Category: Latest Updates

The demand for long products in the European Union continues to be relatively positive compared to the flats sector. A number of challenges remain in place however, according to Amit Sengupta, cmo and vice president for ArcelorMittal Europe Long Products speaking at the Kallanish Europe Steel Markets conference in Amsterdam this week.

The executive notes that market demand for long products has grown steadily since 2014, reaching a level of some 56 million tonnes last year. While this volume could be attained again this year, it still remains over -15% below the 2008 level.

Despite the relatively good signals from demand, the sector continues to be challenged by overcapacity. ArcelorMittal calculates that capacity utilisation at long mills in Europe reached 65% in 2017 while in 2007-2008 it was 79-80%. In addition to low capacity utilisation, the fragmentation of the market on the production side also continues to remain an issue.

The overcapacity is not expected to be reduced rapidly. ArcelorMittal calculates that installed capacity will remain above demand by as much as 60% this year. It should then reach 61% in 2020 thanks to the launch of some new investments involving, for example, wire rod production.

In addition to overcapacity, the market continues to be impacted by increasing imports despite the imposition of safeguard measures. Rebar and wire rod imports, for example, now account for over 10% of European demand, confirming that safeguard measures have not prevented imports as much as expected, ArcelorMittal notes. In 2018 rebar imports accounted for less than 8% of the total supply while wire rod was only slightly above 9%.

Overall imports of long products reduced compared with 2018 in the first part of 2019 (-26% year-on-year). This reduction was accompanied however by a new issue specifically linked with the flooding of the market with imported materials in very short periods of time. Rebar and wire rod quotas for Turkey and Russia, for example, were exhausted very quickly after they were assigned, confirming that European mills face waves of imports disrupting the normal flow of the market.

Looking forward, Sengupta notes that ArcelorMittal believes the second half of the year should be slightly more positive than the first part, overall. He nevertheless says that a recovery might not be seen immediately in July, but could come later on in the second half of 2019. He believes that for long products, the current downturn in Europe is 70% created by sentiment, while only 30% is based on real reductions in consumption.

The UK steel industry risks disappearing if the UK leaves the EU with no deal and remains outside the customs union, as this would prevent the industry from benefiting from the European Commission import safeguards, further weakening its position, Roeland Baan, CEO of steelmaker Outokumpu Oyj, said Wednesday at the European Steel Association’s Steel Day.

The broader fate of the entire European steel industry took center stage at this year’s conference in Brussels. Top agenda items were market conditions, with the forecast that apparent regional steel consumption is expected to fall by 0.4% in 2019 against a backdrop of worldwide steel overcapacity, challenging carbon emission reduction targets and booming imports even with import safeguards in place.

The sum of these conditions puts EU producers in a very difficult situation this year, European steel association Eurofer noted.

“These challenges have the potential to erase the whole steel industry in Europe. On the other hand, these challenges bring us a great opportunity, if we can embrace change and use it to accelerate innovation,” said Geert Van Poelvoorde, president of Eurofer and CEO of ArcelorMittal Europe Flat Products.

“In 2018, there was a record 12% rise in European imports of finished steel products, in a market that grew only 3.3%. We are grateful that the European Commission recognized the problem and took action. However, the safeguard has failed in its objective for a large part of our industry.”

Eurofer has proposed solutions to finish the job the safeguards set out to do. “The purpose is, as it always has been, to prevent surges of imports, not to close the market,” the association stated.

Eurofer representatives are seeking to change six main points in the safeguards system.

First, all country-specific quotas should have quarterly quota periods. Second, access to the “residual” quota should be managed so that smaller exporters to the EU are not crowded out unfairly by bigger players who have exhausted their own quotas.

Third, the February 2019 quota increase of 5% should be reviewed urgently – and the planned July increase should be pushed back or canceled – to reflect actual conditions in the European steel market.

Fourth, exemptions for developing countries that exceed the 3% threshold should be removed.

Fifth, imports from developing countries should not be taken into account in the calculation of the size of the quotas from which they are, in any case, exempt. The quota should therefore be reduced by 2.4% on average.

And lastly, there should be national, quarterly quotas for imports of hot-rolled flat steel products.

“We believe these firm proposals should be integrated into the review of the effectiveness of the safeguards the commission is currently doing,” Outokumpu Oyj’s Baan said.

