Day: 21 October 2022

Tata Steel Nederland and Permastore have struck a deal that allows Permastore to offer options for Tata’s proprietary Zeremis Carbon Lite in its modular and bolted storage containment tanks and silos.

Tata recently introduced the label Zeremis Carbon Lite for a steel with an allocated carbon footprint reduction of up to 100%. Permastore, headquartered in the UK, is a manufacturer of industrial glass-fused-to-steel tanks and silos engineered to the highest international standards. The company has a long history working closely together with Tata Steel Nederland and has now been announced as Tata’s launch partner for Zeremis in the construction sector. Tata will supply the tank sheets through its Feijen Steel Service Center in Maastricht, Kallanish learns from the steelmaker.

Tata claims that customers such as Permastore can easily implement the highly flexible solution without having to compromise on product quality or service reliability.

“We are sharing the same entrepreneurial values and thus it felt only logical to expand our partnership and reach this supply agreement for Tata Steel’s newest low-CO2 steel offering,” says Jaap Jan Aardenburg, marketing manager for distribution at Tata Steel.

Christian Koehl Germany

British Steel has extended its range of “Advance” structural sections for the construction sector by 71 additional beams and columns.

The range provides greater design flexibility due to the inclusion of often difficult-to-find intermediary dimensions, the steelmaker says. Product is available in both standard grades and in British Steel’s premium S460M and weathering steel grades.

“Optimising steel structures by precisely matching often difficult-to-find dimensions has the potential to provide sustainable, efficient and cost-reducing solutions through savings in structure weight, fabrication effort and logistical costs,” says British Steel commercial director construction Ben Cunliffe. The S460M grade allows further optimisation such as wider spans and reduced structure weight, he adds.

British Steel started offering weathering steel structural sections for the construction market last year (see Kallanish passim). The steel is produced at its Scunthorpe works and then rolled into sections at its Teesside Beam Mill. S460M grade was launched in late 2020.

Earlier this year, British Steel secured funding from the UK government for a feasibility study into switching from natural gas to green hydrogen as a fuel source for re-heating furnaces. The study links into the Tees Green Hydrogen project, a green hydrogen production centre to be set up by EDF Renewables UK and Hynamics in the Tees Valley that will, among other local businesses, supply British Steel.

Adam Smith Poland

Anglo American and thyssenkrupp Steel have signed a memorandum of understanding to collaborate on developing new pathways for the decarbonisation of steelmaking.

The collaboration will focus on joint research to accelerate the development of high-quality input stock for lower carbon steel production, using both conventional blast furnace and direct reduction iron, Kallanish hears from the partners.

As part of its tkH2Steel transformation concept, thyssenkrupp Steel’s coal-based blast furnaces will be replaced by hydrogen-powered direct reduction equipment. To that purpose, it is working with many partners to make steel lower in CO2 across the board, says its chief technology officer Arnd Köfler. With Anglo American, the steelmaker will “explore ways in which we can use high-grade iron ore in the production process in the best way possible for reducing emissions,” Köfler says.

Anglo American has adopted a holistic approach to address the challenges of climate change, building on the commitments set out in its 2018 Sustainable Mining Plan to decarbonise its operations. The reduction of CO2 emissions across the entire steel value chain includes investing in climate-positive technologies and working closely with steelmakers to support their specific decarbonisation efforts.

“Anglo American’s high quality iron ore products are primed to play an important role in enabling low carbon steel production at scale,” says the company’s marketing chief, Peter Whitcutt.

Christian Koehl Germany

In the transition to a world economy with zero carbon emissions, governments and the private sector can and should share the risks, experts said during the 2022 edition of S&P Global Commodity Insights’ Mexico Energy Forum.

However, the private sector will make the bulk of the investments, and the best way governments can contribute is by designing public policies and regulatory frameworks that create incentives for those investments, the experts said Oct. 19.

“In the quest for net-zero emissions, technology will be paramount,” said Jose Francisco Castro Guardiola, senior manager of energy planning at Luxembourg-based steel manufacturer Ternium.

Of all the technologies being considered to decarbonize the economy, it is hard to tell which ones will prevail, but companies must make investments to determine which technology is best for them, Castro Guardiola said during a panel about energy transition.

