Category: Latest Updates

The European Steel Association (Eurofer) has filed a registration request against HRC imports from Turkey that could make retroactive any duties set in the dumping case opened by the European Commission (EC) four months ago, S&P Global Platts learned from Veysel Yayan, general secretary of the Turkish Steel Producers’ Association (TCUD), on Sept. 24.

“Eurofer knows no limit in protectionism,” Yayan commented.

The EC launched an anti-dumping investigation into imports of certain hot-rolled flat products from Turkey in mid-May following a request by Eurofer. The preliminary decision in the investigation is expected to be announced on Dec. 23 to be imposed on Jan. 14, 2021. The measures could be retroactively implemented in mid-October.

Eurofer also filed a complaint at the end of May with the EC requesting a countervailing duty (CVD) investigation against allegedly subsidized hot-rolled coil imports from Turkey, as S&P Global Platts has reported.

Due to the COVID-19 pandemic Turkish mills’ steel exports – particularly HRC – to their traditional export market, Europe, had already declined notably in the first seven months of the year. This decline could accelerate in the coming months due to the EU’s imposition a country-specific quota on HRC imports as of July 1, instead of a global quota. The anti-dumping and countervailing duty investigations could deepen this decline.

According to Platts calculations from the latest Turkish Statistical Instute (TUIK) data, Turkish mills shipped around 1.3 million mt of HRC to the EU region in January-July 2020, amid the pandemic, annualized to 2.2 million mt.

Turkey shipped more than 3 million mt of HRC to the EU region during the 12-month period to July 2019. But, with the new quota system, Turkish mills can only ship 1.37 million mt of HRC to the EU during the July 2020 to July 2021 period, a sharp on-year decline in export volumes.

— Cenk Can

Turkey has re-extended the duration of provisional import duties on 300 products, including some steel products, until Dec. 31, with a presidential decree published on Sept. 24 seen by S&P Global Platts.

Turkey began to impose additional import duties on some finished and semi-finished steel products for a three month-period on April 18 until July 15 to protect production and employment in the domestic steel industry during the COVID-19 pandemic.

According to the April 18 decree, customs duties on some alloy and non alloy billet, slab, hot-rolled coil, cold-rolled coil, coated coil, stainless steel, sections and some bar products increased from the previous range of 9%-15% to 14%-20%.

The duration of the duties was then extended till Sept. 30 with another presidential decree on July 14, as Platts has reported. These duties will now remain in force until Dec. 31, 2020.

EU countries and countries with which Turkey has free trade agreements, however, are exempt from these provisional duties.

Turkey was expected to impose retaliatory duties against EU steel, based on the reciprocity principle, in response to the EU’s move for additional measures against EU imports of Turkish steel. Turkey informed the World Trade Organization in this regard on May 25. But, despite Turkish mills’ expectations in this regard, no decree about it has been published so far by the government.

World Trade Organization members have agreed to the establishment of a dispute panel to review a complaint filed by Turkey regarding the EU’s safeguard measures on imports of certain steel products at a meeting of the Dispute Settlement Body (DSB) on Aug. 28, as Platts has reported.

Veysel Yayan, general secretary of Turkish Steel Producers’ Association (TCUD), told Platts that the final report of the panel is expected within six months.

— Cenk Can

Beltrame’s Romania-based Donalam plant is investing €11.3 million ($13.3m) into modernising its hot rolling mill, thereby reducing carbon emissions by -40% and improving competitiveness of steel bars produced, the Italian firm says.

The investment in the Calarasi-based plant will be made from own funds and is expected to be completed by 2022.

The new technology will consist of a reheating furnace, electrical drivers and water treatment system with a production capacity of 120 tonnes/hour. This has high flexibility for round and square sections from continuous casting or ingot up to 700mm diameter, Beltrame says.

The upgrade will reduce gas consumption by up to -40%, or 2.4 million m3/year, and result in thermic energy savings of over 27,300 MWh/year and electricity savings of over 1,300 MWh/year. It will reduce the amount of steel wasted in the production process by about 1,440 tonnes/year. CO2 emissions will fall by almost 5,000 t/y.

“We had planned this investment within the group before the European Parliament approved ‘The Green Deal’, a project that obliges Member States to major investments so that, by 2050, the EU becomes climate neutral,” says Donalam Calarasi chief executive Carlo Beltrame.

“In addition to the investment of 11.3 million euros, already ongoing implemented, we are analysing a much larger investment of over 100 million euros to change the paradigm of the steel industry, considered for a long time, extremely polluting,” he continues. “We have the ambition to have in a few years in Romania the most ‘green’ steel plant in Europe.”

Earlier this year Donalam completed a €4m investment into a special steel bar treatment line, allowing the company to offer steel bar products with increased added value (see Kallanish passim).

