Category: Latest Updates

The World Trade Organisation has established an official dispute panel to review the complaint lodged by Turkey against EU safeguard measures on steel imports.

The EU tried to block the dispute panel from being convened over the summer, but the WTO eventually accepted Turkey’s request. Turkey has been most penalised by the recent review of safeguard measures which became effective since the beginning of July, Kallanish notes.

“The EU said it firmly believes its measures are justified and in line with WTO rules,” the WTO release explains. The US, Switzerland, Norway, the UK, Ukraine, Russia, Argentina, Canada, China, Korea, Japan, Brazil, and India have all nevertheless reserved their third-party rights to participate in the proceedings, it adds.

Shanghai-listed Baosteel, during a news conference held Aug. 28, said China’s major steel end-users will continue recovering in the second half of the year, driving China’s crude steel production 4% higher year on year in 2020 to 1.04 billion metric tons – the first time the country’s annual steel production would breach 1 billion mt.

Baosteel expects China’s vehicle production to drop 6% year on year to 24.2 million units in 2020, improving from a 11.8% year-on-year drop in January-July.

The year-on-year decline in home appliances production was also expected to narrow from double digits in H1 2020 to single digits in full-year 2020.

Production of air conditioners, washing machines, freezers and refrigerators over January-July dropped 8% year on year, improving from the 11% drop in January-June, China’s National Bureau of Statistics data showed.

Meanwhile, China’s property and infrastructure sectors will continue to provide firm steel demand in H2, benefiting long steel, as well as flat steel products used in infrastructure projects, such as in bridges, wind mills and hydropower plants, according to Baosteel.

The company expects long steel prices to be well supported through H2, while Q3 is likely to be the strongest quarter in 2020 for the flat steel market.

China’s 14th five-year plan

Baosteel said further development of China’s vehicle manufacturing, especially for new energy vehicles, will be one of the focus points under the 14th five-year plan covering 2021-2025, boosting demand for high strength and ultra-high strength steel products, as well as non-oriented silicon steel, in the next five years.

Baosteel also expects to benefit from the development of high-end manufacturing sectors, such as ultra-high voltage power transmission and transformation, new energy, rail traffic and chemical engineering.

Meanwhile, China will promote a “dual-cycle” economic development pattern in the 2021-2025 period, which would prioritize “internal circulation” to “external circulation,” meaning domestic consumption will gain more policy support.

The “internal circulation” will be beneficial to Baosteel, as 90% of its steel production is currently consumed in the home market, while 10% is for exports, the company said.

Baosteel’s H1 performance

Baosteel’s net profit dropped 37% year on year to Yuan 4 billion ($583 million) over January-June. Its net profit in Q2 increased 60% month on month to Yuan 2.46 billion, but was still about 32% lower year on year.

In H1, its pig iron output dropped 4% year on year to 21.99 million mt, with crude steel output down 3% to 23.46 million mt. The declines were mainly due to the permanent shutdown of its subsidiary Wuhan Iron & Steel’s No. 1 blast furnace with 1.8 million mt/year capacity, in October 2019.

However, Baosteel’s pig iron and crude steel production is set to increase again in 2021 by 2 million mt, due to commissioning of the third blast furnace at Zhanjiang steelworks in southern Guangdong province in July 2021.

The blast furnace will have pig iron capacity of 4.1 million mt/year, and the steelmaking facilities will have production capacities of 4.5 million mt/year of hot-rolled coils and 1.66 million mt/year of cold-rolled coils.

Baosteel said China’s steel industry has remained scattered, and overcapacity has persisted, adding that its parent Baowu Steel Group will continue pushing ahead with its mergers and acquisitions strategy.

On Aug. 21, Baowu had signed an agreement to take a 51% stake in major stainless steel producer Taiyuan Iron & Steel, or TISCO, worth Yuan 14.5 billion ($2.1 billion), which will take its combined crude steel capacity to 111 million mt/year from about 98.5 million mt/year currently.

— Analyst Jing Zhang

In den ersten sechs Monaten des Jahres gingen die Stahllieferungen der europäischen Stahlservicecenter um 21,8 Prozent zurück. Bei den Flachprodukten fiel die Menge um 16,5 Prozent. Die Liefertage beliefen sich auf 84 Tage, verglichen mit 79 Tagen im Juni 2019.

