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Antwort auf die “Frage des Monats” Januar 2020:

Umfrageergebnisse zur Frage: Geschäftsmodelle in der Stahlbranche

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• Preisentwicklung in der Stahlbranche D + EU
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• Preisentwicklung Rohstoffe und Stahl
• Investitionsbereitschaft und Investitionsbereiche
• Einschätzung zu Wachstumsmöglichkeiten nach Regionen
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• Chancen und Risiken der Digitalisierung/Industrie 4.0
• Regelung der Unternehmensnachfolge
• Stahltrends in D und in der EU 2019
• Digitalisierung und Vernetzung von Maschinen
• Auswirkung der US-Strafzölle
• Situation auf dem Fachkräftemarkt
• Werte im Unternehmen
• Investitionsverhalten
• Datenschutzverordnung
• Weiterentwicklung im Bereich Stahl
• Trend-Themen 2018
• Preis-Trends 2018
• Kommunikations-Kanäle
• Entwicklung der Rohstoff-/Stahlpreise
• Bundestagswahl
• Fachkräftemangel
• IT-Sicherheit
• Stahlbeschafftung

Vorschaubilder: fotolia

US service centre chain Olympic Steel has released its fourth quarter and full-year 2019 financial results, Kallanish reports.

Olympic recorded a net profit of $3.9 million for 2019, down from $33.8m in 2018. The company reported net sales for the year at $1.6 billion, which was a decrease of $100m from net sales of $1.7 billion in 2018. 

In addition to company earnings, Olympic Steel announced its full-year output. Olympic Steel’s tons-sold for carbon flat products was 1.01m short tons, while tons-sold for specialty metals flat products was 1.42m st. The average selling price in 2019 was $917/short ton for carbon flats and $2,564/st for specialty flats.

Olympic Steel announced that 2019 was the second most profitable year ever for their specialty metals, with “… pipe and tube business delivering solid profitability,” according to a statement by ceo Richard Marabito.

“As we start the new year, we will remain diligent in managing our operating expenses and strengthening our balance sheet to provide us with the flexibility to swiftly execute on further growth and business diversification opportunities,” Marabito says.

Last year was unsatisfactory for the German mechanical engineering industry, which saw order intake go down by -9% year-on-year, according to its federation, VDMA.

“Overall, 2019 was a disappointing year for mechanical engineering companies in Germany,” VDMA says in a statement seen by Kallanish. Companies recorded a -9% drop each in domestic and foreign orders.

“In summary, 2019 was an economically-gloomy year for the mechanical and plant engineering industry in Germany,” says VDMA economist Olaf Wortmann. International trade disputes, increasing protectionism, Brexit, as well as the far-reaching structural change in the automotive industry have led to uncertainty and a reluctance to invest. “This has left a clear mark on order books,” Wortmann says.

The end of the year was no exception. In December 2019, orders fell short of the previous year’s level by -7%. Domestic orders in the final month were down -5%, with -7% fewer orders coming from abroad. In October to December 2019, orders were down -11% y-o-y, with domestic and foreign orders trending relatively equally.

ArcelorMittal Italia has announced to unions this week that the hot strip mill no.1 will be restarted on 10-13 March. Unions welcome the move but nevertheless note that uncertainty remains over future industrial plans.

The hot strip mill no.1 at the site has been idled for approximately eight months. It will be restarted for a period of two weeks after which an assessment on the order book will be made. Strip mill no.2 has been operating normally and has increased its output since the beginning of February.

The restart of the strip mill will come weeks after the relaunch of production at the site’s plate line, confirmed at the beginning of February. Altogether, these restarts will bring back to work from temporary layoffs over 600 workers, Kallanish notes.

ArcelorMittal Italia is still negotiating with Italian authorities over the future of the former Ilva; sources in Italy say an agreement is getting closer.

German stockholders have increased their stocks for long and flat products in January, but data shows that restocking activity was slow, according to latest figures from German stockholders association BDS.

Flat steel stocks for January dropped 15.6% year on year to 1.2 million mt, seeing only a 4.1% increase in stocks from December 2019.

Long product stocks stood at 825,014 mt in January, 5.8% lower compared to the same month last year, but 4.1% higher from December 2019.

Sources said that restocking activity remained limited in January due to uncertainty over the sustainability of price rises and subdued demand in some end-customer markets.

“We are trying to sell what we can but wouldn’t be able to do any big projects because of low stocks,” said a German source in the distribution sector.

“Stocks are low because many people didn’t buy a lot. There are lots of sales ex-stock,” said the source.

