Category: Latest Updates

Japan’s Toyota Motor Corp. has lowered its production target for the year ending March 31, 2022, to 8.5 million vehicles, because of the effects of the COVID-19 pandemic on production, the company said Feb. 14.

The company has cut its output projection twice; from the initial 9.3 million vehicles in August and 9 million units projected in September.

The latest revision comes as Toyota lowered its global March production by 100,000 vehicles to 950,000 vehicles “due to the impact of semiconductor shortages,” the company said.

From March 2 to March 22, the company plans to shut three domestic production lines at its Kyushu Miyata and Iwate plants, down from seven lines in six plants in February.

Lower vehicle production has reduced demand for automotive steel, resulting in local steelmakers cutting their yearly forecast.

Nippon Steel has cut its projected consolidated crude steel production for the financial year ending March 31, 2022, to 44.80 million mt, down 2% from the 45.7 million mt it had forecast on Nov. 2, 2021, the steelmaker said Feb. 3, citing a drop in steel demand from the automotive industry as one factor.

Another steelmaker JFE Steel lowered its annual output forecast by 500,000 mt to 26 million mt, but the outlook was still higher than the 24 million mt produced for fiscal year ended March 31, 2021.

“Steel demand is temporarily weakening due to the reduction in automobile production, resulted from the shortage of semiconductor [chips] and parts,” it said Feb. 8.

— Clement Choo

Steelmakers in Europe are driving sales of steel offered with carbon reduction certificates and voluntary carbon offsets in combination with decarbonization investments ahead of bigger emissions reductions on the horizon from hydrogen, electrolysis, scrap and metallics.

Steel group ArcelorMittal in 2021 sold 100,000 mt of steel with carbon reduction certificates, driven by the group’s own decarbonization investments, and it said it expects steel sales with the offsets to reach 600,000 mt/year by the end of 2022.

The Luxembourg-based steelmaker has launched several low emissions products under its XCarb brand, including certified emissions credits bundled steel and a range of renewable steel products. ArcelorMittal is looking to invest in renewable power capacity, offering large baseload electricity purchasing commitments as part of a larger drive to expand further into direct reduction iron at multiple sites in Europe and Canada, with the potential to use green hydrogen and electrolysis, CEO Aditya Mittal told analysts late last week.

“Demand across all segments shows customer appetite for green solutions,” the company said in an investor presentation.

The XCarb green steel certificates are independently verified and offered with ArcelorMittal’s blast furnace-based steel, directly related to CO2 savings from group investments in decarbonization technologies implemented across a number of European sites. The certificates are based on an average 2.1 mt of carbon emissions representing Scope 1 and 2 emissions for flat steel products, according to the company.

The company’s environmental product declaration for hot-rolled coil in Europe states 2.23 mt of carbon emissions to produce 1 mt of finished steel, from manufacturing, transport and raw material supply, as published by Institut Bauen und Umwelt.

Swedish steelmaker Ovako has moved its electric arc furnace-based operations to be carbon neutral, and starting this year is using carbon offsets to counterbalance the full Scope 1 and 2 carbon emissions from steel production, according to the Greenhouse Gas Protocol and ISO 14064:2018 and audited yearly, the company said on its website.

Ovako has chosen to procure credits from projects verified by either The Gold Standard or VCS, while planning to gradually reduce the use of offsets with further investments in new technology and decarbonization. In 2020, Ovako’s operations had a carbon footprint of 180,254 mt on a Scope 1 and 2 basis, according to a KPMG report.

Arcelormittal’s products allow buyers to record zero emissions under the Greenhouse Gas Protocol, Mittal said.

“Clearly, we need to grow that product range, and we’re doing that through the investments that we have,” Mittal told analysts on a Feb. 10 call.

“I think when I look at the totality of our European operations and the totality of what we’re trying to achieve, I feel very comfortable that we’re on the right track, and we’re doing the right things.”

The steelmaker is adapting existing steel processes to increase use of scrap metal and enable gas injection to save on other fuels, such as carbon-based products.

It targets completion of two smart carbon initiatives at its Gent, Belgium, site by the end of the year, under the Carbalyst and Torero projects, which capture CO2 from the blast furnace and produces bioethanol. The company has plans for a 100,000 mt/year DRI pilot plant in Hamburg using hydrogen exclusively.

