Category: Latest Updates

Steel mill output in Germany is anticipated to fall in 2019 according to a new study by the RWI Essen institute, monitored by Kallanish.

Mill production in Germany in 2019 is anticipated to fall by -1.8% from last year, according to the study. This will mean a similar decline to that witnessed last year, when mills’ crude steel production fell by -2%, to 42.44 million tonnes. Production of rolled products is also seen reducing by -1.4%, after it had dipped by -2.6% in 2018.

While global steel production will continue to rise by an equivalent 1.8%, the pressure caused by international trade barriers and currently-reduced demand from the automotive industry will be detrimental for Germany’s mills.

Demand is seen declining by -0.6%, and effective orders by even more at -1.8% due to well-filled inventories, writes author Roland Döhrn.

Mill utilisation will fall only slightly, but still remain at a relatively high level of 84%. By comparison, global utilisation will be 75%, Döhrn says. He reasons that a slower domestic economy will mean lower occupation at mills, but will be manageable, given that imports will also be reduced. A downswing in the global economy, however, would have more pronounced consequences, he writes. He summarises by declaring that “… despite a weakening economy, Germany’s steel industry has held up quite well so far.“

The quota for automotive HDG imported into the EU from all countries except China, Korea, India and Taiwan have been exhausted until the end of March, Kallanish learns from official data.

The new permanent safeguard system assigned slightly less than 50,000t of quota for automotive grade HDG in the period February-March for all countries, excluding the main importers. This quota is allocated quarterly, as opposed to the country-based quotas which are set annually. The first quarter quota is now filled just over two weeks after having been set.

Importers of automotive grade HDG from countries such as Turkey, Vietnam or Japan will now have to wait until the beginning of April to clear their material at the European customs.

The general automotive grade HDG quota is the third to be exhausted following the launch of the new permanent safeguard system at the beginning of February. Quotas for rebar and wire rod originating from Turkey are full until the beginning of July 2019.

Automotive grade HDG steels were divided from the general HDG product in 2016 during the decision on antidumping duties to protect the automotive sector from being overly-impacted by the new AD measures. In the current safeguard system, the allocation has been increased by 50% in the definitive measure compared to the first draft following a complaint by the European carmakers’ association ACEA in January.

The introduction of permanent safeguard measures on steel imports into the EU is causing considerable unease in the market, Kallanish hears from participants in the German rebar sector.

“The new way of splitting the duty-free tonnages per quarter and per country of origin is making everything much more complex – and much more insecure,” one western German manager says. Turkey is the main exporter of rebar to Germany and neighbours, and it took less than one week before the quota for Turkey was exhausted, he adds.

This means that there are presumably volumes sitting at the ports, on the other side of the customs, waiting for the beginning of the next quarter to come. “And I bet you, the quota then will be exhausted in less than a day,” the manager says.

“You do not have trade flows these days – you have material sitting somewhere. The problem is: you do not know what volumes there are on the other side,” another buyer says, reinforcing his colleague’s observation. “So, if you order now for delivery sometime in April, the quota is likely exhausted before your material even arrives at the port, and then it stays there.“ Buyers could still pay the 25% duty of course, “… but just try to hand that down to your customers,” he complains.

Both observers therefore believe that domestic EU mills will have space to increase both utilisation and prices. “Big bending firms that are used to buy certain volumes abroad will run into problems when they try to get 15,000 tonnes from a mill here, and then get only half,” one says. The current domestic base price is seen at €280-300/tonne ($317-340/t), which translates to a delivered price of €545-565/t, trending to the higher end.

The latest price suggested from German sources for rebar from Turkey delivered to premises in early February would have been near €500/t. “A good price, without question, but linked to a lot of risk these days,” one says.

Long products maker Saarstahl will be opening its new five-strand continuous casting plant at the Voelklingen site by the end of 2019, the Germany-based company said Wednesday.

The Eur100 million caster will replace one that was decommissioned in 2010.

Saarstahl operates a total of four continuous casting systems in the steel plant that casts crude steel into billets.

The new caster will not increase production volumes at the site, but enable Saarstahl to apply mechanical soft reduction in casting formats for the production of spring steel, cold-heading wire and free-cutting steel used in the automotive industry and in mechanical engineering.

Saarstahl mainly serves the German market and has been trying to move more into the higher quality range of long products.

