Category: Latest Updates

Germany’s largest road haulage company for steel transport, Hergarten, feels it will emerge from the coronavirus crisis in a stronger position than before, thanks to its efforts with digitalising processes.

“We have been lucky that we had all major internal processes moved to the cloud in time before the coronavirus crisis came on,” says managing director Marcel Hergarten. The company, therefore, has further digitalisation projects planned for the time after Covid-19. Personnel and vehicle files will be available online in the future, and the telematics and merchandise management systems of the company and its business partners will be synchronised.

The digitalisation started some ten years ago, and over the years was pushed to cushion the notorious lack of skilled personnel in the transportation sector. “The enormous value-added of digitalisation for a medium-sized company like us, despite initial costs and efforts for integration, has never become clearer than now,” Hergarten says.

On the competition of Uber Freight, which started its services in Germany last year, the company sees little danger for local transportation groups, which are highly specialised. “For us, such app-based providers can even be a sensible addition at times,” Kallanish hears from Hergarten. For example, the company frequently uses Europe’s largest freight exchange, Timocom, for bookings to offer space for return trips to avoid unladen journeys.

Based in Cologne and Düsseldorf, Hergarten operates 180 trucks with 300 employees, plus warehouses with steel processing facilities.

Most Italian steelmakers will shut down for 2-3 weeks on average for maintenance works this summer. Firms had been willing to stay open to compensate for the long shutdown during the Covid-19 lockdown, but domestic and export demand for finished long products is not strong enough, market participants tell Kallanish.

Longs producer Beltrame will shut down from the start of next week to 25 August. Rebar producers Alfa Acciai will be closed from 8 to 25 August, and Duferdofin Nucor from 26 July to 31 August. Riva Acciaio in Caronno closed on 25 July and is set to reopen on 23 August. Ori Martin will be idled from next week to 23 August. Longs producer Accieirie Venete is also shutting down from 27 July to 21 August.

Tenaris Dalmine is closed from 20 July and will restart operations on 23 August, although the rolling mill was idled slightly later on 27 July.

Rebar maker Feralpi Siderurgica, a net rebar exporter, will implement short stoppages and keep producing to satisfy both domestic and export orders. The company will idle its main works in Lonato del Garda for only a week from 10 to 16 August. Acciaierie Calvisano, part of Feralpi, will be idled from 8 to 21 August, while Feralpi Profilati Nave is shutting down from 27 July to 21 August. The works in Lecco will also be idled from 3 to 28 August.

UK car production fell by 48.2% year on year in June, with half-year output running at its lowest level since 1954 despite a partial recovery from April-May lows, according to figures released July 30 by the Society of Motor Manufacturers and Traders.

“Although post-shutdown production slowly ramped up in the month, strict social distancing measures and weak demand across global markets continued to restrict output,” SMMT said in a statement.

A total of 56,594 units were produced in June, “rounding off [the] weakest six months since 1954,” SMMT said, adding that for the first six months of the year production of 381,357 units was down 42.8% on H1 2019 — a decline of more than 285,000 units.

June manufacturing for the domestic market was down by 63.8% year on year, reflecting the gradual easing of the UK’s retail lockdown, while production for export also fell, by a substantial 45%, the group said.

SMMT added, however, that overseas orders accounted for nine out of 10 vehicles built as key global markets, including the EU, China, US, South Korea and Japan, opened for business earlier than the UK.

“Recovery is difficult for all companies, but automotive is unique in facing immense technological shifts, business uncertainty and a fundamental change to trading conditions while dealing with coronavirus,” said Mike Hawes, SMMT’s chief executive, citing ongoing concerns over a possible “no-deal” Brexit.

According to a survey of SMMT members, six out of 10 automotive companies say COVID-19 has diverted resources away from Brexit preparations, while more than seven out of 10 view securing a tariff- and quota-free trade agreement between the UK and the EU as crucial to their future success.

The latest independent production outlook commissioned by SMMT now expects just over 880,000 cars to be produced in the UK this year — around 32% lower than 2019 and 30% less than anticipated in January pre-crisis, the group said.

“The analysis also suggests that without a positive trade agreement with the EU, and the industry trading on WTO terms with 10% tariffs, output could stay around the 800,000 mark, or less, to 2025,” SMMT said.

