Category: Latest Updates

French authorities are considering different options for the Hayange rail mill, in case it is not sold to Jingye Group as part of the Chinese firm’s acquisition of British Steel, Kallanish learns from French sources.

Jingye signed a preliminary agreement to acquire all British Steel operations, but the French government needs to approve the industrial plan for the Hayange mill within the deal. Local press reports say a potential buyer is being sought for the unit in case its sale to Jingye is not approved.

When approached for comment, British Steel’s Official Receiver said: “The parties are working together to conclude a sale as soon as reasonably practicable.”

Jingye did not respond for requests for comment before deadline.

A source close to the deal says French authorities are looking for leverage in the negotiations and are nervous about selling to a Chinese company. However, it is unclear what action they can take as the Hayange plant belongs to British Steel.

Last month Hayange signed a large supply contract for bloom with Ascoval, the French steelmaking unit controlled by Greybull. Due to this contract and the fact the Hayange mill is considered strategic because it supplies rail to the national railway operator, French authorities are keeping a close eye on the transaction involving British Steel.

ArcelorMittal has presented a new possible industrial plan to the Italian authorities to continue operating the former Ilva plants in Taranto and across Italy. The trade unions involved have immediately opposed the proposal and called for a strike at the plants next week.

The steelmaker said during a meeting with the Italian authorities that it would cut almost 5,000 jobs during the next three years. The first cuts would be in 2020 while the remainder would be in 2023 when the company proposes to idle blast furnace No. 2 and launch an electric arc furnace at the Taranto site.

The local minister for economic development confirmed in a video interview that ArcelorMittal is also targeting the production of 6 million tonnes/year of steel by 2023 using both blast furnaces and a new EAF. The minister added that the Italian government envisages production of 8 million tonnes/year for the Taranto site with the use of BF, EAF and DRI. He said that the Italian government will present a plan for the site next week.

The unions have sent a statement saying the new plan is not acceptable and are calling for a strike at the sites on Tuesday next week.

ArcelorMittal signed a deal with the Italian government in September 2018 agreeing to maintain, among other things, job numbers at above 10,000 and to push crude steel production to 8m t/y by 2024. Since then however many things have changed and the company is currently moving forward to cancel its contract and to return the assets to the local administrators (see Kallanish passim).

Sweden’s SSAB has set out its new strategic targets for 2022, the steelmaker tells Kallanish.

The company lists four major objectives. Firstly, SSAB Europe will ship 1.6 million tonnes of steel in 2022. In 2018 the division shipped 1.3mt.

Another target is that the European segment will ship 800,000t of advanced high-strength steel products (AHSS) to the automotive industry versus 562,000t in 2018 and 900,000t of premium steel (2018: 718,000t). This means that the share of premium products will reach 46% in 2022 versus 36% in 2018.

SSAB Americas aims to increase the share premium products to 39% during 2022 (2018: 29%).

Finally, SSAB Services will increase sales to SEK 4.5 billion ($473 million) through a combination of organic growth and acquisitions. The equivalent value was SEK 2.4 billion in 2018.

In addition to these strategic targets, distribution subsidiary Tibnor aims to reach an Ebitda margin of more than 5% and a return on capital employed of more than 15% in 2022. Ruukki Construction aims to reach an Ebitda margin of more than 10% in 2022.

“We have generated and will continue to generate good cash flow. The balance sheet has been strengthened significantly in recent years. This allows us to continue to invest with consideration in removing bottlenecks in the production of high-strength steel whilst making the transition to fossil-free steelmaking”, says president and ceo Martin Lindqvist.

Italian re-roller Marcegaglia has finalised the purchase of 100% of the capital of plate producer Evraz Palini & Bertoli from Russian steelmaker Evraz. The deal has been done through its subsidiary Marcegaglia Plates for a value of €40 million ($44m), Kallanish learns from Marcegaglia.

The new acquisition is part of the plan to strengthen the capacity of Marcegaglia Plates and will create a new player capable of producing 1 million tonnes/year of plate. The expanded subsidiary will have 200 employees.

Sources in the company tell Kallanish that the acquired company has been renamed Marcegaglia Palini & Bertoli. It will benefit from operational and commercial synergies, the reroller says, and new investment of approximately €15m over the next two-to-three years aimed at strengthening its competitiveness.

Palini & Bertoli has 108 employees and an annual turnover of €216m. It specialises in the manufacturing of heavy quarto plates with over 400,000 t/y of capacity.

Palini e Bertoli’s plate mill is located in San Giorgio di Nogaro and sells its products in Europe and North America. Marcegaglia’s plate production division is also located in the dedicated unit of San Giorgio di Nogaro. It also has a production capacity of 400,000 t/y.

Latin American steel production decreased again year-on-year both in the first ten months of 2019 and in October alone, Kallanish learns from regional steel producers’ association Alacero. The region also saw steel consumption fall to the end of September, according to Alacero data.

“With a third-quarter consumption down further than expected and a lower production level in October than the annual average, we adjusted again the regional consumption outlook to almost 65 million tonnes in 2019,” Alacero says. “The reduction in the trade deficit must be accompanied by a resumption of production levels by 2020, with the expectation of increasing consumption and strengthening the domestic market,” the association adds.

During the first ten months of 2019, Latin American crude steel output was 50.90 million tonnes, or -8% less on-year. In October alone, crude steel production was 4.90mt, down by -14% y-o-y, but 4.2% more than in September.

Ten-month finished steel output totalled 42.36mt, -7.5% lower y-o-y. During October, regional finished steel production was 4.06mt or -12% less y-o-y.

