Category: Latest Updates

Adjusted European Commission steel import safeguards will become effective October 1. As widely expected, the EC did not made any substantial changes from its mid-August review when it surprised the market proposing to reduce the planned increase in tariff-free steel quotas to 3%, down from 5% across all product categories.

“The steel safeguard needs to remain robust in the face of severe deflection from other parts of the world. While the revised measures resolved some issues with the original final safeguard measures, challenges remain, particularly given that steel demand is expected to fall this year in the EU,” European steel producer association Eurofer commented.

As suggested in the review, imports of products falling under category 4B (automotive materials) codes that are not destined for use in the automotive industry should in the future take place only under category 4A. Conversely, all imports of products that were destined for use in the automotive industry should take place under product category 4B and meet the end-use procedure requirements.

Although this point was widely expected, service centers that are importing automotive materials have complained about the lack of clarity in how certain products can enter in the automotive categories while others cannot.

“The final determination of the EC regarding the 4.a and 4.b products will create additional complexity in the market. Operators do not know exactly how to proceed for managing the import of products that could fall into the 4.B group. With such a system independent distribution will be almost excluded from the possibility to source HDG steel for automotive,” stated Assofermet, the Italian association of service centers.

As far as hot-rolled coil is concerned, the EC confirmed limiting the maximum volume that each country can export into the EU to 30% of the quarterly available quota. That means that, within the global limit of the quarterly quota each country cannot export more than approximately 630,000 metric tons. “In the current scenario it seems that this decision will not impact significantly the market,” an Assoferment source commented.

Regarding long products, for category 13 (rebars) and 16 (rod) the EC confirmed that during the last quarter of the two remaining periods of definitive measures the use of the global TRQ will be limited to 30% per supplying country, confirming what was proposed in the review, altough some large importers were very vocal about this point.

In the final draft, the EC accepted the request received from European producers relating to “imports for categories 8 (Stainless Hot Rolled Sheets and Strips) and 9 (Stainless Cold Rolled Sheets and Strips), as well as product category 24 (Other Seamless Tubes), that are from Indonesia and will be now under safeguards, marking the only significantly changes from the August review.”

According to the EC note, the Commission’s proposal to proceed with the adjustments to the existing steel safeguard measures received wide support from EU member states in early September and was also subject earlier in the process to consultations with con concerned WTO members.

The safeguard measures were provisionally put in place in July 2018 and were introduced in their definitive form in February 2019. The aim has been “to prevent serious injury for the EU steel industry following the increased imports and trade diversions caused by the US’ unilateral decision to impose tariffs on steel products last year.”

— Annalisa Villa

ArcelorMittal confirms to Kallanish it will carry out further planned production stoppages at the company’s Asturias mills until year-end due to the extremely difficult market situation in Europe.6

The Asturias mills are facing a situation of “emergency”, said the steelmaker’s Asturias cluster chief executive Oswaldo Suárez during a meeting with unions last week. He was referring to the increasing social and productivity costs – excluding operating costs – of the Asturias plants.

“We had an internal meeting with the unions to inform them about the results achieved by the company in Asturias during the first half of 2019,” confirmed ArcelorMittal without giving further details on stoppages. “The general director of the cluster of Asturias, Oswaldo Suárez, informed unions about the current situation of the plants and advanced new production stops due to market reasons.”

During the meeting, Suárez commented that the steelmaker’s long product line is currently recording significant losses due to a fall in orders and excess imports into the European Union market. The executive estimated that ArcelorMittal facilities in Asurias will end 2019 registering losses and that the outlook for their performance is also not promising for next year.

Last week ArcelorMittal already stopped the plate line in Asturias for two days, due to market reasons.

The OECD has reiterated the need for further global steelmaking capacity reduction after the unexpected growth in capacity in the first half of 2019 despite weak global demand conditions.

At a meeting last week the OECD Steel Committee stressed that “…government interventions, market distorting support measures and resulting excess capacity have contributed to significant distortions in steel trade flows, that are affecting steel-producing economies and contributing to trade tensions.” Moreover, “certain border and behind-the-border measures… are distorting steel markets and steel trade, not least affecting raw material.”

