Category: Latest Updates

ArcelorMittal Italia, the largest Italian flat steel producer, has reached agreement with its employee unions to temporarily reduce output at its Taranto site in the south of the country, with around 50% of its workforce set to stay at home in response to stringent government measures to contain the coronavirus outbreak, sources close to the mill told S&P Global Platts.

As a result of the move, only 3,800 workers will remain on site at the facility in Ilva, sources said.

ArcelorMittal Italia declined to comment on the matter Tuesday.

The number 2 blast furnace at Taranto will be temporarily halted this week as well as the facility’s number 1 melting shop, the sources said.

Crude steel production will be around 8,500 mt/day, with only two blast furnaces — numbers 1 and 4 — working, the sources said.

Rolling mill 1 will continue to be shut down, with the facility’s heavy plate mill also set to stop working as of Tuesday, the sources added.

Around 300 people will work from home and those that continue to work in the mill will wear masks as well as having their temperature checked, the sources said. Thousands of protective masks are expected to arrive this week, while the company will implement more deep cleaning of its various departments, the sources said.

According to industry sources, ArcelorMittal’s site in Genoa, in the northwest of Italy, where the company rolls the Taranto coil, will also suspend production.

The northern parts of Italy have been hit worse by the coronavirus outbreak, in particular the districts of Brescia and Bergamo in Lombardy, the country’s industrial heart.

Separately, Tenaris-Dalmine, the largest global seamless tube producer, has temporarily halted its Bergamo output, an industry source told Platts.

The company wasn’t immediately available for comment on the matter.

In addition, longs producer Feralpi has this week also announced the temporary shutdown of its mill in Lonato, according to an official note seen by Platts.

Longs producer Riva shut down its mills based in Brescia last week, along with section producers Duferdofin-Nucor, Alfa Acciai, Ferrosider and Valsabbia.

— Annalisa Villa

German steel suppliers to the automotive sector are facing “existential threats” from production stoppages at European car manufacturers due to the coronavirus pandemic, associations told S&P Global Platts Tuesday.

Martin Kunkel, managing director of the German cold-rolling association FV Kaltwalzwerke, told Platts that cutting working hours will be unavoidable for companies as the automotive industry makes up two thirds of its customers.

German car manufacturer Volkswagen said Tuesday that it would halt all production in Europe for at least two weeks, with most plants to be shut by Friday. The world’s biggest carmaker followed the moves of Fiat Chrysler (FCA) and France’s PSA Group, which said Monday they would temporarily shut down most of their European plants. German carmaker Audi also said it would cease production at its plants.

“The effects of production stoppages at VW, PSA and FCA are going to be dependent on the duration and depth of the measures and the continued development of the [pandemic],” Kunkel said.

“A production stoppage is of course affecting us immediately and massively albeit with a bit of time lag,” he said. “Companies are therefore forced adopt reduced working hours.”

Kunkel called on the German government to support businesses.

“It is important for us that the German government ensures that liquidity is there in case of reductions to demand and in the case of sick employees,” he said.

The head of the German steel and metal processing industry, Christian Vietmeyer, told Platts that although the promised government aid in the form of reduced-hours pay and liquidity support would be positive, companies will be forced to increase debt capital.

“A lot of suppliers are facing existential threats,” Vietmeyer said. “If the government wants to avoid insolvencies because of the coronavirus crisis, then it has to look at financial support which is not disclosed under non-current debt.”

— Laura Varriale

Please find attached EUROFER’s reply of 17 March on the Commission questionnaire on the “Impact of COVID-19” on the industry.

Please note that the content is based on the aggregated responses EUROFER have received from membership.

As the situation is deteriorating everyday, please keep on providing our director for Market Analysis with information: Alessandro Sciamarelli (A.Sciamarelli@eurofer.be). EUROFER will update the situation frequently. In order to respect competition compliance guidelines, please send any information individually.

