Category: Latest Updates

Thyssenkrupp steel Europe is currently testing a new blast furnace technology designed to enhance process efficiency.

The “Sequence Impulse Process (SIP)” system has now been installed at blast furnace Schwelgern 1 in Duisburg and will serve as a reference plant for marketing, tk Steel notes. Research was carried out by thyssenkrupp AT.PRO tec GmbH, a joint venture with tk Materials Trading GmbH.

“Process development work was focused on the ‘deep action’ of the oxygen,” explains Rainer Klock, manager of furnace metallurgy at the plant. “The aim is to improve gas and liquid flows in the blast furnace and thus improve efficiency. We based this on our knowledge and the targeted use of various gas-dynamic phenomena in the oxygen injection process.”

Technically, this is realised by fitting each of the 40 tuyeres on blast furnace 1 with an additional lance for oxygen injection, Kallanish understands. The 40 lances each have their own injection unit or “SIP box”.

“Improving the efficiency of the blast furnace process optimises the consumption of coke and pulverised coal as reducing agents,” adds Jörg Glebe, managing director of thyssenkrupp AT.PRO tec. “This lowers CO2 emissions and reduces costs. Replacing 5kg of coke with pulverised coal per tonne of pig iron in blast furnace Schwelgern 1 would already result in potential annual cost savings in the millions.”

The unit is holding talks with major plant engineering companies with the aim of launching the process worldwide and supporting installation in blast furnaces.

Martina Merz, who has been acting ceo at thyssenkrupp AG, will stay in that position for an extended period, Kallanish learns from the group.

Merz transferred to the position from the supervisory board of the conglomerate last year, following the ousting of Guido Kerkhoff, who had succeeded Heinrich Hiesinger only a year earlier. The latest decision, communicated in an ad-hoc announcement late Friday, comes as a move in the interest of a necessary stability at the troubled conglomerate. The new ceo will be in the role for a three-year term starting 1 April 2020.

Merz will resign from the supervisory board following the appointment. Furthermore, Johannes Dietsch is stepping down from the executive board effective March 31. His successor as chief financial officer will be Klaus Keysberg who will remain responsible for the steel/materials businesses in addition to his new role.

Brazilian steel market demand has remained at a low level since the beginning of the year and doubt remains whether customers will not accept the price adjustments for domestic end-users and distributors. So says the president of the national flat steel distributors’ association (Inda), Carlos Loureiro, in a statement to media monitored by Kallanish.

“Despite the gap between domestic and imported steel prices, the Brazilian steelmakers should not implement the planned increase of steel prices due to the lack of demand,” Loureiro says.

The steel sector in Brazil will begin to see the economic impact of the coronavirus outbreak as from the beginning of April, the president adds

“The fall in steel demand should worsen as a result of the expected production stoppages of large mills. These will have serious and unprecedented consequences for the automotive and white goods’ sectors in the coming months,” Loureiro continues. The scale of production adjustments and the contraction in the market cannot yet be assessed, as the Covid-19 outbreak in Brazil is expected to spread in April, he adds.

Most of the steelmakers in Brazil, such as CSN, Usiminas and Gerdau, have already implemented preventive security measures at their plants and are working normally.

German steel-using companies active in the automotive supply chain are raising awareness that the current shutdown of carmakers threatens the existence of the German supply industry. Last week, VW, Daimler and BMW announced halts in production of at least two weeks in Germany and other countries (see Kallanish 19 March).

The expected production interruption of several weeks will lead to liquidity bottlenecks for a large number of supplier companies to the automotive sector. So says a joint statement issued on behalf of their federation WSM and the associated interest group for automotive suppliers, ArGeZ.

Loan programmes currently approved by the government through the German development bank KfW are not yet sufficient to cover the looming damage, says Christian Vietmeyer, managing director of the two bodies.

The many supplier companies must not be left out in the cold by a sudden interruption of the supply chains, the associations warn in the statement. “In concrete terms, this means that we expect the buyers in the value chain to accept goods until at least 27 March. Only then will a coordinated and joint restart of production be possible,” Vietmeyer continues.

ArGeZ assumes that delays in delivery could lead to a production ramp-up again by the beginning of May, as components that are still in China are unlikely to arrive in European ports before then. “We therefore expect a necessary interruption in production until 20 April 2020. We expect clear communication from the car manufacturers regarding the production halt and further planning,” Vietmeyer adds.

