Category: Latest Updates

UK steel producers have adjusted their output on softer demand, but overall they are still producing despite the COVID-19 outbreak and some restrictions put in place by the government, company officials confirmed to S&P Global Platts on Tuesday.

Among the major UK steel players, Tata Steel, British Steel and Liberty Steel have made some cuts in production, but mainly in areas linked with the automotive sector to adjust to the drop in demand from clients, the companies confirmed to Platts.

In Europe, carmakers and major construction firms are shutting factories and work sites as the COVID-19 pandemic causes disruption to supplies, staff shortages and collapsing demand.

A Tata Steel spokesperson said, “As you will know overall, European steel demand is lower than normal. A number of steel-using manufacturers have paused production, including European car manufacturers.”

“We have therefore reduced production at some of our European mills to match this lower demand. We will continue to operate all four blast furnaces across our two steelmaking hubs — in IJmuiden, the Netherlands, and Port Talbot, Wales. However, liquid steel production will be reduced as a consequence of the sudden drop in demand,” the spokesperson added.

At Port Talbot, Tata Steel has a capacity of 3.5 million mt of crude steel a year. The company did not say how much production has been cut so far.

Also, the second largest UK steel producer, British Steel, confirmed that its two blast furnaces continue to operate. British Steel produces around 2.5 million mt of crude steel a year.

Meanwhile, according to a Liberty statement sent to Platts, the company has decided to suspend its operations only at Liberty Pressing Solutions, Liberty Tube Components and Liberty Aluminium Technologies, which are factories linked with the car industry.

The company decided to suspend production at the beginning of this week, but work will nevertheless continue for the rest of this week on completing customer schedules and ensuring plant and equipment is shut down in a manner that enables an efficient restart when required.

In the UK, Liberty has 1.2 million mt of crude steel capacity from two furnaces in Rotherham.

UK producers in total make about 7.3 million mt of steel a year, around 65% of the UK’s annual requirement. The industry employs 32,600 people directly in the UK and supports a further 41,100 in supply chains.

— Annalisa Villa

US rebar distributors believe that government stimulus may help guide the market through the uncertainty surrounding the coronavirus pandemic, Kallanish reports.

A Northeast distributor notes that “…investment in infrastructure by the government can help keep the market afloat during this time.”

Specifically, the distributor mentioned an infrastructure bill proposed this week by US President Donald Trump, which intends to focus on the rebuilding of the nation’s deteriorating infrastructure, as a means of spurring the economy (see related story). 

“I see the [infrastructure] bill as a way for the government to provide economic growth, despite the barriers needed to fight the virus,” says the distributor.

French car maker PSA is to resume production and is implementing a timetable for a gradual resumption of activities, Kallanish learns from the company.

PSA had announced the suspension of its industrial activities until March 27 (see Kallanish passim).  However, “… on the basis of the ‘prepare, test, resume’ principle, new dates will be set for European mechanical factories and assembly sites, which will also integrate the ability of suppliers to support these restarts”, PSA says in a note.

The company is implementing strengthened safety and hygiene measures to continue to combat the Covid-19 outbreak and is creating the prerequisite conditions for a resumption of activities, it says.

The Spanish Government has temporarily suspended steelmaking and metal manufacturing in the country as a “… non-essential” economic activity. The measure came into force on 30 March for at least a 15-day period. The new extreme measures to prevent the spread of Covid-19 in Spain are creating considerable uncertainty in the steel sector, representatives from the industry tell Kallanish.

Spanish steelmakers’ association Unesid has asked the Ministry of Industry and Commerce for clarification of the royal decree because it creates uncertainty in the sector, the president of Unesid Andrés Barceló says.

“There are critical plants that cannot be stopped and are not included in the decree. Nor can [… these] comply with the time stipulated by law to make such stops, since specific security plans are required to do so,” Barceló says. The decree also fails to clarify how to proceed once the facilities are halted, as these require minimal maintenance and security services, while the presence of all the workforce is banned, he continues. “We have also asked the government for an urgent system to carry out the supply and loading of material already produced and to guarantee steel arrivals [… from overseas] which are arriving at Spanish ports in the coming days,” the Unesid president adds.

All of the monitored large Spanish steelmakers confirm that they are preparing to put their furnaces in ‘hot idle’ mode until the resumption of operations. “We are evaluating the expected impact on our activities,” an ArcelorMittal spokesperson says.

“Our activity is not included as essential in the royal decree, so Gallardo Balboa is taking all the indicated measures to comply with the law. A halt in the production chain takes time to do diligently and we have 24 hours to adopt such measures,” the Gallardo Balboa steelmaking group confirms.

Other steelmakers such as Celsa, Megasa, Tubacex and Acerinox, are awaiting a possible last-minute exception or a new legal interpretation of the decree in support of the steel industry, Kallanish understands.

