Category: Latest Updates

The Spanish automotive sector showed some recovery on-month in May after the Covid-19 outbreak hit its performance, Kallanish learns from monthly data issued by the local Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac).

“The reactivation of the Spanish factories during the month allowed an improvement with respect to the figures registered during April, a period during which output was practically halted in Spain,” Anfac says. However, the return of activity has been very gradual and production levels remain far from normal.

“New car registrations in Europe suffered a significant contraction in April and May with falls of -76% and -52%, respectively. The reopening of the markets, especially in Germany and France, has allowed the deceleration in production to be mitigated by the progressive evolution of exports,” the association adds.

Spain’s automotive production totalled 92,900 units in May compared to the volume of 294,433 during the same month in 2019. January-May output was 744,955 vehicles, -41.6% less than in the first five months of 2019.

Spanish vehicle exports were 81,802 units during April, or 158,209 units less on-year. Five-month shipments abroad also fell, by -39.9% to 614,930 units, Anfac adds.

Tata Steel’s European assets are currently operating at 70% of their capacity, according to a statement published by the company during its latest financial group release, Kallanish notes

The company confirm that demand in Europe remains a concern. “Key steel consuming sectors such as automotive and construction sector continue to be adversely affected, though demand for packaging material has seen a sharp upsurge,” it said in its note. As a comparison, in India the group’s units are at 80% of their capacity.

Overall Tata Steel Europe saw its performance during the full fiscal year April 2019-March 2020 decreasing in terms of Ebitda. The unit registered a loss of RS 664 crores at Ebitda level. Liquid steel production was also down to 10.2million tonnes during the closed fiscal year, but it recovered somewhat in Q1 2020 by 5% quarter-on-quarter to 2.6mt.

The Italian government is working on defining the size of the public investment to help ArcelorMittal relaunch former local steelmaker Ilva, Kallanish learns from a statement issued by Prime Minister Giuseppe Conte.

ArcelorMittal has in recent weeks become more inclined to negotiate to keep its Italian investment. Conte says the government intends to implement the agreement signed with the company on 4 March and invest in Ilva through its financial subsidiary Invitalia. “We are now getting to the heart of the negotiation with ArcelorMittal to define the details of the new governance. We have promised to achieve ambitious targets both from an environmental and employment standpoint and we are determined to respect this commitment,” Conte affirms.

In a televised interview last month ArcelorMittal Italia chief executive Lucia Morselli also said the company intends to comply with the agreement signed on 4 March with the Italian government. Morselli added that the government becoming a shareholder in the steelmaker would support the plant’s relaunch (see Kallanish passim).

Meanwhile, after an agreement was signed in Trieste for the dismantling of the hot area of Arvedi’s pig iron plant, Taranto mayor Rinaldo Meucci told local press that Ilva should also indefinitely mothball its hot end. The regional authorities in Trieste are going to invest and transform the former plant into a logistics hub that will boost activity at the port of Trieste.

Meucci, together with the Taranto commerce chamber, have lamented a lack of communication between the central government, ArcelorMittal and local authorities. They are asking for a more sustainable development for the future of Taranto.

The European Commission has published the final document related to the review of the safeguard system for steel imports. As anticipated by Kallanish, the new amendments will come into force from 1 July, with some important changes in particular to the way tariff-free quotas are allocated.

Firstly, the Commission has changed all country-specific quotas to be managed quarterly, in order to avoid overcrowding of imports. This is set to dramatically change the flow of imports for some key products, as last year some country-specific annual quotas were exhausted during the first week of becoming available.

Hot rolled coil quotas will also be moved from general to country-specific, further limiting the possibility of large importers taking major advantage of allocations. With the new changes, Russian suppliers will have the largest share of HRC import quotas, despite being subject to AD duties, followed by Turkey and India. With the country-specific rule being applied, Turkey and India, for example, will see their available quotas falling below the average sold in Europe during the last two years.

Stainless steel HRC quotas will conversely be moved from country-specific to global.

The Commission will then split the quotas for large welded tube into a global allocation for material used in engineering projects and a country-specific quota system for material not used in engineering.

In addition, important limitations will be applied to the use of residual quotas during the last quarter by countries that already have a country-specific allocation.

