Category: Latest Updates

Spanish special steels group Sidenor is finalising the acquisition of Imar, a company which specialises in the production of perforated sheets, Kallanish notes.

The acquisition comes after Imar fell into administration earlier this year. The company, established in 1931, has two plants in Spain in Ortuella (Bizkaia) and in Miranda de Ebro (Burgos) which supply perforated sheet to industrial clients and construction companies.

The company also provides a range of other facilities including bending, welding, profiling and folding of sheet materials.

Temporary layoffs are being implemented at Imar’s plants, but Sidenor plans to relaunch production at the sites.

A company source at Turkey’s OYAK Holding, the biggest complementary pension fund in Turkey, which signed an exclusivity agreement in mid-August to buy British Steel, told S&P Global Platts Thursday that the open-ended negotiations for the takeover are ongoing.

This statement to Platts came following some news in the Turkish media Thursday that OYAK could finalize the deal at the beginning of November, citing a statement by UK’s Labour MP for Redcar, Anna Turley.

In the statement, published via a UK-based TeessideLive news report seen by Platts, the MP said: “A large team from the company has been in the UK looking in detail at the operational, regulatory and financial situation at British Steel as part of the due diligence process…Officials are working on pace and there are no delays to the original timeframe of 6 to 8 weeks.”

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.

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

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

ArcelorMittal Italia will end this year with production of 4.5 million mt due to difficult overall market conditions, former AM Italia CEO Matthieu Jehl confirmed during testimony to the Italian government.

ArcelorMittal originally wanted to produce 6 million mt of crude steel at the Italian mill this year and then, due to the challenging market conditions, targeted 4.5-5.0 million mt.

In his last testimony as CEO, Jehl explained the work done so far, stressing in particular how since 2018 the market has changed with European steelmakers under pressure due to very low demand from the automotive sector as well as higher imports — a consequence of the US Section 232 tariffs.

The former CEO also outlined the importance of having a fair playing field for European steel mills and in particular he called for a carbon border adjustment levy to keep European producers competitive.

During the 1.5 hour presentation alongside AM Italia’s new CEO, Lucia Morselli, Jehl confirmed ArcelorMittal’s commitment to AM Italia, underscoring that the company has spent Eur200 million on its environmental program. He said there are 76 projects in progress under the environmental plan, valued at Eur1.15 billlion.

— Annalisa Villa

As Turkey and the US reached a Syria ceasefire agreement following US Vice President Mike Pence and Secretary of State Mike Pompeo’s roughly five-hour meeting with Turkish President Recep Tayyip Erdogan Thursday, previously announced sanctions by US President Donald Trump will also be canceled, including the doubling of Section 232 steel tariffs against Turkey.

The deal is for a 120-hour ceasefire, during which time Kurdish YPG forces could pull back. All Turkish military operations will pause during that time and the operation itself will come to an end upon the completion of the withdrawal.

President Trump posted a new tweet just after the meeting Thursday saying: “Great news out of Turkey. Thank you RTErdogan. Millions of lives will be saved!”

The US on Tuesday announced sanctions against two Turkish ministries and three senior government officials over the North Syria situation. The Section 232 steel tariff increase against Turkish steel was announced by President Trump Monday via Twitter but hasn’t been officially implemented, as Platts has reported.

“Sanctions will be canceled,” Mike Pence said at a press conference following the meeting with Erdogan.

Trump previously raised Turkey’s steel tariff rate from 25% to 50% in August 2018 amid increased political tension between the countries due to the detention of US Pastor Brunson. Turkey’s tariff rate on steel was later dropped back to 25% in May 2019. However, this decision has so far failed to meet Turkish producers’ expectations of a notable rise in export volumes, despite some recovery seen in rebar export volumes in August.

After shipping only 18,486 mt to the US in the previous months of 2019, Turkish mills managed to export 19,800 mt of rebar to the US in August alone. But, this export figure was still lower than the 41,200 mt exported in the same month of 2018.

Turkish mills expected to increase their export volumes to the US gradually, but have found it hard to regain their market shares with the current 25% Section 232 tariff in place, sources said.

— Cenk Can

Trade association UK Steel has published new and updated Brexit guidance for the steel industry, Kallanish notes. The guidance details the steps companies will need to take in order to best prepare for the eventuality of the UK leaving the EU without a deal in place, UK steel says.

