Category: Latest Updates

Swiss government authorities expressed their opposition to the European safeguard system during a meeting last week on the free-trade agreement existing between Switzerland and Europe.

The safeguard measures have a negative impact on the country, which is strongly interconnected to the EU for the trade of steel and automotive components, according to a release from the Swiss economy ministry. In particular the ministry is condemning the decision to further limit trade by reducing the extension of quotas during the latest review finalised at the beginning of October.

“Switzerland maintains its commitment to the EU in favour of the absence of restrictions on trade in iron and steel products,” the note says.

According to the latest data published by Eurofer Switzerland imported over 600,000 tonnes/year of steel into Europe over the period from 2011 to 2018. During the first nine months of the current year, nevertheless, imports have not surpassed 370,000t.

Exports from the EU of steel products to Switzerland on the other hand have been 1.7-1.9 million t/y between 2011 and 2018. During the first nine months of 2019 these have surpassed 1.35 million tonnes, giving an annualised figure of over 1,800,000t. Kallanish calculates.

ArcelorMittal Italia and the Italian government have reopened negotiations to create a new industrial plan for former Italian steelmaker Ilva, Kallanish learns from a release issued by Italy’s Ministry of the Interior (Mise).  

The new plan would include new productive solutions and technologies and would ensure the utmost commitment in the environmental relaunch of the former Ilva plants, the statement says. This follows the latest meeting between prime minister Giuseppe Conte and ArcelorMittal’s Lakshmi Mittal and Aditya Mittal in Rome.

The Italian government is willing to support the project and involvement by the public was also discussed during the meeting, Conte said at a press conference. The main objective of this latest initiative is to reach an agreement. The government will therefore invite the Ilva commissioners to agree to a brief delay of the trial and to postpone the hearing set for 27 November. That is when the Milan tribunal will rule on ArcelorMittal’s right to withdraw from the acquisition.

This will give more time for the negotiation, Mise says in its statement. In the meantime, the government has asked ArcelorMittal to maintain normal operations at the plants and to guarantee continuity of production.

ArcelorMittal Italia had earlier revealed its plans to shut down equipment at the former Ilva steelmaking plant in Taranto. However, following that announcement, the steelmaker said that it will abide by the court’s request to refrain from suspending operations and await the court’s ruling (see Kallanish passim).

South European steel service centres are convinced that a recovery in coil prices will gain some momentum in the coming weeks. This is despite market uncertainty which continues to be a major feature of the sector, sources said during a recent meeting organised by their trade association EUROMETAL in Milan.

A senior market observer noted that the ongoing price recovery should continue until the end of the year, but any such developments in 2020 remain uncertain. “We are getting ready for a rapid recovery aimed at restoring a normal differential between coil and raw material prices. Having said that, first-half demand in 2020 is still not set to jump, so it is too early to say recovery will continue into 2020,” the source noted.

Another executive from an Italian service centre stressed that the market should have turned earlier, when mills clearly began to struggle to make any profit on their coil sales.

“It is interesting to notice that the current recovery is driven by scrap prices. Similarly, the last part of the price decreases we saw after the summer was driven by negative sentiment more than real demand,” another source noted.

According to Kallanish price series, Italian HRC prices have started to move up significantly during the last two weeks. Any recovery in transaction prices in northern Europe has yet to be confirmed.

EUROMETAL calculated that during the first nine months of 2019 steel service centres sales volumes overall in Europe were down by -4.1% year-on-year. The bigger drop was recorded in Germany, Benelux and Austria, where the fall was by -6.2% y-o-y. in Italy the on-year downturn in volume was only -2.7%.

A request extension has been filed at the Court of Taranto for the continuation of the works to meet environmental obligations at the blast furnace BF2 of ArcelorMittal Italia plant, formerly Ilva steelworks, in Taranto, sources close to the mill told S&P Global Platts.

Meanwhile, the Italian government and ArcelorMittal are holding talks to find a solution toward continuing operations at the plant, which is the largest Italian steel producer.

Works at BF2 were supposed to be done by the special administrators by December 13 but the administrators had requested for extension. The recently filed extension should cover a period of between 12 and 14 months.

ArcelorMittal had previously asked to extend the deadline in order to keep the BF2 operative. The failure to grant extension along with the removal of the penalty shield prompted AM Italia to pull out from Ilva’s investments on November 4, Platts earlier reported.

The company produces 1.4% of the Italian gross domestic product, including its supply chain, and provides directly 10,700 jobs and indirectly around 14,000 jobs.

During the weekend, the Italian Prime Minister, Giuseppe Conte, said that ArcelorMittal agreed to immediately restart talks with the Italian government over the future of the Ilva plant.

