Category: Latest Updates

Italian long producer Acciaierie Venete has started a collaboration with energy firm Enel X to decarbonise its steelmaking process.

The company produces an average of 0,238 tonnes of CO2 per tonne of steel at its production sites in northern Italy. The collaboration with Enel involves setting up a roadmap and identifying the technological solutions to significantly reduce emissions levels.

The steelmaker intends to increase its use of renewable energy and sustainable materials, improve the plants’ energy efficiency and optimise the steelmaking process.

Acciaierie Venete is an electric arc furnace-based producer of billet, merchant bar and round bar with a total capacity of 1.8 million tonnes/year. It has production and re-rolling facilities in Sarezzo, Dolcè, Mura, and Bujia near Udine, and two stockists, in Modena and Switzerland. The company employs 1,400 workers, Kallanish notes.

Natalia Capra France

ArcelorMittal implemented shortened working hours at its integrated mill in Eisenhüttenstadt, Germany, as of Monday August 1 amid slow demand, the steelmaker said.
ArcelorMittal Eisenhüttenstadt is applying short-time working hours at its flat steel rolling lines in August and September to adjust production for weak demand, the company said on Friday July 29.

“We are currently seeing a sharp drop in demand for rolled products, which is why we can no longer fully utilize our facilities in the rolling mills and have to resort to short-time work here and in some cross-sectional areas,” labor director Michael Bach said in a release seen by Fastmarkets. “However, our crude steel production continues at normal rates as the demand for slabs is not restricted. We will carefully monitor further developments and react to new developments if necessary.”

Eisenhüttenstadt steelworks has a capacity to produce 2.1 million tonnes of pig iron per year and 2.4 million tonnes of crude steel per year, according to Fastmarkets’ information. The plant is mainly focused on flat steel production: hot-rolled, cold-rolled and hot-dip galvanized coils.

In 2021, ArcelorMittal Eisenhüttenstadt produced 1.6 million tons of flat steel, the company said.

ArcelorMittal has already implemented short working hours at another flat steelmaking facility in Bremen, Germany, starting in July. ArcelorMittal also idled one blast furnace (BF) in France last month, Fastmarkets reported previously.

Slow demand for flat steel has persisted in European markets since April, with prices on a continuous downtrend until recently.

Despite this, European steelmakers have only recently started to adjust their output.

Notably, Serbia’s sole flat steel producer, Hebei Iron and Steel Serbia, stopped one of its two blast furnaces in July.

Slovakia-based flat steelmaker US Steel Kosice reportedly stopped one of its three BFs in June, although a spokesperson for the company denied the stoppage when contacted by Fastmarkets.

And last week, Liberty Ostrava in the Czech Republic idled one BF for planned maintenance.

Italian steel producers have followed suit.

Arvedi stopped operations at its steelmaking facility in Cremona completely for five weeks from late July, while Acciaierie d’Italia, another major local steelmaker, has stopped one BF in Taranto from July until end-August, several sources told Fastmarkets.

Moreover, several market sources have told Fastmarkets that Acciaierie d’Italia will stop one more BF in August in the face of slow demand and high production costs.

Published by: Julia Bolotova

Large Turkish alloy and bright steel bar producer Akcelik has started construction of its new service center in Dilovasi, Kocaeli, to meet rising steel demand, the company said July 31.

The center will have a steel processing capacity of 40,000 mt/year, the company said, adding that it would be powered by a new solar power plant.

Akcelik also plans to double the capacity of 58%-owned Romanian chrome-plated steel bars and tubes producer Tristar Steel within five years with new investments, it said.

Tristar produces hard chrome-plated steel bars and linear shafts with diameters in the range of 6-40 mm.

Akcelik also has 90,000 mt/year of bright bar production capacity at its peeling, cold-drawing and grinding lines in Turkey.

Steel prices in Turkey rose significantly in mid-March following Russia’s invasion of Ukraine, but have declined since mid-April with Turkish mills’ rebar export price falling as low as $615/mt FOB July 29, according to data from S&P Global Commodity Insights.

— Cenk Can

Order activity from plate buyers in northwestern Europe is extremely low and will not pick up notably as long as the summer holidays last, sources observe.

“People are buying only the most necessary material,” says the managing director of a German company that both distributes and processes plate. “They will wait and see until September presumably, and remain on stand-by for prices coming down further.”

In fact, prices already slid very recently, with market sources now reporting offers of €1,100/tonne ($1,130) and even lower for S355 grade, at least for plate cut from coil. For reversing mill plate, opinions differ, but some claim prices there have arrived in that range too.

According to the manager, his company’s distribution activity is low, but the processing department has lots of orders to work on, as do other processors. “I do not believe we have a real low of demand,” he tells Kallanish.

The slowdown that came with Russia’s attack on Ukraine mostly hit projects by private investors, of which many were suspended. Against that, public infrastructure projects cannot be postponed that easily, another manager cautions. “50% of Germany’s bridges need to be renewed, half of those pretty soon, the other half in a matter of 4-5 years,” he notes. He adds that not many mills are licensed by the standards set by Deutsche Bahn for that purpose.

