Category: Latest Updates

ArcelorMittal will restart blast furnace number 2 at the Gijón plant in northern Spain on 11 January, Kallanish learns from the company. The furnace has been idled since the beginning of November 2019 for maintenance reasons and due to weakening steel demand.

ArcelorMittal, however, remains cautious about the possible recovery of normal production levels, given the current uncertain market situation.

“The decision to resume production at the BF2 is based on the need to restock after the period of shutdown due to the revamp of the Avilés steelworks and the start-up of the Gijón Coke Battery number 1 on 12 January,” ArcelorMittal confirms. The company confirmed earlier this week that a number of finishing lines in the country will suffer temporary stoppages due to weak demand.

The maintenance work included the replacement of the furnace’s cooling ducts, as well as the installation of a new dust-catching system, in addition to the existing one. The company also previously carried out work to allow the injection of coke-oven gas in this furnace at a future stage, which would result in reduced coke consumption.

The steelmaker confirms it will resume operations at its steelworks at Avilés at the beginning of February, after the completion of a planned revamp.

Turkey has updated import duties on some steel products, effective 1 January 2020, Kallanish notes.

The gradual reduction of import duties on steel products from South Korea has ended and all steel products imported from this country are now subject to zero duty.

The import duty reduction on cold rolled coil for Turkish producers of white goods, galvanized and pre-painted sheet (PPGI), in force since the beginning of 2019, has been removed for galv and PPGI producers. The current import duty on CRC stands at 10% for galvanized and PPGI producers, and 7% for white good producers.

Welded pipe producers that produce from hot rolled coil are now able to import HRC with HS code 720838009019 at 6% duty instead of 9%.

Import duty on stainless steel CRC under HS codes 721931000000, 721932100000, 721932900000, 721933100000, 721933900000, 721934100000, 721934900000, 721935100000, 721935900000, 721990200000, 722020210011, 722020290011, 722020410011, 722020490011, 722020810011 and 722020890011 has been increased from 10% to 12%.

Import duty on rebar, which was raised to 30% from 10% in April 2019, continues at 30%.

The 2% import duty on pig iron under HS codes 720110110000 and 720110300000 has been removed, while on pig iron with HS code 720110190000 it has remained at 2%.

The 2.7% duty on imports of ferromanganese under HS codes 72021120 and 72021180 has been removed.

Terminal operator Euroports and plate distributor Zimmer Staal have started operating a new warehouse in the Port of Antwerp, Kallanish learns from the port authority. With 17,500m² of storage space, it is able to handle 10,000 tonnes/month of steel.

The investment in steel is significant in view of the difficulties currently facing the steel market due to, among other things, import duties being levied by the USA, the authority notes. The new facility demonstrates there is great confidence in the port as a major hub for breakbulk, it says. Breakbulk forms an important part of the commercial strategy of the Port of Antwerp.

Zimmer Staal, a Belgium-based heavy plate stockholding company based in Lier, with annual sales of 120,000 tonnes, was recently acquired by Pisec Group, a large Austrian company. Euroports is a port infrastructure company that handles over 60 million tonnes of bulk, breakbulk, containerised goods and liquid.

US Steel Kosice (USSK) has postponed its dynamo steel strip investment on account of reduced selling prices in quarterly and monthly contracts, and the difficult outlook for Europe’s economy in 2020. So said parent US Steel in its full-year 2019 guidance published last month.

Twelve months ago USSK said it plans to build a new 100,000 tonnes/year capacity non-grain oriented (NGO) electrical steel line at a cost of $130 million (see Kallanish passim). The new line was to enable production of silicon NGO electrical steel, which is in increasing demand in automotive and generator manufacturing.

Last summer USSK ordered from Tenova LOI Thermprocess an annealing and coating line (ACL) for dynamo steel strip. The new unit was to be named Dynamo-Line no.4.

When contacted by Kallanish a USSK spokesperson declined to comment on whether this order will be affected by the decision to suspend investment.

US Steel says it “…will continue to be flexible and execute investments at the… Dynamo line at US Steel Europe as market conditions warrant.”

Based on current market conditions the Slovakian steelmaker will also keep blast furnace no.2 idle for the time being. It has two other blast furnaces that remain operational.

In the nine months through September USSK’s shipments fell -16% on-year to 2.83 million net tons.

Following the capital increase to rescue the Schmolz+Bickenbach (S+B) group, Swiss billionaire Martin Haefner has taken over the stake of the company’s founder families through his BigPoint Holding AG. The stake, bundled in holding Schmolz+Bickenbach Beteiligungs GmbH, was 10.09% before and 4.7% after the capital increase, the S+B group tells Kallanish.

The move is a surprise because the owner families filed an appeal to the Swiss Federal Administrative Court in December against the granting of an exemption in favour of BigPoint. Although Haefner along with the capital increase would lift his stake to above one third in S+B, he was exempt from being obliged to making an offer for all outstanding shares.

