Category: Latest Updates

Italian wire rod maker Pittini is to strengthen its presence in Germany. The company has started a joint venture with Zurich-based longs distributor Sipro Stahl Schweiz,Kallanish learns from Pittini.

The two groups had begun commercial cooperation in 2016. In January the Pittini Siderprodukte AG joint venture was founded with the aim of selling wire rod from the Italian production sites Osoppo and Verona exclusively for the German market, Pittini says in a note.

Sipro is a distributor of long products in the areas of structural steels, high-quality and stainless steels, as well as various special products. It already distributes products from Italian producers such as Beltrame, Feralpi, Pittini and Acciaierie Venete, Kallanish notes.

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Due to contraction in the domestic market and ongoing protection measures in global markets, 2019 looks to be a tough year for the Turkish steel sector, according to Halil Sahin, CEO of one of Turkey’s major billet and bar producers, Izmir Demir Celik (IDC).

“Sharp exchange rate fluctuations created problems in the Turkish automotive, construction and white good sectors in 2018, which are the Turkish steel sector’s top customers. This led to a significant shrinkage in domestic steel demand last year, while protection measures in the global markets also pulled down demand notably,” the IDC CEO said at the company’s annual report presentation.

“Although prices were down last year due to the contraction in demand, raw material prices and other costs didn’t follow the same trend. So, the sale price-manufacturing cost margin turned to negative in the last quarter,” Sahin said. 

The notable 14.9% shrinkage in domestic demand, however, was compensated by the rise in export sales last year. IDC sold 1.51 million mt of finished products in 2018, up 4.2% year on year, while export volumes rose by 2% to 345,989 mt.

IDC’s billet production fell by 7% on year to 1.23 million mt, while rebar output was up by 7% to 977,629 mt. A total of 307,593 mt of rebar was produced by IDC’s contractual partners during the period. The company also produced 265,636 mt of profiles during the period, notably up 20% year on year, IDC noted.

The company reported a net loss of Lira 341.7 million ($63 million) for 2018, compared with a Lira 15 million profit reported in 2017, due to a heavy financing burden, the company said. IDC’s turnover rose to Lira 4.66 billion ($868 million) in 2018, up 57% from 2017.

IDC has 1.5 million mt/year of melting capacity and produces around 3.5% of Turkey’s total crude steel, while its rolling mills have production capacity of 1.4 million mt/year.

— Cenk Can

Le Lectiones Magistrales di Mario Cucinella (MCA) e di Antonio Belvedere (RPBW) sull’acciaio nella sostenibilità e come espressione tra forma e materia ed un ciclo di workshop per una prospettiva allargata sui temi fondamentali della progettazione e della costruzione in carpenteria metallica.

Numerosi gli appuntamenti in programma presso la CASA DELLA COSTRUZIONE IN ACCIAIO, il nuovo concept di Fondazione Promozione Acciaio per l’ormai prossima edizione di MADE Expo (Fiera Milano dal 13 al 16 Marzo 2019).

The European automobile industry is set to face some “… fundamental challenges” this year. Registration growth is set to stall and carmakers will need to adapt to a fast-changing environment, ACEA, the European carmakers association says. A lowering of registrations will have a negative effect on production, Kallanish notes.

Among the looming challenges for the market ACEA includes a no-deal Brexit, US tariffs on car imports and the need to meet stringent CO emission targets for new vehicles.

Last year EU car registrations increased only 0.1% year-on-year, reaching 15.2 million units. Although this represented the fifth consecutive year of growth, the pace of this has been falling steeply from the 9.3% y-o-y increase seen in 2015. For 2019 the expectation is for the market to stagnate at a similar level to that seen in 2018.

On the political front, Brexit remains a concern, especially if the UK leaves the EU without a deal. “Regarding the operations of the auto industry in the UK, manufacturers are now being forced to take drastic contingency measures. Some are looking for warehouse space to stockpile parts, others are planning a temporary production shutdown after Brexit, and some car makers are even cutting back their investments in the UK,” ACEA said. “Recent figures show that investment in the UK car industry fell by -50% in 2018.”

Another issue will be the threat of US tariffs on EU cars and components. ACEA continues to maintain that no threat exists for EU imports of car parts into the US. it also indicates however that any retaliation by the EU to US measures would confirm the concern of an escalations despite the fact that “… the industry thrives best in an environment without trade barriers”.

ACEA also believes that the challenges to meet the targets imposed the EU for the reduction of CO2 emissions by cars will be difficult to meet. The problems related to diesel engines have increased the share of petrol cars in the mix, emitting more CO2. “First indications suggest that 2018 was the second year in a row where CO2 emissions from new cars actually increased,” ACEA said.

The solution for carmakers remains the continued development of electric cars. Any increase in market share for these will need substantial support from European lawmakers due to the need to reorganise production with the consequential increase in costs for the vehicles.

The UK manufacturing PMI fell to a four-month low in February, according to the latest survey by IHS Markit/Chartered Institute of Purchasing and Supply (CIPS) monitored by Kallanish. Stocks of inputs and finished goods rose sharply and the rate of job losses soared to a six-year high as optimism hit a series low, the survey found.

The headline seasonally adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI) fell to a four-month low of 52.0 in February, down from a revised reading of 52.6 in January (originally reported as 52.8). The PMI is currently at its second-lowest level since July 2016 – the month following the EU referendum, Markit /CIPS says.