— Laura Varriale

EU imports of hot-rolled coil fell 18.6% month on month in December but ended 2018 up 19.3% for the year compared with 2017, Eurofer data showed.

HRC imports declined 123,132 mt to 539,681 mt in December, while rising 1.3 million mt to 8.03 million mt for the full-year period.

Galvanized coil imports dropped 16.9%, or 80,452 mt, month on month in December to 395,378 mt, while cold-rolled coil imports fell 23.9%, or 45,915 mt, to 146,628 mt, according to the trade group.

Plate imports increased in the final month of 2018, rising 9.2%, or 13,549 mt, to 161,252 mt, but ended the year 7.6% behind the pace of 2017 at 2.34 million mt.

Hot-dip galvanized/electrocoated zinc steel and CRC imports for the full-year period rose 2.27% and 2.74% year on year, respectively.

Turkey was again the top source of HRC imports for the EU, shipping 199,574 mt in December, although that was a decrease of 21.7% compared with November.

In the full year period, Turkey supplied 2.87 million mt to the EU, compared with 1.90 million mt in 2017.

Russia sent 126,676 mt of HRC to the EU in November, a 15% drop compared with November. Full-year imports from Russia totaled 1.61 million mt, compared with 720,000 mt in 2017, according to Eurofer.

South Korean HRC shipments dropped 37%, or 9,566 mt, month on month in December to 16,574 mt, with full-year HRC volumes sliding 14% compared with 2017 to 516,877 mt.

Imports from India remained relatively stable month on month at 47,744 mt, while Egyptian shipments jumped 150% month on month to 32,003 mt.

Notably higher buying interest from the European Union, particularly from Spain, supported Turkey’s coated coil export volumes in 2018. Turkish coated coil producers exported 1.33 million mt of coated coils last year, 35% higher year on year, according to the latest Turkish Statistical Institute (TUIK) data sent to S&P Global Platts.

However, Turkey’s shipments to the US — its main coated coil export destination in previous years — totaled just 124,000 mt in 2018, sharply lower than the 300,000 mt exported in 2017 amid doubled US Section 232 tariffs against Turkey effective mid-August 2018.

Spain became Turkey’s main buyer last year, importing 171,500 mt of coated coils, roughly double year on year, while Turkey’s coated coil exports to the UK reached 116,000 mt in 2018, sharply higher than 42,000 mt exported in the previous year.

Greece bought 103,500 mt of Turkish coated coil in 2018, also sharply higher than the 46,000 mt total in 2017.

Turkish mills shipped 102,000 mt of coated coil to Belgium in 2018, while exports to Canada reached 90,000 mt. Turkey’s other significant coated coil buyers in 2018 were: Italy (58,500 mt), Israel (58,000 mt), Bulgaria (57,000 mt), Portugal (48,500 mt), Iraq (48,000 mt), Egypt (41,500 mt) and Romania (41,000 mt), the latest data showed.

Turkish mills’ domestic and export coated coil pricing has increased notably in recent weeks on sharply higher hot-rolled coil pricing, mostly due to higher scrap and iron ore costs.

Some coated coil producers began seeking higher prices for HDG and PPGI this week, but as buyers were generally resisting these new offers, some downward price adjustments could be seen in the coming week if domestic and export demand remains slow, a service center manager observed.

Turkish coated coil mills were offering DX51D HDG with 100 grams/square meter zinc coating, 0.50 mm, in a wide range of $755-$790/mt ex-works Tuesday, while some producers have kept their order books closed since last week.

“We have reflected higher HRC costs to our list prices this week and opened our order books, but demand is sluggish both in the domestic and export markets. India is still offering very agressive prices to Europe and our offers are currently uncompetitive compared to their offers,” a Turkish coated coil producer source told Platts Tuesday.

“Domestic Turkish HRC producers’ offers have reached as high as $560-$565/mt ex-works this week. If they will make some downward corrections in their offer prices in the coming weeks, we could also offer more competitive prices to the domestic and European markets. However, I am afraid, we will miss the train till then.”

— Cenk Can

German e-commerce platform Mapudo has changed its system in a way that customers now get an overview of different vendors selling the desired steel product.

Mapudo, founded around three years ago in Düsseldorf, has so far worked more like an online catalogue, in which customers searched for vendors’ offers using the platform. Now, it has changed its modus operandi, very much in line with the way flight and travel platforms work. Customers enter the specifications of the product they are looking for, and after five seconds get a selection of the vendors selling that product, along with the final price.

