Category: Latest Updates

The US Court of Appeals for the Federal Circuit on Friday denied an appeal filed by US steel importers challenging the constitutional authority of the Trump administration’s Section 232 metals tariffs.

In an opinion issued Friday, the court upheld a March 2019 decision by the US Court of International Trade that rejected the importers’ challenge, finding the court is bound by precedent established in a 1970s Section 232 oil case (Fed. Energy Admin. v. Algonquin). The court ruled the issue in the steel importers’ case is controlled by a portion of the Supreme Court’s Algonquin decision that declares Section 232 does not violate the nondelegation doctrine.

“We agree, and we therefore affirm,” the opinion by the appeals court states: “…The court’s ruling in Algonquin answers the question of the constitutionality of Section 232 presented here.”

The American Institute for International Steel (AIIS), plus two of its members, filed a lawsuit in June 2018 challenging the constitutionally of the 25% import tariff President Donald Trump’s administration issued on steel in March of that year under Section 232 of the 1962 Trade Expansion Act. At the time, the Trump administration also applied a 10% tariff on aluminum imports.

In its appeal, the AIIS looked to distinguish the steel tariffs from the Algonquin decision, arguing the statute only dealt with presidential authority to set import fees and did not address the constitutionality of the entire law. The court, however, said the AIIS “presented no persuasive explanation for distinguishing the tariffs at issue here from the license fees at issue there.”

The appeals court did note that five members of the Supreme Court have recently expressed interest in at least exploring a reconsideration of the delegation-doctrine standard.

“But such expressions give us neither a license to disregard the currently governing precedent nor a substitute standard to apply,” the court said in the opinion.

The Supreme Court in June denied hearing AIIS’ challenge to the Section 232 tariffs.

AIIS did not immediately respond to a request for comment Friday.

The American Iron and Steel Institute, which represents US domestic steelmakers, meanwhile, welcomed the court’s ruling Friday.

“Today the Court of Appeals rightly affirmed our strong belief, and the previous decision of the Court of International Trade, that the constitutional challenge to the Section 232 statute is without merit,” AISI CEO Thomas Gibson said in a statement. “This lawsuit by steel importers is a weak attempt to mask the fact that surging foreign imports have severely impacted the domestic steel industry and threaten our national and economic security. The court today affirmed that Congress acted within its constitutional authority when it authorized the president to take action to adjust imports that threaten to impair our national security. We have consistently maintained this fact and are pleased that the Court of Appeals agreed.”

— Justine Coyne

ArcelorMittal will supply steel for railway infrastructure projects in Spain, Kallanish learns from Spanish state-owned company Adif.

“The Board of Directors of Adif has approved the award to ArcelorMittal of the new rail supply and transport contract for the needs of works, repairs and spare parts in the General Interest Railway Network (RFIG),” Adif says. “The value of the contract is €42,350,000 million ($46.3 million).”

ArcelorMittal will fulfil the agreement by supplying rails from its rails and special sections plant in Gijón, northern Spain, under an open order system without a firm purchase commitment. The provision of rails will depend on Adif’s needs to deal with maintenance and renovation work on roads and treatment of diversions and stations, the railway infrastructure company adds.

The project will be co-financed by the European Regional Development Fund through the Spanish Multi-Regional operational program 2014-2020 and the “Connect Europe” mechanism (CEF).

The Bureau of International Recycling (BIR) warns that the Italian stainless steel market is facing a steep drop in production.

The country is dealing with a series of challenges, such as the steep increase in slab imports from Asian markets, and a significant reduction in finished products sales prices due to an influx of products from northern Europe. Another challenge is stainless steel mills’ continuous attempts to reduce scrap prices through the massive use of ferroalloys, which have become more competitive.

In the BIR’s latest quarterly report monitored by Kallanish, Ruggero Ricco from Italy-based Nichel Leghe says that the beginning of this year has been “…even worse than expected.” He adds: “No one could have imagined such a marked slowdown in the final quarter of last year, resulting in a complete halt to stainless steel scrap sales in December. In fact, the main Italian consumer of stainless steel scrap has totally stopped its purchases while the other players have drastically reduced them.”

The reasons behind this, he says, are lower quantities sold by mills as well as their desire to cut their significant inventories. In addition, there has been an increase in slab imports, thus reducing the need to melt scrap and ferro-alloys.

