EU’s Ukraine-origin semis imports increase in January-February

Ukraine has increased semi-finished products shipments to the EU amid the ongoing Russian invasion, Kallanish notes.

In January-February, the EU ramped up imports of semis from Ukraine by 21.6% on-year to 180,850 tonnes, according to Eurostat data.

The largest importers among the EU countries were Poland with 53,650t, less by 34.6%; Bulgaria with 40,050t, up 91%; Italy with 18,940t, up 89.5%; and Greece with 15,540t, up 155% on-year.

In February alone, the EU also increased imports of semis by 9% on-month and 6% on-year to 100,000t. The largest importers were Poland with 28,000t, up 9% on-month, Bulgaria with 38,000t, 25% more, and Italy with 13,200t, up 131%.

In 2023, the EU reduced imports of semi-finished products from Ukraine by 2.8% on-year 1.03 million tonnes. In monetary terms, intake decreased by 23% to $532 million.

Earlier, European steelmakers association Eurofer voiced concern over the European Commission’s decision to continue to allow Russian slab to enter the EU until 2028 (see Kallanish passim).

According to the latest decision, EU importers will be able to import some 3m t/year of slab from Russia until October 2026. The quota will then be reduced further to 2.6mt and then 2mt respectively during the following 12-month periods through October 2028.

Meanwhile, Russian billet imports into the EU will be prohibited from April 2024, as previously planned.

The EU reduced imports of semis from Russia in January-February to 474,600t, down by 11% on-year (see Kallanish passim).

In 2023, Russia’s steel and raw materials exports to the EU amounted to 4.8mt, down by 39.5% on-year, for €2.4 billion.

Svetoslav Abrossimov Bulgaria

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Tata proceeds with Port Talbot plan, strikes incoming

Tata Steel is proceeding with its single 3 million tonnes/year electric arc furnace plan for Port Talbot following seven months of formal and informal national level discussions with UK trade unions. Unions are gearing up for industrial action, Kallanish notes.

Port Talbot’s two blast furnaces, no.5 and no.4, will be closed by end-June and end-September respectively. Discussions will continue with unions during the next two weeks on a potential memorandum of understanding on the future ambitions of the business and the impact of the restructuring on employees, Tata says.

“We urge all our members in Tata Steel to vote ‘Yes’ and ‘Yes’ in our ongoing ballot for industrial action to help us negotiate an extension of blast furnace steelmaking at Port Talbot, secure the volume for downstream sites like Llanwern and Trostre, and guarantee there will be no compulsory redundancies,” says Community union general secretary Roy Rickhuss. The ballot result is expected on 9 May.

The Unite union says 1,500 members employed by Tata in Port Talbot and Llanwern have an industrial action mandate against plans to shut both blast furnaces, with strikes to be announced soon.

Tata has meanwhile begun preparations to place equipment orders for the EAF by September, begin enabling and preparatory works at the site by December, and based on current permitting timelines, begin construction on the project by August 2025.

The firm has accepted a revised and updated connection offer from the UK’s National Grid and will be finalising documents in the coming days. This will ensure it has the power infrastructure in place to commission the EAF on schedule by end-2027, it notes.

The steelmaker has already secured most of the slab and hot rolled coil substrate required during the transition period for the UK’s downstream mills. It has agreed details with Associated British Ports to expand the slab handling and stock holding capacity in the south Wales ports and is also in advanced discussions to have the rail movement capacity ready for onward transportation of substrate to the appropriate sites.

It adds it has agreed detailed terms with the UK government on the proposed grant package to support the £1.25 billion ($1.46 billion) EAF transformation, with final documents to be executed in the coming weeks.

“Having looked carefully at all the options over the past seven months in consultation with union representatives, we have decided to proceed with our proposed restructuring and transition. This is the most viable proposal, in contrast to the unions’ unaffordable plan which has high inherent operational and safety risk,” Tata says.

The company and the unions’ adviser reached a common conclusion that this plan would involve significant additional costs of at least £1.6 billion, it adds.

Tata Steel UK has had to supplement its own production with imported material of 333,000 tonnes during the last six months. In the 2023-24 fiscal year, the unit recorded a negative Ebitda of £373 million and negative free cashflow of £623m.

Adam Smith Poland

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SSAB’s high-strength steels prevail in weak environment

SSAB expects lower but stable prices in the second quarter, on higher shipments compared with Q1, the steelmaker’s executives said in a conference call on Wednesday monitored by Kallanish.

The company’s operating result for Q1 amounted to SEK 3.16 billion ($290 million), a drop by around one third from the first quarter of 2023. Revenue was SEK 27.15 billion, down from SEK 31.90 billion.

The decrease compared to a year earlier was primarily due to US plate prices that reversed from a high level. The market in Europe continued to be relatively weak, whereas the market for high-strength steel was more stable, the company states.

Demand for high-strength steel was slightly lower compared to the start of 2023, mainly within segments related to the construction industry in Europe and North America. Demand for standard steel in Europe was relatively weak and restocking was less pronounced than normal, outgoing chief executive Martin Lindqvist told call participants.