Haefner is paying CHF 0.45 ($0.46) per share to the owner families, which is approximately double the current stock market value of S+B. For the owner families, this means a profitable but “… ugly exit”, as Swiss daily NZZ puts it, while the smaller shareholders are not considered in the deal.

Haefner will now own 49.6% of S+B, with another 25% held by Liwet Holding, which is controlled by Russian Oligarch Viktor Vekselberg. According to NZZ, the upcoming restructuring measures will mainly affect the group’s operations in Germany, France and the US.

ArcelorMittal has confirmed that it is preparing a series of stoppages at different production units in Spain as lower demand continues to affect some order books. The company implemented a number of stoppages in 2019 and is expected to continue making use of temporary layoffs also in the first part of 2020.

A spokesperson from the mill says at that there are no details about which operation will be stopped and when. Union sources note that the wire rod line in the north of Spain is expected to be halted. Other lines affected should include flats rolling units, at which output has already been reduced during the second part of 2019.

Despite the need to reduce output, the company has not yet cancelled its idea of restarting blast furnace B in Gijon, which has been on stop since October. A spokesperson from the company tells Kallanish that a firm date for the relaunch has not yet been confirmed but local sources say that operations could start as soon as at the end of this week.

At a meeting of the Dispute Settlement Body (DSB) on 8 January, WTO members formally adopted the panel and Appellate Body reports in a case brought by Turkey regarding anti-dumping measures imposed by Morocco on imports of certain hot-rolled steel products from Turkey.

The panel report, circulated to WTO members on 31 October 2018, found that Moroccan authorities had violated several provisions of the WTO’s Anti-Dumping Agreement in their investigation on the targeted Turkish imports. On 20 November 2018 Morocco notified its decision to appeal certain panel findings. 

On 4 December 2019, the Chair of the Appellate Body informed the DSB that it had received a letter from Morocco indicating the withdrawal of its appeal. The Appellate Body issued its report on 10 December stating that, in view of Morocco’s withdrawal of the appeal, it had completed its work and that the 30-day period for the DSB’s formal adoption of the ruling began from the circulation of the Appellate Body report.

The DSB adopted the panel report and Appellate Body report. Morocco will now have 30 days to inform the DSB of its intentions in regards to the implementation of the ruling.

More background on the dispute is available here.

US service centre chain Worthington Industries has gained majority ownership of its Samuel Steel Pickling Company joint venture, Kallanish understands. 

Worthington added its recently acquired Heidtman Cleveland facilities to the joint venture’s portfolio, shifting its total stake in the venture to 63%. Samuel, Son & Co. holds the remaining 37%. 

As a result, the joint venture has been renamed Worthington Samuel Coil Processing, and its earnings will be reported by Worthington. 

“Adding the Heidtman Cleveland facility will enhance the joint venture’s pickling capabilities in this area,” says Worthington ceo John McConnell. “Leveraging the strengths and capabilities of these facilities will allow us to better serve our customers in this market.”

Worthington and Samuel originally formed the joint venture in 2010.

Steelduxx will be a new name in steel logistics at the port of Antwerp, Belgium with effect from 7 January 2020.

Steelduxx is the result of a merger between Edmond Van Dyck & Sons and Aneka, which have more than 125 years of experience in the industry, Kallanish hears from managing directors Lou Appels and Benoit Van Dyck.

The former companies jointly handled 1.2 million tonnes of steel products in 2019, up from 880,000t in 2018. Their combined revenue in 2019 was €43 million ($48m) including car trading. In 2017, the last year without car trading, the revenue achieved was €26m.

The company is partner in the Antwerp Railhouse, a logistics hub of 30,000 square metres which was completed last year. The hub also includes Zuidnatie and Conti7.

Chinese steel mill Jingye is currently seeking the regulatory approvals it needs to complete the purchase of British Steel and is in active contact with EU regulators to gain these, the Official Receiver told S&P Global Platts Monday.

“There is no hard deadline to complete this process. The Official Receiver continues to be able to call upon the indemnity provided by the government to keep the business trading and supplying its customers”, the Official Receiver’s office said.

Although UK is set to leave the EU on January 31, the merger requires approval from a number of European regulators, both at the national level in some countries and by the EU.

“The steel industry is a highly regulated industry and it was always expected that the approvals process would take time to complete. This process remains on track in line with expectations of all parties,” the Official Receiver’s office said.

The Chinese mill planned to close the deal by the end of the first quarter. In November, Jingye agreed a deal in principle to buy the Scunthorpe-based steelmaker for GBP50 million ($64 million) and to invest as much as GBP1.2 billion into the company. The terms of the sale contract gave until the end of February to for the deal to conclude but allowed for an extension into March.

British Steel, which went into compulsory liquidation on May 22, 2019, has about 3 million mt a year of production capacity in the UK, France and the Netherlands, including the supply chain there are at stake 20,000 jobs.

A Jingye spokesman declined to comment.

— Annalisa Villa