Category: Latest Updates

The UK government has provided an emergency loan to Celsa Steel (UK) Ltd to allow the company to continue trading. The agreement safeguards over 1,000 jobs, including more than 800 positions at the company’s main sites in South Wales.

As part of the loan, which is expected to be repaid in full, the company must meet a series of legally-binding conditions. These include commitments to protect jobs, climate change and net zero targets, improved corporate governance, such as restraints on executive pay and bonuses, and tax obligations. Also required are further financial commitments from shareholders and existing lenders.

Although the government did not specify the value of the loan, it is widely reported to be £30 million ($37m).

General Secretary of steelworkers’ trade union Community Roy Rickhuss says: “We’ve said since the start of this crisis that we need our industry to survive the pandemic and then thrive in the future so it can be at the foundation of the recovery. This agreement with Celsa Steel is a vital part of ensuring that can happen and will help to provide some certainty and confidence at a challenging time. We hope this is just the start of steel companies securing the support from government that they need to get through this crisis.”

However, he adds: “The loans are necessary but alone are not enough. More will need to be done by government to step up and stimulate demand and to make sure that works for UK steel producers. Celsa can play an important role in supplying steel for major infrastructure projects but it needs the right environment in which to compete and the right procurement decisions which keep the most value and jobs in the UK.”

Reports last month suggested the UK government was reported to be close to agreeing large loans to local steelmakers Celsa and Tata Steel (see Kallanish passim).

The scrap forward curve on the London Metal Exchange softened across June-September contracts during the week to July 2, on market expectations of a near-term downside in spot physical scrap prices.

The forward curve shifted into a slight backwardated structure over the week to July 2, sustaining minimal losses.

July LME scrap futures contracts were down $1/mt over the week to $260/mt on July 2. August and September contracts were both down $2/mt to $259.50/mt, with the relatively flat curve signaling trader hesitation over future pricing direction.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) remained stable week on week at $255/mt CFR Turkey July 2.

“Perhaps $250/mt CFR for premium 80:20 material is disputable, as it depends on the US guys, and Turkish mills have shown interest at current levels with the US deal at $256/mt CFR, so I don’t expect a major drop,” an EU recycler said. Sources expect most Turkish mills to return to the market soon to buy scrap for August shipment.

Scrap futures trading volumes over the week to July 2 sat at 13,140 mt, down from 61,650 mt the previous week.

The June-September rebar forward curve shifted into a soft contango over the week to July 2, with July and August rebar futures contracts at $419/mt respectively, with July down by $2/mt and August up by $2/mt week on week.

The September contract was assessed at $420.5/mt, falling $1/mt on the week, while October contracts were lower at $417.50/mt on July 2.

Physical rebar demand remained weak in North and East African markets, while East Asia enters the rainy season, indicating a slowdown in buying for Turkish material.

S&P Global Platts assessment of Turkish exported rebar was down $4.50/mt over the week at $410/mt FOB Turkey July 2.

Rebar futures weekly trading volumes this week on the London Metal Exchange totaled 4,860 mt, down from 13,440 mt recorded in previous week.

The Turkish longs melting margin — the spread between Turkish exported rebar and import scrap – dropped $4.50/mt on the week to $155/mt July 2.

— Amanda Flint, Viral Shah

German plate maker Dillinger is supplying 47,000 mt of plate to the Arcadis Ost offshore wind energy project, parent company Stahl-Holding Saar said July 3.

Dillinger will be providing heavy plates for the production of monopiles for the wind farm, off the coast of the German state of Lower Saxony. Production will start in 2021.

The project is a joint undertaking between Dillinger subsidiary Steelwind Nordenham, a monopile manufacturer, and Parkwind, a developer of offshore wind farms.

“We believe the signing of this agreement sends a strong positive message in the difficult context of COVID-19. The impact of this contract fits into EU’s Green Deal initiative and demonstrates the offshore industry’s role in helping Germany reach its ambitious CO2 reduction targets as well as in stimulating the economy and local employment under the particularly difficult conditions of COVID-19,” Arcadis Ost 1 project manager, Clément Helbig de Balzac from Parkwind, said.

The supply deal for Dillinger comes at a time when the pandemic has dealt a hammer blow to European plate demand.

Most German plate mills are currently working at reduced rate, with workers on short-time, where the German government gives financial aid to companies as they run limited shifts.