Finally, the Commission has also reviewed the list of countries included in the measures.

As is often the case in these matters, the final decision from the EC seems to have left most market players dissatisfied. While steel consumers asked in vain for the Commission not to put new limitations on importers, European steelmakers association Eurofer’s request to drastically cut tariff-free quotas for a period of time also went unheeded.

“We have seen a collapse of 50% in EU steel demand since March, but the tariff-free import quota has been further raised,” says Eurofer Director General Axel Eggert. “Objectively, this makes no sense. We had expected a clear decision for European industry. This did not happen. The resulting marginal technical changes may help one or other steel product group but most of our industry has been left in the cold.”

“We are ready and willing to sit down with policy makers with an open mind in order to develop a way forward for our sector and the downstream sectors it services,” he continued. “The result of the revised safeguards is a major upset, and the EU must still find ways and means to avoid further closures and job losses in the European steel sector.”

The European Commission’s definitive adjusted Safeguard Measures operative from 1st July 2020 have just been published in today’s Official Journal.

The Implementing Regulation can be accessed on the link below.  Then, scroll down and then click on the item shown against Page 27, which will then open this Regulation.

COMMISSION IMPLEMENTING REGULATION (EU) 2020/894 OF 29 JUNE 2020 AMENDING IMPLEMENTATION REGULATION (EU) 2019/159 IMPOSING DEFINITIVE SAFEGUARD MEASURES AGAINST IMPORTS OF CERTAIN STEEL PRODUCTS

eur-lex.europa.eu

The changes published by the Commission today (in an Implementing Regulation) fully take account of the special circumstances prevailing in the market due to the coronavirus crisis as well as expected developments. They will ensure that the gradual resumption of activity and return to normality takes place in an orderly manner. The adjustments made in managing the quotas will be effective in deterring potentially harmful stockpiling behaviour by any foreign exporters that may try to sell very high amounts of steel in the EU market in an opportunistic manner to the detriment of the EU steel industry.

Commissioner for Trade Phil Hogan said: “With this package in place, we can effectively save thousands of jobs in the EU steel industry from a very difficult situation that could arise due to the current crisis. In the difficult circumstances that we witness, the Commission must be acting decisively, in full respect of the rules, and that is exactly what we are doing. We also received very strong support from Member States for these measures that, I am convinced, will bring about substantive benefits for EU producers. Of course, our action will not stop just here. The close monitoring of the market must continue and we will not hesitate to put forward further adjustments if that’s what the evolving situation will require.”

The adjustments strike an appropriate balance between the legitimate interests of all the interested parties within the EU. They can shield the EU steel industry from the eventual effects of trade diversion in a way that is most adapted to the current circumstances, while ensuring sufficient supply for the steel-using industries in Europe. Since the launch of the review in February 2020, the Commission has considered 300 submissions received from stakeholders, consulted EU Member States and received their wide support on the proposed changes.

More specifically, the main changes are the following:

• Country-specific quotas will be made available in quarterly and not annual allotments. This will help ensure a more stable flow of imports at this stage and will minimise the risk of short-term import surges.
• A new country-specific quota will be introduced for hot-rolled flat (category 1) steel.
• Access to the residual quota for countries that have previously exhausted their country-specific quota will be only permitted to the extent necessary to respond to demand. This will help ensure equitable access to the EU market for smaller exporting countries.
• The list of developing countries excluded from the measures is now updated on the basis of the most recent stable statistical data (2019).

The measures remain fully in line with the EU’s international commitments, and as provided for by the applicable WTO rules, the affected non-EU countries were consulted earlier this month.

The Commission will continue to carefully monitor the steel market and import flows to ensure that the measures remain effective. If necessary, another review may still be considered in the course of the remaining year of measures.

As part of its efforts to restore a level playing field for European steel producers, the EU is also currently co-chairing the Global Forum on Steel Excess Capacity and will work for robust conclusions and recommendations in this regard to be submitted to the G20 leaders in November.

Background

The Commission introduced the initial safeguard measures on steel imports in July 2018. The measures aim to prevent economic damage for European steel producers, given the risk of import increases related to the introduction of trade restrictions by the US on steel and aluminum products. The Commission confirmed the initial temporary measures in early 2019 for a period until end of June 2021. The first review taking account of the market evolution was concluded in September 2019. The adjustments announced today result from the second review initiated in February 2020.

trade.ec.europa.eu

Workers at units of Tata Steel IJmuiden restarted strikes on Sunday, having halted strike action the previous Wednesday, Kallanish learns from trade unions.