ArcelorMittal has also made climate-related investments under the XCarb Innovation Fund in five technology partnerships

— Hector Forster

Celsa’s site in Cardiff has been the first to obtain the British Board of Agrément (BBA)’s new UKAS-approved rebar certification.

The BBA announced it was launching the scheme last September (see Kallanish passim).

Celsa Steel UK sustainability and strategy head Chris Hagg says: “The BBA has been at the forefront of certification of a broad range of construction products for well over 50 years and the addition of reinforcing steel to its portfolio is very welcome. In a post-Grenfell world of doubts being cast on the validity and authenticity of product testing, this scheme offers additional independent, third-party verified, trusted approval and brings extra value, confidence and reassurance to our customers.”

Celsa is the UK’s largest rebar producer, shipping some 1 million tonnes/year of long products from Cardiff.

The Reinforcing Steel Scheme covers production at steel mills, cold rolling and processing plants, assessing manufacturing, process control and management systems to industry-defined standards, backed by continual benchmarking through material testing, BBA says.

Adam Smith Germany

Liberty Steel has recommissioned the packaging line at its Tilleur site, near Liege, in Belgium.

The line has been down for some time, with the last three months focused on maintenance works to ensure its restart. The decision to relaunch packaging production is part of the plan of the company to relaunch the Liege business with a long-term plan.

The galvanised steel production line in Flemalle, near Liege, is still down, but discussion are continuing on this issue, the company explains. “We are pursuing our action plan to restart the galvanizing activities at the Flémalle site as soon as possible,” says Liberty Liege managing director Olivier Lacroix.

“The Tilleur packaging line, dedicated to the specialist steel required for packaging, has been impacted by an intermittent disruption in raw material supplies and the pandemic. In line with the plant’s new business model, which is to build partnerships with major customers to manufacture specialist packaging for their products, discussions have now been concluded for the contracts required to restart production,” Liberty says in a note sent to Kallanish.

“The restart means that around 150 workers on this line, as well the associated support functions, will return to work. This workforce is aligned with the social agreement reached with the trade unions to ensure that the plant’s organisation meets the expected profitability objectives,” it concludes.

Emanuele Norsa Italy

Special and stainless steel maker Aperam, with operations in Brazil and Europe, achieved record results for the fourth time in a row in the fourth-quarter 2021 amid a positive market environment, the company reported Feb. 11. It also diversified into stainless steel scrap and superalloys recycling in the quarter with the purchase of ELG.

Fourth-quarter 2021 steel shipments at 424,000 mt were marginally lower than the 431,000 mt of Q4 2020, Aperam’s results statement showed. However, notably higher market sales prices took EBITDA per metric ton to Eur1,090 ($1,238), almost triple the Eur369 of a year previously.

Aperam’s Q4 EBITDA rose to Eur462 million, up from Eur159 million in the year-ago quarter, beating analysts’ estimates.

For the whole of 2021, the steelmaker shipped a total of 1.8 million mt of steel, up 8.5% on 2020, while higher prices boosted sales revenue by 40.58% to Eur5.1 billion. EBITDA for the year shot up to Eur1.19 billion, from Eur343 million in the previous year, while net income rose to Eur968 million, from Eur175 million in 2020.

In Q1 2022, Aperam’s adjusted EBITDA is expected to grow slightly from the record Q4 2021 base, it said.

“Looking ahead, our long order book signals a good first half,” CEO Timoteo Di Maulo said in the results statement.

“We’ve not witnessed any softening of demand in Europe in recent weeks,” Di Maulo said in a later call with analysts. “The market is seeing a good level of supply and demand.”

The company’s energy costs peaked in Q4 and are expected to fall moving forward, which should help bolster profitability, he said.

The company will start a share buyback in Q2, Di Maulo added.

Aperam has a flat stainless and electrical steel capacity of 2.5 million mt/year in Brazil and the EU, where it has six production facilities in Brazil, Belgium and France. It also has an integrated distribution, processing and services network and can produce stainless and special steels from low-cost biomass (charcoal made from its own FSC-certified forestry).