“If the market does not come back to life and investments are not going to be unlocked, then it [the situation] is going to become critical for a lot [of plate mills]. It is possible that a lot of integrated mills will not be able to cope in the long term with current raw material costs and today’s market environment. Few inquiries, even fewer orders,” a German plate mill source said.

— Laura Varriale

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Nach dem leichten Anstieg im Mai verbesserten sich im Juni die Erwartungen der deutschen Zulieferindustrie mit Blick auf die nächsten sechs Monate sprunghaft. Der Saldo aus Optimisten und Pessimisten stieg von -33,8 auf -1,6 Punkte an und liegt damit nun nahe der Nulllinie. Dies ist der stärkste jemals gemessene Anstieg und zeigt, dass die Zahl der Zulieferer, die für die kommenden Monate mit stabileren Geschäftsaussichten rechnen, zugenommen hat. Andererseits wird die aktuelle Lage von den Unternehmen weiterhin als schlecht eingestuft. So sank der Saldo erneut deutlich um 4,6 Saldenpunkte auf – 53,1 Punkte. Damit hat sich die Bewertung der aktuellen Geschäftslage auf ein neues Rekordtief seit der Finanzkrise verschlechtert. Der Tiefpunkt lag im April 2009 bei einem Saldo von – 62,9 Punkten.

In der Gesamtbetrachtung zeigt sich ein besseres Stimmungsbild als in den vergangenen Wochen während des Lockdowns. Denn das Geschäftsklima der Zulieferindustrie hat sich im Juni von -41,3 auf -29,3 Punkte verbessert. Das verabschiedete Konjunkturpaket der deutschen Bundesregierung sowie die schrittweisen Lockerungen der Corona-Beschränkungen haben sicher einen Teil dazu beigetragen. Generell befindet sich die Stimmung jedoch weiter auf sehr niedrigem Niveau. Auch mit Blick auf die insgesamt schwache Auftragslage und die daraus folgenden Kapazitätsanpassungen in Form von Kurzarbeit dürfte nur mit einer langsamen Erholung zu rechnen sein.

Quelle und Grafik: ArGeZ Arbeitsgemeinschaft Zulieferindustrie

Der 1.111. NORDWEST-Handelspartner ist das Unternehmen F.W. Waldhausen GmbH & Co. KG aus Übach-Palenberg bei Aachen. Das Familienunternehmen wird bereits in zweiter Generation erfolgreich von Hans-Hartmut Waldhausen und seiner Schwester Renate Waldhausen-Krick geführt. Mit Carsten Waldhausen und Edgar Krick steht bereits die dritte Generation in den Startlöchern. Über 50 Mitarbeiter sind an den Standorten Hückelhoven (Einzelhandel), und Übach-Palenberg, dem Hauptsitz mit dem Baustahlhandel und dem eigenen Biegebetrieb sowie einem weiteren, größeren Einzelhandel, beschäftigt. Zudem gibt es ein Stahlaußenlager in Wismar, von dem aus die Kunden bundesweit beliefert werden, einen Online-Shop und eine Barbecue-Abteilung, die mit 60 verschiedenen Marken die größte Vielfalt in der Euregio anbietet.

Vor über einem Jahrzehnt war der Stahlhändler, der zudem Bauelemente und Eisenwaren in seinem Portfolio anbietet, schon einmal Handelspartner von NORDWEST. Jetzt hat sich die Geschäftsführung entschieden zurückzukehren. „Uns haben definitiv die neuen Konzepte, die viel frischen Wind mitbringen, überzeugt. Und auch eine vertrauensvolle Zusammenarbeit auf Augenhöhe ist uns mit dem Stahlteam rund um Claudio Kemper und Christopher Rüther wichtig“, berichtet Carsten Waldhausen, „deswegen war es für die Geschäftsführung und auch für mich der richtige Schritt, die Zusammenarbeit erneut aufzunehmen.“

Bei NORDWEST freut man sich sehr über die Neuaufnahme und Rückkehr in den Verband, die zudem durch die Zahl 1.111 einen starken Symbolcharakter hat. „Wir freuen uns auf die Zusammenarbeit und sind stolz, dass uns Familie Waldhausen ihr Vertrauen schenkt“, so die Vorstände Andreas Ridder und Jörg Simon.

Quelle: NORDWEST Handel AG / Fotos: Waldhausen/Jenö Gellinek photography

The EUROMETAL Online Presidency Meeting took place online on 2^nd of July 2020 from 15h30 to 17h00.