Die Gesamtlieferungen der Mehrproduktstähle gingen im Jahresvergleich um 13,1 Prozent zurück, lediglich Betonstahl erfuhr eine höhere Nachfrage.

Quelle: Eurometal

Flat steel shipments from EU service centers fell by 21.8% year on year in the first half of 2020 while stocks rose, service center and distributors’ association EUROMETAL reported Aug. 28.

Stockholders’ distribution of multi-product & proximity steel — including long steel products — fell 13.1% over the same period. Stocks of these products at the end of June were lower than a year earlier, it said.

Flat products

In June, strip mill products shipments fell 16.5% on the year, a smaller percentage drop than the 38.5% in May, EUROMETAL said.

Expressed in days of shipments, stocks at EU steel service centers reached 84 days’ worth of shipments in June 2020, compared with 79 days in June 2019, the association reported.

Multi-products

In H1, EU multi-product and proximity steel stockholding distribution registered lower shipments for almost all products of its portfolio, with only rebar shipments increasing in the period, EUROMETAL said.

In June, these steel products shipments fell 10.2% from June 2019, it said.

Expressed in days of shipments, stock volumes of these products leveled in June 2020 at 81 days’ worth of shipments, down from 83 days in June 2019, the association said.

— Diana Kinch

Stainless steel group Outokumpu is testing the waters for new activities that may involve powder metallurgy and could be located in Germany.

German press reports suggest that the company might be building a new production facility at its strip mill in Krefeld, and that it is currently looking for a partner for such a project.

Upon request by Kallanish, a spokesperson of the company states that there are not many details to share yet, due to the status of the project.

“In line with our efforts to develop our operations and products, Outokumpu is continuously monitoring the markets for new business opportunities such as metal powder,” she says.

She confirms that the company is discussing a possible partnership with one of the market key players in this segment. As the planning process is still on-going, it won’t comment on further details at this point.

NLMK La Louvière has begun the pre-assembly of three new finishing mill stands for its hot strip mill upgrade, Russian parent NLMK tells Kallanish.

This will enable the company to expand the production of thinner, stronger and more environmentally friendly steel for customers in the EU. Investment amounted to EUR 150 million ($178 million).

The pre-assembly is planned to last until November, then dismantling of the old finishing mill stands will begin, followed by the installation of the pre-assembled and tested new ones. The finishing mill stands are supplied by Primetals, which was awarded the contract to modernise the hot strip mill in 2019.

The project will enable the mill to expand the production of high-strength, thin hot-rolled coil as thin as 1.2mm, NLMK says. It will also increase the range of high-strength products beyond 1,000 MPa yield strength and provide customers with best-in-class surface and dimensional tolerances.

The first phase of the mill transformation is scheduled for completion by the end of 2020, and the second phase will be completed in 2021.

Belgium-based La Louvière produces coil from slab supplied by NLMK’s principal Russian Lipetsk site. The supply volume is approximately 1.6 million tonnes/year.

NLMK’s consolidated steel output and sales were impacted in the second quarter by declining demand in its traditional sales markets due to the Covid-19 pandemic (see Kallanish passim). It expects lower on-year steel output at Lipetsk in Q3 because of major overhauls.

Consolidated output of crude steel decreased to 3.9mt in Q2, down by -8% on-quarter and -3% on-year due to lower capacity utilisation rates at NLMK Russia Long Products and NLMK USA.

Southeast Europe (SEE) crude steel production continued to decrease in January-July, according to the latest worldsteel data monitored by Kallanish. Regional output amounted to 2.002 million tonnes, down by -28.7% year-on-year.

In the first half of the year regional production had fallen -25.8% on-year to 1.82mt.

Serbia was again the largest steel producer among the seven countries of SEE, which also include Bulgaria, Croatia, Slovenia, Bosnia, North Macedonia and Moldova.

Serbia’s production of crude steel totalled 857,000t in January-July, down by -26.7% y-o-y.

The second-largest producer in the region, Bulgaria, saw its crude steel output fell -20.5% to 280,000t.

Third-largest steel producer Slovenia saw production of 324,000t, down by -14.8% y-o-y.

Fourth-largest Bosnia and Herzegovina saw its crude steel output down by -37.1% to 305,000t.

The fifth-largest steel producer, Moldova, produced 162,000t, down by -24.7% y-o-y.

