Category: Latest Updates

Unions at Tata Steel Netherlands have voted in favour of strikes and demonstrations during the coming days to demand the company safeguards the Dutch unit in Tata Steel’s European asset reorganisation.

The unions started to organise rallies at the end of May, when the head of Tata Steel Netherlands, Theo Henrar, left the company. Since then, Tata Steel Europe has communicated to workers that it will not implement new job cuts until at least October 2021, as originally agreed. However, these reassurances have not stopped unions from deciding to prepare further strikes, Kallanish notes.

Workers at the Dutch unit are demanding Tata Steel completely drops plans to integrated the local company with the British arm. They also want to scrap any plans to sell the group’s Dutch companies as part of the asset reorganisation.

Last year the company announced the intention to cut 3,000 jobs, but this figure was later reduced. Since the coronavirus pandemic began, however, decisions on this matter have been delayed until at least July.

Eurofer, the European steelmakers’ association, is asking for the EU steel trade policy to shift into “a crisis mode” in response to the 50% drop in steel demand since the start of the COVID-19 pandemic, the executives of major EU steelmaking companies said in a statement published by Eurofer on June 8.

The statement was Eurofer’s response to the changes in the European steel import safeguard system, proposed by the European Commission. The new solutions by the EC are insufficient and “unhelpful” in tackling the sharp decline in steel demand, Eurofer said, demanding a considerable reduction in the tariff-free import quota size.

In addition, the transfer of unused quotas to subsequent quarters and the access to the residual quotas for countries with their own quotas ought to be prevented, Eurofer stated.

In its notification from May 29, the EC proposed to bring back country-specific import allocations for hot-rolled coil. It also suggested changes focused on making the import flow of various steel products more evenly spread out between quarters and protecting some of the smaller export countries from being crowded-out from the residual quota by bigger countries.

The EC’s proposals did not mention a radical reduction in the tariff quota size, however, which is what Eurofer members are calling for.

Russia, China, India and Indonesia have been mentioned among those countries, which are posing the risk to the EU steel producers.

Eurofer claimed that the current proposals by the EC are not sufficient and could boost the share of imports in the EU market further.

Also, without tougher measures on imports, the targets to reduce the EU steel industry’s carbon footprint, as set the European Green Deal, are questionable, according to Eurofer.

“If the European steel sector is wiped out by imports, we will simply not be there to lead emissions reductions from the global steel industry,” the statement said.

— Wojtek Laskowski

The Fiom Fim and Uilm unions have announced a 24-hour strike on 9 June in all facilities of former Italian steelmaker Ilva, now ArcelorMittal Italia. The strike is a protest against the company’s new industrial plan for Ilva and, particularly, the Taranto facility where 3,300 job cuts have been proposed, Kallanish learns from union sources.

According to rumours, the new industrial plan submitted last week to the Italian authorities also proposes production of 6 million tonnes/year. Investments such as the revamp of blast furnace no. 5 will also be delayed due to the current Covid-19 crisis that is seen affecting the steel industry for the next three years, ArcelorMittal told Italian economic development minister Stefano Patuanelli.

The unions have obtained an urgent meeting on Tuesday with Patuanelli to discuss in detail the content of the industrial plan which is still unknown to them.

Meanwhile, in a televised interview, Patuanelli announced that ArcelorMittal’s new industrial plan “…does not reflect the government’s intentions for Taranto.” The company seems to be finding excuses not to keep its promises, he added. The government is working on a national plan for the Italian steel industry that also involves other sites such as Acciai speciali Terni and the former Aferpi, now JSW’s Piombino steelworks, he explained.

The chief executives of EU steelmakers have written to the European Commission voicing their disappointment over the proposed safeguard review prepared by the Commission.

In the letter published by European steelmakers’ association Eurofer, the steelmakers again request safeguard tariff-free quotas to be cut significantly, in line with the Covid-19-related slump in steel demand.

“Steel demand has fallen by 50% since the start of the Covid-19 pandemic in March,” they write in the letter. “Our industry has had to cut production sharply to adapt to these changed circumstances, with 40% of the EU steel workforce laid-off or having to work part-time. Meanwhile, countries such as China, India, Indonesia and Russia have not rested: they continued, or are restoring, steel production and stockpiling. The imminent risk of cheap steel offers flooding the market would hamper our recovery and the survival of one of Europe’s strategic industries.”

Earlier, Eurofer asked for quotas to be cut by as much as 75%. As it stands, this request was not included in the review proposal of the European Commission. It has nevertheless included a series of changes to the system in order to limit further imports of some key products from key importing countries.

