Day: 19 November 2021

Italian crude steel output increased again in October after rising in previous months, according to data issued by local steelmakers association Federacciai.

Last month, crude steel production rose by 4% year-on-year to 2.2 million tonnes, Kallanish notes. Output also hiked in the first ten months of the year, by 24% on-year to 20.7mt.

Italian flat steel production rose by 18.3% to 1mt in October, and by 18.7% to 9.2mt in the first ten months of the year.

Longs output however decreased last month by 1.3% to 1.2mt, but rose by 25.5% to 11.5mt in January-October, Federacciai says.

Natalia Capra France

Following a year of “greatly improved” fiscal figures, thyssenkrupp remains upbeat and predicts its adjusted Ebit will double year-on-year, Kallanish hears at the group’s annual results conference.

In the fiscal year from October 2020 to September 2021, the group posted an order intake totalling €39.6 billion ($44.9 billion), an increase of 41%. Revenue improved by 18% to €34 billion. Adjusted Ebit increased to €796 million, after a loss of €1,759m in 2019/20.

All segments contributed to this positive development, with substantial earnings improvements in some cases. In particular, steel distribution unit tk Materials Services profited from rising volumes and prices. As a result, thyssenkrupp achieved the upper end of the earnings forecast range that had been revised upwards in May.

Going forward, the group expects to achieve an Ebit of €1.5-1.8 billion in the current fiscal year. This figure includes a significant improvement in earnings at steelmaking unit tk Steel Europe. The unit was profitable in 20/21, but more modestly than other mill groups because of its customer structure, says chief financial officer Klaus Keysberg. “We have less spot business and more annual contracts than other competitors, and this will bring a clear advantage in revenue in the current year,” he said at the conference.

Compared with the pandemic-weakened prior year, tk Steel Europe increased order intake by 31% to €9.3 billion. Adjusted Ebit improved to €116m from a loss of €820m a year earlier.
At tk Materials Services , order intake rose by 29% to €12.7 billion. At €587m, adjusted Ebit marked a respectable turnaround from the prior-year loss of €85m.

Christian Koehl Germany

The Bureau of International Recycling (BIR) has responded to the EU’s waste shipment proposal by saying further restrictions to trade can be counter-productive to ensuring a circular economy.

On Wednesday the European Commission published a proposal to review waste shipment regulations, which includes the implementation of limitations and standards to be applied to firms exporting outside the EU (see Kallanish passim).

BIR says it fully supports regulations that aim to protect the environment and promote the correct use of waste. It nevertheless notes the Commission seems to be targeting lower prices for waste and scrap in the EU domestic market, leading to possible further investment cuts by recyclers.

“The proposal significantly diverges from free and fair trade in an open intention to reduce the cost of materials within the EU, allowing those in the EU to use more waste as feedstock, which they should be able to purchase at a lower price,” the association says. “These trade restrictions, artificially lowering the costs of materials in the EU for the EU manufacturing industry, will affect the capacity of the European recycling industry to invest in efficient and innovative recycling capacities and processes.”

“Also, by cutting access to outside markets, they will result in excess volumes which will be lost to the global circular economy,” BIR adds. “Such changes will finally have a counterproductive effect on the implementation of a truly global circular economy.”

According to the association, putting new limits on exports could also limit waste and scrap collection. “Over many years the EU has been continually increasing separate collection of used and end-of-life goods and materials. The consequences of these well-supported actions, and the efforts of all citizens, is that there is an excess of recyclables collected in the EU, more than is currently consumed in the EU. Without buyers within the EU these excess steel scraps, aluminium scrap, copper scrap, and scrap paper are exported to manufacturers in third countries; that €13 billion trade provides revenue for EU Member States,” BIR points out.

While the new proposal does not seem to significantly limit ferrous scrap trade from Europe, it could impose new burdens on exporters, mainly for sales to non-OECD countries such as India, Egypt or China.

Emanuele Norsa Italy

New car registrations in the EU in October were down 30% year on year at 665,000 units, the fourth consecutive monthly decline, the the European Automobile Manufacturers Association (ACEA) said Nov 18.

Most EU markets suffered double-digit losses, including the four largest ones — Italy (36%), Germany (35%), France (31%) and Spain (20%) — in what was the lowest October total since ACEA started collating the data.

Over the first 10 months of 2021, new car registrations in the EU were up 2.2% year on year at 8.2 million units.

