Category: Latest Updates

Government officials from the US and UK met this week in Washington, DC, to discuss trade issues stemming from the 232 steel and aluminium tariffs.

US Commerce Secretary Gina Raimondo and UK Secretary of State for International Trade Anne-Marie Trevelyan said after the meeting that the two nations will “engage expeditiously” in talks in the new year.

The US and European Union reached an agreement in October to replace the 25% tariffs originally imposed by the US in 2018 with a quota arrangement. Under the agreement, the EU may supply the US with up to 3.3 million tonnes of steel products tariff free each year. The UK was excluded from the deal.

Finding “a solution that would be mutually beneficial for workers and businesses on both sides of the Atlantic” was stressed by Secretary Trevelyan in this week’s talks.

Ways for the two countries to tackle global overcapacities in both steel and aluminum will also be discussed, Kallanish understands.

To tackle decarbonisation, the leaders plan to discuss expanding cooperation in clean technologies as well.

Secretary Raimondo was invited to London in January for further discussions on these topics.

Laura Miller USA

French construction industry managers’ confidence over future activity improved on-month in November, despite the current obstacles to production due to global supply disruptions and slow deliveries, according to a l’Institut National de la Statistique et des Études Économiques (Insee) report monitored by Kallanish.

French construction companies’ general outlook for the next quarter is optimistic as more companies than in October consider their order books higher than normal. Current order books provide them with over 8 months of work, above the long-term average of 5.9 months, the report says.

Pressures on production capacity persisted in November.

“Roughly as many business managers as last month have reported that obstacles have been limiting their production … A bit less than half of business managers are facing difficulties due to a workforce shortage,” Insee observes.

About 28% of companies are unable to increase their production in case of additional orders, the same share as in November.

“Since July, half of business managers have reported to be in this situation,” Insee adds, with little change from October.

In November, more construction firms than in the previous month said they will increase their prices over the next quarter.

Domestic rebar prices remain stable on November at €750/tonne ($848/t) ex-works. Some restocking for January is now underway as the market expects increases to be announced by producers before the start of the Christmas holiday.

Natalia Capra France

The US Commerce Department will remove 30 steel and aluminum product types from its general approved exclusions (GAE) list, again subjecting these items to duties under the nation’s Section 232 metal tariffs, the department said Dec. 9.

“Based on Commerce’s review of the public comments received in response to the Dec. 14 [2020] rule and additional analysis conducted by Commerce on the Section 232 exclusion request submissions, Commerce determined that a subset of the GAEs added in the Dec. 14 rule no longer meets the criteria for inclusion as a GAE and should therefore be removed,” Commerce said in an interim final rule published in the Federal Register.

The 26 steel products and four aluminum products removed from the GAE list will again be subject to tariffs beginning Dec. 27.

In 2018, the Trump administration utilized Section 232 to apply 25% and 10% tariff rates to broad categories of steel and aluminum products. However, the tariff program allowed importers to request that certain shipments be excluded from the tariffs, on a case-by-case basis, if the subject items were not produced in the US in sufficient quantity or quality or for national security considerations.

Commerce established the GAE list in a previous interim final rule on Dec. 14, 2020, to improve the efficiency of the exclusion request process as importers would not be required to file individual exclusion requests for GAE items.

The GAE designation granted a blanket tariff exemption for specific products if previous exclusion requests for the subject products did not receive objections and if such a blanket exemption was warranted for all importers.

The initial list included 123 steel and aluminum products as GAEs, though the list can be revised at Commerce’s discretion. The list now includes 93 GAE items following the removals.

— Nick Lazzaro

Le Groupe COMET avait convié le Secrétaire d’Etat pour la relance et les investissements Stratégiques, Thomas DERMINE, à une visite des installations de COMET SERVICES à Mont-sur-Marchienne.

Ce dernier était accompagné d’une délégation composée de mandataires locaux (Ville de Charleroi, Province du Hainaut) et de collaborateurs.