The sector is hoping for the first positive effects from the European Commission’s safeguard measures. Sources are pinning their hopes on these reviving consumption and production of stainless steel in Europe. That was, however, before the spread of the coronavirus.

The European stainless steel sector in Europe is going through a stagnation and low-price phase that was reflected in mills’ and distributors’ 2019 financial results. However, Kallanish earlier learned from sources in the industry that mills are now registering a surge in sales to the distribution sector after a major and long process of destocking.

Import offers of hot rolled coil into southern Europe are still uncompetitive, despite some source believing service centres will soon need to replenish their stocks.

Turkish suppliers are still reported to be offering at €480-490/tonne ($527-537) cfr. This is well above the €440-460/t ex-works base transaction levels registered in Italy and not competitive compared with offers in the Spanish domestic market.

“Service centres in Italy are sniffing around, but domestic material remains more competitive than imports,” a trader notes.

The market is in limbo this week due to the outbreak of the coronavirus in Italy. Arvedi, a local flat products supplier, says production and deliveries are not impacted. Nevertheless, a trader notes demand will be hit. “The market should not suffer from the recent news in Italy, but, effectively, demand will be impacted negatively during the next weeks,” he says.

According to the Kallanish price series, import prices for HRC remain at their peak since June 2019. The differential of €35/t is also very high compared with recent periods. This indicates that if import levels remain elevated, domestic mills should have the possibility to further lift transaction prices in their respective markets.

Turkish integrated long steel producer Kardemir has taken the first step to enter into flat steel production by starting to produce narrow tool steel plate, also known as platina, at its rail and profile rolling mill, the company said on Thursday.

“We have started commercial production of narrow platina with 20-80 mm thick and 200-405 mm wide with an initial capacity of 25,000 mt [per year],” the company’s general manager, Huseyin Soykan, said. He added that their target is to reach 100,000 mt/year of production capacity soon and to raise the width to as much as 520 mm.

“We will continue to focus on value-added steel and our new narrow platina production could be evaluated as Kardemir’s first step into flat steel production,” the general manager said.

Kardemir, which relighted its fourth blast furnace after a revamp at the beginning of October last year, also launched its second basic oxygen converter and lime plants in the fourth quarter of 2019 following capacity increase investments.

Within the scope of the 3.5 million mt/year steel production capacity target as well as the performance increase and productivity, the company will build a new blast furnace with a capacity of 1 million mt/year, as S&P Global Platts has reported.

Kardemir currently has 2.5 million mt/year of liquid steel production capacity.

— Cenk Can

En el siguiente enlace pueden acceder a la edición de Febrero de nuestra revista: Infoacero febrero 2020

A continuación destacamos algunos de sus contenidos:

1. Opinión – D. Josep Roca –Miembro Junta Directiva de  la UAHE. 
2. Evolución del Índice de Precios de Productos Siderúrgicos – UAHE.
3. Formación:  Calendario de Cursos UAHE para el primer cuatrimestre.
4. Siderurgia: Previsión de Eurofer sobre el mercado europeo del acero 2020-2021.
5. Jornada UAHE: Asamblea General y Conferencias, Madrid, 4 de Junio.
6. Colaboración ASCEM: Ventajas del Acero en Estructuras Sismorresistentes.

French car maker PSA anticipates a year-on-year decline of -3% in the automotive market in Europe in 2020 and by -2% in Russia. It also foresees a stable automotive market in Latin America, Kallanish learns from the group’s 2019 financial statement.

PSA manufactured 1,226,000 cars in France in 2019 representing 36% of its global production output. Fifteen models are manufactured in France, including high value-added models at five assembly plants. 33% of the models produced in France are for the domestic market and 67% are exported to the rest of Europe and beyond. Last year PSA exported 379,000 vehicles, up 5% versus 2018.

“PSA continues to have strong roots in France… …ensuring that its “French plants are competitive in a challenging economic environment, while also contributing to the energy transition,” chairman of Groupe PSA’s Managing Board Carlos Tavares says in a note.

The company’s total inventory, including independent dealers and importers, stood at 606,000 vehicles at 31 December 2019, down 74,000 vehicles compared to 31 December 2018, PSA says.

Spanish-headquartered stainless steel producer Acerinox has received the green light from the European authorities to take full control of Germany’s VDM, a producer of specialty alloys, Kallanish notes.

