofer.

The association sees the bloc’s overall end-use output rebounding 9.3% on-year in 2021, with growth slowing to 4.6% in 2022.

EU end-use sector output recovery continued in Q1 despite considerable problems in the global supply chain, particularly for the automotive sector – rising transportation costs, rising fuel costs and shortage of components, Eurofer observes. End-use output growth rebounded 2.6% in Q1, the first quarterly increase since Q3 2019.

“Industry in the EU has recovered the output loss experienced during the pandemic, but activity remains exposed to fragility and risks, due to persisting uncertainty around vaccination plans and the ongoing consequences of the pandemic, which is not yet over,” Eurofer says in its latest quarterly report sent to Kallanish.

Industrial output is likely to continue to grow and to gain further ground over the second half of 2021, provided there are no further shocks. Growth in 2021 and 2022 is seen at 8.6% and 4% respectively.

Real steel consumption however fell 0.6% in Q1, the eighth consecutive quarterly drop. It is expected to recover 7.9% on-year in 2021 after the counter-cyclical destocking process seen throughout 2020 came to an end in Q1.

“Government investment and public expenditure are expected to play a rather robust, countercyclical role and could provide a strong contribution to the growth of domestic demand, although the most visible effects will only be visible from 2022,” Eurofer says of the macroeconomic scenario.

Adam Smith Germany

The EU’s apparent steel consumption is expected to return to pre-pandemic levels this year and continue growing in 2022 ,driven by the continued improvement in demand from steel-using sectors, European steel association Eurofer said Aug. 16.

After a difficult period that was impacted considerably by the pandemic, consumption is set to increase by 11.2% this year, reaching 143 million mt, and then to grow “more moderately” by 3.7% in 2022 to 149 million mt.

EU steel consumption in 2020 plummeted by 10.6% to 129 million mt, after a drop of 5.3% registered in 2019 to 144 million mt, the association said.

That followed a record-high year in 2018, when apparent consumption was 152 million mt.

“The loosening of COVID measures over the third quarter of 2020 allowed industrial activity to restart, with a considerable rebound in output compared to the record lows seen in the preceding quarter,” Eurofer said.

The recovery continued – at an even faster rate – over the fourth quarter of 2020 and up to the first quarter of 2021, driven by a faster-than-expected demand especially from domestic appliances and automotive sectors.

The fourth quarter of last year registered growth in apparent consumption (+3.6%), the first quarterly growth in apparent consumption since the fourth quarter of 2018. This trend continued over the first quarter of 2021.

Domestic deliveries by EU steel suppliers increased year-on-year in the fourth quarter of 2020 by 4.6%, after eight consecutive quarterly drops, reflecting the improvement in demand within the EU. Positive developments were also observed in the first quarter of 2021, albeit at a lower rate (+1%), the association said.

Total imports of finished products into the EU marginally increased year-on-year in the first quarter of 2021 (+2%) after a drop of 5% in Q4 2020. This was the first increase since the third quarter of 2019. Imports surged considerably over the second quarter (+44%), “mirroring improved demand across the EU but also — to a limited extent — due to the comparison to the low levels recorded in the second quarter of 2020,” Eurofer said.

Imports were volatile across 2020 and in early 2021, continuing a trend seen in 2019. In the second quarter of 2021, the main countries of origin for finished steel imports into the EU market were Turkey, Russia, South Korea, India and Ukraine, which together accounted for 78% of total EU finished steel imports.

— Annalisa Villa

Turkish mills’ section exports in the first half exceeded 1 million mt, as market diversification supported mills’ export volumes. According to the latest monthly Turkish Statistical Institute (TUIK) data observed by S&P Global Platts, Turkish mills’ sections exports through June totaled 1.03 million mt, up 14.5% on year.

Peru became the largest importer of Turkish sections in H1 at 72,900 mt, up more than fourfold on year, while exports to Colombia reached 55,500 mt in that period, more than double on year.

Morocco became one of other largest importers of Turkish sections in that period at 66,900 mt, up 11% on year, while Turkish mills’ sections exports to Egypt totaled 62,400 mt, down from the 102,000 mt in the same period the previous year.

Turkish mills’ also exported 39,200 mt of sections to Canada in the six-month period, while Turkey’s section exports to Malaysia totaled 37,000 mt.

Turkish sections exports to the EU region remained generally low in January-June while exports to the US totaled 18,000 mt.

Turkey’s other sections export markets in H1 were: Israel (36,500 mt), Argentina (31,700 mt), UAE (22,400 mt), Senegal (21,000 mt), Iraq (20,500 mt), Greece (20,400 mt) and Yemen (18,500 mt), the latest data showed.

— Cenk Can