Another observer, however, points out that public investment is not completely unharmed by the turmoil seen this year. After all, construction companies contracted by the government need to work profitably as well, and authorities are slow with reacting when circumstances change drastically.

“When a bridgebuilder planned a budget last autumn on the basis of then €1,100/t for plate, it came to a grinding halt when peaks shot over €2,100 in April,” he says. Authorities have not released more money yet, “although it ought to be clear to everyone: when everybody talks about war, the conditions of last autumn cannot apply anymore”, he adds.

Quite possibly, the intermediate irritation has been overcome now that plate prices are returning to the mark of last autumn.

Christian Koehl Germany

Kaltenbach.Solutions GmbH develops digital solutions for the manufacturing industry and manufacturers of machinery and equipment. Internally, the company uses digitization as a tool that quickly solves problems, makes processes efficient and sustainably improves workflows. In order to be able to guarantee maximum security for information and data worthy of protection within the company, certification in accordance with the internationally recognized ISO 27001 standard is now being sought. The experts at the Freiburg “Datenschutzklinik” are supporting the implementation of the ISMS project.

Certification to the ISO 27001 standard enables companies to objectively demonstrate the effectiveness of their information security management system and build trust. The globally recognized standard defines the requirements that are placed on the introduction, implementation, documentation and continuous optimization of an ISMS. In Germany, it is primarily IT service providers and energy suppliers that have realized certification in accordance with ISO 27001; other industries and public authorities have not yet been required to introduce an ISMS.

Kaltenbach.Solutions has set itself the goal of protecting its most important corporate assets through the audited system. The concrete measures guarantee professional handling of sensitive information such as development, project and customer data and minimize the risk of damage or loss. In cooperation with Sebastian Koye, the managing director of the “data protection clinic” in Freiburg im Breisgau, Germany, rules and procedures are defined to manage, control and continuously improve information security. Certification in accordance with the ISO 27001 standard is to be achieved by the end of 2023. 

Nine European plants fully or partially suspended steel production

In May 2022, EU produced 12.9 mln tons of crude steel. This is 6.8% lower than in the same month last year. TOP 10 EU countries by drop in steel production include France (-12.3%), Croatia (-11.6%), Germany (-11.5%), Finland (-10.3%), Netherlands (-10.2%), Spain (-10.2%), Bulgaria (-9.8%), Poland (-9.0%), Czechia (-8.0%), Austria (-5.0%).

As of 27.07.2022, nine steel plants in EU fully or partially paused steel production. In particular, two steel plants (Arvedi and ArcelorMittal Warszawa) completely stopped production. Their annual crude steel capacity is estimated at 4.8 mln tons. Salzgitter postponed the restart of the blast furnace until September, while previously this re-launch was planned for May-June.

EU steel plants suffer from weak demand, falling steel prices and rising energy costs. Next winter the EU may face a gas shortage, which will negatively affect the local industry. Energy price growth is expected to continue this year. So, more and more steel plants will be forced to reduce production.

Andrii Glushchenko

Salzgitter has announced a partnering agreement with wind turbines manufacturer GRI Renewable Industries to include the possible processing of low-CO2 steel products in wind towers.

GRI has a long-standing relationship with Salzgitter subsidiary Ilsenburger Grobblech, which supplies plate to the wind turbine maker. GRI is one of the first renewable energy equipment companies in the new Salzgitter partnering programme, Kallanish hears from the steelmaker.

The programme offers companies the opportunity to secure a defined tonnage of green steel today, to be supplied as of 2025 as part of the SALCOS – Salzgitter Low CO₂-Steelmaking – scheme. In addition, both companies intend to cooperate in the further development of steel grades.

“The wind power industry is a strategic target sector for Ilsenburger Grobblech,” says the company’s managing director, Sebastian Bross. “This customer segment is a perfect fit for our portfolio green and renewable steel.”

Christian Koehl Germany

Uzmetkombinat, Uzbekistan’s state-owned steelmaker under the management of SFI Management Group, has opened a trading office in Vilnius, Lithuania, the company tells Kallanish.

The enterprise intends to supply rebar and wire rod to the Baltic countries by rail and road, as well as to northern and Eastern Europe through the port of Klaipeda.

However, its main goal is to export long products form Uzbekistan to Europe, where opportunities have emerged after the cessation of supplies from Russia, Belarus and Ukraine dur to the Russian invasion of Ukraine.

Uzmetkombinat has already certified its rebar in Lithuania, Latvia and Sweden, and in the near future expects to receive similar documents in Finland, Denmark and Norway, the company says. There are plans to organise deliveries to other European countries.

In 2021, Uzmetkombinat produced 1.075 million tonnes of finished long products. Of these, 123,000t were exported, mainly to the neighbouring countries of Central Asia.

Earlier, Uzbekistani coil coater Toshkent Metallurgiya Zavodi (TMZ) said it is stepping up its supply of product to Europe after signing agreements with buyers in Poland, Germany and Estonia (see Kallanish passim). TMZ has started shipping products to European countries in containers by rail. The first 250t were shipped to Tallinn in Estonia.