According to ACEA, despite the recent drop in sales due to the ongoing impact of the semiconductor chip supply crisis, substantial rises earlier in the year helped to keep cumulative volumes in positive territory.

Cars demand remained positive in three out of the four key EU markets: Italy (13%), Spain (5.6%) and France (3.1%), while Germany’s year-to-date total was down 5.2% on the 2020 period, the ACEA data showed.

— Annalisa Villa

Germany’s Thyssenkrupp plans to spin off its steel unit rather than sell it, following several failed attempts at a sale.

CFO Klaus Keysberg, speaking on full-year 2020/21 (to Sept. 30) results call Nov. 18, said that despite the steel market seeming to be in a favorable environment there were no active consolidation talks with other steel peers, and Thyssenkrupp’s focus would remain on carving out the steel business.

“Consolidation could be an option but, as you know, we tried and could not work it out,” Keysberg said.

Thyssenkrupp ended talks in February about selling its steel unit to Liberty Steel, saying “ideas about the corporate value and the structure of the transaction were far apart” and would drive forward a “sustainable position” for steel on its own.

Prior to that, a steel joint venture with Tata Steel Europe was called off in 2019 following the blocking of the plan by the European Commission without further divestments.

Keysberg said Thyssenkrupp would take its time and was conducting a study as to the circumstances under which steel could be made a standalone business.

Nevertheless, Thyssenkrupp said it remained in favor of European steel consolidation in general and that it would give an update on the spin-off in spring “but not necessarily a decision”.

The sale of Thyssenkrupp’s stainless steel plant AS Terni to Italian steel producer Arvedi was expected to close during the current fiscal year.

Steel demand, prices pick up

Like its peers, Thyssenkrupp’s steel unit has profited from a pick-up in demand and increasing steel prices, but fell short of taking full advantage of steel spot increases due to long-term contracts fixed ahead of steel price rises.

Keysberg said those profits will be reflected in the current fiscal year. Long-term contracts are usually 6-12 months but occasionally three months, Keysberg said.

The daily Platts hot-rolled coil assessment reached a record Eur1,190/mt ($1,350/mt) EXW Ruhr on June 25 on material tightness, up from a low at Eur395/mt EXW Ruhr on June 22, 2020.

The spot environment has come under pressure since June due to unclear auto demand and hesitant buying. The Platts hot-rolled assessment stood at Eur990/mt EXW Ruhr on Nov. 17.

Keysberg said the company was seeing a stable spot market at the moment.

During its 2020/21 year, shipments of cold-rolled products increased 9.3% to 6.5 million mt, but fell to 1.5 million mt in its fourth quarter from 1.7 million mt in Q3.

Hot-rolled shipment increased 22% year on year to 3.5 million mt. Within that, shipments fell to 741,000 mt in Q4 from 965,000 mt in Q3.

Crude steel production, including production at semis producer HKM and Thyssenkrupp’s blast furnaces increased 10% year on year, while from 2.8 million mt in Q3 to 2.2 million mt in Q4 due from to a reline of blast furnace No. 1, which restarted in October.

Order intake rose 31% year on year but again fell considerably from Q3 to Q4 due to the reline.

The Materials Services unit, which includes steel distribution, sold 9.1 million mt of materials and raw materials, up 12% year on year. “Demand significantly outpaced supply, so that prices for finished steel in particular continued to reach new highs in the fiscal year,” the company said.

For 2022, Thyssenkrupp expected strong demand recovery, particularly for premium flat steel for the automotive industry, while remaining below pre-pandemic levels. The semiconductor shortage in the auto industry that resulted in canceled volumes of steel remained an uncertainty.

For Material Services however, Thyssenkrupp expects materials supply to return to pre-pandemic level during the current year on the back of increased demand for supply chain and processing services.

The steel unit recorded an EBITDA of Eur214 million in 2020/21, having made a loss of Eur532 million in 2019/20.

— Laura Varriale

Fernando Espada, President of EUROMETAL, participated in the session “Session 3: Coil distribution, processing & end-use markets” at the Kallanish Flat Steel 2021 virtual conference, Tuesday the 16th of November 2021.

Francois-David Martino, CEO of Becker Stahl Service, Alessandro Sciamarelli, Director of Economic and Market Analysis at the European Steel Association (EUROFER) and Fernando Espada interviewed by Emanuele Norsa, debated on the exceptional year for suppliers, processors, and distributors across many regions of the world and shed some light on the expectations for coils demand and market fundamentals for 2022.