ELG

Aperam consolidated Germany-based ELG as of Dec. 31, 2021, under a new recycling segment.

With this development, Aperam say it has become a global leader in collecting, trading, processing and recycling of stainless steel scrap and high performance alloys, including nickel- and titanium-based superalloys scrap, delivering around 1.2 million mt of materials annually. The recycling segment’s results will be presented as a division along with the rest of Aperam’s results as from Q1 this year, Di Maulo said on the call.

“2021 was an extremely exciting year and the future will be even more exciting,” he said. “We expect a lot of progress on ELG in the short term.”

— Diana Kinch

The growing demand for universally applicable digital devices for measuring performance on machines  in the steel processing industry made it necessary to professionalize the supply chain management of  Kaltenbach.Solutions GmbH. A newly established warehouse and shipping center in the Rhine-Main  area will take over Europe-wide shipping of the “BoosterBOXes“.  

In the processing of the steel trade, the topic of “Industry 4.0” has now become part of everyday  working life. More and more companies are using universally applicable digital measuring devices  such as the “BoosterBOX” from Kaltenbach.Solutions GmbH as well as specially developed industry  solutions on a daily basis to precisely measure the performance of their machines and increase  performance. Therefore, Kaltenbach.Solutions’ existing delivery systems had to be adapted to the  increasing demand. The challenge was to design an efficient, cost-effective and easily scalable  supply chain management solution. The warehouse and shipping center in the Rhine-Main area features a high-bay storage system and professional packing stations and enables a 24-hour delivery  service of BoosterBoxes to customers in the steel processing industry in Europe. 

www.kaltenbach-solutions.com

Liberty Steel Group, part of the GFG Alliance group of companies, said Feb. 11 it remains in dialogue with creditors to ensure a sustainable future for its UK businesses, after press reports suggested UK tax authority HMRC could take it to court or wind some operations up over unpaid tax, which might result in works closures and unemployment. HMRC said that it aimed generally to be “supportive.”

“Our priority has been to protect thousands of jobs in the UK. We are committed to repaying all our creditors and continue to work with all stakeholders around the UK to create a sustainable future for our businesses following the collapse of Greensill Capital,” a Liberty Steel spokesperson said. “We are in continuous dialogue with all our creditors including HMRC to find an amicable solution that’s in the best interest of all stakeholders. Short term actions that risk destabilizing these efforts are not in anyone’s interest, and undermine creditor recovery at a critical stage in our debt restructuring efforts that seek to secure the future of our businesses.”

Liberty Steel started to experience cash flow difficulties following the collapse of GFG’s main financier, Greensill Capital, in March 2021. This also led to raw materials supply interruptions at some plants as some suppliers reportedly pulled out of supply arrangements due to fears of not being paid, hitting Liberty’s output levels. While a UK market upturn from mid-2021 allowed Liberty Steel UK to restart operations by October at its “greensteel” Rotherham electric arc furnace and its speciality steel division in Stocksbridge – this latter having been closed since spring 2021 – high electricity costs have forced Liberty to operate the EAF only at night since that time.

“Against a very challenging backdrop in the UK with record high energy prices and imports we have provided tens of millions in funding to keep our people in employment and maintain operations to serve customers and strategic supply chains while we complete our refinancing”, the Liberty spokesperson said.

The spokesperson did not immediately confirm Liberty Steel’s current production levels in the UK.

According to reports in the Financial Times and The Guardian newspapers, HMRC has issued petitions to wind up operations at Liberty’s Speciality Steel UK, Liberty Pipes (Hartlepool), Liberty Performance Steels and Liberty Merchant Bar operations which reportedly owe a total of GBP26.4 million ($35.83 million) to the tax authority.

Usually informed sources said they could not confirm that the HMRC had yet filed any court case against the steelmaker.

HMRC, BEIS indicate ready to be supportive

An HMRC spokesperson said in an email to S&P Global Platts: “We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.” The authority added it could not comment on identifiable taxpayers due to the law around taxpayer confidentiality.

A government spokesperson from the Department for Business, Energy and Industrial Strategy said in an email that: “The Government is closely monitoring developments around Liberty Steel and continues to engage closely with the company. As always, we stand ready to support their dedicated employees and their families affected by any developments.