Donalam produces 8-320mm diameter round bar for use in oil & gas, agricultural machinery and equipment, large mechanical equipment and hydraulic equipment. The firm had a turnover of €78m and sales of 106,000 tonnes in 2019. It distributes its product throughout Europe through partnerships with Germany’s GMH and Austria’s voestalpine. Feedstock is imported from Germany.

Italian crude steel production went up in August for the first time this year, marking a sign of slight recovery, but cumulative production since January was still negative, Italian steel producers association Federacciai data showed Sept. 23.

Crude steel production in August totaled 939,000 mt, up 9.7% on the year-ago month, while production from the beginning of the year to August was down 17% year on year to 12.76 million mt.

Production of long steel products was 10.7% year on year to 487,000 mt, while output for flat products was down 16.2% to 6.8 million mt.

ArcelorMittal Italia, Italian largest flat steel producer, is producing at its lower ever historical level, and Arvedi, Italian second-largest flats producer, stopped production at its 2.8 million mt No. 2 electric-arc furnace for upgrading at the beginning of August.

Arvedi restarted production at its No. 2 EAF in mid-September, while AM Italia is still producing at its lowest capacity. The former Ilva is working with two of the four blasts its cold-end units.

ArcelorMittal Italia workers are planning to go on strike Sept. 24, demanding clarity about their future after production was halted across most of the site. The are meeting Sept. 23 with the Italian minister for economic development, Stefano Patuanelli.

— Annalisa Villa

German crude steel production in August was 17% higher month on month to 2.83 million mt, reflecting the ramp up of producers over late summer, data from German steel federation WV Stahl showed Sept. 23.

Although output remained 13% below 2019 levels and WV Stahl saying a stabilization of the situation had yet to be seen, the increase from July suggested production cuts by German mills during the height of the coronavirus pandemic have been reversed somewhat.

The month-on-month increase could be seen in both blast- and electric arc furnace-based production, which grew 12% to 1.99 million mt and 11% to 844,000 mt, respectively. Pig iron production rose 2% to 1.8 million mt, which was down 15% year on year.

Hot-rolled steel production amounted to 2.4 million mt, up 4.3% from July but down 13% from August last year.

According to S&P Global Platts monthly German steel sentiment survey at the beginning of September, the majority of participants expected further production increases in early autumn as mills were increasingly ramping up as demand rose.

Finding an equilibrium between supply and demand has been one of the biggest challenges during the pandemic for mills.

“Small furnaces are being restarted. But mills seem to be disciplined and not ramping up too quickly, because they would pay the price later,” a German mill source said.

— Laura Varriale

The looming second wave of the Covid-19 pandemic is creating huge uncertainty over steel demand and pricing in the fourth quarter after the market improvement witnessed in Q3. So said International Rebar Exporters and Producers Association (Irepas) committee members at the association’s virtual meeting this week.

Scrap is back to pre-pandemic levels of $300/tonne cfr Turkey, thanks in large part to “…extreme” raw materials and semi-finished products demand from China, which has proved a “…saviour,” Irepas raw materials suppliers committee chairman Jens Björkman said during the meeting attended by Kallanish.

There is a lot of uncertainty over renewed lockdowns, Björkman added, but also positives such as the strong construction sector performance.

Traders committee member F.D. Baysal said the US market has stabilised from the pandemic-induced shock, but average capacity utilisation of 65% is still down on the September 2019 level of 80%. Residential construction has grown but non-residential is down with lower recovery prospects, he added. Steel prices have increased, driven by costlier scrap and low inventories, but some of these prices may not hold if the pandemic deteriorates, he observed.

Producers committee chairman Murat Cebecioglu, meanwhile, said the pandemic has resulted in investment delays that have reduced demand. Chinese stimulus measures and reduced exports are driving the global market. However, there is huge uncertainty regarding the future development of the virus.

Baysal said there will be fundamental changes to economies after the pandemic, with more people working from home and companies occupying less office space. This will create office overcapacity, considering the segment was already oversupplied before the pandemic. However, there will be more warehouses and distribution centres built to cater for growing online retail.

Björkman argued China’s scrap import restrictions make little sense. Although China has vast scrap reserves, they are spread throughout the nation and need to be transported long distances to areas where mills are located. Moreover, some scrap may have quality issues and therefore need to be blended with imported material.

When it comes to steel demand, “…I guess for Turkey it is looking a lot rosier now than it did 4-5 months ago,” Björkman observed. Construction activity and capacity utilisation is rebounding globally, resulting in increased raw materials demand. It remains to be seen whether supply keeps up, he concluded.

Blast furnaces have no long-term future in Europe, with very few, if any, likely to remain in operation by 2050 when the EU aims to achieve carbon neutrality, according to Andreas Schneider of Stahlmarkt Consult.

Various ways of moving towards carbon neutrality are being considered by EU steelmakers. The closure or reduction of capacity, such as that touted by ArcelorMittal Italia, entails high decommissioning costs and social unrest. EAF-based production potentially with captive direct reduced iron poses questions over whether the steel quality produced is sufficient for high-end applications like automotive.

