Category: Latest Updates

French steel exports increased again in October 2019 after surging in the two previous months, Kallanish learns from new data from national steel association Fédération Française de l’Acier (FFA).

French exports of flat and long steel to countries outside the EU28 rose by 22% year-on-year in October to 200,000 tonnes. Flats exports increased by 26.9% to 165,000t, compared to 118,000t in October 2018. Longs exports also hiked, by 2.9% to 35,000t, compared to 34,000t a year earlier, the association reveals.

Over January-October 2019 French long and flat product exports to non-EU countries ticked up on-year by 5.4% to 156,000 tonnes/month. Flats exports increased by 8.9% to 134,000 t/month, from 123,000 t/month in January-October 2018. Longs exports fell by -12% to 22,000 t/month, from 25,000 t/month a year earlier.

Exports of both long and flat products had fallen by -21% on-year in full-year 2018, the FFA says.

The latest trade data published by Eurofer confirm the slump in EU imports and the stability of exports in 2019.

As largely anticipated, steel imports into the EU fell by almost -15% year-on-year in 2019 to 25.3 million tonnes. According to Eurofer data, the level registered was the lowest since 2015.

All products experienced a decline in imports, including cold rolled coil, coated coil, rebar and wire rod. Hot rolled coil imports also moved down to an average of 634,000 t/month. Turkey remained the biggest importer but also reduced its average monthly imports compared with 2018, Kallanish notes.

The reduction in imports was caused partially by the new safeguard system and partially by the slow demand registered in Europe during 2019. Apparent steel consumption moved down by -3.3% y-o-y in 2019, according to Eurofer. A recovery of over 1% y-o-y is expected for 2020.

On the export front, 2019 volumes remained stable compared with 2018, at some 20.5mt. This helped the EU to close its trade deficit in finished steel. It is worth noting, nevertheless, that the figure registered in 2019 remains a record-low level for Europe; back in 2012 exports surpassed 27mt.

European imports of hot-rolled coil ended 2019 down 10% year on year, while total cold-rolled coil imports slipped 7% lower, according to the latest data from The European Steel Association, or Eurofer, published Monday.

Total HRC volumes declined from about 510,000 mt in November to about 310,000 mt in December, 39% lower month on month.

While Turkish volumes for December came in at 81,062 mt, 57% lower than November, Turkey remained the top supplier to Europe shipping 2.77 million mt in 2019.

Hot-rolled coil shipments from Russia fell by half in December to about 54,000 mt, with the combined 2019 shipments sliding 12% year on year. However, Russia remained the second largest supplier by volume to Europe, shipping 1.38 million mt.

Total cold-rolled coil import volumes increased from about 128,000 mt in November to about 150,000 in December, 17% higher month on month.

Import volumes from both India and South Korea more than doubled in December, increasing to about 58,000 mt from India and to about 43,000 mt from South Korea. Imports from Brazil, the top supplier to Europe in November with about 27,000 mt, declined to just about 300 mt in December.

South Korea ended 2019 as the top supplier to the bloc with around 412,000 mt, which was a decline of 13% compared to 2018. Volumes from India fell 26% year on year to around 386,000 mt in 2019, relegating India into second place in volume terms.

Turkey increased cold-rolled coil volumes by 66% year on year, shipping about 348,000 mt, up from around 210,000 mt the previous year.

Fiat Chrysler Automobiles (FCA) has temporarily suspended production at its Kragujevac plant in Serbia due to reduced availability of certain components sourced in China, an FCA spokesperson tells Kallanish.

With the coronavirus outbreak hitting manufacturing activity in China, the supply chains of various industries stand to suffer from the knock-on effect. FCA becomes the first carmaker in Europe to halt production as a result of this situation.

The firm has rescheduled planned downtime in order to carry out the Serbian plant stoppage. “We are in the process of securing future supply of those affected parts and production will be restarted later this month,” the spokesperson says. “We do not expect this change in scheduling to impact the total production forecasted for the month.”

HBIS Serbia did not respond before deadline to requests for comment on whether the production stoppage would affect its supplies of automotive steel to FCA.

Italian trade unions, meanwhile, say difficulties in sourcing components from China could have an impact on FCA Europe’s entire supply chain, including in Italy.

Fiat Serbia produced an estimated 60,000 vehicles in 2018.

Italian car output dipped in both December and full-year 2019. The December dip is the 18th consecutive negative monthly figure, says local carmakers’ association Associazione Nazionale Filiera Industria Automobilistica (Anfia) in a report monitored by Kallanish.

Passenger car production in Italy fell by -19% year-on-year in 2019 and also declined in December by -25% compared to December 2018.

According to ISTAT (Instituto Nazionale di Statistica) data, total automotive production including heavy and industrial transport fell by -9.6% last year and by -11.5% in December 2019 compared to December 2018.

No volumes for the periods have been disclosed by Anfia and Istat. Based on already-published data, Italian passenger car production slowed in 2018 by -10% year-on-year to 671,000 units. Passenger car production also decreased in December 2018 by -13% compared to December 2017 to 39,000 units.