In contrast, a successful conclusion to negotiations with a zero tariff and quota free trade agreement would see car volumes recovering to pre-crisis levels of 1.2 million units within the next few years, with potential for growth thereafter, it added.

“The critical importance of an EU-UK FTA is self-evident for UK automotive. Our factories were once set to make 2 million cars in 2020 but could now produce less than half that number, a result of the devastating effects of the pandemic on top of already challenging market conditions and years of Brexit uncertainty,” said Hawes.

— Andy Blamey

Italian steelmakers’ association Federacciai president Alessandro Banzato says Italian crude steel output is recovering slightly, calling the June decline of only -13% on-year “…encouraging.” This comes after the sharp drop of over -42% in April and over -16% in May.

During a webinar organised by Siderweb, Banzato added that the former Ilva steelmaker, now ArcelorMittal Italia, has been running at minimum capacity.

“If this gradual recovery was to consolidate in the coming months, we could forecast an end of year production fall of -15%, in line with forecasts for Europe,” Banzato commented. “My hope is that we do better before the decisive recovery forecast for 2021.” While scrap values are forecast to broadly remain stable next month in Italy, he also said German price movements in August will have an impact on other European countries.

Meanwhile, UBI Banca foresees a recovery between 2021-2022 with a gradual and progressive improvement particularly for those companies and sectors that focus on exports, Kallanish understands. However, 2020 will be particularly negative for Italy’s GDP and companies in the steel sector, UBI Banca concludes.

Global cold rolled stainless steel production is estimated to have fallen by -12% on-year in the first half of 2020, with every country experiencing a decline in output.

Average utilisation rate is estimated to have decreased from 76% to 63%, with a resulting increase of 2.8 million tonnes in overcapacity. Due to the stainless consumption drop in all major regions resulting from Covid-19 and demand weakness, coupled with new capacity in China and Indonesia, global utilisation rates should remain in this range in 2020, says French stainless producer Aperam.

Utilisation is expected to remain relatively low until at least 2022, assuming China does not address its overcapacity issue and there is no recovery in global demand. European producers are expected to remain under pressure as imports remain at a high level in a contracting market. Moreover, further capacity is coming online in 2020, in particular from Indonesia, Aperam says.

All Aperam’s non-essential and discretionary expenses have been frozen while capital expenditures have been reviewed down to reach about €100 million ($117m) in 2020. Half of this amount is for the new cold rolling and annealing and pickling lines in Genk, Kallanish notes.

Aperam started well into the year 2020 with a first quarter marked by a seasonal volume recovery and the exhaustion of some import quotas increasing demand for domestically-produced material. Prices remained flat. Towards the end of Q1 the company started to face significant Covid-19-related effects which continued over Q2.

Ebitda was €70m in Q1 and €49m in Q2. In H1 it was €119m versus €176m in H1 2019. Total sales in H1 stood at €1,867m compared to €2,268m in H1 2019. Steel shipments stood at 814,000t compared to 966,000t in H1 2019. Average selling prices were at €2,231/tonne compared to €2,272/t in the same period the previous year.

Sunningwell International Polska is set to acquire Huta Czestochowa (HCz) after its tender bid for the Polish plate mill was accepted by the Czestochowa district court, an official at the investment firm tells Kallanish.

The winning bid of PLN 220 million ($58.5m) was made by Sunningwell Steel Polska, a holding set up by Sunningwell in 2019 to operate steel assets acquired in Poland, Romania and potentially other Central and Eastern European countries.

Sunningwell, which has been leasing insolvent HCz since last September, was the only company to make a valid bid in the tender to sell the plate mill. Another bid came in from Liberty Steel-owned Corween Investments, which also participated in last year’s sales process for HCz. However, this bid came in after the deadline and did not contain the required deposit, resulting in it being rejected by the court. The Sunningwell official says it was Liberty’s intention to prevent the acquisition of HCz.

Electric arc furnace-based HCz has a 1.2 million tonnes/year capacity of heavy plate.

Sunningwell also previously acquired Romania-based Otelu Rosu Mill and Laminorul Braila Mill through its Laminorul Danube Metallurgical Enterprise subsidiary. It was on the verge of acquiring Combinatul de Oteluri Speciale (COS) Targoviste earlier this year but the transaction was delayed by an objection to the deal from one of Targoviste’s creditors (see Kallanish passim).