“We have provided extensive support to the steel sector as a whole to help with the costs of electricity and are working with them to support their low carbon transition.”

The BEIS spokesperson noted that HMRC’s decisions regarding issuing of winding-up petitions are taken independently, and that it is “first and foremost the responsibility of the company to manage commercial decisions for the future of the organization.”

— Diana Kinch

UK car production fell 6.7% on-year to 859,575 units due to multiple factors, most Covid-19-related, says the Society of Motor Manufacturers and Traders (SMMT). However, electric vehicle output surged, while improvement is forecast for 2022 thanks to a potential £4.9 billion ($6.6 billion) of investment and recovery in production.

The shortage of semiconductors was the principal cause of the output decline, with factories having to reduce or even pause production while awaiting parts whose supply has been heavily constrained by the global pandemic, SMMT observes. Carmakers also wrestled with staff shortages arising from the need to self-isolate, and depressed demand with car showrooms closed for months due to lockdowns. The closure of a major UK car plant in July also contributed to the decline.

Honda saw the largest output drop of 21.5% in 2021 to 54,465 units, while largest producer Jaguar Land Rover reduced production 9.6% to 220,554 units, Kallanish notes.

British car factories nevertheless produced an annual record 224,011 of battery electric (BEV), plug-in hybrid (PHEV) and hybrid electric vehicles (HEV), representing over 26% of all cars made.

Some 80% of cars produced were exported, with the EU accounting for 55% of exports, despite shipments there dropping 3% on-year in 2021. Shipments to second- and fourth-largest markets the US and Japan fell 10.5% and 36% respectively. Third-placed China however increased intake by 0.6%.

The avoidance of an EU/UK “no deal” and the signing of the Trade and Cooperation Agreement (TCA) saw publicly announced investment for the industry reach a potential £4.9 billion. This includes vital investment announcements in Ellesmere Port, Halewood, Norfolk, Sunderland and Surrey.

Adam Smith Germany

Salzgitter posted pre-tax profit in 2021 of €707 million ($807m), on revenue of €9.8 billion, versus a loss of €196m in 2020, Kallanish learns from an ad-hoc statement.

Looking ahead, the German group speaks of a “decidedly encouraging start to the new year” and believes in a sustained, strong profit trend predominantly in the strip steel business. It thus anticipates an increase in 2022 revenue to just under €11 billion and a pre-tax profit of between €600m and €750m.

Salzgitter assesses the probability of another pandemic-induced plunge in the economy as rather unlikely. However, it warns of virtually unquantifiable forecast risks stemming from extremely high energy costs and the threat of further price increases, as well as uncertainty surrounding the current geopolitical hazards.

The company underlines that its sections segment also reported an outstanding result despite the massive increase in energy prices, which badly hit the electric arc furnace mill for sections in Peine.

The complete annual report for 2021 will be published on 21 March.

Christian Koehl Germany

Polish apparent steel consumption rose 19.4% on-year in January-November 2021 to 14.15 million tonnes, with full-year use expected to reach 15.3mt, an annual record. However, consumption in November alone of 1.05mt was the lowest monthly figure since January 2021, points out the Polish Union of Steel Distributors (PUDS).

Imports remain a crucial component to supplying domestic demand, with a 24% surge in the 11 months to 12.46mt, while exports rose 8% to 5.22mt, PUDS chief executive Iwona Dybal said during a meeting on Thursday attended by Kallanish. In the nine months through September, Ukraine-origin imports into Poland soared by 129% on-year, meaning the country overtook Czech Republic as second-largest supplier. The largest supplier to Poland, Germany, increased shipments by 20%.

11-month crude steel output in Poland rose 8% to 7.76mt. Hot rolled flat and long products output grew 10.2% and 9.1% respectively.

Polish distributors’ sales in January-September meanwhile rose 8% on-year, while inventories grew 3.7%.

Finally, distributors’ prices of steel products in Poland are markedly higher now than they were 12 months ago. For example, S235J grade hot rolled coil and DC01 cold rolled coil prices are at PLN 4,577/tonne ($1,165) and PLN 5,730/t respectively this week, up 34% and 39% on-year. BST500 12mm rebar is at PLN 3,947/t, up 29%.

Adam Smith Germany