Category: Latest Updates

thyssenkrupp Materials Processing Europe, the unit of tk’s Materials Services division that covers service centre activities in several countries, has added new in-house developments to its portfolio of digital applications. The company highlights the web-based information platform mpe connect, which it says provides real-time digital access to information.

Technically, mpe connect is modelled on the proprietary SAP and ERP system, but visually it has the advantage of a user-friendly interface, Kallanish learns from the company. All details of open purchase orders or available quantities can be accessed – from order confirmation to delivery and invoicing, tk explains. These and other documents, such as test certificates, are also available for downloading. As with online parcel tracking, process status can be tracked in real time.

The service centres of tk Materials Processing Europe serve fabricators from the automotive, electrical, construction and furniture industries at 13 sites in six countries. The unit will present its new digital solutions at the Blechexpo trade show in Stuttgart next month.

Arvedi, the EAF-based coil supplier based in Cremona in northern Italy, has confirmed to Kallanish that it intends to cut its production by 70% at the company’s main mill during November and December.

Rumours of such big reduction in output began to circulate in September. Arvedi confirms that during the downturn it will implement a number of upgrades at the plant.

“International tensions linked to tariffs, the sharp economic slowdown and the persistent crisis in the car industry which has dragged Germany into recession, are creating a highly critical situation in the market for steel products and above all the market for hot rolled coils,” the company explains. “If to this [… situation] is added massive imports at very low price, in particular from Turkey, the picture is one of difficulties which risk becoming systemic.”

The producer is also issuing a call to both national and European authorities to adopt a strong stance to safeguard the market going forward.

It is understood that the reduction in the Arvedi output will have an impact on the coil market due to the lower availability of finished product. It will also affect the Italian scrap market, where Arvedi is among the largest buyers. A trader calculates that the Italian scrap market would see demand reduced by as much as 70,000-100,000 tonnes during November and December as a result of the temporary stoppage by Arvedi.

Production capacity at the Cremona mill is 3.4 million tonnes/year, Kallanish understands.

While exclusive talks continued between the Official Receiver and preferred bidder Turkey’s OYAK over the sale of British Steel, Sanjeev Gupta’s Liberty House Group, which is part of his family holding company GFG Alliance, has in recent days held fresh talks about buying the UK’s second-biggest steel producer, according to UK-based Sky News.

The discussions had accelerated ahead of the expiry later this week of an exclusivity period granted by the Official Receiver to Ataer Holding, a subsidiary of Turkey’s Oyak, Sky News said citing sources.

While exclusive talks continued between the Official Receiver and OYAK over the sale of the UK-based steelmaker, Chinese steelmaker Jingye Group also approached the UK government with a fresh offer for British Steel at the beginning of October, as reported.

The Official Receiver told S&P Global Platts Tuesday that they are continuing to engage with the preferred bidder.

“We have seen media reports regarding other interested parties speaking with other parts of government about their interest British Steel, but we are unable to confirm those reports,” he noted.

A company source at OYAK Holding, the biggest complementary pension fund in Turkey, which signed an exclusivity agreement in mid-August to buy British Steel, told Platts late last week that the open-ended negotiations for the takeover are ongoing. 

According to an OYAK statement previously sent to Platts, after the successful completion of a detailed inspection process at the end of October, the handover was expected to be held by year-end. Turkish military pension fund OYAK is Ataer Holding’s parent company, which is the largest shareholder in Erdemir, the nation’s biggest steel producer.

British Steel, which went into compulsory liquidation on May 22, has about 3 million mt/year of production capacity in the UK, France and the Netherlands.

— Cenk Can and Annalisa Villa

The European Steel Association (EUROFER) has today issued a joint release alongside eighteen other regional and national steel associations calling for the Global Forum on Steel Excess Capacity to be extended. At the same time, the crisis in the European steel industry – largely a result of the very overcapacity the Global Forum exists to fix – continues to intensify.

“Europe-based steelmakers and those in their partner regions across the whole world are making it clear today that they believe the extension of the Global Forum on Steel Excess Capacity is essential to effectively reduce global production overcapacity in the sector”, said Axel Eggert, Director General of EUROFER.