In 2018, Ternium committed to investing almost $500 million in a decade exploring different technologies, including renewables. After this period and with that amount of investment, the company will be in a position to outline a concrete path to zero emissions, he said. In Mexico, the carbon footprint of the company is smaller than in other parts of the world as steel in Mexico is mainly produced from scrap, he said.

A combination of technologies

Companies should consider a combination of technologies as different solutions are required in every place, Fernando Reiter, corporate finance director at Cemex, said during the panel discussion.

“The public sector can and should get some skin in the game, invest in research and innovation, take some risk, but the bulk of the investments will be made by the private sector,” Reiter said.

Cemex is exploring using numerous technologies in its operations around the world, like storing heat, burning garbage at high temperatures and recycling concrete from demolished buildings.

What governments must do is design appropriate regulations, Reiter said.

“When good regulation is in place, transition occurs even when there are no incentives,” he said.

Consistency in government policy

Carlos Pascual, senior vice president for Global Energy and International Affairs at S&P Global Commodity Insights, agreed on the importance of incentives. He added that government policy must also be consistent through time, noting that in Mexico there is infrastructure designed in the previous administration but that has not been built.

Governments must be able to deal with basic issues, like permits, which may not be very sexy but that are essential to reach the big objectives, Pascual said during the panel discussion.

“The planet as a whole is already late; we have depended 100% on hydrocarbons for decades,” he said. “We are now at 80%, but bringing that to zero will be a huge challenge. We will have to escalate solutions to a level never seen before.”

— Sheky Espejo

Global scrap consumption fell in the first half of 2022, following the same trend as crude steel production, the Bureau of International Recycling said Oct. 19.

H1 global crude steel production fell 5.5% on the year to 949.4 million mt, according to World Steel Association data previously reported.

Scrap consumption by key countries and regions decreased 8.4% year on year in H1 to 248.789 million, with related crude steel production also down 6.1% at 777.235 million mt, the BIR statistics showed, which represented verified data for 81.9% of global crude steel production, it said.

Largest steel scrap user China’s H1 steel scrap consumption dropped 13.8% to 119.55 million mt, with scrap usage as a percentage of crude steel production low at 22.7%, it said.

The second-largest user EU saw usage drop 3.2% to an estimated 43.856 million mt, while H1 scrap use in the US decreased 3% on the year to 22.5 million mt.

Turkey’s scrap consumption dropped 3% on the year in H1 to 12.480 million mt, although its steel scrap usage as a percentage of crude steel production was high at 87.1%.

The BIR noted that Turkey remained the world’s foremost steel scrap importer, with it importing 2.23 million mt from the US, 1.16 million mt from the Netherlands and 1.135 million mt from the UK.

Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $364/mt CFR Oct. 19, down 21.4% since the start of 2022, according to data from S&P Global Commodity Insights.

The second-largest importer South Korea imported 2.72 million mt scrap in H1, up 29.1% on the year, with supplies coming from Japan at 1.7 million mt, the US at 399,000 mt and Russia at 226,000 mt.

India imported 2.67 million mt of scrap in H1, up 0.3%, with 711,000 coming from the UAE, 208,000 mt coming from the US and 170,000 mt from Singapore.

H1 scrap imports also increased into Thailand, Indonesia and Norway, but fell to the US, the EU and Taiwan, BIR said.

US largest exporter in H1

The US was the largest steel scrap exporter in H1 for the first time since 2014, despite shipments dropping 5.6% on the year to 8.87 million mt, the BIR data showed.

Its main buyers were Mexico at 2.005 million mt, Turkey at2 million mt, Bangladesh at 900,000 mt and South Korea at 357,000 mt.

The EU’s scrap exports also fell 23.9% year on year in H1 to 8.5 million mt, with its main destination being Turkey at 5.8 million mt, Egypt at 625,000 mt and Switzerland at 318,000 mt.

The largest scrap exporter in the region was the Netherlands that shipped 1.82 million mt, down 35.8% on the year.

The UK exported 4.1 million mt in H1, down 0.8% year on year, mostly to Turkey at 1.05 million mt, Egypt at 856,000 mt and Bangladesh at 529,000 mt.

Canada, Singapore, Norway, Malaysia and Brazil all increased exports in H1, although Japan and Australia saw declines over the period, the BIR said.

— Jacqueline Holman

Our President represented yesterday EUROMETAL at the Flat Steel 2022 conference organised by Kallanish in Istanbul.