An Italian court overseeing the investigation into alleged improper payments made in Brazil for the supposed benefit of Confab Industrial S.A. has decided to move the case to trial, according to the Techint Group. Confab, which is subsidiary of the group, manufactures, supplies and exports welded steel pipes, as well as producing equipment for the energy sector.

The case involves several Techint group executives and others. These include chairman and ceo, Paolo Rocca, board members Gianfelice Rocca and Roberto Bonatti, and the company’s controlling shareholder, San Faustin S.A., Techint subsidiary Tenaris says in a note monitored by Kallanish.  

“The company’s outside counsel previously reviewed the Italian prosecutors’ investigative file and has informed the board that neither that file nor this magistrate’s decision sets forth evidence of involvement by any of the three directors in the alleged wrongdoing,” Tenaris comments. 

Accordingly, the Techint board has concluded that no particular action is warranted at the present time, “… other than inviting the referred board members to continue discharging their respective responsibilities with the full support of the board,” Tenaris adds.

The Techint group is the largest steelmaker in Latin America. The company operates in the engineering, construction, steel, mining, oil & gas, industrial plants and healthcare sectors through a number of subsidiary companies including Ternium and Tenaris.

The US-China phase one trade deal reduces the risk of a near-term escalation in trade tensions between the countries, but trade policy uncertainty has not gone away, says Moody’s. The US threat of 25% tariffs on auto and auto parts imports, for example, remains on the table, while tariffs on steel and aluminium have been extended.

“Faced with the shock to its economy from the coronavirus, China will have more difficulty meeting the already ambitious commitments it made under the agreement,” Moody’s says in a report sent to Kallanish. “Therefore, the trade war could be reignited if and when the US Trade Representative (USTR) determines that China has not met its obligations.”

The outbreak of the coronavirus has dented the optimism created by the US-China trade deal and early signs of a pick-up in the industrial sector.

“There is already evidence — albeit anecdotal — that supply chains are being disrupted, including outside China,” Moody’s says. “If the outbreak persists, domestic and international supply chain disruptions are likely to become significant, amplifying the shock to the global economy.” Factory shutdowns could lead to shortages and raise the prices of manufactured goods globally.

The Chinese government and private sector will likely slowly relax quarantine and travel restriction rules once the rate of new infections meaningfully falls. Moody’s baseline forecast assumes the rate of disease transmission will slow in the coming weeks. Under this assumption, the economic impact will be limited to the first quarter and certain normalcy will be restored by the beginning of Q2.

The episode is nevertheless forecast to shave 0.6 percentage point from China’s GDP growth in 2020. Moody’s has revised its China GDP growth forecast to 5.2% in 2020.

Fiat Chrysler Automobiles (FCA) has temporarily suspended production at its Kragujevac plant in Serbia due to reduced availability of certain components sourced in China (see separate article).

ISD Dunaferr has postponed plans to lay off 350 workers after reaching a wage agreement with unions, a company official tells Kallanish.

The Hungarian steelmaker announced the lay-offs last October as a result of the weak performance of the European steel industry. Due to slowing economic growth and falling steel demand, the firm had to postpone a number of strategic development projects in 2019 and curtail production. However, it avoided the plant closures seen at other European steelmakers.

This week’s agreement will ensure there are no lay-offs until at least 31 December 2020. The parties agreed a 5.8% average wage increase versus the almost 34% raise seen in the last two years. But it comes at the cost of reducing the number of workers hired in the past two months, as well as early retirement for some employees and agency worker cuts.

“Pinpoint optimisation will obviously continue,” the official says of plans to boost efficiency. A spokesman adds that Dunaferr “… is now working hard to boost production and take advantage of improving market opportunities.”

Dunaferr recently revamped its hot-dip galvanized coil line, thereby increasing its capacity by 20-30% (see Kallanish passim). Last year the producer said it will increase HDG output to 130,000 tonnes/year.

In 2018 its hot rolled coil sales rose 1% on-year to 639,925t, with cold rolled coil and HDG sales up 3% and 4% respectively to 319,210t and 104,330t. Overall steel sales rose 5% to 1.64 million tonnes. The firm has a 1.7m t/y crude steel capacity.

thyssenkrupp has confirmed that it plans to close its plate mill in the Hüttenheim district of Duisburg if no buyer is found by 30 June.

“We need to face the facts. The plant cannot go on as it does now. The option of specifying a sale or a continuation until 30 June creates the clarity we need,“ thyssenkrupp AG executive Oliver Burkhardt says in a statement sent to Kallanish. The alternatives have been specified earlier, but as time has passed it became increasingly unlikely that a buyer would emerge, given the overcapacity on the European plate market.

The deadline was announced to workers on Thursday evening and cannot have come as a surprise. Burkhardt expressed sympathy for discontent amongst the workforce, and pledged that the 800 workers at the mill will be offered jobs elsewhere within tk Steel. Nevertheless, union IG Metall has announced industrial action as a protest against the measure.