The Global Forum was established in late 2016, on the instruction of G20 Leaders. It set out to gather information and report on the evolution of steel supply and demand conditions, steel production capacity, and government policies that lead to global overcapacity, such as subsidies. The Forum’s work has already produced results, such as detailed statistics on steel capacity and production around the world and has instigated work to cut excess capacity where it is needed.

“Meanwhile, the impact of this overcapacity is causing ructions around the world. The trade wars being waged, and the resultant rise of protectionist measures affecting products well beyond our sector, has steel overcapacity at its root”, emphasised Mr Eggert.

“Even with the EU Steel Safeguard in place, the EU is having a torrid time. Apparent demand for steel is expected to fall by 3.1% in 2019, even as imports surge in often violently unpredictable ways. We therefore ask the EU Commission to further strengthen the safeguards.”, added Mr Eggert.

Steel imports into the EU rose by 12% in 2018, to the highest recorded level. Today, imports are still well above the 2016 & 2017 levels, which were themselves records at the time. Surges are at least as damaging as sustained high import levels, and the EU saw a 50% drop in total finished steel imports in June 2019, followed by a 50% rise in July when the new safeguard quota period opened.

“Overall global steel overcapacity has fallen only slowly in the past few years, if only because China, in particular, is ramping up production – up 9.1% in the 8 months to August 2019, even as production in Europe has fallen by 2.9%, and in the majority of other regions is also flat or declining. Global overcapacity still stands at some 500 million tonnes and the OECD expects it to rise again in 2020”, stressed Mr Eggert. “This is a deepening crisis which has already seen a number of European steel plants idled or closed, with thousands of steel workers being laid-off over the past year”.

“We call for the Global Forum on Global Excess to have its mandate extended – and for it to continue vigorously for the foreseeable future, either with all members or with the supportive members of the international community”, concluded Mr Eggert.

October has been a difficult month for Italian domestic long products sales so far, Kallanish learns from large service centres and distributors in the country.

An established distributor in Northern Italy has described the month as “… disastrous” with sales for some products such merchant bars extremely low in a difficult market. “In the period July-October merchant bar sales have registered the lowest figures since 2009,” the source comments.

There are fears for all domestic long products in terms of both prices and sales volumes for November and December. The sources interviewed believe more price falls should be expected before the end of the year before some level of stability becomes apparent.

The only product for which another distributor has seen some recovery in sales volumes is welded tube for which discounts have been increasing up to 44 points but sales are ongoing. The product with the worst commercial profile remains merchant bar for which demand is low amidst competition from cheaper Spanish material.

Turkey will remain a privileged supplier of steel to the European Union, due to their industrial, geographical and historical ties, but Turkish suppliers could do more to enhance this cooperation. So says Tommaso Sandrini, president of Italian steel trade association Assofermet.

The steel industry is operating in a climate of protectionism and extremely fluid and unstable business environment, where buyers are afraid to take positions amid rapidly changing rules and regulations. Timely response to requests, efficiently managed claims and use of credit insurance could therefore strengthen EU-Turkish trade, Sandrini told delegates at the Kallanish Euro-Turkey-CIS Flat Steel conference on 17 October.

After steadily increasing since 2012, the EU’s total imports of steel products declined by -6.8% on-year in the first seven months of 2019, as compared to a 12% rise in the corresponding period of 2018.

The safeguard import quota, introduced last year, has achieved several notable changes, such as reducing hot rolled coil imports over time. However, for long products, due to its quarterly nature, the system creates sudden upsurges in import volumes followed by their absence, thereby distorting the market balance, Sandrini explained.

Both country and quarterly quotas are not consistent with safeguard goals and are detrimental to market stability, while artificially reducing quota availability. But the now-approved revision of the European Safeguard System will have little or no impact on this undoubtedly negative scenario. As geopolitical drivers increasingly replace economic ones, the global trade system and steel market are undergoing a deep revolution, punctuated by deglobalisation and the dismantlement of the WTO. The European steel market will deeply feel the effects of this.

As bilateral trade negotiations replace multilateral trade agreements, geo-political tensions will continue to limit global trade, fragmenting it into regional trade. Long-term, the current “new normal” of trade wars and protectionism, though chaotic and painful, will eventually lead to new investments and opportunities, creating a bi-polar world of winners and losers, Sandrini observed.

But, in the meantime, the current global economic downturn involving all major and emerging economies will continue to affect EU steel demand. “All mills are losing money while the market has not yet reached the bottom,” Sandrini said at the Istanbul event.