The acquisition was first announced in November last year. Acerinox said that it had decided to buy VDM “… to create a world leader in both stainless and specialty alloys”. The two companies produce “… complementary products with similar end use”, Acerinox explained.

VDM has seven production plants located in Germany and the US, supported by four service centres.

In 2019 VDM produced and sold around 43,000 tonnes of products, up 7% from 2017. Sales amounted to €852 million, up 13% compared with 2017. 2019 results had been generally unchanged compared to those in 2018.

VDM’s output is of sophisticated niche products with high growth potential, Acerinox says. The Spanish company calculates that the demand in the specialty alloys market (excluding seamless tubes) has reached a level of over 310,000t globally in 2018, up 4% from 2010. VDM is the largest global supplier of these high-performance products, used mainly in the aerospace, oil and gas, nuclear, chemical and automotive industries.

China’s Jingye is committed to completing the acquisition of British Steel as quickly as possible despite the fact that Thai-based Sahaviriya Steel Industries (SSI) just bought now the remaining 50% of Redcar Bulk Terminal that it didn’t already own, British Steel’s official receiver told S&P Global Platts Tuesday.

“The potential acquisition of the remaining 50% shareholding in the Redcar Bulk Terminal was known when the sales agreement for British Steel was drawn up,” the official said. “It does not affect the British Steel sale.”

Sources close to the deal said that Jingye had been interesting in buying a stake in the port because it is one of four UK ports capable of handling Capesize vessels. However, although that avenue is no longer open, the deal to purchase British Steel is expected to close in the next few weeks, the sources said Tuesday. Jingye is likely to strike a commercial agreement with other ports for the transportation of raw materials and steel products, the sources said.

Jingye declined to comment.

SSI’s Thai parent company already held a 50% stake in the terminal and on Thursday exercised its pre-emptive right to purchase the remaining half. Steelmaker SSI previously owned the Redcar blast furnace. It acquired Teesside Cast Products within part of the port at Redcar in 2011 from Tata Steel and then mothballed the plant in 2015 and put it into compulsory liquidation. “Last Thursday, as part of the deal, 90 jobs have been saved at Redcar Bulk Terminal which will continue to operate as normal”, the South Tees Development Corporation said in a statement.

The deal also included a plan to develop a state-of-the-art Electric Arc Furnace within three years, the statement said.

The move was backed by the UK’s Conservative government, which had pledged in last year’s general election to invest in the region.

British Steel, which went into compulsory liquidation on May 22, has about 3 million mt/year of production capacity in the UK, France and the Netherlands.

— Annalisa Villa

Crude steel production rose 2.1% year on year in January to 154.4 million mt across the 64 countries reporting to the World Steel Association (worldsteel), according to the trade association.

In Asia, crude steel production in January rose 4.2% year on year to 111.4 million mt, with output in China increasing 7.2% compared with January 2019 to 84.3 million mt.

Elsewhere in Asia, India produced 9.3 million mt of crude steel in January, down 3.2% compared with January 2019. Japan produced 8.2 million mt of crude steel in January, down 1.3% on January 2019’s total. South Korea’s crude steel production was 5.8 million mt in January, a decrease of 8.0% compared with January 2019, according to worldsteel.

Europe registered a year-on-year output decrease of 12% to 12.29 million mt. In the EU, the largest European steel producer, Germany, saw its crude steel output slump 17.7% to 1.8 million mt. Italy produced 1.9 million mt of crude steel in January, down 4.9% compared with January 2019.

Bucking the trend in the EU, France produced 1.3 million mt of crude steel in January, a 4.5% increase compared with January 2019.

In North America, production slipped 1.4% to 10.23 million mt. The US produced 7.7 million mt of crude steel in January, an increase of 2.5% compared with January 2019, while Mexico’s output decreased 15.9% to 1.38 million mt.

In South America, production fell 10.6% year on year to 3.33 million mt, with Brazil’s crude steel output totaling 2.7 million mt, down 11.1% compared with January 2019.

Turkey’s crude steel production in January totaled 3.0 million mt, up 17.3% compared with the year-ago period.

CIS crude steel production dipped 1.2% year on year to 8.49 million mt. Crude steel production in Ukraine was 1.8 million mt last month, down 0.4% compared with January 2019.

African output slumped 18.4% to 1.03 million mt, while production in the Middle East jumped 29.5% to 3.84 million mt.

— Annalisa Villa, Len Griffin