Uzbekistan produced in June about 60,000t of crude steel, down by 16% on-year, according to worldsteel data. In January-June the country produced 385,000t, less by 23% on-year.

Svetoslav Abrossimov Bulgaria

ArcelorMittal expects real steel demand this year in Europe to be “at least stable if not slightly positive,” despite current headwinds, the major steelmaker’s CFO said on a conference call.

In the auto sector, “we can be cautiously optimistic about seeing higher volumes moving into the second half, even though there was no significant improvement in the first half,” Genuino Christino said in a conference with analysts following release of the company’s Q2 results July 28.

“Forecasts are still showing growth on year in terms of [auto] production,” he said.

Christino said it was positive that steelmakers are applying discipline in production, with World Steel Association data showing the magnitude of recent production cuts.

Worldsteel’s latest report showed a 5.9% year on year drop in June in crude steel production worldwide, to 158.1 million mt, with production in the EU-27 down 12.2% at 11.8 million mt, and the rest of Europe producing 3.8 million mt, down 10.9%.

“We are adapting our supply to meet demand,” the CFO said, noting that schemes in place such as the possibility of reducing working hours in Germany help make the company “confident that we can navigate this crisis.”

CEO Aditya Mittal said on the call that it “makes sense” to cut production in the weaker demand environment such as being seen in H2.

ArcelorMittal on July 12 took one 1.5 million mt/year capacity blast furnace out of production at Dunkirk in France and a 2 million mt/year furnace was also taken out of production the same week at Acciaierie d’Italia, where ArcelorMittal is a shareholder, for around six weeks. Trader and market reports of further capacity to be taken out at Italy’s biggest steelmaker were not immediately confirmed by the company July 29.

Other steelmakers have also reduced output in Europe and elsewhere. Christino noted that in China, where markets have continued to be impacted by COVID-19 lockdowns and steelmaking margins are very thin, the government “has made it clear it doesn’t want production increasing… it’s not our expectation that we’ll see structurally higher levels of exports from China.”

Significant economic incentives recently announced in China should impact domestic demand levels positively in Q4 and in 2023, the CFO said.

In Ukraine, ArcelorMittal’s iron mines are operating at around 50-60% capacity, and the company is working with one blast furnace, representing about 20% of its local capacity, and has some billets inventory, Christino said.

“Most coal for this operation is sourced domestically with some from Poland and for the time being we don’t expect much change… logistics continue to be a significant challenge,” he said.

Prices stabilizing

In Europe, ArcelorMittal expects steel market activity ” to pick up after the summer break,” Christino said. While the company is currently experiencing destocking in Europe, this is “not excessive” and expectations are now for more stability in shipments. The incentive for importing steel into Europe has come down significantly, especially with the weaker euro, “which makes everything more expensive,” he said.

European steel prices have been “relatively stable” over the past two weeks, while international prices are also showing signs of normalization, the CFO continued. “After the initial shock coming from the war [in Ukraine], we have seen prices stabilize in some regions, after a quite significant correction, but raw materials have also corrected. This will clearly impact our results in Q3… but we are working through the inventories we have on our books.”

Domestic prices for hot-rolled coil across the EU remained largely stable July 28 as market activity slowed down in line with the typical seasonal pattern.

Some European mills have started summer maintenance, with others expected to follow soon. Buyers are reportedly holding back from new bookings, awaiting a revival of market activity in September. In addition, distributors are reported to have sufficient stocks of material.

Platts assessed HRC in North Europe at Eur850/mt ($867/mt) ex-works Ruhr July 28, down by Eur5/mt day on day, according to data from S&P Global Commodity Insights. The price peaked at Eur1,460/mt March 18.

Elsewhere, ArcelorMittal is seeing “relatively stable volumes” in its NAFTA division and Brazil, with perhaps lower exports from Brazil, Christino said.

“Some increase in shipments from the CIS in H2 should provide some support as we face the impact of the strike [at ArcelorMittal’s works] in South Africa,” he said.

— Diana Kinch

Italian steelmaker Acciaierie d’Italia, the joint venture between ArcelorMittal and state-owned Invitalia, is considering idling a second blast furnace at its Taranto plant starting this week, according to sources close to the company.  Contacted by Kallanish, the company refused to comment.

This comes after the steelmaker, formerly known as Ilva, already mothballed BF no.2 until the end of August amid the downturn in prices and demand in the global coil market. At present, Acciaierie d’Italia’s Taranto facility is working using BFs 1 and 4, one of which sources say will be mothballed. In June, two galvanizing lines were also idled due to deteriorating demand for coil.

At the end of 2021, the steelmaker mothballed blast furnace no.4 because of a technical issue. In October 2021, BFs no. 1 and 4 were restarted. The latter was idled for about seven months and the company spent €70 million ($71m) on upgrade works. 

In France, ArcelorMittal has idled one blast furnace – HF2 – at its Dunkirk mill, effectively reducing output for the coming months (see Kallanish 20 June).

Natalia Capra France