As deglobalisation proceeds, US trade wars will continue not as a means of rebalancing its trade deficit, but as a means of limiting China’s – and Germany’s – economic ambition. This will force Europe to adapt to long periods of slow economic growth and low profitability.

Demonstrationen, Brandbriefe, TV-Beiträge, Leitartikel – die Stahlindustrie schreibt derzeit viele Schlagzeilen. Das Wort von der „Stahlkrise“ macht die Runde. Einträchtig machen Unternehmens- und Gewerkschaftsvertreter externe Ursachen für die Probleme verantwortlich: Überkapazitäten, unfairer Wettbewerb und Klimaschutz-Lasten werden in den Vordergrund gerückt. Forderungen nach zusätzlichem Schutz und nach milliardenschwerer Staatshilfe werden laut. Diese Stimmen sind kritisch zu hinterfragen, denn manche Behauptungen gehen an der Realität vorbei. Die aktuellen Probleme sind im Kern das Ergebnis marktwirtschaftlicher Prozesse. Etwas anders sieht es bei den Folgen der politisch gewollten Dekarbonisierung aus, die gerade erst sichtbar werden.

Zweifellos erlebt die deutsche Stahlindustrie gerade eine schwierige Phase. Mangelnde Auslastung, sinkende Preise und wachsender Ertragsdruck kennzeichnen die Situation. Branchenvertreter machen immer wieder in erster Linie unfaire „Billig-Importe“ für die Situation verantwortlich und fordern einen besseren Schutz. Während viele Medien diese Behauptung ungeprüft übernehmen, zeigt ein genauerer Blick, dass das höchstens ein kleiner Teil der Wahrheit ist. Die Ursachen für die aktuelle Situation sind vielfältig und teilweise auch hausgemacht:

1. Das größte Problem heißt Nachfrageschwäche

Die mit Abstand wichtigste und zugleich erstaunlich selten genannte Ursache für die aktuellen Probleme ist die aktuelle Nachfrageschwäche am Heimatmarkt, von der Deutschland aufgrund seiner Exportlastigkeit und der großen Bedeutung der Automobilindustrie besonders stark betroffen ist. Die im zweiten Halbjahr 2018 einsetzende Flaute hat (nicht nur) viele Stahlersteller kalt erwischt. Zur Wahrheit gehört auch, dass die Branche sich in den Wachstumsjahren davor stark auf die Kunden aus der Automobilindustrie fokussiert hat. Dadurch ist eine große Abhängigkeit entstanden, die jetzt voll durchschlägt. Ob wir es jetzt mit einer Konjunktur- oder mit einer Strukturschwäche zu tun haben, ist noch nicht wirklich klar. Wahrscheinlich ist es eine Mischung aus beidem.

1. Der Stahlbedarf steigt anderswo, die Wettbewerber werden stärker

Struktureller Art sind in jedem Fall Verschiebungen am Weltmarkt. Dabei greift der Verweis auf die Überkapazitäten der anderen zu kurz. Diese bestehen übrigens in der EU laut einer McKinsey Studie aus dem Jahr 2018 in einem proportional ähnlichen Maß wie in China. Natürlich gibt es auch in anderen Regionen große Überkapazitäten. Dennoch haben Stahlunternehmen weltweit noch in den Jahren 2017 und 2018 gutes Geld verdient. Ein Grund dafür ist, dass die chinesischen Stahlexporte seit 2015 als Folge der umgesetzten Strukturreformen um ca. 40 Mio. Tonnen gefallen sind.
Aus europäischer Sicht wichtiger sind andere Weltmarkt-Trends: Das Nachfragewachstum am Stahlmarkt findet vor allem in Asien statt. Und anders als zum Beispiel die Automobilindustrie oder der Maschinenbau partizipiert die deutsche Stahlindustrie kaum an diesem Wachstum, sondern ist stark von gesättigten Märkten abhängig. Dort hat sie es mit internationalen Wettbewerbern zu tun, die mit modernster Anlagentechnik und einer steilen Lernkurve frühere Qualitätsnachteile schnell aufholt. Verschärft wird die Situation dadurch, dass die EU-Industrie im weltweiten Vergleich Kostennachteile aufweist. Der Verweis darauf, dass Wettbewerber oft Staatsgeld im Rücken haben, ist zwar richtig, trifft aber nicht den Kern. Auch im Wettbewerb mit rein privat geführten international geführten Konkurrenten fallen hiesige Unternehmen seit geraumer Zeit zurück.