Mr. Fernando Espada participated in the last session about coil distribution, processing & end-use markets.

In addition to participating as a speaker, EUROMETAL collaborated in this conference as a Media Partner.

Miner Anglo American and German steelmaker Thyssenkrupp Steel have signed a memorandum of understanding to accelerate development of high-quality input stock for lower carbon steel production, using both conventional blast furnace and direct reduction iron, the companies said Oct. 20.

Thyssenkrupp said the new research and development work will focus on use of high-grade iron ore at its own installations, and will also involve working with partners.

“We want to decarbonize the steel value chain inside and outside our plant boundaries,” said Arnd Köfler, chief technology officer of Thyssenkrupp Steel. “We are setting up our own production with low-CO2 emissions through a combination of direct reduction plants with innovative melters. In addition, we are working with many partners to make steel lower in CO2 across the board.”

As part of its tkH2Steel project, Thyssenkrupp Steel’s coal-based blast furnaces will be replaced by hydrogen-powered direct reduction equipment. The iron produced by this equipment, directly reduced by hydrogen, will be liquefied in downstream, specially developed melting units to produce high quality hot metal, in what Thyssenkrupp maintains is a pioneering process. All subsequent production steps can take place in the existing plant structure, including the steel mills, allowing all the company’s products to be produced with low CO2 emissions, it said.

Thyssenkrupp recently released equity funds for construction of a first direct reduction plant at its Duisburg site, as part of an investment of more than Eur2 billion ($1.96 billion) in its “green transformation,” it said. The state government of North Rhine-Westphalia also intends to fund the project with an amount “in the mid three-digit millions,” according to the steelmaker.

The first direct reduction plant in Duisburg is scheduled to come on stream in 2026. The low carbon hydrogen-fueled direct reduction plant with downstream melters will have a capacity of 2.5 million mt/year and will avoid the emission of 3.5 million mt/year of CO2, according to information previously given by the company.

Thyssenkrupp Steel Europe is Germany’s biggest steel producer, with annual crude steel production of more than 11 million mt currently. It aims to produce 5 million mt/year of low-carbon steel by 2030, cutting emissions by more than 30%, and is targeting climate neutrality by 2045.

Miners target Scope 3 emissions cuts

Peter Whitcutt, CEO of Anglo American’s marketing business, said the miner is “combining the premium physical and chemical qualities of our minerals with thyssenkrupp Steel’s innovative technology to drive more sustainable operations.” High iron content ore with few impurities typically allows coal usage to be reduced in conventional steel mill blast furnaces.

In 2021 Anglo American set a target to reduce its Scope 3 emissions by 50% by 2040, building on a pre-existing commitment to reach operational (Scope 1 and 2) carbon neutrality by the same year. The majority of Anglo American’s Scope 3 emissions are linked to materials — steelmaking coal and iron ore — sold into the steelmaking industry, making decarbonization in the steel value chain central to the miner’s own decarbonization efforts.

Anglo American has now signed agreements with a number of major steelmakers in Europe and Asia to collaborate on decarbonization of the steelmaking industry, involving research on and supply of efficient feed materials suited to use in direct reduced iron steelmaking, including iron ore pellets and lump iron ore.

Iron ore miners Vale, Rio Tinto and BHP have also signed decarbonization research and collaboration agreements with major steelmaking groups worldwide in recent months.

Platts, part of S&P Global Commodity Insights, assessed hot-rolled coil in Northwest Europe up Eur10/mt Oct. 19 at Eur660/mt ($645.68/mt) ex-works Ruhr, in a subdued market. The price is down 28% since the start of the year. Iron ore prices are also down 22% from the start of the year on weakening demand. Platts 62% Fe Iron Ore Index was at $93.75/dry mt CFR North China on Oct. 19, down $1.05/dmt on the day amid a bearish market.

— Diana Kinch

German steel product sales in September fell 3.5% year on year to 855,795 mt, data from German steel stockholders’ association BDS showed Oct. 20.

The sales volume for the month, however, rose 2.3% from August to a four-month high, the data showed.

Some 60.9%, of sales were from the flat product category at 521,047 mt, down 1.4% year on year, but up 4.2% on the month to a six-month high.

Sales of long products in September made up 32.7% of the overall total at 279,633 mt, rising 4% year on year and up 0.65 from August.

