Category: Latest Updates

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Quelle: 247TailorSteel / Fotos: marketSTEEL / Bildtext (Beitragsfoto): Paul Schipper, CEO von 247TailorSteel

thyssenkrupp Schulte, the German steel distribution subsidiary of thyssenkrupp Materials Services, has launched a business to business portal throughout Germany at portal.thyssenkrupp-schulte.de.

In a first step, the new digital offer is aimed at existing customers in the metal processing industry, Kallanish learns from the company. It will give access to the company’s complete standard range of around 17,000 products in 57 categories. The B2B web shop gives detailed information on each product – from the availability and price of the goods to material data sheets, as well as on possible quantity discounts. The portal “…is simple and intuitive to use,” claims Michael Bäuerlein, head of digitalisation and e-commerce at thyssenkrupp Schulte.

With the new portal, tk Materials Services says it is taking the next important step towards implementing its omnichannel concept. Since the end of 2018, for example, materials can be ordered via app on the smartphone. This year, the company integrated artificial intelligence (AI) “Alfred” into its business processes, helping to dynamically manage the global logistics network with 271 warehouse locations.

“Whether by app, phone, fax, e-mail or now at portal.thyssenkrupp-schulte.de – the aim is to meet customers’ requirements across all channels with tailor-made offers and services,” says Martin Stillger, CEO of thyssenkrupp Schulte.

The global steel industry has reached its latest inflection point which is likely to be followed by a prolonged period of slow growth, according to worldsteel data management head Adam Szewczyk.

The global economy is experiencing structural challenges and a slowdown in globalisation, with western liberalism in retreat. There has been a cyclical downturn since late 2018, with US-China trade tensions, Brexit, and geopolitical conflict in the Middle East all dampening investor confidence. Trade tension is hampering global value chains, resulting in slowing trade activity, Szewczyk said at this week’s Irepas meeting in Düsseldorf attended by Kallanish.

In Germany manufacturing is in recession and the automotive industry has contracted, while the decade-long expansion cycle in the US, the longest since the 1950s, is coming to an end. The Chinese economy is continuing its smooth deceleration with rebalancing. Developing Asia continues to be a high-growth region but a quick Turkish economic rebound is unlikely, Szewczyk noted.

According to worldsteel’s latest forecast from April – new data is published only next month – global finished steel demand growth will slow to 1.3% in 2019 and 1% in 2020. The main reason for this is the deceleration in Chinese demand. Chinese GDP growth is expected to be its lowest since 1992. Trade tensions with the US are pressuring Chinese manufacturing, while auto output is contracting, but real estate growth remains strong. In 2020 demand will slow further with no government real estate stimulus.

Despite the Indian market failing to deliver on post-election optimism in 2019, infrastructure and consumption will drive demand in 2020, while ASEAN will continue to be the growth bright spot. “But the growth will not be able to offset the Chinese slowdown,” Szewczyk said.

In 2035 finished steel demand will be below 2 billion tonnes, with average annual growth of less than 1% until then. “You may say that, globally, currently installed capacities are sufficient to meet steel demand till 2035,” Szewczyk concluded.

The UK steel industry could see a “renaissance” if it leaves the EU Emissions Trading System immediately after the country exits the European Union, according to Heinz-Juergen Buechner, managing director for industrials and automotive at IKB Deutsche Industriebank.

While there are several potential strategies for the UK steel industry in the case of a no-deal Brexit, leaving the ETS straight after the UK’s departure from the EU could reduce the cost of steel production in the country by Eur30/mt from 2021, Buechner said at the MBI Stahl Tag conference in Frankfurt on Wednesday.

Alongside cheaper pricing for domestic consumers, this would mainly serve as a strategy to be more competitive in export markets, especially as a disorderly Brexit would make it harder to sell steel to the EU27 countries outside the currently existing trade and tariff arrangements.

More than 75% of UK steel products were sold into the EU in 2018, mainly to Germany and France, underlining the dependency on EU customers for UK steelmakers, Bruechner said.

But if the UK reduces its cost base through an ETS exit, EU safeguards against such measures or an EU subsidization of steel exports to the UK to protect the EU27 steel industry are potential responses, Buechner said.

Exports to the US or other non-EU countries could also prove to be challenging for UK steelmakers in this scenario amid increasing competition from other producers like Turkey, and uncertainty around US Section 232 tariffs after the UK’s exit from the EU.

Similarly, no-deal Brexit strategies — such as greater investment in higher quality steel production or high import tariff barriers to protect UK mills from strong EU and non-EU steel inflows and stimulate the domestic steel industry — are also likely scenarios, but could draw retaliatory measures from EU steelmakers, Buechner said.

Amid continued uncertainty around trade agreements and steel trade flows in the face of a potential no-deal Brexit, UK crude steel production is likely to slump further to 6.8 million mt in 2019 and 2020, respectively, compared to 7.3 million mt in 2018, according to IKB estimates.

— Pascal Dick

The US government is preparing a “free trade agreement” package, which may also contain revised Section 232 duties on Turkish steel, in order to help increase trade with Turkey, as reported by several Turkey-based media outlets, but Turkish steel executives are awaiting more details.

A top Turkish steel industry source on Wednesday told S&P Global Platts that he wants a clearer picture before commenting officially, but the developments “are very hopeful.”