EUROFER will also prepare a note for the press in case journalists are requesting information.

There is now a Commission task force led by the Commission President. The Commissioner for Internal Markt, Thierry Breton, is also part of that task force. EUROFER and some energy intensive industries will have a call with the Commission’s DG GROW tomorrow at noon to discuss questions relevant for the industry.

Please send (DirectorGeneral@eurofer.be; A.Sciamarelli@eurofer.be) by tomorrow, Thursday 10 am any issue that you believe needs to be clarified with the Commission, for example on free movement of people and goods, … ).

Kind regards, Axel Eggert

German steel purchasing cooperative Nordwest Handel with its steel sub-division Stahlverbund Phoenix is strengthening partnerships in other European countries.

An initial strategy meeting with French specialist trade partners was held in Paris at the beginning of February, headed by Nordwest’s Vincent Wicker, who was appointed project manager Steel Western Europe in September. Around 20 people discussed the activities of the Phoenix group, Kallanish learns.

In addition to expanding the number of trade partners for Phoenix group, a further goal is to increase the supplier portfolio, the company notes. “Compared with Germany, the share of private SMEs in the steel market in France is considerably lower. However, the importance of medium-sized companies is growing increasingly,” Wicker says.  

The strategic orientation was further defined and worked out together with the French partners, so that volumes will continue to be bundled. At the beginning of last year, the tonnage was already increased, Nordwest says. The German cooperative also plans another meeting with its Polish cooperation partner ESG, at which further measures for joint market development will be discussed and promoted.

Workers at ArcelorMittal Italia’s former Ilva plant in Taranto have cancelled the strike they had announced last week until 22 March, a trade union source confirms to Kallanish.

The strike began on Friday last week and was supposed to last for 10 days at the Taranto steelworks. Workers complained about the poor measures at the steelworks to fight the spread of coronavirus (see Kallanish 16 March).

However, “… after a meeting with ArcelorMittal Italia last week, workers were reassured and decided with the company to introduce further measures to fight the coronavirus contagion. At the moment there are no cases within the company but workers in the steel sector are afraid to go to work which has caused so many companies to shut down in Italy. During the meeting with the workers ArcelorMittal Italia has been absolutely open-minded regarding further measure and will do everything in its power to protect the company from the virus spread,” the representative tells Kallanish. He adds that the company is reducing its activity and production.

Italian steelmaker and longs’ producer Riva Acciaio is shutting down production at its steelworks Italy, Kallanish learns from trade union sources.

The company will carry out a cleaning process on its equipment to fight the spread of coronavirus. “This follows a request from workers who have concerns about catching the virus because of the inevitable proximity with other workers despite the instructions from the Italian ministry of health having been carefully applied by the company,” the source says. He adds that Riva will temporarily lay off workers this week until 23 March.

This adds to a long list of Italian long producers who have halted production and are temporarily laying off workers. Rebar makers Iro, Alfa Acciai, Feralpi and Valsabbia have closed their steelworks together with sections’ producers Lucchini RS and Duferdofin-Nucor, Kallanish notes.

European carmakers are curbing production as the spread of the coronavirus accelerates, while steel associations linked with the automotive sectors, in the worst hit European country so far, Italy, are asking for EU joint decisions.

“After having put in place all the government measures to prevent and contain the spread of the epidemic, we can see that there is no margin for the closure of production plants, except by a joint decision of all EU countries, in particular, Germany and France,” ANFIA, the Italian Association of the Automotive Industry said Monday. “The possible closure of Italian plants for 15 days is only feasible if that decision is jointly taken by the German and French governments for their respective countries”, the association stated.

Germany is the top importer of Italian automotive components with a 20% share of Italian exports, while France is in second place with 11%.

Fiat Chrysler Automobiles said Monday that its subsidiaries FCA Italy and Maserati were suspending production across most of its European manufacturing plants through March 27. France-based PSA Group also said it was suspending production at its main European production sites. Germany’s Volkswagen is reducing production in Iberia.