As the spread of the coronavirus has accelerated, Toyota has decided to suspend production in Turkey at the end of this month, S&P Global Platts learned Wednesday.

“Within the scope of Turkish Health Ministry’s advice, to protect our workers’ health, we decided to suspend production at our plant in Sakarya for two weeks from March 21 till April 5,” the company said in a statement.

Toyota Turkey is one of Toyota’s largest automotive plants in Europe with a production capacity of 280,000 units/year.

Due to interruptions in production facilities abroad, another large Turkish automotive producer, Ford Otosan, also suspended production at its 455,000 units/year plant in Kocaeli from March 30 till April 4, as Platts has reported.

After falling to the lowest level of the last 16 years in 2019, the Turkish Automotive Manufacturers’ Association was expecting 2020 to be a normalization year.

However, the coronavirus outbreak could harm these expectations, if the outbreak is not brought under control soon.

— Cenk Can

European steel service center stockpiling of coils could lead to market instability amid market uncertainty, sources told S&P Global Platts Wednesday.

“The market is quieter with each passing day as companies are shutting down voluntarily meaning there is less turnover and Belgian companies are fearful of a forced lockdown,” A Benelux-based service center source said. “This will have an impact on subcontracting companies and the economy is likely in a recession scenario now. The coils market however is stable with imports only being offered when the currency rates move to certain levels.”

Stockpiling of coils by service centers could lead to instability in the coming months if consumption remained at depressed levels, according to an Italy-based rolling mill source.

“End-user buyers are booking but for specific jobs or projects and they are just accepting prices without much negotiation,” he said. “However some service centers are buying without thinking of the macro outlook, they are like supermarket shoppers hoarding groceries and this might be messy if they have to liquidate at a later date if their customers don’t continue to purchase. The smaller service centers don’t hedge their inventory so it would be disruptive for the market if they needed cash and had to sell quickly.”

The market in Europe would remain stable until mid-April Easter holidays then there was potential for a softening in pricing, the source said.

Another Italy-based mill source said that production costs for steel producers remained high and this would support prices in the short term..

“Costs remain relatively high and mills are not making money so prices cant go lower,” he said. “Mills are selling what they can at the moment in this difficult situation.”

The Platts TSI hot-rolled coil index was calculated 50 euro cent lower Wednesday at Eur482.50/mt ($523.37/mt) ex-works Ruhr, and in southern Europe was assessed at Eur453/mt ex-works Italy, gaining 50 euro cent day on day.

Cold-rolled coil slipped Eur1.50 day on day and was assessed at Eur555/mt ex-works Ruhr.

— Len Griffin

European steelmakers are cutting output as a consequence of the coronavirus outbreak’s impact on steel-consuming sectors such as automotive and construction, which are curbing their production.

ArcelorMittal, the largest worldwide steel producer, said Thursday morning that it will reduce production across all its European operations in order to respond to declining demand and to protect workers.

The company when reached by Platts declined to disclose where it is planning to cut productions.

The steelmaker – which had already cut back output at its Italian mill in Taranto earlier in the week, according to sources close to the mill – produced 44.7 million mt of crude steel in 2018 in Europe, but cut this back by around 3% last year.

ArcelorMittal produces a wide range of long and flat steel in Europe, with key sites in the Benelux region, Germany, France and Spain. After Italy, France and Spain have seen the largest impact from the virus in Europe.

In France, according to the local press, ArcelorMittal will decrease steel productions at its site in Fos-sur-Mer and in Dunkerque.

In France, Europe’s largest merchant steel bar producer, the Beltrame group, temporarily closed its French operation, Lamines Marchands Europeens, in Trith Saint Leger until the end of March because of the coronavirus pandemic, a Beltrame spokesperson said Wednesday.

Beltrame has its headquarter in Italy where it suspended its production only for a few days at the hot end of its operations in Vicenza, as well as in its re-rolling units in San Giovanni in Tuscany and in San Didero in Piedmont, until the middle of next week to sanitize the area.

In Italy also the largest global producer of seamless steel tubes, Tenaris-Dalmine has temporarily halted its Bergamo output. Long products maker Feralpi temporary shut down its mill in Lonato, joining the earlier closures of mills owned by Riva, Duferdofin-Nucor, Alfa Acciai, Ferrosider and Valsabbia.

In Germany, Salzgitter confirmed to Platts that it would decrease its flat steel production over the next few days and might take further steps depending on how the situation develops.