Although Serbia’s crude steel production decreased, construction growth provides a positive outlook for the country’s steel industry, according to long steelmaker Metalfer (see Kallanish passim). The Serbian government stepped up construction projects in the run up to the general election, which the ruling party of President Aleksandar Vucic won in the early summer.

Seaborne iron ore prices steadied on Friday. Port stocks continue to resume, but the iron ore sector remains more firm than steel.

The Kallanish KORE 62% Fe index gained $0.12/t to $122.52/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index gained $0.13/t to $133.27/dmt cfr, and the KORE 58% Fe index slipped $0.39/t to $110.27/dmt cfr. On the Dalian Commodity Exchange, January 2021 iron ore settled up CNY 1.5/t at CNY 822.5/t ($119.62/t). On the Singapore Exchange, September 62% Fe futures settled up $2.42/t at $120.18/t, while the same contract for 65% Fe and 58% Fe futures settled up $2.3/t at $133.31/t, and down $1.19/t at $107.77/t respectively. In Tangshan, billet prices gained CNY 10/t to CNY 3,410/t.

Iron ore port stocks resumed their increase last week, but did not make up the decline the previous week. Across 35 ports, stocks were up 900,000t last week to 105.89 million tonnes, according to a count by SMM. Deliveries from port stocks slowed down, in part because of restrictions in Tangshan, and in part because of the disruption of Typhoon Bavi. Some restocking from mills is therefore likely to resume in the coming week.

Data released by the National Bureau of Statistics (NBS) meanwhile shows that the ferrous mining sector has seen profits surge. Ferrous mining profits were up 24.3% year-on-year at CNY 16.54 billion over January-June. The growth rate was second only to computers and electronics. The ferrous smelting and rolling sector by contrast saw profits fall 32% to CNY 110.69 billion over the same period.

In first 6 months of 2020, shipments of EU SSC dropped by -21,8%. In same period shipments of EU multi-product & proximity steel stockholding distribution were down by -13,1%.

In first 6 months of 2020, shipments of EU Flat SSC did fall  by -21,8% in a year-on-year comparison.

In June of 2020 compared to June 2019, Strip Mill Products shipments did drop by -16,5%, year-on-year, compared with -38,5% for the month of May.

The negative trend in SSC shipments was accompanied by higher SSC stock indices. 

When expressed in days of shipments, stocks at EU SSC reached 84 days in June 2020, compared to 79 days in June 2019.

For June 2020, the index of stock volumes did drop and noted at index 100, to be compared with index 115 in June 2019 (average 2015 = index 100).

In the first 6 months of 2020, EU Multi-Product & Proximity Steel Stockholding Distribution registered lower shipments for almost all products of its portfolio. Only rebar shipments noted higher.

As a matter of fact, during the first 6 months of 2020, total shipments dropped by -13,1 %, year-on-year.

June of 2020 compared to June 2019, “All Steel Products” shipments decreased, year-on-year by -10,2%.

Stock volumes index of EU Multi-Product & Proximity Steel Stockholding Distribution registered at 86 in June 2020, to be compared to a significantly higher index of 100 one year before (average 2015 =Index 100).

When expressed in days of shipments, stock volumes leveled in June 2020 at 81 days of shipments, compared to 83 days in June 2019.

One year after the launch of its B2B portal, Germany’s largest steel distribution group thyssenkrupp Schulte gives a positive status report on its e-commerce activities.

“In the past six months, the number of registered customers has almost tripled,“ Kallanish hears from the company. Sales growth via the B2B portal also shows a positive upward trend, reaching new monthly peaks, tk Schulte says. In order to improve the services, tk Schulte is in communication with customers on the possibilities and advantages of using the purchasing web shop.

“The intensive exchange allows us to individually identify the right channel with the maximum customer benefit. In this way we can support our customers specifically in their digital transformation and drive digital innovations together with them,” says Michael Bäuerlein, the company’s head of digitalisation and e-commerce. Additional comfort functions, such as retrieving or managing various documents themselves – from delivery notes to certificates – will be possible in the future, he says.

The B2B portal of tk Schulte is one part of the omnichannel concept for digitalisation which its parent group thyssenkrupp Materials Services is pursuing. Last year, the group also integrated artificial intelligence (AI) “Alfred” into its business processes.