One problem for buyers in the way the platform worked until the end of last year was that different vendors have different extra charges, like certificates, handling, and transportation according to distance. Managing director Niklas Friederichsen explains to Kallanish: “Effectively, the price that came up eventually in the basket was much higher than seen at the beginning, so that many then refrained from ordering; this is what we had to learn the hard way.”

Mapudo’s platform lists some 45,000 products from around 30 steel distributors. Friederichsen notes that setting up one’s product range for distributors on the platform means quite a bit of run-up work, for both Mapudo and the distributor. The company also has a cooperation with Saarstahl, for which it organises the sale of non-customer-specified products to distributors.

The European Commission’s steel import quotas on coated sheets will not be sufficient for European stockholders and service centers to meet demand and could cause shortages, particularly for non-automotive industries, as the car industry is likely to absorb most of the quotas, Brian Paterson, chairman of the International Steel Trade Organization (ISTA) told S&P Global Platts.

The EC set new safeguard quotas for steel effective February 2, with changes seen from the initial proposal in December 2018, particularly for coated sheets.

“The increase in the Chinese quotas, covered under Table 4b [in the regulation] will be largely used to facilitate the automotive industry, whereas traditional metallic coated sheets import countries, such as India and South Korea, to the EU, will have to prioritize their export offer to achieve best returns and will not be able to facilitate all of the customer’s requirements,” Paterson said.

Sources suggested that car-makers weighed in during the consultation period early this year to increase quotas, as category 4B is primarily used for automotive applications and 4A for construction.

South Korea and India received both country-specific quotas in the two categories, but whereas quotas in the construction category were decreased from proposal to final regulation stage, volumes in automotive were increased. Trading sources told Platts last week that they feared quotas could be filled very soon in both categories.

According to data from the European Commission Monday, 87,000 mt out of 204,951 mt of the total Chinese import volume for the February 2-June 30 period in category B, were already awaiting allocation. The awaiting allocation for the “all other countries group” in category 4B have already reached total volumes for the period until the end of March.

“Demand from markets such as general manufacturing, construction and industrial industries could be under pressure from supply, as these are not traditional core markets for EU mills,” Paterson said.

The EC should be starting import volumes allocation this week and updating the total balance that will be available to import on a daily basis.

European steel association, Eurofer, said it would be looking into the matter.

— Laura Varriale

The low water on the Rhine that impaired iron ore and scrap transport in 2018 and temporarily caused force majeure at some Duisburg mills has pushed authorities to take remedial measures.

The Directorate General for Waterways and Shipping (WSV) has announced that it will spend a sum of €260 million ($293m) to widen and deepen the waterbed between Mainz and the Loreley Rock. It will do similarly in the northern section past Cologne and Düsseldorf, leading up to the Ruhr. In the latter section, most important for transport to and from the Dutch/Belgian sea ports, the ground is to be lowered by 20 to 30 centimetres to a depth of 2.80 metres up to 2037.

Last year, the low water period persisted from the end of June until early December and saw some of the lowest water levels in the 150-year history of depth monitoring, Kallanish learns from WSV. The Rhine is Germany’s most important waterway for freight transport. Industrial hubs along the river handle their imports and exports predominantly through the ports of Amsterdam, Rotterdam and Antwerp (ARA). Roughly one third of all freight landing at the ARA ports are forwarded into Germany via the Rhine – some 150 million tonnes/year.  

The plans will face objections from those interested in the protection of nature and cultural heritage, especially in the Rhine Valley near the Loreley. WSV argues however that a big vessel of 110m length and a capacity of 3,000 tonnes replaces some 150 road trucks. Following the waterbed expansion, vessels could load up to 250t more, the equivalent of about 10 road trucks, WSV says

Eisen + Stahl Service Center GmbH feiert die Fertigstellung einer neuen Produktionshalle

Service aus einem Guss: Durch den Bau einer neuen Produktionshalle hat die Eisen + Stahl Service Center GmbH ihr Produkt- und Dienstleistungsspektrum entscheidend ausgebaut. Das Herzstück des darin befindlichen Maschinenparks ist eine Längsteilanlage, wodurch das Mannheimer Unternehmen über noch mehr Bearbeitungs-Möglichkeiten und Flexibilität verfügt.