Manufacturers’ optimism regarding future output fell to its lowest level in the series history in February. Positive sentiment was either at, or near to, record lows across the consumer, intermediate and investment goods sectors, the survey results showed.

There is much preparation work being carried out in the sector for the post-Brexit period, Markit/CIPS says. “Preparations to mitigate Brexit uncertainty were most visible in the trend in stocks of purchases. Pre-production inventories rose to the greatest extent in the series history, after also hitting a record high in January. Almost 70% of the companies offering a reason behind the build-up of stocks attributed it to Brexit.”

The UK steel sector meanwhile continues to face headwinds of its own. Estimated crude steel output for January was 520,000 tonnes, down -11.2% from the same month in 2017 and less than half what it was in January 2015 (1.064 million tonnes).

The nation’s steel users’ dependence on steel majorly imported from EU countries, with which there stands to be no free-trade agreement on 30 March, has therefore doubled in just five years. Little wonder therefore that UK manufacturers have loaded up to the metaphorical gunwales with inputs and are battening down the equally-metaphorical hatches in anticipation of a rough voyage to come. 

The safeguard quotas available for the import of automotive grade HDG into the EU are rapidly declining. The country-specific quota for China also appears to be almost fully filled until the end of June this year, Kallanish learns from EU official customs data.

Chinese exporters had been allocated almost 205,000 tonnes of tariff-free quotas in the period February-July. Of these, only some 28,500t remain, with over 17,000t of material awaiting to be cleared at customs in the coming days.

Once the quotas are exhausted completely, importers will have two options. The first is to pay a 25% tariff to import automotive grade HDG from China. The second is the possibility of using some of the quotas allocated under the ‘other countries’ section from the beginning of April to the end of June. These however amount to less than 77,000t.

The exhaustion of Chinese automotive HDG quotas further exacerbates a situation in which the ‘other countries’ quotas for the same product were exhausted last week until the end of March. The speed with which these quotas are being filled confirms the concerns expressed by market participants as soon as the new quotas system was announced in January this year.

For automotive grade HDG quotas are still widely available for imports from South Korea, India and Taiwan. A trader comments that the rapid usage of these quotas confirms that the system is clearly not protecting the market from the redirection of imports into the EU, but creating a new barrier for existing traditional trade flows.

En el siguiente enlace pueden acceder a la edición de Febrero de nuestra revista Infoacero: Infoacero Febrero 2019

A continuación destacamos algunos de sus contenidos:

• Opinión – D. Gerardo García de las Heras – Miembro de Junta Directiva de la UAHE.
• Evolución del Índice de Precios de Productos Siderúrgicos – UAHE.
• Programa del Steel Net Forum Iberia, 21 y 22 de Marzo, Sevilla.
• Previsión del Mercado del Acero en Europa 2019-2020 –Eurofer
• Informe de la Morosidad en España en 2018- PMcM. 

Austrian distribution group EHG Stahlzentrum has taken over two steel stockholders in Germany’s state of North Rhine Westphalia, Kallanish notes.

Both of the companies acquired, Lingemann Stahlgrosshandel GmbH and Stahlkontor GmbH, are located in Bad Oeynhausen in eastern Westphalia. They were both long-standing and family-owned firms, and were spun off to EHG by sole owner Lorenz Lingemann. EHG previously consisted of seven sites in Austria, Switzerland, Romania and southern Germany. The new additions in Westphalia will constitute the group’s northern-most sites.

EHG’s range of products places an emphasis on speciality steel long products such as engineering steels and bright bar, but also offers sections, sheets and stainless products. According to EHG’s managing directors, Markus Lutz and Stefan Girardi, the two Westphalian firms “… fit very well with us with their range of products.” They highlight that the acquisition brings in expertise in pipe laser-cutting, thus adding new processing technology to EHG.

EHG is headquartered in Dornbirn and employs a staff of 300 at its now-expanded nine sites. The company achieved a consolidated revenue of €165 million ($187m) in 2017.

Trade association UK Steel has welcomed the UK government’s confirmation that 15 steel anti-dumping tariffs will be transitioned over in time for Brexit. However, it has called for a withdrawal agreement with a transition period in which the UK Trade Remedies Authority can ready itself to deal with trade cases.

UK Steel director general Gareth Stace says: “We warmly welcome the confirmation from the Government that 15 anti-dumping tariffs crucial to UK steel producers will be transitioned over in time for Brexit. These measures are essential to the future competitiveness of steel production in the UK, ensuring we do not become the dumping ground of Europe in the event of an abrupt departure from the bloc at the end of March.”

“However, this is not to suggest that we believe the UK is adequately prepared to take on full responsibility for trade remedies in just a months’ time. The UK’s Trade Remedies Authority still does not legally exist, lacks substantial collective expertise, and is still in the process of recruitment and training,” Stace says in a note sent to Kallanish.

“UK steel producers are at risk of exposure to unfair trading practises whilst the fledgling Trade Remedies Authority wrestles with this mammoth task and plays catch-up with its EU counterpart,” he continues. “A withdrawal agreement accompanied by a suitably long transition period would provide the Trade Remedies Authority with almost two years to ready itself properly for its new role. It is the only sensible option.”