“We agree that the problem is a European problem not only an Italian [one]it is true that Italy. [Italy nas] been hit badly so far by the coronavirus with unfortunately more deaths, but if we look at it from an industrial perspective, it is a European problem as the production lines are global,” Riccardo Benso, head of the Italian steel association Assofermet, which represents the steel stockholder and distribution chain, said.

Benso said that some of the main stockholders were still working but were limited in their deliveries, due to the new trade measures at the borders. He underlined how everyone was working to contain the virus and that there would be a hit to the economy for a period of time. But he said that if the slowdown was a “collective slowdown, it will be more sustainable for everyone and that also in the end, thanks to all the large economic stimuli that are starting to be put into place, a recovery will also happen.”

— Annalisa Villa

German steelmaker Salzgitter will stop production at its special steel plant in Lombardy, Italy, temporarily this week as the coronavirus pandemic worsens, but sees no current effects on production or logistics at other sites, it said Monday.

Also, the start-up of one of its blast furnaces in Germany, which has been idled since last summer, will depend on the state the market. The restart was envisaged for mid-2020.

During a streamed briefing Monday on the company’s 2019 results, CEO Heinz Joerg Fuhrmann said the shutdown of the Italian plant would be done “in an orderly manner” over the course of this week.

The Lombardy plant, which produces stainless tubes, is located in one of the regions in Italy worst affected by coronavirus.

When asked by S&P Global Platts about disruptions in production and supply at mills and customers in Germany amid that country’s increased measures — such as introducing border controls over the weekend, Fuhrmann said there were none for now.

“We are not seeing any problems in the supply chain at the moment,” Fuhrmann said, adding future developments cannot be predicted.

No coronavirus impact at German sites

Fuhrmann said, however, that one of Salzgitter’s employees had contracted COVID-19 and colleagues of the employee were in isolation.

A German cold-roller said there were no current disruptions in the market but, looking at how steel demand in Italy has decreased due to shutdowns at car plants, there will be more reduced shifts at German companies supplying the automotive industry.

Salzgitter temporarily idled one of their blast furnaces last summer as a response to a decrease in steel demand.

As a result, crude steel production at the company dropped 6% to 6.6 million mt in 2019.

Production down on slow demand

Production of rolled steel at the flat steel division decreased 2.1% in 2019.

Rolled steel production decreased more heavily at the plate/section division where production shrank 17% in 2019 to 1.89 million mt, mainly due to lack of demand for plate.

Looking ahead, Salzgitter’s galvanizing line, which is under construction, and will produce “premium steel” for the auto industry was planned to be opened in 2022, while the treatment line for heavy plate will be opened in 2021.

— Laura Varriale

ArcelorMittal Bremen has commissioned Berlin-based technology company Smart Steel Technologies (SST) to introduce its artificial intelligence (AI) software products for strip products for demanding applications.

The steelmaker has selected ‘SST Casting Optimization AI’ and ‘SST Surface Inspection AI’ software, which serve to optimise the continuous casting process and automated surface inspection, Kallanish learns from the supplier. ArcelorMittal has already cooperated with SST at its other German strip mill at Eisenhüttenstadt.

According to SST, ArcelorMittal Bremen will install a system for AI-supported analysis of production data to implement effective optimisation measures that include a reduction in rejections caused by surface defects.

“Surface inspection will be improved with a centralised, cross-plant aggregation of all detections and application of robust defect classifiers based on SST’s proprietary Deep Learning technology,” the tech company says. The implementation of the measures in the production process will take place after a project duration of six months.

“We have observed very closely the outstanding performance of Smart Steel Technologies at ArcelorMittal Eisenhüttenstadt. The same quality optimisation project is underway there. The results are convincing,” says ArcelorMittal Bremen board chairman, Reiner Blaschek.