COMET SERVICES est un maillon essentiel au sein de l’écosystème du recyclage mis en place par COMET, véritable trait d’union entre les Recyparcs et les unités de traitement du groupe.

REVUE DE PRESSE COMET SERVICES

Krakatau Steel could go bankrupt by year-end if the several steps being taken to restructure the Indonesian state-owned enterprise’s debt fail, says Minister of Stated Owned Enterprises (SOE) Erick Thohir.

“Krakatau Steel must take three steps [to restructure], but the third step [blast furnace investment] is still deadlocked,” Thohir observes. “In addition, negotiations with Posco, one of the two reorganising firms, were also critical but not easy. If the two parties fail to reach an agreement three times in a row, the company faces bankruptcy.”

Thohir reveals that Krakatau was in negotiations with Chinese partners, but was put off by the excessive investment required, including to repair blast furnaces. In negotiations with Posco, the Indonesian government requires equity to be split equally, but Posco has not given any response to this proposal.

The South Korean steelmaker planned to invest $3.7 billion into Krakatau in two phases for the production of hot rolled coil, and new iron and steel production facilities (see Kallanish passim).

Krakatau Steel also made a plan to sell 40% of PT Krakatau Sarana Infrastruktur, its wholly-owned subsidiary, to repay debts. It would thus retain its status as a major shareholder after the transaction. However, it could also increase the share sale to 70%.

In addition, Thohir has encouraged the Indonesia Investment Authority, the so-called LPI, to invest in Krakatau Steel.

By Kallanish Team

EU buyers’ hot-dip galvanized coil imports from Turkey remained strong year-on year in October, showed the latest data from the Turkish Statistical Institute (TUIK). This was despite the pressure from EU quotas and ongoing AD probe on imports of HDG from Turkey.

The probe, however, has begun to raise some concerns among European buyers in recent weeks and has limited Turkish mills’ export volumes to the EU region notably, industry sources told S&P Global Platts. Pre-disclosure of the AD probe is expected on Dec. 24, while provisional measures, if any, will be imposed by the EC until Jan. 24, 2022.

Definitive measures could be announced on July 20, 2022, Platts learned from an European Commission document sent to Platts by a Turkish industry source.

According to the TUIK data, Turkish mills exported 263,900 mt of coated coil, most of them hot-dip galvanized coil, to global markets in widths of 600 mm and above in October, double year on year on base effect. This export figure was also 11,000 mt higher on the month.

EU countries remained Turkey’s top coated coil export destinations by far in that month, despite the dumping investigation that was opened in June and the quotas.

Spain became Turkey’s main coated coil buyer in October with 79,800 mt, 50,000 mt higher on the year, while Belgium imported 32,700 mt, around eightfold higher on the year.

Italy imported 24,100 mt of coated coil from Turkey over this period, more than double on the year, while the US was Turkey’s other main coated coil buyer with 23,400 mt, compared to 1,000 mt imported in October 2020.

Turkish mills’ other coated coil export destinations in October 2021 were: Bulgaria (14,500 mt), Greece (11,800 mt) and Romania (11,200 mt).

— Cenk Can

Seaborne iron ore prices jumped on Tuesday, supported by smaller increases for other ferrous sector products. China’s return to economic support amid a slowdown has reassured ferrous markets.

The Kallanish KORE 62% Fe index gained $5.23/t to $106.70/dry metric tonne cfr Qingdao, the highest since October. The Kallanish KORE 65% Fe index increased $5.50/t to $123.49/dmt cfr, and the KORE 58% Fe index appreciated $2.39/t to $77.06/dmt cfr.

On the Dalian Commodity Exchange, May iron ore settled CNY 31/t higher at CNY 649/t ($101.72/t), while on the Singapore Exchange January 62% Fe futures settled up $8.45/t at $112.55/t. The same contract for 65% Fe and 58% Fe futures settled up $9.02/t at $130.43/t, and down $0.08/t at $78.25/t respectively.