The Swedish stainless steel company has a mill in Sheffield with one EAF with a design capacity of 450,000 mt/year that at the moment is producing just 350,000 mt of crude steel that is rolled into stainless billets, blooms and slabs, Baan said.

According to Eurofer representatives the discussion between EC members on safeguards is likely to be held in September during the next European members’ meeting.

— Annalisa Villa

European Steel Association Eurofer Wednesday called for measures to urgently address the high carbon costs faced by European steel mills.

A comprehensive policy framework and specific proposals for a package of measures are needed to address this problem, Eurofer representatives said during the association’s annual European Steel Day in Brussels.

According to Eurofer, one reason why the problem of surging steel imports needs to be urgently addressed is because imports into the EU market come largely from countries that are not intending to reduce their carbon dioxide emissions to the same extent the EU is committed to do.

“At the same time, EU producers face ‘carbon dioxide emissions-related cost burdens’ that are large and growing. Carbon prices – the cost of EU ETS allowances – have risen from single figures at the beginning of 2018 to the mid-twenties now. This has become a significant cost factor, along with other environmental regulations, that negatively impacts the competitiveness of the European sector at an unfair level,” Heinz Jörg Fuhrmann, CEO of steelmaker Salzgitter AG, said at the event.

During the upcoming fourth ETS trading period between 2021 and 2030, the EU steel industry faces a total certificate under-allocation of 25% or more, which will not be compensated for by customers due to global competition and an extremely uneven playing field, Fuhrmann stressed.

The EU aims to decarbonize the economy by 2050, but according to Eurofer representatives this is not a decarbonization at all. “If it carries on like this, yes, Europe will surely decarbonize, but only by importing its products from third countries and thus exporting its CO2 to elsewhere,” the representatives said.

The European steel industry has developed a wide range of technological solutions that could lead to CO2 emissions reductions of more than 80% by 2050. However, such breakthrough transformations will be very expensive and a package of measures needs to be developed in a comprehensive framework, the Eurofer representatives said.

As a pre-condition for low-carbon steelmaking technologies to be deployed, the EU needs to map out the necessary energy supply and infrastructure needs for energy-intensive industries. Such mapping must assess hydrogen, high voltage electricity and CO2 pipeline energy sources, as well as others factors.

— Annalisa Villa

Slovakian integrated steelmaker US Steel Košice has ordered an annealing and coating line for dynamo steel strips from Tenova, the Italy-based supplier said Wednesday.

The plant, branded Dynamo-Line No. 4, will produce non-grain-oriented electrical steel. It will replace the two outdated annealing and coating lines that are being dismantled.

The contract covers the engineering and to a large extent the turnkey delivery of all equipment and the supervision of the assembly as well as the commissioning.

USSK, a wholly owned subsidiary of US Steel, produces coil, galvanized strip and non-grain-oriented electrical sheets.

A week ago US Steel decided to idle the 113,400 mt/month No. 2 blast furnace at the Košice mill until year-end in response to increasing levels of imports.

— Ekaterina Bouckley

ArcelorMittal has said that it could relinquish control of the ex-Ilva plant in Taranto as soon as 6 September if its problems with proposed Italian government legislation on environmental matters are not resolved.  The company fears that the new law that could remove existing legal safeguards in place to protect the group from incurring liability for environmental issues that occurred before it took control of the plant.

The news was shared by head of ArcelorMittal Flat Products Europe and Eurofer president Geert Van Poelvoorde, on the sidelines of the Eurofer European Steel Day organised in Brussels yesterday.

Last week the company (supported by the Italian steelmakers’ association Federacciai) voiced its concerns over the new decree under discussion in the Italian parliament.

Van Poelvoorde added that the company will continue its environmental investments in Taranto in the coming months as a solution with the Italian authorities within the next two months could be forthcoming. If so, the group would revoke any plan to relinquish control of the former Ilva at the beginning of September. ArcelorMittal has agreed to lease the mill from the Italian authorities for a period of up to five years starting in November 2018 before completing the full acquisition.

En el siguiente enlace pueden acceder a la edición de Junio de nuestra revista Infoacero: infoacero junio 2019

A continuación destacamos algunos de sus contenidos:

1. Opinión – D. Eduard Brunet – Miembro de Junta Directiva de la UAHE.

1. Evolución del Índice de Precios de Productos Siderúrgicos – UAHE. 

1. Próximos Eventos: XII Congresso de Construçao Metálica e Mista  (Coimbra, 21 y 22 noviembre),MetalMadrid (Madrid, 27 y 28 noviembre).