During January-September, meanwhile, finished steel consumption was 51.20mt, or -4.9% down on the same period of 2018. A key factor contributing to this result was a series of political crises in Colombia, Chile, Peru and Ecuador, in addition to the economic recession in Argentina and Mexico, Alacero.explains.

The regional steel producers’ association reports that Latin American exports grew during the period, while imports continue to decrease (see related article). 

ArcelorMittal Poland said Wednesday it has completed the second stage of the modernisation of its Sosnowiec mill in Poland to improve efficiency and quality of wire rod production.

The work included the modernization of the rolling stands and cabling system at the plant in Zaglebie Dabrowskie.

The first stage of the modernization was carried out in October last year and the total cost of the project was estimated at Zloty 120 million ($31 million). The investment will increase the mill’s wire rod manufacturing capacity by 100,000 mt/year to 800,000 mt/yr.

Wire rod is a semi-product used to make bolts, fences, shopping trolleys and metal shelves for fridges.

The Sosnowiec mill began production in 1905 as the Cedler plant and was the biggest producer of stainless steel in Europe in the 1970s.

“We have invested in this installation because we are aware of the importance of the continuous improvement of our products and adapting them to the growing expectations of our customers and the increasing competition on the market. Rolled steel is a product that is widely used and demand for it is not weakening,” Bogdan Mikolajczyk, managing director of the long products and logistics department said.

Turkey’s steel consumption may have turned a corner after a rebound in demand at the beginning of the fourth quarter, according to the latest available data.

Turkish Steel Producers Association (TCUD) figures published this week, showed that domestic steel consumption rose 34% year on year in October.

“This has raised recovery expectations for the coming months as well as for 2020,” TCUD said.

Turkish mills — which reduced their capacity usage notably in previous months — have started to ramp up activity, leading to stronger market sentiment and higher steel prices. Koc Metalurji — which stopped production late September due to a sluggish market — restarted output on December 1.

Despite the recovery in October, Turkey’s overall steel consumption in the first ten months fell by 21.5% on year to 21.5 million mt, TCUD data showed. Flats consumption declined by 8.4% on year over the same period to 12.6 million mt. Longs consumption slumped by 34.6% to 8.9 million mt, amid a construction sector crisis, according to the data.

Turkey’s overall finished steel output was also down by 15.8% year on year to 27.6 million mt. Turkey’s longs production declined by 22.3% to 16.4 million mt and flats output fell by 3.9% to 11.2 million mt in the same period.

Turkish mills have focused more on exports and managed to increase their overall steel export volumes by 6.4% year on year to 18.5 million mt in January-October, TCUD noted.

Several thousand thyssenkrupp steelworkers demonstrated on Tuesday at the Duisburg headquarters of thyssenkrupp Steel Europe, during a meeting of the division’s supervisory board. They were called to action by the trade union IG Metall, which is demanding more clarity on the future of the group and its steel activities. 

Among other things, the union finds that the company’s steel division has been “… starved” and has a need for higher levels of investment than have been pledged so far. “According to our calculation, we need €1.5 billion ($1.7 billion) to bring tk Steel up to date technologically, to keep up with the market,” Kallanish learns from IG Metall.

“This is only a warm-up,” shop chairman Tekin Nasikkol told the crowd of demonstrators, and announced that an upcoming clash with the steelmaker’s management could be “… the mother of all confrontations.” According to the union, some 6,000 steelworkers appeared at the gathering. 

No results from the board meeting were released by the company before publication deadline. A report by Reuters however suggested that the company has plans to invest €570 million in its steel operations, much less than that indicated by the trade union.

The Spanish steel sector is undertaking a project to produce steel with zero emissions of CO₂ before 2050, according to a statement issued by the local steelmakers’ association Unesid, monitored by Kallanish.

The objective is technologically feasible and will place Spain`s steel industry in a leading position in the world and also meet the European Union`s lower carbon emissions guidance, Unesid says.

“The Spanish steel sector has been advancing with spectacular environmental progress for many years. The CO₂ emissions per tonne have fallen by 75% in production, the use of water and discharged in the processes has decreased by more than 95% and practically 100% of waste and by-products are recycled and recovered,” Unesid president Bernardo Velázquez says.

66% of Spanish steel is produced by the electric melting route. The Spanish steel industry also recycles 10.2 million tonnes of steel annually or 71% of total national production.

The zero-emission steel production plan, however, faces a series of obstacles such as the high energy cost or global overcapacity of steel production. This reduces the margins of business and hinders the attraction of investment, Velázquez warns.

The Spanish steel sector considers the collaboration of different sectoral administrations in this process as “… essential”. Unesid is also calling for competitive electricity prices, the financing of more research projects and better public purchasing of more environmentally-friendly steels.

ArcelorMittal has temporarily halted operations at its steelworks at Aviles in northern Spain, to undertake improvement work to enhance the quality of production and improve performance, Kallanish notes.

The work is due to begin on 4 November 2019 and will last until the first week of February 2020. The entire steelworks has been halted for the next ten days however, according to a spokesperson from ArcelorMittal.

The upgrade involves the replacement of the vessel and supporting ring of one of the converters, a new boiler and a new smoke aspiration system. The steelmaker will also revamp its continuous caster No. 2 in order to produce slabs of greater thickness and width.

“The converter was awarded to the technology supplier Primetals and is scheduled to go into operation on 29 January 2020. Meanwhile, the continuous caster No. 2 should start operations as from 8 February 2020. This equipment is supplied by SMS group,” the steelmaker says.

The investment value involved is €50 million ($55.4m), ArcelorMittal confirms.