1. Importe: Einfluss nicht so groß wie behauptet

Der Einfluss der Importe, gerne als „Billig“ oder „Dumping“-Importe verunglimpft, wird in der öffentlichen Diskussion maßlos übertrieben. Die Fakten sind andere. Die deutschen Stahlimporte zeigen keine Anzeichen einer „Schwemme“, sondern schwanken seit Jahren bei leicht steigender Tendenz weitgehend im Einklang mit der Nachfrage. Die Importe lagen 2018 um gerade 6% höher als 2015 und der weit überwiegende Anteil davon kommt aus EU-Ländern. Das erste Nicht-EU-Land liegt auf Platz 8 der Import-Rangliste, liefert 3% der deutschen Importe und heißt Brasilien. Direkt aus China kamen 2018 ca. 340.000 Tonnen Stahl auf den deutschen Markt, knapp 50% weniger als noch 2016 und ca. 0,8% des gesamten Marktvolumens.  

Am EU-Markt sind die Einfuhren aus Drittändern in den vergangenen Jahren zwar klarer gestiegen. Ihre Marktanteile liegen aber nicht höher als in vielen anderen Industriebranchen, die damit offenbar besser umgehen können. Bedenkt man, dass viele Stahlerzeugnisse als internationale Commodity gehandelt werden, ist die Bedeutung der Importe am EU-Markt erstaunlich niedrig. Bei Flachprodukten war es 2018 ein Marktanteil von knapp 20%, bei Langprodukten 12%.

1. Klimaschutz-Lasten fangen erst an

Der Verweis auf die klimapolitischen Lasten der europäischen Stahlhersteller, die zu Wettbewerbsnachteilen führen, steht im Moment hoch im Kurs. Dies ist auch in dem Sinne richtig, dass der deutsche bzw. europäische Weg der Alleingänge tatsächlich zu Lasten führt, die in anderen Regionen in der Form nicht zu tragen sind.
Richtig sind aber auch zwei Ergänzungen: diese Lasten sind keine Ursache der aktuellen Krise, denn sie fangen gerade erst an, schrittweise zu wirken. Bisher ist die EU-Stahlindustrie an vielen Stellen verschont worden, etwa durch die kostenlose Zuteilung von Zertifikaten und verschiedene Sonderregeln. Und das Bild, der europäische Stahl sei der „sauberste“ der Welt, klingt zwar gut, macht es sich aber zu einfach und entspricht nicht der Wahrheit. Jede Tonne Stahl aus einem türkischen Elektro-Stahlwerk hat eine bessere CO₂-Bilanz als die Tonne aus einem deutschen Hochofen. Und in vielen Ländern gibt es klimapolitische Maßnahmen und Aktivitäten, die die jeweilige Stahlindustrie treffen.

1. Fazit: Auch eigene Antworten finden

Die aktuellen Schwierigkeiten der Stahlindustrie sind in erster Linie das Ergebnis konjunktureller und struktureller Veränderungen bei Angebot und Nachfrage in einem sich schnell wandelnden Marktumfeld. Darauf muss die Stahlindustrie, wie auch andere Branchen, eigene Antworten finden. Diese werden in einigen Fällen schmerzhaft sein. Der Ruf nach politischer Unterstützung ist hier kaum gerechtfertigt und wenig zielführend.
Etwas anders sieht es bei den Folgen der politisch gewollten Dekarbonisierung aus. Diese kann in der Stahlindustrie entweder durch die Schließung von Standorten oder durch einen enorm kostspieligen Umbau der Produktion erreicht werden. Letzterer wäre für die deutsche Stahlindustrie in der jetzigen Struktur ein kaum zu stemmendes Mammutprojekt. Die politische Diskussion darüber, ob und in welchem Umfang daher staatliche Hilfe sinnvoll ist, ist richtig. Ein wenig mehr Aufrichtigkeit würde dieser Diskussion allerdings guttun.    

Der Beitrag stammt vom Leverkusener Stahlmarkt-Berater Andreas Schneider, StahlmarktConsult.