The first Presidency Meeting of 2020 has been organized online due to Covid-19 pandemic and traveling restrictions. 

The agenda of the Presidency Meeting was proposed as follows:

1. Opening by EUROMETAL President
2. Approval of Financial Statement 2019
3. Talks with European Commission and National Federations
4. EUROMETAL Webinar (09.07.2020)
5. 70th Anniversary Summit in 2021

Road-bound steel transport faces increasing difficulty with obtaining permits for large loads, say Germany’s main steel federations, WV Stahl (mills) and WSM (fabricators).

Transports totalling more than 40 tonnes – including the weight of the vehicle – need a permit of exemption, which is increasingly questioned by the authorities, according to WV Stahl expert for transportation issues Achim Beerheide.

“The argument often goes that coils can be smaller, and lighter,” which is not pragmatic, he says. “Entire process chains from the mills to the fabricators are laid out for big coil sizes. With smaller coils, the production facilities cannot operate efficiently, which means losses in capacity and quality, and extra costs,” he tells Kallanish.

Moreover, splitting coils onto two trucks also means more emissions and more trucks on the roads. In principle, WV Stahl favours transportation via railways. But this is not an overall solution, given that many companies do not have a rail connection, Beerheide says.

A rebar stockholder manager on the Rhine describes the problem of establishing a rail connection. “Our company is lucky to have a rail connection,” he says. “But in my previous company I tried to establish one for three years, and that faced so many costs and so many requirements that I just gave up in the end.”

Euroconstruct (EC-19) area construction output is set to fall this year by -11.5% year-on-year, in line with the fall registered back in 2009, says the European construction research network in its latest outlook. A partial recovery is expected for 2021 and 2022 but levels will remain below those seen in 2018.

EC-19 area output grew 2.7% y-o-y in 2019, driven mainly by new constructions. Total construction output reached €1,700 billion in 2019. This year the decline is now expected to be -11.5% y-o-y. “The total construction output is expected to reach about €1,500 billion which corresponds to the level of 2015, hence losing several years of growth,” Euroconstruct explains in a note seen by Kallanish.

Among the largest countries, Germany will see output decrease by only -2.4% y-o-y, while Italy, Spain, France and the UK will see it dropping by as much as -12-33% y-o-y. Portugal and Poland will be among the few countries to register growth despite the coronavirus emergency.

“Total construction for EC-19 countries will see a rebound already next year by around 6% and then continue to grow by 3% in 2022, reaching an output level similar to the one in 2018,” Euroconstruct explains. “Still, there are downward risks to the forecast and the most significant one involves the coronavirus and the containment of it. Questions such as, will there be further lockdowns after restrictions are being eased or will everyday life start to go back to normal after the summer, are affecting the market view.”

Civil engineering is expected to be the least impacted segment within the construction sector, while residential and non-residential construction will suffer more in the 2020-2022 period.

Spanish holding Grupo Industrial Cristian Lay (CL) has proposed an offer for the 100% acquisition of steelmaker Gallardo Balboa, the potential investor tells Kallanish. 

The supplier of light long products for the construction sector was acquired at the end of last year by investment fund Kohlberg Kravis Roberts (KKR). The move was designed to save the company from insolvency. The board of Gallardo Balboa has been working on a long-term solution for the company since November 2019.

“CL has presented to the bank a proposal to lift the pre-contest of creditors declared by Gallardo Balboa, to reinforce the own resources by means of a capital increase and inject additional liquidity,” Grupo Industrial says. CL will guarantee all of Gallardo Balboa`s commitments to suppliers as well as maintain the activity of the steelmaker’s subsidiaries and continuity of its 900 employees, the investor adds.

“Our offer, compared to others that suppose the dismemberment of the company, guarantees the continuity of jobs and all the activity of Grupo Gallardo Balboa, especially that of the Jerez de los Caballeros,” says Grupo Industrial CL president Ricardo Leal. Both the Government of Extremadura and the Gallardo Balboa council have expressed their support for the negotiations.

“The potential investor commits to maintain all jobs in the company, which is essential for the region. It is the best offer for the interests of Jerez and Extremadura,” comments Government of Extremadura President Guillermo Fernández Vara.

Grupo Gallardo Balboa declined to comment on the negotiation process, but it is understood other parties are still interested in the assets of the steelmaker.