Day: 26 January 2022

Global crude steel production closed out 2021 with a decline of 3% on-year in December to 158.74 million tonnes, as China and the EU both saw reduced output, worldsteel data show. Full-year 2021 production still inched up 3.6% on-year to 1.91 billion tonnes, but slowed from the 14% growth seen after the first half-year, Kallanish notes.

December was the fifth consecutive month to see a decline in crude steel production across the 64 countries reporting to worldsteel.

Chinese output fell 6.8% to 86.19mt, but Indian, Japanese and South Korean output rose 0.9%, 5.4% and 1.1% respectively to 10.4mt, 7.9mt and 5.98mt.

EU27 output dropped 1.4% to 11.1mt. Although German production was up 0.1% to 3.14mt, Italian, French and Spanish output fell 6.9%, 13.5% and 5.7% respectively to 1.5mt, 999,000t and 844,000t.

Turkish output meanwhile dropped for the first time in multiple months, by 2.3% to 3.33mt.

US production nevertheless continued to surge, rising 12% to 7.25mt in December, while Brazilian output was down 11.4% to 2.61mt.

CIS output fell 3% to 8.93mt, with Russian production estimated flat at 6.57mt and Ukrainian output confirmed down 8.5% to 1.74mt.

In the full year, although global output grew, Chinese production ended down 3% versus 2020 to 1.03 billion tonnes.

However, India’s and Japan’s surged 18% and 15% respectively to 118.1mt and 96.3mt. EU output grew 15% to 152.5mt, with Turkish output up 12.7% to 40.4mt. The US and Brazil saw production up 18% and 14.7% respectively to 86.01mt and 36.04mt. Russia is estimated to have grown output 6% to 76mt.

In fact, besides China, Qatar, Iran, Uzbekistan, Belarus and Hungary were the only countries to see crude steel production decline last year, according to worldsteel’s statistics, with Norway seeing a 0.2% drop.

Adam Smith Germany

German steel product sales rose 2.7% year on year to 10.6 million mt in 2021, data from German steel stockholders’ association BDS showed Jan. 25.

December sales rose 1.9% year on year to 633,653 mt after three consecutive months of year-on-year falls. However, the sales volume for the month was 28.6% lower than the previous month and the lowest since December 2020.

Steel demand faltered over the last few months of 2021 due to weaker auto demand and the short-term slowdown in the run up to Christmas.

The majority, or 61.3%, of sales in December were from the flat product category at 388,645 mt, up 3.3% year on year, but down 26% from the previous month to a 12-month low.

For 2021, flat product sales rose 6.3% on the year to 6.3 million mt, which made up 59.5% of total annual sales, up from 57.5% in 2020.

Sales of long products in December comprised 27.1% of the overall total at 171,545 mt, dropping 7.2% on the year and down 40% from November.

This brought sales of long products for the full year to 3.3 million mt, slipping 2.3% from 2020 and making up 30.8% of the overall total, down from 32.4% in the previous year.

December stocks at five-month low

Stocks of German steel products totaled 2.1 million mt in December, rising 8.1% year on year, but 1.7% lower than the level seen in November, the BDS data showed.

The monthly stocks were at the lowest level since July.

Flat products made up 63.1% total inventories in December at 1.3 million mt, which was 13.5% higher on the year, but down 1.1% from the previous month’s level.

Long products stocks totaled 718,655 mt in December, or 34.65% of the total inventory, up 0.5% year on year but down 1.6% on the month to the lowest level since December 2020, the BDS data showed.

— Jacqueline Holman

While northwestern European mills are currently pushing to stabilise coil prices in the view of seeing them rebound, hot-dip galvanized coil could see a softening in the longer run due to new capacities coming on stream.

At Salzgitter, a new galvanizing line with a capacity of at least 500,000 tonnes/year is due to start operation this year. A new line of similar size at thyssenkrupp Steel’s Dortmund location was scheduled to be started up last year. The company has not updated on this project recently, but it will in any case bring new volumes to the market in the near future. These come on top of the new galv line launched at ArcelorMittal Florange in 2020, and officially inaugurated last year. 

On the other hand, Liberty Group’s well publicised troubles pose questions over the future of its European capacities, mainly its works in Dudelange, and in Flemalle, where it suggested to close down one galv line (see Kallanish passim).

According to a manager of an automotive supplier, lower galv prices can already be seen in the market. Mills are officially maintaining the mark of €1,100/tonne ($1,245) ex-works, and most observers see prices not too far below that. However, the manager claims he has heard of transactions that went down to €1,000.

According to a southern German stockholder’s buyer, the market is very opaque because northwest European mills currently confine their business to their regular clients. “When I inquire at some of them, I do not even get an answer,” he tells Kallanish. He suspects that mills are holding back volumes in the hope of a price surge soon.

One big question mark here is over the return of regular automotive production once the bottleneck of semiconductor chips is resolved. It could mean a sudden hunger for material, which some expect later in the first quarter and others not before the end of Q2. This leaves room for a wide pricing range in the meantime.

Christian Koehl Germany

French stainless steel producer Aperam has increased its February alloy surcharges for its austenitic range of flat stainless steels for Europe by another €100/tonne ($112) on average versus January. This comes on top of the €100/t increases announced each for December and January, Kallanish notes.

The surcharge for grade 304 (1.4301) has gone up from €2,427/t to €2,519/t effective 1 February. For grade 316 it has increased from €3,643/t to €3,791/t. Grade 309S, a heat-resistant stainless steel used in high-temperature applications, has also seen its value increase from €3,267/t to €3,409/t. The surcharge for the most popular ferritic grade, 409, however, has gone down from €922/t in January to €898/t in February, the company reveals.

Offers for nickel cash buyers reached $20,925/t on 31 December and went up to $23,500/t on 24 January, Kallanish notes.

Natalia Capra France

Turkish coated coil producer Yildiz Demir Celik is planning to start hot-rolled coil production by building a melt shop with a liquid steel capacity of 4 million mt and a hot-rolling mill with a finished product capacity of 3.5 million mt, the company said in an official document submitted to the Ministry of Environment and Urbanization.

According to the document seen by S&P Global Platts, the facility which will be built in Kartepe, Kocaeli, western Turkey is scheduled to start production within 36 months.

An Environmental Impact Assessment (EIA) process has started for Yildiz Demir Celik’s new mill project, the ministry said January 24. The project is expected to be accelerated following the EIA approval.

Yildiz Demir Celik’s cold-rolling mill complex in Kocaeli, western Turkey, started production on its new continuous pickling tandem line in late 2019, with an annual capacity of 1.5 million mt.

The company currently has a production capacity of 400,000 mt/year for HDG coil and 150,000 mt/year for pre-painted galvanized iron (PPGI), as well as 300,000 mt/year of cold-rolled coil.

The company is targeting to reach 900,000 mt/year of galvanizing capacity with a new line to be started in the coming months of the year.

Flat steel capacity in Turkey has been rising in recent years with new investments. Another coated coil producer, MMK Metalurji, the Turkey-based subsidiary of Russian steelmaker Magnitogorsk Iron & Steel Works (MMK), started hot rolled coil production at its EAF facility with a casting and rolling module in July 2021.

Tosyali Demir Celik, one of Turkey’s largest steel producers, is also currently building a new flat steel mill with a liquid steel capacity of 4.55 million mt.

As some other Turkish HRC producers started work to raise their HRC output, Turkey’s total HRC production capacity is expected to rise more than 9 million mt/year in the coming few years, while some new coated coil capacities are also on the way.

— Staff, Cenk Can