To accompany this guidance, UK Steel is holding a workshop in Birmingham on Monday 21 October, open to any companies with an interest in the steel and metals sectors. The association will go through the core elements of the guidance at the workshop.

“Nearly three million tonnes of British-made steel is exported to the EU every year, so it is no surprise that the steel industry is ensuring that we are as prepared as possible for every Brexit eventuality, including No Deal,” says UK Steel general director Gareth Stace.

“The updated UK Steel guidance goes through all manner of areas companies should prepare for, including new customs procedures, environmental regulations, the EU tariff regime, and much more. While we are still hopeful that a deal will be reached with the EU, we are nevertheless working to be as ready as possible to leave on October 31, ”Stace adds.

Total freight volume handled by the Port of Antwerp rose 1.1% January through September compared with the same period last year, the Port Authority reported Wednesday.

Twenty-Foot Equivalent Units were up by as much as 6.4%, the Port Authority said in a statement. The volume of dry bulk such as scrap metal, minerals and coal soared by 9.5%, propelling the port’s overall freight growth. However, the slowdown in the world economy reduced the growth rate of more volatile trade flows such as conventional breakbulk, liquid bulk and vehicles.

According to the Port Authority, with growth of 5.7%, the container freight is by far the largest category in the port of Antwerp. This growth can mainly be seen in the transhipment of containers, but this volume is also expanding as a result of more imports and exports. All trading regions with the exception of Latin America recorded positive growth.

Recent adjustments to the MSC feeder network, a network of smaller ships that take on freight from larger units in the port for onward transport, were favorable for Antwerp, the Port Authority said.

“The uncertainty in world trade has not yet had any impact on our container volume,” Port Authority CEO Jacques Vandermeiren said. “In fact it is continuing to expand, thus further consolidating our world leadership position. As a consequence we are continuing to develop additional freight transport to the hinterland by rail and barge.”

Global trade uncertainties are continuing to have an impact on breakbulk freight flows, resulting in an overall drop of 9%, according to the Port Authority. Conventional breakbulk volume, with steel as the main category, suffered a fall of 12.9%. Both imports and exports of steel are increasingly feeling the consequences of geopolitical measures that restrict the flow of trade. Only exports to Mexico and Turkey experienced growth, while imports from all producing countries suffered a decline.

— Annalisa Villa

Sie ersetzt Matthieu Jehl, den derzeitigen Vorsitzenden und CEO, der neue Aufgaben bei ArcelorMittal übernehmen wird.
Geert van Poelvoorde, CEO ArcelorMittal Europe, Flat Products, sagte dazu:

“Ich möchte zunächst Matthieu Jehl für die wichtige Rolle danken, die er bei der Unterstützung von ArcelorMittal beim Aufbau einer Präsenz in Italien gespielt hat. Insbesondere bei der Umsetzung der Umweltinvestitionen und der Verbesserung der Prozesse wurden trotz des schwierigen externen Umfelds gute Fortschritte erzielt. Wir freuen uns sehr, Lucia als neuen Vorsitzenden und CEO von ArcelorMittal Italia begrüßen zu können. Sie ist weithin anerkannt als eine sehr erfahrene Unternehmensleiterin, die einen wesentlichen Beitrag zur italienischen Industrie geleistet hat.  Ihre Erfahrung und ihr Fachwissen werden für ArcelorMittal Italia sehr wertvoll sein, da wir das Unternehmen auf eine nachhaltigere Basis stellen und den Konsens über die Zukunft der Anlage stärken wollen.”

Lucia Morselli erklärt zu ihrer Ernennung: “Es gibt heute in Italien wohl keine größere, komplexere industrielle Herausforderung als die ehemaligen Ilva-Anlagen. Ich bin sehr motiviert, ArcelorMittal Italia zu leiten, und ich werde mein Bestes tun, um seine Zukunft zu sichern”.

Quelle: ArcelorMittal Europe

Crude steel output from ArcelorMittal’s operation in Dunkirk, in northern France, is expected to be -5% lower than that registered in 2018, according to plant director Dominique Pair. He was speaking to local media this week, reports of which were monitored by Kallanish.