Last month the OECD revised downwards its global economic growth forecasts to 2.9% in 2019 and 3% in 2020, the weakest annual growth since the financial crisis. Trade policy tensions are weakening confidence and business investment, while persistent weakness in the manufacturing sector is negatively affecting household incomes and spending, the committee said. Significant financial market vulnerabilities have also arisen from a high level of indebtedness coupled with a slower growth environment.

The latest available data show an increase in global steelmaking capacity in H1 2019 to an annualised level of 2,290.1 million tonnes. In the absence of additional capacity closures during the remainder of 2019, global capacity would increase this year for the first time since 2015, the committee pointed out. The gap between global capacity and production has widened to about 440mt.

“At the same time, many new investments contributing to excess capacity continue to take place in specific jurisdictions, and many others are in the planning stage,” the committee said in a note seen by Kallanish. Should these projects be realised, global capacity could increase by 2-3% between 2020 and 2022.

The committee also “…called for the removal of subsidies and other government support measures that hinder the exit of inefficient steel firms. Delegates also noted the importance of addressing consequences of structural adjustment by applying effective social dialogue and assisting displaced steel workers.”

Klöckner & Co. hat nach Informationen des Handelsblatts einseitig die Gespräche mit thyssenkrupp über einen Zusammenschluss mit dessen Werkstoffgeschäft beendet. Dabei beruft es sich auf Kreise des Aufsichtsrats bei dem Stahlhändler aus Duisburg. Hintergrund dafür sei der am vergangenen Dienstag angekündigte Rauswurf von Vorstandschef Guido Kerkhoff gewesen, heißt es in dem Bericht. 

Quelle: Handelsblatt

The EU has published and implemented its revision of the EU steel safeguard. The new design of the tariff-free quota will better stabilise trade flows by containing import concentration from certain exporting countries. While the changes have resulted in improvements, the result is still not sufficient for a large part of the sector, especially given that it is facing depressed domestic steel demand.

Speaking after the publication of the revised measures on 27 September, the European Steel Association’s (EUROFER) Director General, Axel Eggert said, “The largest part of the steel sector is still being squeezed, hampered by unsustainable import pressure – pressure that will not abate, despite the changes made today”.

Steel producers’ margins have all but disappeared, production plans have been curtailed, and installations across Europe have been temporarily closed, affecting thousands of jobs in the industry and the value chain.

“The steel sector is now back in choppy waters – demand is falling, and imports are still at a very high level”, added Mr Eggert. “The safeguard nevertheless keeps the door open for these historically high import volumes, even as market conditions deteriorate. We hope that the Commission will, in due course, further review the artificially high tariff free quota level and reduce it to close to the 2015-17 import volume.”

The European steel industry has suffered a series of setbacks over the past few years. The EU market has still not completely bounced back since the 2008 economic crisis – and what growth has come has, to a large extent, been absorbed by imports. Global steel overcapacity, targeted dumping from several regions, and rising climate compliance costs have also squeezed margins across the sector.

“We had 18 ‘good’ months between the acute effects of Chinese dumping being stamped out towards the end of 2016 and the imposition of the US’ Section 232 tariffs in mid-2018”, stated Mr Eggert. “Imports have remained high and are increasingly concentrated from a handful of trade partners, including Turkey, Russia and China. This concentration has not been diminished by the safeguard measures. Steel prices have collapsed, even as costs continue to rise”.

While noting the fresh revision will have to be seen in action before conclusions can be drawn, EUROFER urges the EU to continue to defend the sector against unfair trade from third countries.

“Steel is at the heart of the EU economy – but it is under threat again because the means to defend it are incomplete”, emphasised Mr Eggert. “We need to see dynamic revisions to this safeguard, and we welcome the suggestion by President-elect von der Leyen for a Carbon Border Adjustment to help industrial sectors, such as ours, re-establish a level playing field with foreign competitors that do not face the same climate cost constraints”.

In addition, EUROFER urges continued international efforts against global overcapacity, which is at the root of the challenges faced by the EU sector today.

“Global overcapacity is still running far ahead of growth in worldwide production. We need to see further work done on this abroad – and continued efforts at home to ward off the effects on the EU steel market”, concluded Mr Eggert. “The G20’s Global Forum on Excess Steel Capacity must continue its work so that countries such as China, Indonesia, Iran, Russia, or Turkey stop building up excess capacity that endangers the global steel market. The safeguard alone will not be sufficient”.