Total nine-month sales were 7.8 million mt, down 5.5% year on year, of which 4.6 million mt was flats, down 5.6%, and 2.5 million mt was longs, down 0.5%.

Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur730/mt ($713/mt) ex-works Ruhr Sept. 30, down 3.95% from the start of the month.

Meanwhile, stocks of German steel products totaled 2.15 million mt in September, slipping 0.5% year on year and down 3.3% from August to the lowest monthly level since December 2021, the BDS data showed.

Flat products made up 63.2% total inventories in September at 1.4 million mt, which was 5% higher on the year, but down 2.9% on the month to a nine-month low.

Long products stocks totaled 749,675 mt in September, or 34.9% of the total inventory, dropping 6.8% year on year and down 4.2% from August to an eight-month low.

— Jacqueline Holman

Weak demand and a pessimistic outlook among market participants continued to stifle activity in the rebar market in Southern Europe in the week to Wednesday October 19.Mills offered competitive discounts to stimulate market activity, but customers remained in wait-and-see mode.

Italy
Sluggish demand and pessimism regarding the demand outlook for the rest of 2022 resulted in minimal trading in the Italian rebar market, Fastmarkets understands.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Italy, was €885-925 ($867-907) per tonne on Wednesday, down by €10-30 per tonne from €895–955 per tonne last week.

Rising interest rates, high inflation and uncertainty regarding a worsening recession across the continent has resulted in construction projects being postponed or cancelled, sources told Fastmarkets. This in turn resulted in weak end-user consumption for long steel products.

Customers were waiting for prices to drop further before restocking, they added.

One producer source said that there was little buying activity because consumers were waiting for prices to fall.

“Rumors that international scrap prices are going to increase soon have resulted in producers becoming more hesitant about offering any further discounts,” the source said. “We are not optimistic regarding a recovery in demand for the end of 2022 or the first months of 2023.”

Production cuts have not affected prices so far because demand was so low, sources said.

The potential for surging energy costs was another key factor that was making mills resistant to further price falls, they added. And while energy costs have fallen over the past fortnight, they were expected to rise again toward the end of the fourth quarter.

Imported stock bought from Turkey by a major Italian trader was being sold at a price €50-60-per-tonne lower than offers for domestic rebar. But overall appetite for imports remained depressed due to safeguarding risks, long delivery times and falling prices in the domestic market.

The Italian government has pledged support to help mills survive high energy costs. But the country’s new government was not yet established, so no support has yet been put in place, sources told Fastmarkets.

“We are still without a new government, so now there isn’t a clear view about help to high energy consumers like the steel industry,” one producer source in the region said.

Spain
Prices remained stable in the Spanish rebar market, Fastmarkets understands, although weak demand and a wait-and-see attitude among buyers continued to weigh on market activity.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered Spain, was €800-850 per tonne on Wednesday, stable week-on-week.

International scrap prices affect the prices of all long steel products. Scrap prices have stabilized through mid-October.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, was €365.00 per tonne on October 19, up slightly week-on-week from €362.41 per tonne.

Published by: India-Inés Levy

A normalisation of the global economic scenario could take place in the coming 18-24 months, according to doctor Osman Cevdet Akcay, a senior economist speaking at the opening of the Kallanish Flat Steel conference held in Istanbul this week.

Currently global economies are being strongly affected by inflation, but the latest decision of the US Federal Reserve to tackle inflation even at the cost of significantly slowing down economic growth (or even initiating a recession) has been accepted by international policy makers and is expected to have positive effects in 2024. Similarly the European Central Bank authorities are looking to tackle inflation despite a recession looming.

Dr Cevdet believes this position in favour of deflation against economic growth is going to be beneficial. The recent outlooks point to record levels for inflation levels in 2022, but a slowdown in inflation should already be achieved in 2023 (excluding for China).

He added that for developed economies the end of 2022 and 2023 wil be very bumpy, but a normalisation is in sight. He noted also that some countries such as India will have a smoother ride during the next months, as will the Asia-5 countries.

“The Fed and the ECB want to limit and reduce inflation at whatever costs and the market has finally understood we need to go though recession to deflate. Having said that, I remain relatively positive toward a normalisation in the next 18-24 months; if a truce is agreed between Russia and Ukraine I would even become very positive,” Dr Cevdet noted.

On the exchange rate side, Dr Cevdet said “I would bet on the Dollar strength.”

Emanuele Norsa Italy