US Ambassador to Turkey David Satterfield made a briefing to the Turkish presidency about the free trade package last Friday, according to a BloombergHT report. The package could contain Turkey’s potential purchase of US Patriot air missiles, new proposals about Turkey’s participation in the F-35 Joint Strike Fighter program, as well as a cut of import duties against Turkish steel.

Speaking at a meeting with US Secretary of Commerce Wilbur Ross on September 10 in Turkey, Turkish president Erdogan said he and his US counterpart agreed to kick-start free trade agreement talks, and that officials from both nations would soon begin preparations, as Platts has reported.

“I also attended the (Sep 10) meetings with Wilbur Ross by the Trade Ministry’s invitation,” a Turkish steel mill executive told Platts Wednesday, noting that he was currently in New York along with the Turkish president and several of the country’s ministers, including Trade, for the UN General Assembly. “All of the subjects will be discussed including steel, but it is too early to make a comment,” he said.

“We shouldn’t forget that Wilbur Ross [was] also a steelmaker and he is not very eager to accept tax-free steel imports from Turkey, but as $50 billion of reciprocal trade is in question, it may take some time to reach an agreement,” the executive said, adding that some scrap suppliers were already trying to benefit from the news in the hopes of raising their offer prices.

The US government’s decision in mid-May to reduce the Section 232 tariff on Turkish steel back to 25% from 50% has so far failed to meet Turkish producers’ expectations of increased exports, as Turkish mill sources say their steel offer prices remained uncompetitive in the US market.

— Cenk Can

JSW Steel Italy has announced that it is restarting its rail exports, specifically to Spain and Portugal, Kallanish learns from a note issued by the company’s rolling plant in Piombino.

According to the note, the first shipment will be directed to Portugal while a second one with 2,000 tonnes of rails will be delivered to Barcelona. The company had not been exporting since 2003 but currently it is relaunching its production following the acquisition of the former Lucchini and Aferpi site by India’s JSW Steel last year.

In a recent video interview with the media JSW Steel Italy confirmed that it is now producing at an average rate of 50,000 tonnes/month. The mill in Piombino produces rail as well as wire rod and bar from billet acquired through its Indian parent company. JSW relaunched production in the fourth quarter last year following the takeover.

Germany’s export-intensive mechanical engineering industry continues to suffer from the growing protectionism around the globe, says industry association VDMA in a statement on sentiment this week.

“A sustainable change for the better is not foreseeable in the near future. We therefore expect a real decline in production of -2% in mechanical engineering in 2020,” says VDMA’s chief economist Ralph Wiechers. VDMA also confirms its production forecast for the current year which is also down -2% on the previous year.

The downturn for VDMA’s member companies is being cushioned by a good order loading of 8.4 months at the end of July 2019, Kallanish learns from the association.  A capacity utilisation of 86.6% has been maintained to date, just above the long-term average.

But real production has shown an increasingly negative trend in the course of the year so far. In the first seven months it fell by -0.9% compared with the previous year. While the first quarter of 2019 showed growth of 0.3%, production in Q2 2019 declined by -2.9% compared to the previous year.

The trade war with the USA has put a brake on China’s activity, and the prospects for machine deliveries to the EU, the largest sales market, are also mixed. Many countries are victims of the trade dispute between the USA and China because of their close trade relations. Added to this is the continuing uncertainty as to when and how Britain’s EU withdrawal will take place. Customers of machines and systems are therefore reluctant to invest.

However, Wiechers suggest that there is light at the end of the tunnel. “Global industrial growth is now at a level that, unless there are massive disruptions, is unlikely to sink further,” he says.  “And a solution to one or other of the political conflicts cannot be ruled out.”

Liberty Steel chief Sanjeev Gupta has officially visited the former ArcelorMittal coil rolling and finishing lines located in Belgium and Luxembourg this week. These were acquired by Liberty earlier this year.

During the visit, the executive noted that a new investment plan for the mills is soon to be announced. Meanwhile the company also confirmed that the output at the Dudelange site in Luxembourg will be boosted further in the coming months.

Kallanish understands that the Dudelange rolling mill is set to produce HDG at full capacity, meaning around 600,000 tonnes/year. Electrogalvanized production meanwhile will reach some 140,000 t/y, double the current output. The plant could produce up to 360,000 t/y but currently 160,000 t/y of capacity is mothballed, according to Liberty Steel’s website.

Germany’s total steel sales from stockpiles declined 10.1% on the month in August, according to data published by German trade association BDS AG.

In August, long product sales from inventories fell 46,927 mt to 277,186 mt, a decline of 14.5% month on month.

Flat product sales from inventories also declined, losing 53,411 mt to 520,074 mt, a drop of 9.3% month on month.

Other product sales held relatively stable month on month, softening by 1% to 100,386 mt compared to July.

Inventory balances also declined as the destocking trend continued with total inventories dropping 98,895 mt to 2.31 million mt, a decline of 4.10% month on month and the lowest stock position since December 2018.

Long steel stockpiles declined to their lowest level since December 2018. Inventories fell 21,392 mt on the month, or 2.5% to 849,796 mt at the end of August, the data showed. They were still 4.4% lower compared to August 2018.

Flat steel stockpiles saw a stronger destocking rate, losing 4.85% month on month to 1.41 million mt, the lowest level since December 2018. They were still 10.22% lower compared to August 2018.

BDS members include ArcelorMittal Distribution, Jepsen Stahl GmbH and Klöckner & Co Deutschland GmbH.

— Len Griffin