AM InvestCo, the main holding company of AM Italia, confirmed to Platts with a note “that a constructive meeting was held on Friday 22nd November with Prime Minister Conte and other government representatives to discuss solutions for the ex-Ilva steelworks. Discussions will continue with the aim of reaching an agreement as soon as possible to support sustainable steel-making in Taranto.”

AM Italia said on November 14 that it wanted to place all blast furnaces at the former Ilva steelworks in Taranto on standby mode by January 15, 2020, Platts reported earlier. AM Italia is producing at a rate of 3.8 million mt/year.

ArcelorMittal Group on November 4 asked the Ilva Special Commissioners to take back responsibility for AM Italia’s operations and employees within 30 days from receipt of the withdrawal letter. On November 12, ArcelorMittal asked the Court of Milan for withdrawal from the former Ilva rental contract.

AM Italia took the decision to withdraw from Ilva after Italian parliament removed legal protection for the company, leaving its managers liable to prosecution over environmental issues.

The decision was also taken as a result of the criminal court of Taranto obliging the Ilva extraordinary commissioners to meet certain conditions at the works by December 13, failing which blast furnace number 2 would be shut down.

In response the special commissioners filed an urgent appeal in the Milan court. The hearing has been set for November 27.

In den kommenden drei Jahren plant Benteler im Stahlrohrgeschäft den Abbau von etwa 600 Arbeitsplätzen.

In diesem Geschäftsfeld sind etwa 3.600 Menschen in den Werken Dinslaken, Bottrop und Paderborn beschäftigt.

Mit dem Stellenabbau möchte das Familienunternehmen die Produktionskapazitäten der sinkenden Nachfrage anpassen. So soll der größte Teil der deutschen Arbeitsplätze gesichert werden.

Die Stellenstreichungen werden sozialverträglich erfolgen, teilt das Unternehmen mit.

Quelle und Vorschaufoto: BENTELER International Aktiengesellschaft

The European steelmakers’ association Eurofer tells Kallanish that it is supporting the challenge launched by the European Union with the World Trade Organization against Indonesian export restrictions on nickel used in stainless steel production.

“The European Commission said that, ‘these restrictions unfairly limit access of EU producers to raw materials for steel production, notably nickel as well as scraps, coal and coke, iron ore and chromium. The EU is also challenging subsidies that encourage the use of local content by Indonesian producers and give preference to domestic over imported goods, which goes against WTO rules’,“ Eurofer says.

“Indonesia has been engaging in an aggressive expansion of its nickel processing and stainless steel sectors,” says Eurofer director general, Axel Eggert. “This began in 2014, with Indonesia banning the exports of nickel-bearing raw materials to ensure its nascent domestic stainless production had access to below-market price inputs. Although the restriction was partially eased in 2017, a full export ban will be restored on 1 January 2020.”

Apart from the disregard for the rules of international trade, the integrated production route used by Indonesia to produce stainless steel is more CO₂-intensive than the electric melting process used in Europe, Eggert adds.

“200,000 direct and indirect European jobs depend on stainless steel, and they should not be put at risk because of the unfair activities of other countries,” the director general continues. 

Gestamp, the Spanish automotive industry supplier, has started operations at its second hot-stamping plant in Almussafes, Valencia, Kallanish learns from the company.

The project was supported by the regional government, Generalitat Valenciana, with an investment of €3.1 million ($3.4m) as part of its program for environmental sustainability and research and development promotion.

“Hot stamping is one of the solutions that allow manufacturers to reduce the weight of the body in white structure, resulting in reduced emissions,” Gestamp explains. “In addition, the hot stamping process improves the vehicle’s behaviour in case of collision and contributes to passenger safety.”

Gestamp Levante is the only factory in the Valencian region that has hot stamping technology. In addition, the company has improved its welding facilities for large assemblies. The company supplies vast welded and body-in-white parts to Ford’s Almussafes plant, which it communicates directly through a tunnel system, Gestamp adds.

The European Commission has approved Italian steel company Marcegaglia’s pending takeover of plate mill Palini e Bertoli, part of Russian mining and steel group Evraz.

Evraz Palini and Marcegaglia Plates are both active in the manufacturing of heavy quarto plates but the proposed acquisition does not raise competition concerns as the companies’ combined share of the heavy plate market would be limited, the commission concluded.

“We are aiming to strengthen through the synergies both companies and, in line with the market needs, to use all the designed capacity of the two mills”, Marcegaglia Chairman and CEO Antonio Marcegaglia told S&P Global Platts Thursday.

The deal is expected to be finalized by early December, industry sources said.

Marcegaglia has been in advanced talks for several weeks to buy Palini e Bertoli from Evraz. Once the deal is concluded, the Italian company will expand its 380,000 mt/year plate capacity to 800,000 mt/year.

Marcegaglia’s range of heavy plates is manufactured in San Giorgio di Nogaro, northeast Italy. The plant processes plates with up to 200 mm thicknesses and up to 2,700 mm widths. Palini e Bertoli produces plates in 10-250 mm thicknesses and 1,500-3,000 mm widths.