The Eurofer letter starts by stating that the survival of Europe’s steel industry is at risk because of the review proposal by the Commission. A similar theme has appeared in numerous requests made by European steelmakers to limit imports during the last five years, Kallanish notes.

Last month the Commission published its proposal to review the safeguard measures, but these measures still need to be approved to become effective as from the beginning of July. While Eurofer hopes further changes to the proposal will be implemented, it states: “This crisis requires a serious review that takes into account the world as it is today. The steel safeguard being reviewed was created for the pre-Covid era. Now it needs to be adapted to the post-Covid world.”

Flat steel product shipments from EU steel service centers fell by 18.5% in January-April from the same 2019 period, as lockdowns related to the COVID-19 pandemic took their toll on industrial activity, the European Federation of Steel, Tubes and Metals Distribution & Trade (EUROMETAL) stated June 5.

Shipments by stockholders and distributors of EU multi-product & proximity steel, including long steel construction products, fell 8.7% in January-April from the year-ago period, with only rebar shipments increasing, EUROMETAL said.

Steel distributors, service centers and traders supply around 80 million mt/year of steel, tubes and metals, accounting for more than 60% of supplies to end-users in EU manufacturing and construction industries, EUROMETAL said.

In April strip mill flat steel product shipments plunged 50.8% on year, compared with a 17.4% on-year decline for the month of March, the distributors’ group said.

Lower shipments led to higher stocks, with flat products inventories at EU steel service centers soaring in April to the equivalent of 139 days-worth of shipments, nearly double the 76 days-worth of April 2019.

Stock volumes in the multi-product & proximity steel distribution category were equivalent in April 2020 to 94 days of shipments, up from 80 days-worth in April 2019.

EUROMETAL members said in late May they were optimistic that steel distribution levels had started to show an upturn.

The World Steel Association forecast June 4 that global steel demand would decline 6.4% overall in 2020 from 2019 levels. Steel demand in the developed economies is however expected to decline this year by 17.1%.

“The manufacturing sector, which was forecast to enter a recovery phase in early 2020, was pushed back into a deeper recession as lockdown measures led to a massive fall in orders,” worldsteel said in its short-range forecast. The steel sector association said the EU’s automotive sector – which uses primarily flat steel products.

Source: Eurometal

Spain’s Gestamp has secured a €200 million ($226.9m) loan for its strategic plan to develop new steel processing technologies for the production of vehicle components such as chassis and bodywork, Kallanish learns from the company. Gestamp is a major supplier of components to the global automotive sector.

The funding is provided by the European Investment Bank (EIB) under the European Fund for Strategic Investments (EFSI).

“The project aims to facilitate the design of lighter and safer vehicles. The new components will also boost the development of electric vehicles, helping to cut emissions,” Gestamp says. The EIB funding will enable the company to invest in innovation, research and development in its factories in Spain, Germany, France and Sweden. The project will be implemented over a period of four years and will help to safeguard highly skilled jobs.

“Investing in innovation has to be one of the key components of fostering economic recovery in the wake of the coronavirus crisis. This agreement will boost the development of electric cars and lighter and less polluting vehicles. Financing clean technologies is one of the EIB’s priorities in facilitating the transition to a new low-carbon economic model,” EIB`s Vice-president Emma Navarro comments.

This loan represents a show of confidence in Gestamp’s project, and it will strengthen the Group’s financing means so that it can continue contributing to the development of the mobility of the future, she adds.

Drawing attention to the European Commission’s latest notification to the World Trade Organization that it could begin to impose a country-specific quota on HRC imports as of July 1, instead of a global quota, which is expected to especially impact Turkey’s exports to the region, the Turkish Steel Producers’ Association (TCUD) has called upon the Turkish government to impose similar counter measures on steel imports from the EU.

“Our overall steel exports to the EU region fell by 44.4% year on year in the first four months of 2020, while our hot-rolled coil shipments declined more significantly by 47% on year,” TCUD said, adding that Turkey’s steel imports from the EU, however, rose by 6.5% on year in that period.

“Despite this trend, [the EC] is continuing its moves to block steel imports from Turkey,” TCUD noted, adding that counter measures should be taken by the government without delay.

The EC recently launched an anti-dumping investigation into imports of certain hot-rolled flat products from Turkey following a request by European steel association Eurofer. The association 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.

As a reply to these moves Turkey informed the WTO on May 25 that customs duties ranging from 9% to 17% on some flat-rolled products, non-alloy bars and angles from the EU region could be imposed, in response to the EU’s move for additional measures against imports of Turkish steel.

Turkey has 30 days to suspend, change and impose the stated additional duties, according to article 8.2 of the Safeguard Measure agreement.

