Day: 10 November 2021

The provider of artificial intelligence solutions for steel mills Smart Steel Technologies (SST) has entered a partnership with PSI, supplier of production management solutions in the metals industry.

According to SST, three AI-based software solutions will be launched jointly in the areas of product-to-order reallocation, slab and coil classification, as well as to optimise liquid steel quality, and in particular temperature control. This cooperative effort will digitise applications at every stage of the steelmaking process – from the liquid phase to strip finishing, Kallanish hears from the Berlin-based firm.

“Our partnership with PSI Metals was established to maximise efficiency gains and associated cost savings in steel companies. The combination of PSI’s extensive production management know-how and SST’s profound AI expertise lifts evident synergies for everyone involved,” says chief executive Falk-Florian Henrich.

SST has designed AI solutions for the German mills of ArcelorMittal, and only in October announced it had opened an affiliate in the USA.

Christian Koehl Germany

Germany’s mechanical engineering sector is upbeat about its performance in 2021 so far and about the prospects for 2022. Large-scale plant builders, especially, have recently secured major orders. However, companies are concerned about a shortage of steel and other materials for their purposes, Kallanish hears from their federation, VDMA.

For the current full-year 2021, the association confirms its forecast of real production growth of 10% compared to the previous year. “Without the material shortages, even higher growth would be possible,” says VDMA president Karl Haeusgen. “As is the case in all industries, the supply chain difficulties for some preliminary products will continue to be felt for some time. But order books are still well filled, and we expect sales from these orders to be booked with some delay.” For 2022, VDMA expects a further increase in production of 5% in real terms.

An exceptionally high contribution from large-scale plant business filled the order books of the machinery engineering industry in September. Orders in this month increased by 65% in real terms year-on-year. Orders from abroad almost doubled. VDMA does not specify if this includes orders for metallurgical plant builders, which are represented in its division for large-scale plant building, AGAB (ArbeitsGemeinschaft GrossAnlagenbau).

While a singular month could be an outlier in this business, an upward trend has indeed been seen throughout the year. In the first nine months of 2021, plantbuilders recorded a real increase in incoming orders of 36% y-o-y. In the three-month period from July to September, the order increase was up to 50% y-o-y.

One development addressed with concern by VDMA is the drifting apart of the two economic powers USA and China. Almost half of German mechanical engineering companies source components from China or the USA that are critical for their own production. These are primarily electronic components and parts, but also raw materials such as steel and castings. “There is a risk here of being pressured by China or the USA in the event of trade disputes,” Haeusgen observes. “Companies therefore know they have to act.”

In a survey, one third of the companies polled say they intend to opt for a “forward strategy”, meaning they will increase their own investments in the USA and China, for example, by setting up or expanding local production.

Christian Koehl Germany

European stainless steel hot and cold rolled coil supply remains under pressure this month, with prices increasing due to higher month-on-month alloy surcharges for November and increasing base prices from European mills, sources tell Kallanish.

Final demand and consumption remain strong. All European coil producers are now quoting lead times between April and June 2022, depending on customer and contract. European stainless HRC is offered at €3,900-4,000/tonne ($4,520-4,636) delivered on average for March and April delivery. Stainless CRC contracts for European material are hovering at €4,100/t delivered on average, including alloy surcharges, depending on material quality and volumes.

Imported stainless coil from Asian countries is said to be waiting at Italian ports to be discharged on 1 January when quotas are renewed. The entire European value chain is slowed by long lead times at European mills, but margins remain high for both coil and flat products, with good profits both upstream and downstream. Stocks of flats and tubes are reported to remain relatively low in Western European countries.

The short supply and increasing prices are forecast to last through the end of the year and first quarter of 2022, sources believe.

Natalia Capra France

The latest data issued by European distributors association Eurometal confirms the negative growth trend reported in the segment in September.

After a series of positive months, September shipments of strip mill products from service centres dropped 5.5% year-on-year. Multiproduct distributors saw their shipments decrease by 7% y-o-y.

“All products had a negative trend, except plates, tubular products, stainless steel and other alloy steels,” Eurometal tells Kallanish.

Despite the September downtrend, the figures for the first nine months of 2021 remained positive, with SSC flats shipments up almost 15% y-o-y and stockholders’ shipments up almost 9% y-o-y.

Emanuele Norsa Italy

Japanese trade minister Koichi Hagiuda has asked the USA to exempt Japan from Section 232 tariffs on steel and aluminium imports, according to the Ministry of Economy, Trade and Industry (Meti). This follows the recent signing of the US-EU trade deal.

US commerce secretary Gina Raimondo will visit Japan, Singapore and Malaysia from 15 November to reaffirm US commitment and strengthen economic ties with allies and key partners, the government said last Sunday. On the same day, US trade representative Katherine Tai will arrive in Tokyo.

It is expected two US officials will discuss with Japanese officials a possible review of the USA’s 25% tariffs on steel imports and 10% tariffs on aluminium imports. These are the so-called Section 232 tariffs introduced by the administration of former US President Donald Trump, Kallanish notes.

Hagiuda says these measures are having a devastating effect, and he has asked the US to take action. The Japan Iron and Steel Federation said on 2 November that the recent agreement between the US and EU will result in a comprehensive relaxation of measures in the form of a tariff-free quota for EU steel. The steel industry of Japan, which he notes is an ally of the US, will be put behind the EU in terms of export competitiveness to the US.

By Kallanish Team