Sales volumes at stockholders grew 5.3% year on year to 281,273 mt in January for long products and 2.5% for flat steel to 597,073 mt. Both product groups saw significant jumps in sales volumes month on month — at 65.2% for longs and 91.9% for flats.

Sources, however, said that it would still be difficult to lift prices ex-stock as end-buyers remain hesitant to price increases making the situation difficult for stockholders as European producers have lifted prices since January.

— Laura Varriale

Liberty Steel confirmed this week disruptions in the supply of substrate for hot-dip galvanized (HDG) sheet steel production, which is impacting delivery of galvanized coils at their Liege-Dudelange HDG line in Belgium.

“There are some intermittent production issues at one of our HRC suppliers, which is temporarily impacting deliveries to Liberty Liège-Dudelange. The team is working with all of our suppliers to mitigate the impact,” a Liberty Steel spokesman said.

Market sources said this week they had been approached by customers looking to replace HDG orders at other mills.

“I had a customer who approached me this week and I asked why they need so much material suddenly and they said Liberty Liege could not deliver and there is no benefit of imports in the market,” a European mill source said.

A second European mill source reported that lead times in HDG were now extending to 10 weeks from eight and that their order book was full.

The operations at Liege-Dudelange, Belgium were bought from ArcelorMittal in July 2019 in a Eur740 million ($707 million) deal and were part of the remedy package imposed by the EU for ArcelorMittal to take over Italy’s Ilva.

London-based Liberty Steel, part of GFG Alliance, said in a previous statement that it intends to increase sales at the plants by 50% by 2022.

According to analysts at Jefferies Research Services, Dudelange and Liege in total have annual capacities 1.6 million mt of galvanized/coated steel, 300,000 mt of cold-rolled coil and 200,000 mt of tinplate.

According to ArcelorMittal’s website, Dudelange consists of two hot-dip galvanizing lines, two electrogalvanizing lines, two slitting and two cutting lines. It produces Aluzinc, Alusi, Usibor and EG sheet.

— Len Griffin, Laura Varriale

One of Turkey’s largest steelmakers, Colakoglu, which placed an order with Primetals Technologies last October to upgrade an existing VD (vacuum degassing) plant in its Dilovasi meltshop to a VOD (vacuum oxygen decarburization) plant is targeting a May startup, S&P Global Platts learned from Ugur Dalbeler, CEO of Colakoglu, Wednesday.

“We are targeting to produce ultra low carbon steel grades at the plant,” Dalbeler said, adding that by producing interstitial-free grades they should be able to raise their market share notably in the automotive industry, which they are currently serving.

“Our general target is to raise the unit value of our steel production by producing maximum steel grades of hot-rolled coil,” he noted.

With a heat size of 295 metric tons, the VOD plant will be the largest worldwide. Colakoglu will be able to produce special steels, like IF grades, ULC grades or stainless steels at the plant. This will help Colakoglu broaden its product range and enter additional markets.

Colakoglu is one of Turkey’s major longs and flats producers with bar output capacity of 1 million mt/year and HRC production capacity of 4.5 million mt/year.

— Cenk Can

Swiss steel trading company Ludwig Stahl is leaving business and will be closed on 31 March, Kallanish learns from managing director Reinhard Kopf.

Together with Peter and Roswitha Orlandi, Kopf has run the company, which he and three others acquired with equal stakes from founder Bernd Ludwig, since 1996. Specialising in heavy plate and strip products, the company was mainly active in Europe until 2008. In the wake of the global financial crisis and digitalisation, it redirected is business to third country imports. It has traditionally sold 30-40,000 tonnes/year of steel.

“Unfortunately, framework conditions in trading have changed massively since 2016,” the company says in a farewell note, citing global overproduction as well as antidumping measures. “The EU’s safeguard measures have become all but incalculable, changing business to a first-come-first-served game by which you cannot work decently,” Kopf tells Kallanish.

The company’s main source used to be China, which, along with Switzerland’s high costs made it too difficult to continue, he says. Kopf himself will now be operating under the name of ReKo Stahl GmbH from Koblach in Austria.

Liberty Steel plans to invest €2 billion ($2.16 billion) into its Continental Europe business after completing a 100-day strategic review following its acquisition of the plants last summer.

The group plans to “…create a new champion in European steel with a clear focus on carbon neutrality by 2030,” says Sanjeev Gupta, Executive Chairman of Liberty Steel parent GFG Alliance.

Its Galati steelworks in Romania will see a $1 billion ten-year investment programme that includes major upgrades to its casters, rolling mills and coating lines, which will enhance the unit’s product offering. Also planned is the installation of an electric arc furnace to reduce emissions and the steelworks’ dependency on imported natural resources.