Market prices for strip and heavy plate in Europe took a downturn during the first quarter following the recovery that took place at the end of 2023. Distributors adopted a cautious approach during the quarter and import volumes increased compared to a year earlier. Inventory levels in the market are estimated to be normal.

In North America, demand for heavy plate was lower and market prices fell during the first quarter. Inventory levels at North American distributors were still low, but they remained generally cautious against a backdrop of lower market prices. For the second quarter, SSAB Americas’ shipments are assessed to be somewhat higher, while prices will be somewhat lower.

Christian Koehl Germany

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French car output ticks up in 2023

French passenger car production increased by 2% last year compared to 2022, says French carmakers’ association Organisation Internationale Des Constructeurs Automobiles (OICA).

The country’s automakers produced 1,026,690 passenger cars in 2023. When compared to 2019, however, the year before the pandemic, output decreased by 38%. In 2019, France produced 1,662,963 cars, compared to 927,344 produced in 2020 and 918,825 in 2021, Kallanish notes.

Light commercial vehicles (LCV) output in 2023 jumped by 28% year-on-year to 478,386 units. French production of passenger cars and LCVs combined increased last year by 11% to a total of 1,505,076. Compared to 2019, when the country produced 2,172,515, production declined by 31%.

According to the latest World Steel Association data, first-quarter crude steel production was slightly over 2.5 million tonnes. In 2023, the country’s output stood at 10mt.

Natalia Capra France

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Acerinox focuses on US market development

Acerinox will focus on “maximising” synergies with the acquisition of Haynes International (HI) and developing its presence in the US market. The group does not anticipate new mergers in the short term but is evaluating the path forward for its business in Malaysia. So says the global stainless supplier’s president, Carlos Ortega, during the company’s shareholders meeting.

“Haynes is a very relevant opportunity to increase the importance of the United States within the group and is in line with our strategy, together with the German VDM Metals highly valued supplier, to promote what we call the triple ‘A’: more America, more special alloys and more aerospace,” he comments.

HI’s transaction received approval from US antitrust authorities last week and is expected to close in the third quarter of 2024. Acerinox’s commitments include the absorption of its debt and other adjustments of approximately $172 million and an additional investment of $200m (see Kallanish passim).

The company’s chief executive, Bernardo Velázquez, states that Acerinox’s Bahru Stainless unit in Malaysia is going through a difficult situation. He suggests that the company is losing competitiveness following the flooding of cheaper steel from China in the region.

“We are making strategic reflection. The only thing that can be done is to stop production. We can’t compete there,” he observes.

Velázquez confirms that the board is trying to seal the new collective agreement with the workers at the Los Barrios plant in Cádiz, who have been on an indefinite strike since 5 February.

“In these moments when we are having losses, we have to be responsible and ensure everything goes forward,” he adds.

Acerinox produced 1.18 million tonnes of crude steel in 2023, down 11% year-on-year. Full-year cold rolled coil output fell by 15% to 1.22mt, while longs production dropped 41% on-year to 138,000t.

High-performance alloys output amounted to 76,000t in 2023, a decrease of 7%.

Acerinox’s 2023 net sales fell 24% y-o-y to €6.6 billion ($7.14 billion), while the group’s Ebitda was 45% lower at €703 million.

Todor Kirkov Bulgaria

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China, EU drag down March global output

Global crude steel production fell 4.3% on-year in March to 161.19 million tonnes, although this was up over 10mt on February. Weaker Chinese and EU output were the main drivers of the on-year drop, Kallanish notes from worldsteel data.

Chinese production slid 7.8% on-year in March to 88.27mt, while Japanese and Korean production were down 4% and 9.5% respectively to 7.2mt and 5.28mt. Indian output however surged 7.8% to 12.7mt.

Japanese and Korean output nevertheless rose slightly versus February, while China’s output was up 7mt, although the February tonnage remains an estimate.

EU27 crude steel production fell 4.3% on-year in March to 11.6mt, despite German production rising 8.4% to 3.5mt and French output by 2% to 812,000t. However, Italian and Spanish production dropped 12.6% and 14.4% respectively to 1.9mt and 1.02mt.

EU output nevertheless rose by almost 900,000t versus February.

Turkish production soared 18% on-year in March to 3.2mt, coming from a low, post-earthquake base last year.

US production was flat on-year at 6.91mt and Brazilian output rose 5.6% to 2.79mt.

Russian volumes are estimated to have risen 0.8% to 6.64mt.

Crude steel output in the 71 countries monitored by worldsteel inched up 0.5% on-year in the first quarter to 469.06mt.

Adam Smith Poland

Thyssenkrupp Materials advocates alternative drivetrains for US logistics

Thyssenkrupp Materials Services is evaluating alternative drivetrains for its road transport vehicles in North America, where it has numerous subsidiaries, in order to reduce emissions, says chief executive Martin Stillger.

Speaking on the occasion of the International Logistics Day last week, Stillger said more than 72% of US freight is transported by road each year. Trucks travel more than 300 billion miles annually, and generate emissions that need to be reduced drastically.

