Day: 16 December 2021

The European Commission has given the greenlight to the acquisition of special steel producer Terni by Acciaieria Arvedi, according to an official note of the EC Dec. 15. The closing is expected to be done by January 2022, the Italian steelmaker told S&P Global Platts Dec. 15.

The European Commission received Nov. 17 the notification of the proposed acquisition of the whole of Acciai Speciali Terni S.p.A. (AST) from thyssenkrupp Stainless GmbH by Acciaieria Arvedi.

On Sept. 16, thyssenkrupp had announced that it was selling its stainless steel mill unit of Acciai Speciali Terni (AST), including the associated sales organization in Germany, Italy and Turkey, to Italian steel producer Arvedi and that the transaction was subject to approval by the supervisory board of thyssenkrupp AG and of the EC Antitrust.

AST, often referred to as Terni, is the only integrated stainless mill in Italy. It has the capacity to produce around 1.3 million mt/year of crude steel, of which 70% is stainless and the rest is carbon steel. According to unions contacted by S&P Global Platts, the company is likely to reach its 1 million mt production target this year.

Arvedi’s core business is primary steel production and processing. Arvedi is Italy’s second largest steelmaker with a capacity of around 4 million mt of crude steel. Arvedi has two electric arc furnaces at its headquarters mill in Cremona. The No. 1 furnace has 1.4 million mt/year of crude steel capacity and the No. 2 furnace was upgraded and expanded last year to a capacity of 2.6 million mt/year.

— Annalisa Villa

ArcelorMittal has completed construction of the new 2.5 million mt/year hot strip mill at its Mexican Lazaro Cardenas plant, producing the first coil on Dec. 15, the company said in a statement.

The new mill will kick off commercial operations in January, according to the steelmaker, taking the plant’s capacity to 5.3 million mt/y of finished steel. Flat-rolled steel production would total 2.5 million mt, long steel would total 1.8 million mt and 1 million mt would be slabs.

According to the company, its new production of hot-rolled coils “can cover [one-third] of the total production of the national market, which was 16.8 million mt in 2021, according to data from the national steel chamber, Canacero.

Following investments of $1 billion and three years of construction, the new Mexican mill changes ArcelorMittal Mexico’s profile from an exporter of semi-finished steel to a downstream steel manufacturer.

The HSM is able to produce a wide range of sheets with a final thickness of 25.4 mm to a minimum of 1.2 mm, as well as the production of low carbon steels, ultra-low carbon, high strength low alloy, and API grades.

ArcelorMittal operates eight sites that produce flats across the US, Canada, Mexico, and Brazil, and 15 sites across Europe. Its long carbon business has 15 sites in the Americas and 17 integrated and mini-mill facilities in nine European countries.

— Adriana Carvalho

European hot-dip galvanized sheet steel prices softened Dec. 15 as automotive demand woes and the Christmas slowdown elicited a heightened sense of bearishness in the market, with mills and stockholders heard to be quietly handing out generous discounts to customers in need of material.

Market chatter surrounding the anti-dumping investigation into HDG imports from Turkey and Russia was also rife, with some participants expecting provisional measures to come into effect by the end of January, sources told S&P Global Platts.

A European mill source close to the anti-dumping investigation told Platts he expected the European Commission to “not delay” in implementing such measures by the end of next month. An Italy-based trader had also heard similar chatter in the Italian market.

A Turkish coated coil producer said there was an appointment scheduled with the EC in mid-January specifically for the investigation, and therefore did not expect the EC to officially communicate a decision before this meeting took place.

Platts previously reported that provisional measures, if any arise, are expected to be imposed by the EC on Jan. 24, 2022.

With the Christmas slump nearing, mills have entered a risk management phase in anticipation of unclear Q1 demand.

“Mills are falling back into old habits – they are panicking and making discounts to keep lines running – asking customers to keep it quiet,” a European mill source lamented. “Hand-backs from automotive are still coming back in.”

Despite this, the mill source predicted a 5% increase in steel demand driven by the auto industry, though it was a “mixed picture” depending on the particular OEM and its material needs.

“Customers are waiting and holding off finalizing contracts, they think they can get a better price,” he added. “Those wanting to speculate could get a good deal for Q1 delivery but when demand kicks off they might be in trouble.”

There was a consensus around HDG auto contract pricing, with most sources quoting Eur1200-1250/mt delivered Europe for 2022.

— Amanda Flint

Metinvest has signed with SMS Group and its subsidiary, Paul Wurth, a memorandum of understanding to improve its operational efficiency and environmental performance on decarbonisation of production, the steelmaker says.

The document is also expected to provide the parties with the opportunity to develop and test new technologies to enhance both iron and steelmaking, as well as downstream processes.

‟In working together with SMS, we will be able to better consider the available technical solutions that will improve steelmaking processes,” says Metinvest chief executive officer Yuriy Ryzhenkov. “Our particular focus will be on solutions that reduce greenhouse gas emissions.”

‟We will examine a whole range of technological solutions together, which includes the application of innovative Paul Wurth technologies for sustainable ironmaking, such as direct reduced ironmaking with our partner Midrex,” notes SMS ceo for Europe Georges Rassel. “Both parties will also cooperate in ‘blue’ blast furnace with reduced CO2 emissions, the use of hydrogen, electrification, digitalisation. As well as carbon capture, usage and storage.”

