Category: Latest Updates

Spanish seamless tube makers, Tubacex and Tubos Reunidos (TR), have joined the growing number of Spanish steel companies halting production due to the coronavirus outbreak, Kallanish notes.

The two companies are closing their plants in Llodio, Amurrio and Trapaga in the Basque Country in a controlled way, local trade union sources reveal.

The measures were initiated by the Tubacex and TR workforces, despite the fact that the two companies had guaranteed all health and safety conditions, unions say. “The most convenient thing was to stop production as a preventive measure. We hope that both companies take advantage of the measures that the Spanish government is taking and that there is no unemployment in this exceptional case,” a workers’ representative comments.

Tubacex has “… shown an attitude both open to dialogue and the search for solutions to maintain production activity, aware of the impact of this decision on the future of the plant and employment in the region,” the company says.

TR, meanwhile, confirmed that has decided to temporarily halt its production plants ahead of the Saint Joseph’s Day, holiday starting 19 March. It also intends to have a conversation with unions during the four-day Basque-country holiday to find the most reasonable way to restart production as soon as possible and reduce any impact on its workers.

Similarly the special steel supplier Sidenor is also halting production this week, at least until the beginning of next week, Kallanish understands.

Spanish-headquartered stainless producer Acerinox has also reportedly taken all necessary steps to maintain production. The company, however, is prepared to cut its output and to take decisions on restrictions according to how the pandemic evolves, trade unions add.

Steelmaker Liberty is halting production at its Italian Magona plant in Piombino after having discovered a case of coronavirus, Kallanish notes.

A union source says the company will shut down until 24 March and that sanitisation procedures will be carried out at the plant. Magona produces galvanized and pre-painted thin-rolled coil products. It was acquired by Liberty from ArcelorMittal last year as part of the reorganisation of Italian production following the latter’s purchase of Ilva.

This adds to a growing list of long and flat steelmakers and service centres that have shut down production in the country this week. Steel makers Alfa Acciai, Iro, Feralpi, Riva, Valsabbia and Duferdofin are stopping production while ArcelorMittal Italia, Arvedi, Acciaierie Venete are reducing their output (see Kallanish passim).

ArcelorMittal has confirmed in statements to Kallanish that its European flat products’ operations will reduce production due to the coronavirus outbreak. Among others, the biggest operations impacted so far are set to be those in Italy and France.

“Given the extent of the outbreak, and particularly the impact it is having on several European countries in which ArcelorMittal operates, as an initial response the company intends to reduce production from its European Flat Products operations. We will continue to monitor the evolution of the coronavirus and its implications for steel demand in each of our operating markets,” the company says.

The halting of a number of ArcelorMittal production units has already been implemented in Italy this week, including the temporary idling of a blast furnace, but the situation is in constant evolution.

In France the company is confirming output reductions due to the fall in demand, with the exception of that linked with the packaging industry. In the south of the country the company will halt a blast furnace and a steelmaking unit for a period of seven days. Some rolling mills in Fos-sur-Mer will also be halted, starting from this week.

In Dunkirk, in the north of France, one blast furnace will also be halted from next week, while finishing lines will reduce output there and also in Florange.

In Spain the local unions at the company’s integrated sites in the north of the country have requested that the steelmaker considers output reductions or stoppages to protect workers. In Sagunto some rolling lines are already planning to stop production due to the expected fall in automotive demand.

Europe’s largest merchant steel bar producer, the Beltrame group, has 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.

The LME plant in northern France has an electric arc furnace with a capacity of 850,000 mt a year and two rolling mills. Beltrame is based in Vicenza in Northern Italy.

Beltrame’s works in Vicenza has one EAF with a capacity of 1 million mt/year crude steel capacity and two rolling mills. In Vicenza, the company will suspend production at its EAF but only for few days until the middle of next week, while the rolling mills were halted Wednesday also for a few days to sanitize the area.

This is the second time the company has done so to comply with all the new measures on coronavirus. Beltrame has also reduced operations at its re-roller units, in San Giovanni in Tuscany and in San Didero in Piedmont.

Beltrame was continuing to deliver orders across Europe but there were delays because of the restrictions now in force on the borders, the spokesperson said.

— Annalisa Villa

Please find below a Cicero/AMO overview on the latest measures being taken to tackle the COVID-19 outbreak, detailing the response of the EU and its Member States and key global economies (UK, US, China, Hong Kong and Japan).

Click here to access Cicero/AMO’s overview of the latest measures being taken to tackle the COVID-19 outbreak.

