Day: 28 February 2023

The blast furnace at ArcelorMittal Bremen whose production was reduced to a minimum is now back to regular operation, Kallanish is told by a German official of the ArcelorMittal Group.

Blast furnaces in various European countries were temporarily shut down last autumn in response to low demand and purchasing activity, with most now reactivated. Most German mills, on the other hand, kept all their active blast furnaces in operation. ArcelorMittal Bremen decided to stop pig iron production at one BF but still kept it running for power generation purposes.

The fact no German blast furnaces were fully idled may have to do with the country’s high electricity costs, meaning mills tried to maintain their on-site power production with the top gas from their blast furnaces.

One unit that was stopped, however, was the direct rection plant at ArcelorMittal Hamburg, the only of its kind in Western Europe. While blast furnaces have a by-function as power generators, a DRI plant is subject to external supply of power and especially gas, which both became too costly for the mill to keep going. This unit, too, is projected to come back on stream in the first half year, “sooner than we had planned”, the spokesman says.

Christian Koehl Germany

The EU Commission and UK government have agreed a solution for the movement of the most sensitive categories of steel from Great Britain to Northern Ireland that are subject to tariff rate quotas (TRQs). This comes as part of the changes agreed to the Northern Ireland Protocol on Monday, Kallanish notes.

Northern Ireland companies will now be able to use the EU’s TRQs for steel, providing them access to UK-origin steel in these categories. This will allow them to avoid having to pay the 25% tariff linked to the EU safeguard measures currently in place for steel imports into the EU, the Commission notes.

In response, UK Steel director general Gareth Stace says the deal “will make a significant difference in being able to move steel tariff-free from Great Britain to Northern Ireland, in the context of a complex interplay between the terms of the Protocol and the EU’s steel safeguard quotas. The provision of separate quotas for certain products that can be earmarked for the UK’s use for shipments into Northern Ireland creates a blueprint that can be more widely applied and demonstrates a willingness to find workable solutions.”

“The previous arrangement had meant that the UK was dependent on whether countries like Turkey were using up the EU’s quotas to determine whether steel could be moved within the UK tariff-free. This was clearly illogical and we are hugely pleased that a sensible solution has been agreed in what until recently appeared as a stalemate,” Stace continues.

“While the new arrangement does not solve all problems in relation to trade with Northern Ireland, it marks a positive step forward, addressing the most urgent issues and creating a framework for reaching further solutions,” he concludes.

Since the start of 2021, the UK implemented a temporary “workaround” to ensure steel moved from Great Britain to Northern Ireland remained tariff free. However, changes the EU made to its steel safeguard regime last July resulted in this workaround no longer working for constructional steels including steel beams and reinforcing bar. The exhaustion of EU quotas for these product categories had resulted in steel movements from Great Britain to Northern Ireland being liable to tariffs.

Adam Smith Poland

Turkey has postponed the effective date of the increase in customs duties on imports of flat steel with a new presidential decree published Feb. 26, following an earlier decree on the same on Jan. 28.

According to the decree seen by S&P Global Commodity Insights, the effective date of the custom duty rise will now be April 1 instead of Feb. 27

Customs duties on unalloyed hot-rolled, cold-rolled and coated coil imports will be increased by 6%-7% to 15%, 17% and 20%, respectively, as of April 1.

EU countries and countries with which Turkey has free trade agreements will be exempted from the customs duty rise.

Both long and flat steel prices in Turkey’s domestic market have increased recently amid some temporary mill stoppages due to the Feb. 6 earthquakes and increased demand from reconstruction activities that are expected to start from March, sources said.

As Turkish producers could reserve most of their steel capacities for reconstruction projects, prices in Turkey could rise further, sources said.

“The government’s latest move is probably aiming to prevent the increase in flat steel prices in the domestic market, however, it could technically have limited effect as the effective date is still very near,” a steel service center manager said Feb. 26.

Platts assessed the Turkish HRC steel price at $815/mt ex-works Feb. 24, $50/mt higher than on Feb. 4 before the earthquake.

— Cenk Can