1. Información Asociativa: Reunión Andalucía Oriental (Antequera, 29 de Mayo) y Asamblea General de Asociación Almacenistas de Galicia (Santiago, 6 de Junio)

1. Construcción: Resumen Informe Euroconstruct Junio 2019

German steelmaking and engineering group Thyssenkrupp has opened a new automotive components plant in Sibiu, Romania, in a EUR60 million ($68.21 million) investment, the company said Tuesday.

The new site in Sibiu will produce dampers for customers including Daimler, Jaguar Land Rover and Porsche, the company said in a statement.

Karsten Kroos, CEO of Thyssenkrupp’s automotive division, said this is an investment “not only in the targeted expansion of our European production network, but also in newly obtained customer projects and new technologies…We are in the process of industrializing an entirely new generation of dampers for highly automated intelligent chassis systems.”

Thyssenkrupp has been producing dampers in Sibiu since 1996. The new plant is an extension to the existing production site, it said.

The damper business is part of the group’s components division, which serves the automotive and machinery sectors. Its components technology business area had sales of EUR7.9 billion in fiscal year 2017/2018, it said.

Last week, Thyssenkrupp announced an investment of Eur50 million ($56.7 million) in a new automotive components plant in Hungary, as previously reported.

— Diana Kinch

ArcelorMittal’s profiles and façade panels unit ArcelorMittal Construction Deutschland has acquired fellow German operation Münker Metallprofile, Kallanish learns from the Luxembourg-headquartered group.

With a production capacity of more than 100,000 tonnes/year, Münker Metallprofile claims to be one of the largest manufacturers of components for lightweight metal construction in Germany. It makes trapezoidal profiles, corrugated profiles, cassettes and cantilevers at its site in Reichshof in the Siegerland west of Cologne. The company has been in the market for more than 40 years.

As part of its expansion strategy in the field of roofing and facade technology, ArcelorMittal has taken over all shares in the company with effect from 21 June. It says that Münker’s location and the independent brand “Münker Metallprofile” will remain in the long term. Also, it says that production will be further expanded through ongoing investment in the coming years, and that additional employees are to be hired.

ArcelorMittal Construction is located in eastern Germany in Sandersdorf/Brehna, north of Leipzig. It is a processing unit within a larger group site, with distribution for sandwich panels and profiling systems for cassette, trapezoidal, load-bearing, design and corrugated profiles.

The activity of European steel distributors continued to be negative compared with last year during the first four months of 2019 , according to the latest report by their trade association Eurometal. In a note sent to Kallanish, the association says that shipments from flat steel service centres (SSC) were “… disappointing.”

SSC saw shipments fall by -3.8% year-on-year, while proximity and multiproducts distributors’ shipments moved down -2.7% y-o-y. When expressed in days of shipments, stocks at EU SSC reached 75 days in April 2019, compared to 72 days in April 2018.  For April 2019, the index of stock volumes was at 116, compared with an index of 110 in April 2018 (average 2015 = index 100), Eurometal says.

Eurometal notes that, for multiproducts and proximity distributors, only profiles, rebars and hot-rolled flats registered higher shipments during the first four months of the year, compared with 2018.

Italian commercial vehicle sales in May rose 6.6% year on year to 17,589 units, the fourth consecutive monthly gain after 11 months of falls, foreign automakers association UNRAE said Tuesday.

Commercial vehicle sales in January-May rose to 79,043 units, up 6.5% on the year. UNRAE classes vehicles weighing up to 35 mt as commercial.

The association forecasts commercial vehicle sales to fall 7.6% to 168,000 units this year. The forecast reflects a bleak Italian economic outlook, with the European Commission having downgraded Italy’s growth forecast in recent months to 0.1% from 0.2%, and estimating that the debt-to-GDP ratio will hit a record 133.7% this year.

Italian car sales fell 1.2% in May, to 197,307 vehicles, according to transport ministry data released earlier this month. Car sales dropped 3.8% in the first five months of the year to 910,093 units. UNRAE revised its forecast for this year lower to 1.85 million from 1.89 million, in a statement released in April.

UNRAE is made up of 43 foreign car makers which sell 60 different brands in Italy.

— Anthony Poole