Day: 31 August 2021

Wuppermann Hungary has commissioned a new automatic scrap chopper (ASC) double-head side trimmer in the outlet area of the combined pickling and hot-dip galvanizing line.

With the new side trimmer, the Hungarian unit of German coil processor Wuppermann, located in the port of Győr-Gönyű, aims to improve the flatness and evenness of its products. The steel strip can now be used in other areas with particularly high demands on the flatness of the material, Kallanish hears from the company. As examples, it cites the production of panels with laser cutting quality by steel service centres, or in switch cabinet construction.

The new ASC side trimmer is used for trimming pickled as well as galvanized steel strips with zinc or zinc-magnesium coating. The production range is trimmed strip widths from 700 to 1,600mm and strip thicknesses of 1-6mm. The new trimming unit was developed for operation in a continuously operating strip processing line.

With the twin-blade cutterhead system from SMS, Wuppermann can significantly reduce processing costs required for knife resharpening and save material at the same time.  If one edge is worn, the knife can still be used. It is simply turned over after loosening the knife clamping piece, the company explains.

Wuppermann notes that it has already had good experience with the ASC double-head side trimmer at its unit in Moerdijk, the Netherlands.

Christian Koehl Germany

EU mechanical engineering output should rebound 10.6% on-year in 2021 and a further 3.6% in 2022, with new business investment likely to be supported by interest rates at record lows, says European steelmakers’ association Eurofer. Covid-19-linked global supply chains are expected to ease in the third quarter.

EU mechanical engineering output rebounded 3.8% on-year in Q1 2021, the first growth since Q2 2019.

The manufacturing recovery is expected to continue, albeit at historically low levels of output. During the 2019 downturn and throughout 2020, companies in most downstream sectors refrained from investment in new machinery and equipment and have instead favoured maintenance and the upgrading of existing machinery, Eurofer notes in a report seen by Kallanish.

“The combined effect of persistently low business confidence, trade friction, weakened demand in key domestic markets in the EU, and policy uncertainty in general may continue to put the brake on investment decisions at least until the second half of 2021,” Eurofer observes.

The main EU mechanical engineering export destinations such as the US and China are experiencing a stronger-than-expected economic recovery and trade flows are also improving at a rather fast pace. However, the recovery in the EU is lagging behind.

Adam Smith Germany

In spite of the overall increase in output versus the first period of lockdown in 2020, crude steel production at German mills went down for the second successive month. In July, it came to 3 million tonnes, after 3.4mt in June and 3.7mt in May, according to steel federation WV Stahl figures.

This short-term trend is only partly explained by the summer slowdown. In the comparable year 2019, the dip from June to July was less steep, from 3.4mt to 3.2mt, Kallanish observes. One big factor this year will be the reline of thyssenkrupp’s blast furnace No 1, which takes out a good 200,000 t/month of output.

In the year-on-year comparison with 2020, July production went up by 25%. Since the start of the year, production has totalled 23.6mt, an increase of 19% year-on-year. On an annualised basis for 2021, this would result in 40.5mt and thus remain below the pre-crisis year 2018 level of 42.4mt, WV Stahl notes.

Christian Koehl Germany

Over recent weeks European traders and sources have confirmed that their domestic market has received competitive hot rolled coil offers mainly from Russia and India.

Sources say Indian suppliers are heard to be offering October HRC shipments at somewhat below €900/tonne ($1,061) cfr southern Europe, Kallanish notes.

Buyers are likely to calculate the need to pay the 25% safeguard measure on top of this price by the time the material reaches Europe, but these offers are nevertheless attracting some interest. Indian HRC quotas were exhausted rapidly in July and the same is expected to happen in early October as new quotas become available.

Even more competitive at the moment seem to be Russian offers. A trader says one mill was offering HRC at €900/t cfr southern Europe for October-November shipment from northern Russia, to which the anti-dumping duty will need to be added.