Evraz is seeking to divest Palini e Bertoli as plate is no longer part of its core business. The steelmaker stopped being an important participant in this market after selling its Czech heavy plate mill, Vitkovice Steel, in 2014.

Latest EUROMETAL meeting of SSC from Southern Europe was convened in Milano on 21. november 2019.

The conference was attended by steel professionals from Italy, Spain, Portugal, Turkey, Switzerland, France, Austria, Belgium, Denmark, the UK and Ukraine.

During conference presentations and panel discussion the idling of ILVA was controversially debated.

Some Italian SSC claim that they are prepared to face a number of potential scenarios. As in the past, they are confident that they will be able to quickly adapt to react to changes on the supply side.

Others indicated that at least at short terms, supply problems might well arise and that importing coils might eventually remain the sole viable solution to cope with EU supply shortages.

As a consequence, voices claimed to re-open an assessment on the impact of EU flat steel safeguards, on the background that an idling of ILVA would mean that a yearly volume of 4,5 million tons of flat steel products would disappear from EU supply side.

Conference was told that EU steel safeguard measures had in 2019 an effect of significantly  decreasing import volumes into EU but that in the same time these lower imports had no impact on the HRC price levels which crashed by approximately 170 Euros per ton since the introduction of provisional safeguards.

In this regard imports from Turkey were another conference topic.

In fact, Turkish steel producers did take advantage of AD cases against HRC imports from China, Russia, Ukraine, Brasil and Iran to boost their exports to EU markets.

In this context, conference was informed that EU Commission might consider to launch an AD probe into HRC imports from Turkey.

On the other hand, Turkey is a very important market for EU flat steels, which could incite the Turkish administration to retaliate against eventual EU measures against Turkey.

But it might be worth noting, that Turkish steel producers as well as Turkish steel end users are strongly opposing any trade barriers on steel imports into Turkey. Background of this is that most of Turkish automotive and white goods production is under control of EU interests and that most of these outputs are marketed back into EU markets.

Another point noted during the meeting was that Italian SSC business in 2019 remained close to a fair activity level, despite a more negative perception.

As a matter of fact, shipments by Italian SSC did drop in the first 9 months of 2019 by only -2,7 %, year-on-year, while during same period shipments by German SSC dropped by -6,2 %, French SSC by -5,7 % and SSC from EU-28  by an average of -4,1 %.

The conference did also stress out the systemic role of SSC for consumers, on one side, and for producers, on the other side.

For consumers, SSC bring added value by stock availability, by making available the complete range of products and processing required by the supply chain, by customized delivery logistics, by timing complying with customer requirements and by smoothing and stabilizing the price cycles.

For suppliers, SSC represent an efficient route to the market, complying with mill volume and range requirements and constituting a fair partner regarding pricing for value.

Finally, the conference expressed high concern that world economy has now entered a phase of de-globalization, triggering also a move from global to regional steel markets and steadily growing protectionism against international steel trade flows, in contradiction with any principles of optimizing global supply chains.

Photos of the event.

In Essen soll mehr als die Hälfte aller Stellen gestrichen werden. So wird die Mitarbeiteranzahl der derzeit knapp 800 Mitarbeiter im kommenden Jahr auf etwa 430 reduziert. 

“Wir drehen gerade jeden Stein im Unternehmen um. Da sehen wir viele Geschäfte, in denen die Verbesserung der Performance eine ganz alltäglich Praxis ist. Wir müssen nicht überall üben, Spitze zu sein. Es gibt Konzernunternehmen, die zu den besten ihrer Branchen gehören. Das darf aber nicht über den dringenden Handlungsbedarf hinwegtäuschen, den wir in anderen Geschäften sehen”, erklärte die Vorstandsvorsitzende Martina Merz. 

Mit zahlreichen Maßnahmen will man die Leistungsfähigkeit aller Geschäfte steigern, nachdem im vergangenen Geschäftsjahr ein Fehlbetrag von rund 260 Mio. Euro verbucht worden ist. Der misslungenen Fusion mit Tata Steel Europe wird die Schuld zugeschoben, durch die der Konzern massiv unter Druck geraten sei. Das Unternehmen belastet aber auch der massive Nachfragerückgang zu Auto-Komponenten in den USA und Westeuropa. So soll im automobilen Anlagebau jede fünfte Stelle gestrichen werden und somit 640 der 3500 Jobs wegfallen. 

Wie es mit den Stahlwerken in Duisburg, Bochum und Dortmund weitergeht, bleibt vorerst ebenso offen wie die Frage, ob sich Thyssenkrupp vom Aufzug-Geschäft trennen könnte, was einer Streichung von 50.000 Arbeitsplätzen gleichkäme. 

Quelle und Foto: thyssenkrupp AG