Laminorul Danube then agreed to lease Targoviste for one year starting from 1 April or until the creditor’s appeal had been resolved. Then the Covid-19 pandemic struck and forced Sunningwell to invoke force majeure in the lease contract and suspend its execution. The Polish firm intends to complete the lease agreement once Covid-19 complications ease, the official confirms.

The investment company Sunningwell International Polska made a formal offer to buy the Polish heavy plate mill Huta Czestochowa, which was accepted by the mill’s administrator and approved by the local court, Marek Frydrych, Sunningwell’s president, said July 29.

Frydrych said his bid was the only one received by Huta Czestochowa before the deadline on July 27. Sunningwell also paid a Zloty 22 million ($5.9 million) deposit required for the offer to be valid.

Frydrych added that on July 28, the company Corween Investment, part of the Liberty Group, also submitted an offer. The company requested for its offer to be accepted despite missing the deadline and for the deposit payment period to be extended until August 3. The local court rejected both requests.

According to local media reports, a representative of Corween Investment made a pledge to offer Zloty 2 million ($0.53 million) over the initial asking price set at Zloty 220 million ($58.7 million).

A representative of Liberty Group said the company had no comment regarding its interest in the Polish mill.
— Wojtek Laskowski

En el siguiente enlace pueden acceder a la edición de Julio de nuestra revista: Infoacero Julio 2020

A continuación destacamos algunos de sus contenidos:

1. Opinión – D. Antonio Ibáñez – Junta Directiva de  la UAHE. 
2. Evolución del Índice de Precios de Productos Siderúrgicos – UAHE.
3. Ayudas Covid: programas TIC Cámaras, Ciberseguridad e Industria 4.0.
4. Webinar Eurometal:  “Después del Covid 19- Estrategias de Supervivencia para la Distribución de Acero”
5. Próximos Eventos: Jornada UAHE– 19 de Noviembre,  31ª Bienal de Máquina Herramienta–  24-25 de Noviembre

The low water levels that troubled the German steel industry in the summers of 2018 and 2019 are not expected to re-occur this year.

“The level at Duisburg’s Ruhrort port is at present still regular for the season,” Kallanish is told by German steel federation WV Stahl. From the current point of view, “…extremely low levels in the coming weeks are unlikely,” a WV Stahl spokesman says. But he does not exclude this in the months ahead, “…if precipitation remains low.”

In fact, no industry has so far reported transport bottlenecks on waterways. However, rain has been sparse for months and agricultural federations in North Rhine Westphalia have already warned of damages to the harvest.

Last year, some problems did occur along the Rhine, Ruhr and Saar Rivers, but the impact was nowhere near as dramatic as in the summer of 2018. That year prompted industries and politicians to come up with an “Inland Waterway Transport Masterplan,” which was revealed by the Ministry of Transport in May 2019.

That plan was welcomed by WV Stahl president Hans Jürgen Kerkhoff. He noted then that “…the exceptional low water in 2018 has shown to what degree the industry depends on the waterways.” According to WV Stahl, one fifth of German steel transport is carried out on the domestic waterways.

Russia is on track to once again becoming the largest supplier of hot rolled coil into the EU this year, according to data published by Eurofer.

Until 2016 the country was often the EU’s largest supplier of HRC, but then the imposition of anti-dumping duties on Russian steel forced volumes to drop significantly. So far in 2020, the country is on track to sell to Europe almost 2 million tonnes of HRC, according to annualised calculations made by Eurofer using data from the first five months of the year. If this volume is reached, Russia would also surpass its record annual tonnage of supply to the EU of above 1.8mt in 2016.

In January-May Russia supplied to the EU over 800,000t of HRC, up over 35% year-on-year, with over 230,000t sold in May alone, according to Eurofer data. Due to the existence of high duties on most Russian suppliers, it is understood most volumes were sold by Severstal, the company with the lowest AD duty, Kallanish notes.

Eurofer indicates Russia will be the only major HRC supplier to the EU in 2020 to see its volumes increase compared to 2019. The other top suppliers, Turkey and India, are likely to be surpassed by Russia and see their volumes drastically reduced due to the coronavirus outbreak and new changes in safeguard measures.

New EU safeguard quotas became effective since 1 July, and Russia was also the sole HRC supplier to see its dedicated quota increase enough to allow a recovery in sales compared with 2019. Turkey and India, on the other hand, suffered a cut in available quotas due to the decision to allocate them on a country specific and quarterly basis.