Output should not surpass 6.5 million tonnes in 2019, down from 6.8mt in 2018 and 6.9mt in 2017. Production in 2020 is expected to at the sme level as in 2019.

ArcelorMittal announced in May that it intended to reduce primary steelmaking at a number of sites across Europe due to the weakness of the steel market. Dunkirk was among the sites affected with a reduction implemented mainly during the first half of 2019.

Overall French monthly average French crude steel production moved down -2.3% y-o-y during the January-August period, according to the latest data by Federation Française de l’Acier (FFA).

Tata Steel managing director TV Narendran believes the company’s UK operations can be cash positive this year, despite the challenging market conditions facing the industry.

Speaking to Argus on the sidelines of the World Steel Association’s general assembly in Monterrey, Mexico, Narendran point blank denied talk that part of the UK’s upstream business is up for sale, despite the transformation plan currently underway at Port Talbot and Ijmuiden. Consultants Alvarez and Marsal is advising the UK business and Boston Consulting Group is advising Ijmuiden.

The best way for the European operations to take charge of their own destiny is by being cash positive, or cash neutral, so they are not reliant on multiple cash infusions from the Indian parent — as has been the case in recent years. Narendran said there is an expectation the European operations will be able to stand on their own feet in the next few years without financial support, which is a strain on the Indian business that is profitable and seeking growth opportunities.

The transformation programme is analysing costs on a granular level, and how the company can optimise spend and what should be prioritised or postponed. The production mix of IJmuiden and Port Talbot will not change, with the review focusing on what levers can be pulled to create efficiencies. Tata is regularly looking at its downstream businesses, which include the distribution unit, and what fits into the portfolio.

Narendran admitted India has been the price setter in the south-east Asian market in recent months, given the contraction in domestic demand and the wider economic issues. But he said Indian mills are profitable even at current prices given that they are primarily at the lower end of the cost curve, alongside CIS sellers, which have also been aggressive into south-east Asia recently.

With coking coal pries creeping up and iron ore still comparatively strong, Narendran said there is little scope for prices to fall further. He also believes measures taken by the Indian government will start to positively impact the steel market and wider economy in coming months. The reserve bank of India has reduced interest rates and the government has cut corporate tax rates, which could help the economy going forward — it grew by 5pc last quarter, down from typical growth rates of 7pc.

Should the domestic economy start to strengthen, Indian mils will turn their focus back towards home and away from exports, Narendran said.

On the issue of consolidation in Europe, Narendran said customers — who have informed the European Commission on whether competition would be impacted — have been short-term. They prefer a “weak” supplier basis so they can negotiate harder on prices. But for suppliers to invest in research and development, and breakthrough technologies, they need to have the requisite financial strength. Around 15 years ago, none of the grades now used in European automotive production existed, he said, noting this takes time and money to develop. A thinly-spread, ill capitalised and unprofitable base cannot afford to invest the time or capital.

He supported a mechanism to ensure carbon-efficient plants in Europe are protected, saying IJmuiden is one of the most efficient in the world. If such a plant pays a cost for carbon, as it does under the European emissions trading system, then it is only fair mills in other jurisdictions should pay a cost too — duty-free access to the European market for suppliers not paying such a cost only makes carbon efficient production less viable, in his view.

ArcelorMittal Italia said Tuesday its chairman and CEO, Matthieu Jehl, was moving to another job with the parent company and would be succeeded in both roles by Lucia Morselli, effective immediately.

Morselli had been appointed because “it would be beneficial to have an Italian chairman and CEO with extensive experience in operating in the country,” an ArcelorMittal spokesman told S&P Global Platts. Jehl will help during the transition period.

Morselli is “widely recognized as a highly experienced business leader who has made a significant contribution to Italian industry. Her experience and expertise will be very valuable to ArcelorMittal Italia as we seek to put the company on a more sustainable footing and strengthen the consensus around the future of the plant,” said Geert van Poelvoorde, CEO of ArcelorMittal Europe, Flat Products.

Morselli is recognized as one of Italy’s leading businesswomen, having held CEO positions at numerous companies including Acciai Speciali Terni, where she achieved a turnaround. She is a member of the board of directors at Essilor-Luxottica, Telecom Italia SPA, Sisal SPA and ST Microelectronics.

— Annalisa Villa