Source: EUROFER            Photo: Fotolia

ArcelorMittal’s Kazakh steelworks Temirtau is eyeing a switch to natural gas in order to cut harmful emissions produced by coal, mazut and other types of fuel currently used at the steelworks, Kallanish learns.

The gasification may be accomplished after the gas-line Saryarka is commissioned, Paramjit Kalon, general director, suggested at the latest industrial heads meetings with the regional government.

“The chief advantage of using natural gas is its lower impression on the environment,” Kalon is quoted as saying. Should the Kazakh government approve an annual allowance of 800 million cubic meters of gas, the company will upgrade its equipment for natural gas use, primarily its power stations. 

Kalon estimates the switch will reduce around 80% of harmful emissions as compared to current levels, bringing it in line with Western European mills. The company is prepared to pay market prices for the gas, and to implement the switch incrementally.

The UK’s All Steels Trading has announced in a statement monitored by Kallanish that it has recently completed the acquisition of Bromford Iron and Steel in West Bromwich in the West Midlands.

Bromford is a producer of hot rolled long products and employs 36 people at its site in Oldbury. As well as being a leading producer of hot rolled steel profiles for horseshoe manufacture, the company is a major supplier to other sectors including oil and gas and chain-making, All Steels says.

“The company has benefitted from regular and extensive investment in new plant and technology to ensure that Bromford’s product quality, flexibility and ability to produce small tonnages…” the Yorkshire-based trading company adds.

The acquisition of Bromford Iron & Steel offers “… excellent synergy with All Steels Trading’s other UK steel related businesses, but especially with our Wolverhampton-based Special Steel Sections re-rolling mill,” All Steels trading comments. “As a bulk international steel trader, we have the critical mass to obtain extremely competitive raw materials prices and these price savings will inevitably enable Bromford to sustainably grow and fulfil capacity,” it adds.

No information was forthcoming on either the value of the acquisition or Bromford’s current financial or production figures. However, in its latest available financial accounts, Bromford had a turnover of £9.63 million ($11.9m) in its fiscal year ending 31 March 2018. This generated a loss after tax of £264,859.

Forecast lower global economic growth in 2019-2020, trade policy tensions and falling investment have dimmed the steel market outlook, the OECD’s steel committee said last week.

Declining steel prices and higher raw material costs have squeezed margins, as crude steel production continued to rise in the first half of 2019.

Steel capacity is poised to rise again this year, exacerbating oversupply, with the gap between capacity and production widening to 440mn t/yr in January-June. The OECD expects global capacity to increase by 2-3pc in 2020-22.

Meanwhile, global steel trade is falling, contracting by 2.6mn t on the year in the first quarter, following a 5.2pc drop for the whole of 2018.

The OECD highlighted its concern over cross-border investment by state-run enterprises, citing implications for capacity expansions. And the committee called for the removal of subsidies, noting that these prevent inefficient mills from exiting the market.

The UK’s All Steels Trading has announced in a statement monitored by Kallanish that it has recently completed the acquisition of Bromford Iron and Steel in West Bromwich in the West Midlands.

Bromford is a producer of hot rolled long products and employs 36 people at its site in Oldbury. As well as being a leading producer of hot rolled steel profiles for horseshoe manufacture, the company is a major supplier to other sectors including oil and gas and chain-making, All Steels says.

“The company has benefitted from regular and extensive investment in new plant and technology to ensure that Bromford’s product quality, flexibility and ability to produce small tonnages…” the Yorkshire-based trading company adds.

The acquisition of Bromford Iron & Steel offers “… excellent synergy with All Steels Trading’s other UK steel related businesses, but especially with our Wolverhampton-based Special Steel Sections re-rolling mill,” All Steels trading comments. “As a bulk international steel trader, we have the critical mass to obtain extremely competitive raw materials prices and these price savings will inevitably enable Bromford to sustainably grow and fulfil capacity,” it adds.

No information was forthcoming on either the value of the acquisition or Bromford’s current financial or production figures. However, in its latest available financial accounts, Bromford had a turnover of £9.63 million ($11.9m) in its fiscal year ending 31 March 2018. This generated a loss after tax of £264,859.