“Even with the existing AD duties on Russian HRC added, most of the mills are competitive in today’s market,” the trader opines. “Russian suppliers are currently hungry for orders as the new export taxes imposed by the local government have significantly reduced their order books. We calculated, nevertheless, that after paying the export taxes, Russian mills are still making a potential $300/t profit on HRC sales.”

Emanuele Norsa Italy

No US steel mills were in the direct path of Hurricane Ida, though sources in the steel market were assessing potential impacts Aug. 30 as utilities were downed by the storm and logistics were expected to be affected in Louisiana and beyond in its wake.

The storm made landfall as a Category 4 hurricane on Aug. 29, about 100 miles south of New Orleans, near Port Fourchon.

Freight rail and trucking in the region remained a concern and it was too soon to tell Aug. 30 how the storm would impact barges in transit, both inbound and outbound from the port of New Orleans, sources said.

A total 1.04 million st of steel products were imported into the port of New Orleans in 2020, in addition to 3.51 million st of iron products and ferroalloys, according to data from the American Iron and Steel Institute.

The port of New Orleans is also a hub for steelmaking raw materials, particularly pig iron, with 2020 pig iron imports totaling 2.61 million st and iron and steel scrap imports at 378,905 st, according to the AISI.

Port NOLA said crews were still assessing Hurricane Ida impacts the afternoon of Aug. 30 as cargo operations remained closed, according to a statement.

“Initial reports indicate no major damage to our facilities,” Port NOLA said. “We are coordinating with navigation partners as well as local and state officials so we can resume operation safely and as quickly as possible.”

A steel trader said he expected the port to remain closed for about a week and it would take 10 to 15 days for operations to go back to normal following the storm.

Issues at the port could add further complications to an already tight steel market and cause delays in deliveries of imported steel products. US hot-rolled coil prices continued setting fresh all-time highs due to steady demand combined with tightly supplied market ahead of a series of planned outages in the fourth quarter.

The S&P Global Platts TSI US hot-rolled coil index was calculated at $1,938.25/st EXW Indiana Aug. 30, up almost 100% year to date. With record-high prices, domestic mills started negotiations of index-linked contracts with minimal discounts, full freight and extras. Mills already entered contract season with a firmer stance and any supply-chain bottlenecks might serve a threat to the bargaining power of buyers.

“With the surge, barging will be very difficult,” the trader said.

On the raw materials side, Nucor’s Louisiana direct reduced iron facility was proactively shut down prior to Hurricane Ida making landfall, a spokesperson for the company said Aug. 30.

“Our Nucor teammates and their families are safe and the DRI plant did not sustain any major damage from the storm,” Nucor spokesperson Katherine Miller said. “We expect to resume operations in the coming days when we determine it is safe to do so given the storm’s impact to the region as a whole.”

Nucor’s Louisiana DRI facility, located in St. James Parish, has an annual capacity of 2.5 million mt/year.

— Justine Coyne, Ali Oktay

US hot-rolled coil prices edged higher to a new all-time high on Aug. 30 as multiple mills were reported to be targeting a minimum of $1,940/st for their October production.

The daily Platts TSI US HRC index rose by $16 to $1,938.25/st on an ex-works Indiana basis.

“It seems clear to me that current supply-demand conditions will remain in place the rest of the year,” a Midwest service center source said. “Supply is still tight and demand is sustaining.”

The source was anticipating mills to capture their target prices in the short run. He said that he needed to pay $1,940/st for more than 250 st of October production from a Midwest mini-mill.

“Pricing is out of line; too high for manufacturers and discussion centered around getting to a price point everyone is comfortable with,” another service center source said. He added that a Southern mill started quoting its October availability at $1,960/st while his representative from a mini-mill informed him about targeting $2,000/st in upcoming days.

“Slope of increase in pricing is softer,” a third service center source said. “I think the market will stabilize somewhere around current levels.”

The market was disagreeing on how prices were going to react after moving sideways for a while, according to the third service center source. He anticipated a steep correction in the following two months but added that the majority of the market was not expecting any major changes this year.

The combined Platts TSI price index uses a volume-weighted-average calculation, according to TSI’s standard, to determine value on an ex-works Indiana basis.

— Ali Oktay