Workers decided to give the company time to respond to their requests, pausing demonstrations and strikes from Wednesday last week. Nevertheless, the company did not issue a final position on workers’ demands and new strikes started on Sunday at the docks of the steelmaking plant.

The ongoing strikes are now hitting the mill for the third consecutive week and are reported to be the first of these actions seen in almost three decades. According to trade unions, “…more than 20 teams and departments have left all their work,” during the last three weeks of intermittent strikes.

“Since Tata Steel Europe announced last year that it would reorganise on behalf of the Indian owners, the company has been unsettled,” says the FNV labour federation. “Employees of the profitable Tata Steel Netherlands fear that they will have to integrate with the loss-making Tata Steel UK. In addition, they want, among other things, that the management guarantees there will be no redundancies and that no jobs will be cut until at least 2026.”

The ceo of Acciai Speciali (AST) Terni Massimiliano Burelli has told Italian media that two foreign groups together have expressed their interest to buy out AST, the Italian specialty steel maker controlled by ThyssenKrupp. Two Italian companies, Italian steelmaker Arvedi and re-roller Marcegaglia have also shown an interest but the two foreign groups have asked to remain anonymous.

In an interview with local broadsheet Il Messaggero, Burelli has also expressed a negative opinion about the interest of AST’s major client Marcegaglia. “The Group Marcegaglia has written a letter to ThyssenKrupp showing interest for AST… I would like to remind the Marcegaglia siblings that other letters of interest have been received and introducing themselves to the authorities and the unions here in the city (of Terni) doesn’t mean anything. Instead, from a certain standpoint, it complicates things”, Burelli said. He referred to a visit that Antonio and Emma Marcegaglia made last week to the local authorities and the unions to introduce their company. They also illustrated the possible industrial synergies that could take place if Marcegaglia managed to secure Terni.

A union source close to the matter tells Kallanish that unions are not prejudiced regarding any buyer and will consider the industrial plan, investments and job creation but will not accept any job cuts.

Thyssenkrupp is seeking either a partnership or a sale for its Italian subsidiary. Pursuing its restructuring strategy, the company is considering for certain assets “… the best prospects for the future – a place under the thyssenkrupp umbrella, in a partnership or outside the company. With this reassessment of the portfolio, we have taken some difficult decisions that were long overdue and will now implement them systematically. thyssenkrupp will emerge smaller but stronger from the transformation”, Chief Executive Officer Martina Merz said in a note sent to Kallanish (see Kallanish 19 May).

Turkey has imposed new additional customs duties on more than 400 products of up to 20%, including some steel products, like sections, non-alloy/stainless wire and pipe & tube fittings.

Additional customs duties set for steel products range 5-17% and will be readjusted on October 1, S&P Global Platts observed from a presidential decree dated June 28.

The new duties are aimed at reducing the negative effects of the COVID-19 pandemic on the Turkish economy and to protect domestic industry from import pressure.

Turkey also imposed some additional customs duties on more than 800 products on May 20, including some steel products like hot-rolled coil, cold-rolled coil and pipe, as Platts has reported.

As EU countries and countries with which Turkey has free trade agreements are exempted from these additional duties, the effect of these duties is expected to be limited.

Turkey is also 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, no decree about it has been published so far by the government.

— Cenk Can

En el siguiente enlace pueden acceder a la edición de Junio de nuestra revista: INFOACERO JUNIO 2020

A continuación destacamos algunos de sus contenidos:

1. Opinión – D. Gerardo García – Junta Directiva de  la UAHE. 
2. Evolución del Índice de Precios de Productos Siderúrgicos – UAHE.
3. Ayudas Pymes: programa de apoyos Covid-19.
4. Formación UAHE: 4ª Edición curso “Sistemas de Gestión de Almacenes”-Aula Virtual
5. Construcción: Resumen Informe Euroconstruct- Junio 2020
6. Eventos: webinar Eurometal- “After Covid-19: survival strategies for Steel distribution, SSC and steel trade”