The Covid-19 outbreak is triggering an economic slowdown for which the consequences for Spanish industry remain unclear, the Spanish automotive association, Anfac warns. Nearly 90% of the large companies in the industry have begun implementing temporary lay-offs since 16 March, Kallanish notes. Industry sources are demanding urgent measures from the Spanish government to prevent further economic hardship and mitigate significant layoffs during the crisis facing the country.

The Spanish automotive industry has seen more than 100,000 direct jobs affected, as a result of the temporary lay-offs implemented by Seat, Renault, Nissan, PSA Group and Mercedes production plants in Spain.

“The coronavirus crisis is impacting the automotive sector with the same severity as the other industrial sectors in Spain. There is uncertainty surrounding the scale of collapse in the supply chain, as well as to how the automotive sector will react when the economy began to recover,” analysts say. Sales of vehicles in Spain might drop by more than -70% year-on-year in March, industry sources estimate.

“The automotive sector has closed the vast majority of its production plants. This paralysis has also a direct impact on the manufacturers of parts and components, and indirectly, on the chemical sector, for which 20% of activity relies on the demand from the automotive sector,” market analysts add. According to Anfac, the automotive industry represents 10% of Spain`s GDP.

Mannesmann Stainless Tubes Italia, located in Costa Volpino in Italy, is shutting down production this week, Kallanish learns from the parent group Salzgitter.

Group cfo, Burkhard Becker, announced this at a press conference on the measures that the group is taking to combat coronavirus.  With a production line for cold pilgering and cold drawing, the Costa Volpino mill specialises in tube with smaller outer diameters. Its products are used for instrumentation tubing, heat exchanger piping, boiler tube and tube for umbilical lines.

The Mannesmann business unit ended 2019 with a loss, but the company expects a turnaround this year. Order intake fell to €1.38 billion ($1.52 billion) in 2019, down from €1.46 billion, on shipments that dropped to 546,000 tonnes, from 625,000t in 2018. The pre-tax loss (Ebit) was €27 million. This development was essentially attributable to the notable downturn in demand for precision tubes from both the automotive and manufacturing industries. Moreover, the lack of volumes from the US market in the medium-sized line pipe segment was not fully offset by projects in other markets, Salzgitter says.

In contrast, the stainless steel tube group achieved a notable increase in order intake, and was the only subsegment that kept its shipments steady y-o-y. The group’s expectations of returning to profit in 2020 are partly based on a positive outlook, especially for stainless tube. It remains unclear as to how the Italian, and other potential production cuts will affect that outlook.

Italian EAF-based flats supplier, Arvedi, is set to reduce output during the coming weeks, in a similar move to that taken by many other steelmakers in the country.

Sources in the market confirmed that the company is set to produce only on weekdays, cutting production during weekends, Kallanish notes. The decision has been taken in response to the coronavirus emergency and the consequent shutdown of many automotive sector production lines in Italy and Europe.

Arvedi is located in the north of Italy, the area most affected by the coronavirus outbreak in Europe. Many longs suppliers in the same area have halted production for the time being and ArcelorMittal has also significantly reduced output at the former Ilva plant in Taranto and rolling lines in Liguria (see related articles).

ArcelorMittal Italia is reducing production volumes at its main steelworks in Taranto, Kallanish learns from trade unions at the site.

Steel shop number 1 and blast furnace no. 2 will be idled together this week with the plate mill and strip mill no. 1. The company will implement temporary layoffs for half of the workers for a period of nine weeks, extending its current temporary layoffs (see Kallanish passim).

Work on blast furnace no. 2 to improve safety, already planned before the outbreak of the coronavirus, will be carried out. Of over 8,200 workers at the Taranto site, 3,200 will be working. Production will be reduced gradually from Tuesday 17 March, the source adds. The company is currently producing 8,000 tonnes/day of pig iron. This would mean output of approximately 2 million tonnes/year or -50% less compared to pig iron volumes being produced before the virus.

A request for comment from ArcelorMittal Italia remained unanswered before Kallanish publication deadline.

While the Taranto output will be cut, the rolling lines located in Genova will also be stopped due to the coronavirus emergency, Kallanish learns from unions.

ArcelorMittal Tubular in Europe has issued a statement confirming that all its mills across the continent remain operational, Kallanish notes.

The company said that none of its tube mills will be shut down in France, Poland, the Czech Republic, Romania or Italy. Some delays in shipments and the delivery of raw materials to the sites could occur nonetheless due to lockdowns in many European countries.

ArcelorMittal notes that “… the transport of goods is a key priority for all EU governments.”

The company has taken all the necessary measures to safeguard the health of its workforce and serve customers with a minimum impact, it says.