“As one of the world’s leading mill-independent materials distribution and service providers, we are aware of our great responsibility to reduce greenhouse gas emissions,” Kallanish heard from Stillgers. “In California, a large proportion of our truck fleet already runs on renewable diesel R99. The engines do not need to be specially converted, but the CO2 savings are still enormous.”

Also in the USA, some units are currently testing the use of RNG trucks that run on renewable natural gas. In Germany, the first hydrogen-powered trucks started this year, while the UK subsidiary uses trucks that run on hydrotreated vegetable oil (HVO). The sustainability strategy of thyssenkrupp Materials Services is called “BEYOND” and is based on internationally recognised ESG standards, the company notes.

On the occasion of another recurring international date last week, the UN World Day of Creativity and Innovation, tk Materials Services presented its new solution entitled “Forward Sensing”. It describes the tool as a cross-industry digital platform that gives users a complete view of their entire end-to-end supply network and its dependencies in real time.

“This is done by sharing transactional data, such as orders and their confirmations. Of course, this involves a lot of effort in terms of data provision, but it more than pays off in the end,” explained Sebastian Smerat, head of subunit Smart Services.

Christian Koehl Germany

GCC-Iraq-Turkey-Europe land link could facilitate commodities trade

Turkey and Iraq have signed a memorandum of understanding on the Development Road project to connect the Gulf Cooperation Council and Iraq to Europe via Turkey, according to Turkish media reports.

The project aims to establish a 1,200km highway and railway from the Grand Faw Port in Basra, Iraq, through the Iraqi cities of Diwaniyah, Najaf, Karbala, Baghdad, and Mosul to the Turkish border. It aims to provide access from the Turkish border to Mersin Port in Turkey and onward to Europe via Istanbul by road.

The agreement, involving Turkey, Iraq, Qatar, and the United Arab Emirates, aims to significantly reduce transportation time to 25 days and set a $20 billion target for Turkey-Iraq trade.

The deal was made during Turkish President Recep Tayyip Erdogan’s visit to Iraq, the first in 13 years, during which a total of 26 agreements were signed to enhance bilateral cooperation in various sectors, including energy, trade, education, tourism, sports, health, and defence.

Given the Red Sea shipping crisis, the alternative of road transportation is gaining importance for ensuring safe transportation of, among other things, commodities such as steel, Kallanish notes.

Elina Virchenko UAE

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Mills welcome German federation’s ‘LESS’ low-emission standard

Two steelmaker groups, GMH (Georgsmarienhütte) Gruppe and Swiss Steel, have issued notes of approval for the proposal from German steel federation for a standard for low-emission steel.

Both mills happen to be makers of special bar qualities, and the word of Swiss Steel may have some international weight, given it has melt shops in Germany, Switzerland and France.

WV Stahl announced on Monday that it has set a cornerstone for prime markets for climate-friendly streel with a standard its members developed together with the German economy and climate protection ministry.

The Low Emission Steel Standard (LESS), as it is called, is the first standard that makes the main customary production routes, blast furnace and EAF, comparable in terms of their efforts to decarbonise. Its centrepiece is a labelling system for the classification of low-CO2 steels, Kallanish learns from WV Stahl.

Companies certified by LESS will have to reveal their product carbon footprint (PCF) according to the environmental product declaration (EPD). The LESS book of rules provides a basis from which steel users can obtain all information they need to be able to document their climate targets, the federation explains.

“The quest for a definition of green steel has long been discussed internationally,” says Bernhard Osburg, president of WV Stahl and chief executive of thyssenkrupp Steel. “I am happy that we joined our efforts to work out a solution that is based on international rules and which finds a broad consensus.”

GMH Gruppe managing partner Anne-Marie Grossmann has already pointed to a next step, the establishment of the standard in public investment. Once public institutions take LESS as a mandatory basis for their materials procurement, the acceptance of LESS will gain momentum, Grossmann says.

Christian Koehl Germany

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Bureaucratic delays threaten support for transition: Eurofer

European Resilience Fund money, meant to support investment by steelmakers into cleaner technology, could no longer be available when steelmakers need it, according to Eurofer.

The so-called RRF fund requires the project be implemented by 2026, which is too short notice for the timeline used in building big plants. “Equipment suppliers say they cannot deliver such plants before 2026,” Eurofer director general Axel Eggert said on the sidelines of “The Future of EU Industry” conference in Brussels attended by Kallanish earlier this month. “We are losing €1 billion [$1.1 billion] because of that.”

The system is caught between the RRF’s expiry date, technology suppliers’ delivery schedules and delays in implementation of relevant legislation at EU member level (see separate story). Eggert gave the example of a case in which a supplier cannot deliver the equipment earlier than 2027, meaning that one mill already granted €1 billion is now at risk of losing it. “We do not need more money, but we need better coordination,” Eggert maintained.

Another issue is that EU members seem to favour decarbonisation in principle but do not make it a prerequisite in their own public tenders. “In this sense, there is a huge contradiction,” Eggert said, adding that 40% of all spending in the EU is public. If EU public procurement legislation included references to green products, this would allow for the creation of lead markets for green steel/green products in the EU, he concluded.

Christian Koehl Germany