Foto: StahlmarktConsult, Fotolia

Tata Steel is likely to reduce headcount as a result of its transformation programme, the company confirmed to Argus today.

“Proposals are being developed to improve our supply chain, our manufacturing performance and raw materials usage, as well as efficiency gains through digitalisation. We expect these to include a reduction in our employment costs,” the company said today when asked about local media reports it plans to cut 2,500 jobs to save $930mn/yr.

Tata launched its transformation programme in June, and managing director TV Narendran told Argus last week that it would not entail any change to the firm’s upstream production mix, and would focus more on downstream operations.

The programme was designed with the aid of consultants Alvarez and Marsal and Boston Consulting Group — the former working at the company’s south Wales operations and the latter in Ijmuiden, the Netherlands.

The company’s distribution business — where it is consolidating operations — is the subject of speculation. Tata recently told workers it would be shutting its Degels service centre in Neuss and shifting work to another site.

“We are aiming to develop a simpler and leaner organisation, capable of sustainably financing high levels of investment,” Tata said.

Turkey’s major steel associations expressed their optimism over an improvement in Turkish steel demand after 2020 at last week’s Kallanish Euro-Turkey-CIS Flat Steel Conference in Istanbul.

Turkish Steel Exporters Association (CIB) board member Asiye Ay said Turkey, with its growing exports this year, was the sixth-largest steel exporter in the world in the first half of 2019. “While production, consumption and imports have decreased by -10.5%, -27.7% and -19.6% respectively, exports have increased by 9.5% in the same period,” she told delegates.

Flat steel accounts for 27% of Turkey’s steel exports, of which 60% is hot rolled coil and 26% is coated coil. In the nine months through September the EU was the largest flats export destination at 3.021 million tonnes, followed by North Africa with 395,000t and the Middle East with 297,000t.

While commenting on a question regarding Turkish steel imports, she said that downstream producers are still suffering from high prices and lack of certain specifications from local feedstock suppliers.

Turkish Steel Producers Association (TCUD) general secretary Veysel Yayan, meanwhile, said the Turkish steel industry is used to managing economic crisis and local demand will increase in 2020.

Underlining the imbalance in Turkey’s flat steel imports from and exports to the CIS, which are 2.5-3mt and only 75,000t respectively, he called for immediate action to change this situation. In reference to new restrictions from the USA and EU against free and fair trade, he added that the steel industry should not be subject to political issues. “It is impossible to keep other products global when the steel industry is under threat from regionalisation,” Yayan commented. Trade wars will in the end hit the initiators.”

Gökhan Demiruz, Chairman of Turkey’s Association of Flat Steel Importers and Manufacturers (Yisad), said that Turkey will catch last year’s production volumes with only a small difference. By 2030 Turkey’s flat steel consumption will reach 30 million tonnes.

“This is a temporary condition and after 2020 we will start seeing improvement in the steel industry,” he commented. “Low mortgage interest rates will support the improvement. As for pricing, we cannot be independent from global prices. We have to follow the developments starting from scrap raw materials.” Regarding trade restrictions, he said he is not against protectionism such as anti-dumping if it is applied after fair investigations.

On Friday, Polish plate mill Huta Czestochowa resumed steelmaking after having been idle for six months and aims to tap into the market from end-October.

Czestochowa resumed production after a quick, four-week commissioning project. Its restart marks the end of the first stage of the mill’s full return to the Polish steel market, said Marek Frydrych, managing director of Sunningwell International Polska, the Warsaw-based financial firm holding the lease for the steel mill.

The implementation of this task in such a short time was possible thanks to the extraordinary mobilization of all employees of Huta Czestochowa, their friends and support teams, said Frydrych.

In the following days, after the start of the electric arc furnace meltshop and casting of the first slabs, the mill will carry out the necessary tests related to quality assessment of slabs in order to establish what technical adjustments are needed before it proceeds to full-scale production including rolling.

The next stage – the actual return to the Polish plate market – is scheduled to begin at the very end of October.

Prior to the restart, Sunningwell planned to bring production back to the level that annualizes to 600,000-650,000 mt/year with two thirds of this destined for the Polish plate market, which absorbs 1.2 million-1.4 million mt/year, as Platts reported earlier.

— Ekaterina Bouckley