Spanish metal groups could face a further shutdown after measures in Spain to contain the spread of the COVID-19 virus were further extended, via a decree in the State Gazette (Boletin Oficial del Estado) Sunday.

Following two weeks of restrictions on individuals’ movements and work, the Spanish government further tightened its containment measures for COVID-19 and extended the duration through to April 9.

The new measures includes the closure of all industrial sites except for those that produce sanitary materials, food or other products for essential activity.

However, Spain’s largest metal producers said it was still unclear which parts of their production might have to close.

A spokesman for Alcoa, Spain’s largest aluminum producer with a 228,000 mt/yr unit at San Ciprian, told S&P Global Monday that the company is confident it will be considered essential and is working on ensuring that will be the case.

A steel industry source also noted said that the group was working on defining which industries would be allowed to continue operating. The groups are waiting for clarifications from the country’s Industry Ministry, after the new restrictions were only published just before midnight Sunday. Spain’s latest order will give the industries one day to make the necessary adjustments and preparations during Monday March 30, given that the order was passed late Sunday night.

Scrap dealers said they can still operate, collecting scrap even in the most virus-hit area such as Madrid, but they also underscored that the situation was fluid.

Sources said that most of steelmakers are still working but however some have started to cut productions.

Among the main domestic steel players that have cut productions according to local sources are ArcelorMittal that reduced its production in Sestao, suspending its 1.8 million mt a year EAF, as well as special long steel producer Sidenor that has temporary shut down its production in Vitoria and Basauri. ArcelorMittal and Sidenor were not available to comment.

Much of the country’s manufacturing industry, such as autos, have already closed in the previous two weeks, meaning metal demand and steel prices within Spain has already been impacted.

The Platts TSI hot-rolled coil index was calculated Friday at Eur444.50/mt ($492.28/mt) ex-works S. Europe, a decline of Eur11/mt since March 2. Hot-rolled coil in northern Europe has fared marginally better in March declining Eur7/mt within the month and was assessed Friday at Eur475.50/mt ex-works Ruhr.

Also Spanish power demand, of which around half is attributed to industry, has been slipping progressively since before the emergency measures were put in place on March 16.

For the five Mondays of March, daily demand has fallen from around 706 GWh on March 2 and 700 GWh on March 10 to 664 GWh on March 16, 619 GWh on March 23 and now to 593 GWh for March 30 — or a drop of 16% from the first Monday to the fifth.

— Gianluca Baratti, Annalisa Villa, Len Griffin

En el siguiente enlace pueden acceder a la edición de Marzo de nuestra revista: INFOACERO

A continuación destacamos algunos de sus contenidos:

1. Opinión – D. Roberto González –Presidente de  la UAHE. 
2. Evolución del Índice de Precios de Productos Siderúrgicos – UAHE.
3. Formación:  Curso sobre Normativa de la Estiba, Gijón 28 de Febrero.
4. Nueva Fecha Jornada UAHE: 23 de Septiembre, Madrid
5. Asesoría Legal: “Aclaraciones sobre los ERTES por Fuerza Mayor”
6. Evolución Sector Metal: Informe sobre Coyuntura del Metal – Confemetal.

Spanish automotive production rose year-on-year in February after the drop seen at the beginning of the year and before the halting of domestic factories caused by the Covid-19 outbreak, Kallanish learns. The national automotive association, Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac), however, foresees output slumping between -50% to -60% in March.

“The Spanish automotive sector is suffering a sharp drop in March given the expansion of the pandemic and the restrictions derived from the state of alarm in Spain. It is expected that the sector will stop producing approximately 157,000 vehicles,” Anfac says.

Spain’s automotive production totalled 262,449 units in February or 2.9% more compared to the same period of 2019. During the first two months this year, the country’s output amounted to 502,484 vehicles. This volume was up by just 1.4% on the volume produced in January and February of last year.

Spanish vehicle exports were 216,429 units during February, an increase of 6.8% compared to the same month in 2019. Two-month shipments abroad also rose by 1.8% y-o-y to 400,159 vehicles, Anfac data show.

French crude steel production decreased year-on-year in February. This follows a hike in January and a decline in 2019 as a whole, Kallanish learns from data released by the Federation Française de l’Acier (FFA).

Crude steel output declined by -1.3% y-o-y last month to 1.232 million tonnes. This is down from 1.248mt in February 2019, the association says.

Over the first two months of the year however French crude output upticked y-o-y by 0.6% to 1.234m tonnes/month. This is up from 1.227m t/month in January-February 2019, FFA says.

The monthly trend reflects the gradual erosion in recent French steel output. In 2019, output dipped by -6.1% on-year to 1,204,000 t/month. This was down from 1,282,000 t/month in 2018. In 2018 average crude steel production fell by -0.8% to 1,282,000 t/month, down from 1,292,000 t/month in 2017, the FFA says.