The investment aims to increase Galati’s share in the Romanian domestic market and raise production to 4 million tonnes/year of steel over time. Galati will also construct a captive lime plant to further enhance competitiveness.

Since acquitting Galati, Liberty has carried out improvements including the starting of a new cutting line, work on the installation of a new hot stove and environmental projects, the firm says.

Liberty’s Ostrava steelworks in Czech Republic will undergo a $750 million ten-year investment programme to install by 2024 new hybrid steel-making technology – a first in Europe, the steel group claims. It will also carry out a major modernisation of its rolling mills.

“The new hybrid steel-making technology will allow the business to utilise higher volumes of local steel scrap to reduce the reliance on imported natural resources, lower CO2 emissions and enable greater flexibility by switching or blending blast furnace and electric arc furnace steelmaking,” Liberty says in a statement sent to Kallanish.

In the next five years the Ostrava plant, in collaboration with the government, also plans to install a high voltage power line to support further electrification of processes to reduce emissions.

Liberty also plans a $100m investment to improve the quality, performance and output of galvanised steel products at its Liege-Dudelange works, which will improve competitiveness.

Moreover, at its Magona plant it will spend $100m to upgrade and extend the organic coated and galvanised lines to restore the unit’s long-term profitability.

Finally, at the Skopje plant it will invest $25m to increase and improve organic coated capacity by upgrading existing lines and broadening its product and service portfolio.

Mediterranean rebar trade flows have experienced significant changes in recent years because of trade restrictions and demand fluctuations.

One of the region’s largest rebar exporters, Turkey, had to redirect volumes historically sold into the US and EU to other destinations, presenting an opportunity for other suppliers.

Turkish rebar exports to the US dropped to just 73,219t last year from 344,716t in 2018 and 782,698t in 2017, because of the Section 232 duty — President Donald Trump doubled the duty on Turkey to 50pc in August 2018, before relaxing it to 25pc last year.

The drop in US rebar imports last year was nowhere near as big as the drop in Turkish volumes — overall rebar imports slid by just 85,857t to 1.06mn t. European suppliers benefited from the 50pc Turkish duty. Spanish shipments into the world’s largest steel import market jumped to 236,703t last year from 68,903t in 2018. A slowdown in domestic Spanish demand during political uncertainty saw mills seek new markets. The lack of a stable government in Spain has put a brake on new construction projects.

Italian bar shipments to the US fell by 73,977t to 152,907t last year. Overall export shipments declined to 1.5mn t last year from 1.74mn t in 2018.

Protectionism and demand dynamics saw Turkish rebar shipments drop by 251,216t last year to 5.94mn t. Yemen has become the largest buyer of Turkish rebar, highlighting the difficulties and fragmentation facing what was a benchmark price from the world’s leading exporter. Shipments to Singapore and Israel jumped — Turkish mills have benefited in recent years from the comparative strength in Chinese prices, and its pullback from export markets.

Turkish rebar-in-coil shipments have increased in recent years — to 639,468t last year from 488,566t in 2018 and 379,577t in 2017. Coiled bar is attractive for markets where labour costs are higher. “Coil is mostly an automated process — they can load a coil, set the machines to bend to whatever shape you need and leave the machine to do the job,”, a European trader told Argus.

Some importers have raised purchases of rebar in coils proportionally with rebar or in some cases more significantly — around 50pc over two years in Singapore and Israel.

For EU customers, quality apart from the quota system remains an important factor, limiting them in import opportunities to a few regional suppliers. Western European countries such as Germany, which has the highest rebar in coils share of around 50pc of total rebar consumption, often adjust their machines for material from a particular supplier.

Shares of rebar in coil of total rebar consumption in other countries amount to 5-25pc, although price is the primary factor in purchasers’ decision-making. “Automatic processing of material is increasing. But in our business the material price is the main driver,” a European producer said. If rebar is much cheaper than rebar in coil, which is usually in line with wire rod levels, customers will buy rebar, he said. With a shortage of import opportunities, many European mills have increased premiums for wire rod.

While Turkish scrap prices have jumped rapidly in the past week — the Argus daily assessment has risen by $31.50/t since 5 February to $279.50/t today — European mills achieved lower scrap settlements for February and made further concessions. This encouraged EU suppliers to focus on the North American market again and start negotiations with US and Canadian customers.

Some Italian and Algerian volumes have been booked recently, market participants said, although this was not confirmed and negotiations are continuing. A Turkish mill sold at around $600/t cfr including duties and tariffs into the US in the past 10 days or so.

By Elena Grebiniuk