The Hisarna ironmaking process in combination with carbon capture and storage (CCS) requires CO2 infrastructure. And the capturing and recycling of carbon from steel mill gas, as in the “Carbon2Chem” and “Steelanol” processes, has a high energy requirement.

Hydrogen-based DRI and steelmaking is seen leading the way in Germany because it is innovative and politically attractive, and can potentially zero carbon emissions completely. However, its energy requirement is ten times higher than for conventional primary steelmaking. This would generate an additional 130 TWh of energy demand, around 50% of German energy production in 2019. DRI production based initially on natural gas is a possibility from 2025, with increasing volumes of hydrogen added to the feedstock mix thereafter.

According to a study from German think tank Agora Energiewende, the hydrogen route would result in a €532-630/tonne crude steelmaking cost by 2050 compared to €391/t in 2019. “Steel will be costlier,” Schneider said at this week’s MBI Stahl Tag conference in Frankfurt attended by Kallanish. “And the question again is who will bear this?”

“Green” steelmaking requires a huge investment – estimated at up to €1,000/t – that not many companies can afford. The pace of technological development required is meanwhile unlikely to keep up with demand, leading potentially to steel shortages that will drive up prices. The question is, “…will green steel be produced in sufficient amounts for market demand and will the market pay for it?” Schneider asked.

Among other things, a new wave of certification and bureaucracy is on the horizon, which will include the requirement of labelling all steel with CO2 content. Moreover, a border adjustment tax and “Carbon Contracts for Difference” are being touted, but it remains unclear who will bear the costs of these.

“All of this will make steel costlier and more complicated,” Schneider observed. It could lead to loss of international competitiveness and growing protectionism against German steelmakers who are export orientated, and declining margins if additional costs cannot be passed on.

The Spanish automotive sector recovery from the Covid-19 pandemic impact floundered in August, Kallanish learns from national Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac).

“Production is recovering progressively since the restart of activity of Spanish automotive factories in May,” Anfac says. “The summer period, however, conditioned the rhythm of output during July and August.”

July-August saw a sales recovery in the main European markets, such as France (+3.9%) and the UK (11.3%), the association observes. “Meanwhile, the Spanish market saw a slow return to activity, which prevented production from recovering at a better pace. One in four vehicles manufactured in Spain stays within our borders, so it is also necessary to increase demand in the country for factories to recover,” Anfac adds.

Spain’s automotive production totalled 80,481 units in August, down -27.9% compared to the same month in 2019. January-August output was 1,274,642 vehicles, -32.7% less than in the first eight months of last year.

August Spanish vehicle exports were 82,994 units, a fall by -14.1% on-year. Year-to-date shipments abroad fell -29.6% to 1,081,845 units, Anfac adds.

Northwest European mills are holding coil offers firm, supported by a recovery in demand from the automotive sector, and a dip in prices is unlikely anytime soon.

This is especially true for hot-dip galvanized coil, after carmakers resumed activity in summer to a large extent. “I do get the impression that demand for HDG is altogether stronger than for cold-rolled,” a Dutch fabricator summarises following talks with various business partners.

A German stockholder concurs. “Demand for galv is definitely higher; carmakers ask for it nearly exclusively,” he tells Kallanish. “Galvanizing lines are the production step with the smallest capacity, so bottlenecks occur there most easily.” He believes that “…we are not far from the €600/t [$700/t, ex-works],” which the leading mill previously announced as its target. Another buyer confirms he paid this price “…for a smaller lot.”

A mill representative claims that €600 has already been reached, and that “…smaller lots” are currently the rule rather than the exception for deals. “There is not much free capacity left until the end of the year, so you simply won’t get big lots anymore,” he says, and predicts that January will see the €600 mark surpassed.

It appears that galv is at more than the customary €100/t above hot rolled coil, which is pegged at around €480/t, with cold rolled coil fetching some €70-80 more.

Voestalpine’s Metal Engineering division has commissioned a new, fully automated continuous caster, with an annual production capacity of 1 million tonnes, Kallanish learns from the company.

The division at voestalpine’s Donawitz site produces high-grade steels for processing into special rails for railway infrastructure, premium wires for the automotive industry, and high-quality seamless tubes for oil & gas exploration.

It spent around €90 million ($105m) on the new caster, which it says will allow the group to make even higher-purity steels with optimal surface properties. For example, cracks caused by extreme stresses on rail surfaces can be prevented through the use of homogenous material structures, it says.

The CC4, as it is called, replaces a caster that had been in operation for 40 years, and fully complies with all Industry 4.0 standards, voestalpine emphasises.

The facility was supplied by Primetals and can produce round blooms with a diameter of 230mm and rectangular blooms with a cross-section of 270x360mm. It is designed so that it can also produce a format of 440x330mm. It will be able to process rail steels, case-hardening steels, machining steels, feedstock for seamless steel tubes, heat-treated steels, spring steels, and various other sorts.