Austrian steelmaker Voestalpine said Thursday it would assess the feasibility of keeping production running. German long steel maker Georgsmarienhuette said similarly that production would continue as normal for now, as they had stockpiled raw materials.

Thyssenkrupp board member Oliver Burkhard told local media that the workforce would have to prepare for reduced working hours.

The port of Antwerp, a major hub for steel imports into northern Europe, said it would remain open and that the transport of goods and raw materials would be secure.

Sources however said that long delays have started to occur in transport, particularly by rail and road as many European countries have implemented border controls.

A source at a German cold-roller told Platts Thursday that the stoppages at car manufacturers are likely to be extended beyond the initial two weeks.

“This is dramatic for steel mills. An entire monthly production volume would be missing for them. For direct and indirect steel suppliers to the automotive [sector] it is bad as well,” the source said.

“We expect a reshape of steel production once this is over. The question is steel mills will stop blast furnaces. If they keep them running at a minimum then this will result in material that won’t be used and create oversupply and massively put pressure on spot prices. The second question is if mills will be able to restart quickly enough once demand increases,” the source said.

Steel prices have largely been stable since the height of the outbreak in Europe, but with demand from end-customers dropping sharply due to shutdowns, market sources have become deeply bearish on the future outlook.

— Laura Varriale, Annalisa Villa

German steelmakers are under pressure from the coronavirus outbreak on the one hand, and production stoppages announced this week by carmakers on the other.

For ArcelorMittal, this means production cuts primarily at its strip mill in Bremen and Eisenhüttenstadt. Bremen will again idle blast furnace No.3, which was restarted only in early January following a stoppage since October, Kallanish is told by the company. It is currently holding talks with works councils about short working hours and further measures to prevent the spreading of the virus, says ArcelorMittal Flat Steel Germany chief executive Rainer Blaschek.

In a brief statement Salzgitter says it will reduce production at its strip unit as of this week. Thyssenkrupp steel says it “…will analyse the situation thoroughly these days to find out if and to which extent we need to adjust our production.”

In Austria, meanwhile, voestalpine is “…currently examining which production areas can continue to operate in compliance with all legal regulations, and which will need to significantly reduce operations or even be completely shut down.”

On the long product side, Schmolz+Bickenbach is the biggest supplier of SBQ steels for the automotive industry from its sites in Germany and Switzerland. “We are assessing the situation from plant to plant,” a spokesman says upon request. The company had already introduced short working in response to slackening demand from carmakers. “We expect in any case that production will be re-adjusted to the new low level of demand,” the spokesman says.

Aperam is pausing production at some European production lines in response to the coronavirus emergency, Kallanish learns from the company.

The firm controls production units in France and Belgium but did not specify which mills will be impacted and which lines.

“Following stringent measures introduced by several governments in terms of health and safety, hygiene, and border closures which are heavily impairing our ability to continue receiving supplies and producing, we have decided in coordination with our social partners to temporarily pause production at some of our European production lines where necessary,” Aperam says. “Such measures are expected to take a few days to implement depending on the operations.”

The cuts planned from this week will be adapted further as the situation evolves. “The restart and the further output level will be adapted in line with future measures ordered by authorities, the related impact on our workforce and the production situation of our customers. Our flexible multi-plant production set up will minimize the impact for customers,” the company adds.

While production lines will be impacted, service centres will continue working normally at the moment, Kallanish understands.

Turkish welded pipe producers are facing very stagnant demand in export markets this week.

As a result of the coronavirus outbreak, unclear market conditions, sharply decreased scrap prices and shipment problems, welded pipe buyers are seen to have backed off from the market.

In the absence of demand, most welded pipe producers are refraining from declaring a price level. However, with the current price of hot rolled coil, they prefer to keep their prices at $520/tonne fob.

A Turkish welded pipe producer tells Kallanish: “It’s useless to express an offer level when there are no buyers. I would prefer to sell at $520/t fob; however, under current conditions – when there is no demand – I would not hesitate to sell at $500/t fob if I could find a firm bid.”

Another Turkish welded pipe producer adds: “We have stopped our sales activities. We focused on loading our previous sales. Ports are full, there are no containers, everybody’s panicked. We have to rush to load while we can. We may be unable to load in the near future. Who buys under these conditions?”

Coupled with European quotas, the coronavirus spread has caused welded pipe demand to come to a halt.

Most welded pipe producers are seen to be pessimistic and are not expecting to see a positive development in market conditions in the near future.