Earlier, Metinvest аnd Danieli signed an MoU to develop and implement technologies for green and low-carbon steel production (see Kallanish passim). The partnership will cover Metinvest’s steelmaking facilities in Ukraine and the EU.

Svetoslav Abrossimov Bulgaria

China’s real estate crisis continues, with weak data released for November. Investment and construction activity are all down, while prices are being cut as developers compete for revenue. Despite moves to calm markets, more developers are approaching bankruptcy, Kallanish notes.

Investment over January-November was up 6% at CNY 13.731 trillion ($2.157 trillion), according to the National Bureau of Statistics (NBS), but that left November investment down 4.3% year-on-year at CNY 1.238 trillion. That is the third straight month of y-o-y declines. Real estate sales were up 4.8% at 1.581 billion square metres over 11 months, but November sales were down 14% at 150.9m sqm. This was an improvement from October, and credit data also shows mortgage issuance increased last month.

This was due to an easing of restrictions on lending to the sector as the government manages a debt crisis among certain companies. It wants to pressure companies to sell assets and land relatively safe bankruptcies, without crashing the whole sector and causing a wider crisis.

Evergrande has been the centre of attention due to its $300 billion plus debts. It is now officially a defaulter and is widely expected to be steadily wound up as a business. Local government work teams have been sent to the company to ensure revenue raised by asset sales goes to the right creditors and to work towards an official bankruptcy.

Developers across the board are being forced to compete for revenue, however, and this has forced prices lower. In its survey of 70 cities, NBS now records prices falling m-o-m in 63 of them, the most widespread decline since February 2015. NBS data also shows that average real estate prices fell for the fourth consecutive month to CNY 9,597/sqm, the lowest level since April 2020.

The impact on the steel sector has been dramatic, with Chinese steel demand seeing a step-change lower in the second half as China began moving more aggressively against developers. This is also expected to drag Chinese steel demand lower in 2022. Kallanish’s China Steel Intelligence expects apparent steel demand in 2022 to be down 3.4% at around 913 million tonnes.

Tomas Gutierrez UK

The Italian government’s proposed investment into JSW Steel’s Piombino steelmaking facility has been postponed by two months, much to the frustration of trade unions.

The government plans to become an investor in JSW Italy through its financial arm, Invitalia. Invitalia and JSW signed a binding agreement in recent months before due diligence started, but the due diligence has been pushed back from December into 2022, authorities announced at a meeting with unions at the Ministry for Economic Development (Mise) in Rome this week.

A union source tells Kallanish that the parties involved were supposed to discuss the new industrial plan at the meeting, but the company did not submit it. The government will extend furloughs for Piombino workers past their scheduled expiration date of 7 January.

However, at the meeting unions told officials they have lost trust in JSW as it is withholding all promised investments and waiting for the Italian government’s cash injection without detailing a clear plan for the steelworks’ future. They have asked minister Giancarlo Giorgetti to find an alternative solution.

Italian steel producers’ association Federacciai is against the Italian government investing in JSW’s Italian facility. “I reiterate my respect for Sajjan Jindal … However, I don’t understand what he really wants to do with Piombino, also because in three years, as Federacciai, we have never had the opportunity to meet him and discuss, not even with his collaborators,” association president Alessandro Banzato stated at its annual meeting in Milan attended by Kallanish in October.

Invitalia is also buying a majority stake in Italian steelmaker Acciaierie d’Italia, formerly known as ArcelorMittal Italia.

Natalia Capra France

Vietnamese production of finished steel rose during the first 11 months of the year compared to the corresponding period of 2020. Coated steel sheet exports also soared during the period, Kallanish notes.

Vietnamese 11-month steel production reached 30.6 million tonnes, up 21.5% year-on-year, according to the Vietnam Steel Association. Finished steel sales reached 26.9mt, an increase of 17.8% y-o-y. This total figure comprised export sales of 7.1mt, which was a massive 73.7% jump.

In November alone, Vietnam’s production of finished steel products amounted to 2.9mt, up 9% y-o-y. Sales however reached 2.3mt, down 8.6%.

Vietnamese 11-month production of metallic and colour-coated steel totalled 5.4mt, up 37.1% y-o-y. Domestic and export sales were 4.9mt, up 37%. Exports touched 3.1mt, more than doubling on-year.

Hoa Sen, Tong Dong A and Nam Kam are the major producers of coated steel in the country, accounting for 35.9%, 17.7% and 14.6% respectively of the country’s combined domestic and export sales. The domestic market share held by Hoa Sen, Tong Dong A and Nam Kim is 29.5%, 13.9% and 10.4% respectively.

	Production (‘000t)	Sales (‘000t)	Exports (‘000t)	Productiony-o-y	Salesy-o-y	Exportsy-o-y
Long products	11,352	10,883	2,028	+3.9%	-2.6%	+55.0%
HRC	6,559	6,525	1,204	+68.2%	+75.5%	+84.0%
CRC	4,794	2,125	591	+20.3%	+8.7%	+42.5%
Coated steel sheet	5,,432	4,893	3,101	+37.1%	+37.9%	+110.4%
Welded pipe	2,445	2,504	217	+2.5%	+1.7%	-16.7%
Total	30,582	26,929	7,142	+21.5%	+17.8%	+73.7%

Anna Low Singapore