Platts, meanwhile learned that Turkish Trade Minister Ruhsar Pekcan held a meeting with EU Trade Commissioner Phil Hogan on June 5. However, details of the talks couldn’t be determined by press time that day.

According to the latest Turkish Steel Producers Association (TCUD) data published this past week, Turkish mills’ overall steel exports declined by 21.6% on year in April to 1.5 million mt, while imports slumped by 54.6% on year to 563,000 mt, amid the COVID-19 pandemic, which sharply decreased global demand that month.

Turkish mills produced 2.3 million mt of crude steel in April, down by 26.3% on year, due to the mills’ temporary stoppages and output cuts, the latest data showed.

— Cenk Can

The bankruptcy administrator of Polish steel plate producer Huta Czestochowa (HCz) has reduced the starting price for the mill sale by Zloty 30 million ($7.6 million) in a second attempt to find a buyer, Dominik Bogacz, a judge at a regional court in Czestochowa, said in an email to S&P Global Platts on June 5.

The new starting price has been set at Zloty 220 million ($56 million). Interested parties can submit their offers by July 27.

The first tender, closed on June 3, was inconclusive as no valid offers were submitted.

The mill remains under lease by investment company Sunningwell International Polska until September 19. Although the lease holder did not submit its offer in the first tender it expressed interest in buying HCz outright, outside the tender process, by exercising its pre-emptive right.

Other companies previously mentioned as being interested in HCz are Liberty Group and Metinvest, an industry source said.

The mill has an in-house meltshop and its heavy plate production capacity stands at 800,000 mt/year.

— Wojtek Laskowski

Flat steel product shipments from EU steel service centers fell by 18.5% in January-April from the same 2019 period, as lockdowns related to the COVID-19 pandemic took their toll on industrial activity, the European Federation of Steel, Tubes and Metals Distribution & Trade (EUROMETAL) stated June 5.

Shipments by stockholders and distributors of EU multi-product & proximity steel, including long steel construction products, fell 8.7% in January-April from the year-ago period, with only rebar shipments increasing, EUROMETAL said.

Steel distributors, service centers and traders supply around 80 million mt/year of steel, tubes and metals, accounting for more than 60% of supplies to end-users in EU manufacturing and construction industries, EUROMETAL said.

In April strip mill flat steel product shipments plunged 50.8% on year, compared with a 17.4% on-year decline for the month of March, the distributors’ group said.

Lower shipments led to higher stocks, with flat products inventories at EU steel service centers soaring in April to the equivalent of 139 days-worth of shipments, nearly double the 76 days-worth of April 2019.

Stock volumes in the multi-product & proximity steel distribution category were equivalent in April 2020 to 94 days of shipments, up from 80 days-worth in April 2019.

EUROMETAL members said in late May they were optimistic that steel distribution levels had started to show an upturn.

The World Steel Association forecast June 4 that global steel demand would decline 6.4% overall in 2020 from 2019 levels. Steel demand in the developed economies is however expected to decline this year by 17.1%.

“The manufacturing sector, which was forecast to enter a recovery phase in early 2020, was pushed back into a deeper recession as lockdown measures led to a massive fall in orders,” worldsteel said in its short-range forecast. The steel sector association said the EU’s automotive sector – which uses primarily flat steel products – is expected to be the worst hit of the region’s manufacturing sectors, while the construction sector – a significant user of long steel products – could remain relatively resilient.

— Diana Kinch

In first 4 months of 2020, shipments of EU SSC dropped by -18,5%. In same period shipments of EU multi-product & proximity steel stockholding distribution were down by -8,7%.

EU Flat SSC Distribution

In first 4 months of 2020, shipments of EU SSC did fall  by -18,5% in a year-on-year comparison.

In April of 2020 compared to April 2019, Strip Mill Products shipments did drop by -50,8%, year-on-year, compared with -17,4% for the month of March.

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

When expressed in days of shipments, stocks at EU SSC reached 139 days in April 2020, compared to 76 days in April 2019.

For April 2020, the index of stock volumes did drop and noted at index 106, to be compared with index 117 in April 2019 (average 2015 = index 100).

EU Multi-Product & Proximity Steel Stockholding Distribution

In the first 4 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 4 months of 2020, total shipments dropped by -8,7 %, year-on-year.

April of 2020 compared to April 2019, “All Steel Products” shipments decreased, year-on-year by -28,0%.

Stock volumes index of EU Multi-Product & Proximity Steel Stockholding Distribution registered at 88 in April 2020, to be compared to a significantly higher index of 102 one year before (average 2015 =Index 100). When expressed in days of shipments, stock volumes leveled in April 2020 at 94 days of shipments, compared to  80 days in April 2019.