Both scrap and billet prices also continue to push higher. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta gained another CNY 8/t to 3,386/t. In Tangshan, billet prices gained another CNY 20/t to CNY 4,360/t.

Ferrous markets have been buoyed by the cut in the banking reserve requirement ration announced on Monday, which should release some CNY 1.2 trillion in credit. There were also officially reported statements that China would push affordable housing construction and support the real estate sector.

These actions and statements contradict China’s longer-term goals of reducing dependence on cheap credit flowing into low-return investments, and of reducing the importance of the housing sector to the overall economy, but have become necessary because of the broad economic slowdown China currently faces.

Tomas Gutierrez UK

European stainless scrap purchase volumes will remain significant in December, as they were in November, Italian steel trade association Assofermet says in its monthly market report sent to Kallanish.

The association forecasts good demand for stainless scrap in Europe despite the impending Christmas holiday break. Prices, however, will be impacted by external factors such as nickel quotes from the London Metal Exchange (LME) and the global pandemic, with restrictions in activity seen possible.

In November, Assofermet noted significant demand for stainless scrap from European and non-European stainless steel mills. Prices in Europe have been in line with Italian values, which prevented imports of stainless scrap into Italy. Quotes for stainless scrap have been related to LME trends characterised by weekly fluctuations, the association adds.

In December, stainless scrap grade 304 and 316 in Italy and France increased by almost €100/tonne ($112) on high nickel prices, particularly for grade 316 that remains in short supply (see Kallanish passim).

Natalia Capra France

India’s finished steel exports posted their fourth straight month-on-month fall in November, tumbling 31.6% from October, data from the Joint Plant Committee showed Dec. 6, as overseas demand slowed.

Year on year, however, the November exports were up 20.7% compared with the corresponding month of 2020. The annual rise was due to lower comparison figure seen in November 2020, when exports for the month sank 31% versus November 2019.

As for finished steel imports in November, they were both down 11.1% year on year and 17.5% month on month.

The lower exports came as European buyers waited for automotive contracts to be finalized for hot-rolled coil as local HRC stocks rose due to canceled orders by the automotive industry as demand fell for vehicles.

Passenger vehicle registrations in the European Union sank 30.3% in October to 665,001 units, marking a fourth straight month of declines and the weakest October since record-keeping began “due to the ongoing impact of the semiconductor supply crisis,” the European Automobile Manufacturers’ Association (ACEA) had said.

Also, the EU’s import quotas for Indian flat steel from October to December had been exhausted early fourth quarter, data from the European Commission had showed Oct. 7. Belgium and Italy were among the leading destinations for Indian-made HRC.

The EU’s steel industry could see some firmness, according to S&P Global Platts Analytics, due to an easing of restrictions on EU steel exports to the US because of changes to the tariff regime, effective Jan. 1, which combined with recovering automotive demand, could potentially support another, milder price rally in 2022.

As for finished steel production in November, it fell 3.3% from October to 9.19 million mt but was up 1.7% against November 2020.

Similarly, crude steel output in November increased a slight 0.3% year on year but dipped 1.6% year on year.

Production of hot metal reached 6.38 million mt in November, both up 1.2% from November 2020 and 0.5% from October 2021.

Indian Steel Data (million mt)

	Oct 2021	Nov 2021	Change (%)	Nov 2020	YOY Change (%)	Nov 2019	Nov 2021/2019 Change (%)	Apr-Nov 2020	Apr-Nov 2021	YOY Change (%)
Crude Steel Output	9.79	9.64	-1.6	9.61	0.3	8.93	7.9	63.13	76.44	21.1
Finished Steel Output	9.50	9.19	-3.3	9.03	1.7	8.57	7.2	57.44	72.07	25.5
Finished Steel Imports	0.38	0.31	-17.5	0.35	-11.1	0.43	-27.3	2.697	3.063	13.6
Finished Steel Exports	1.06	0.72	-31.6	0.60	20.7	0.87	-16.7	7.697	9.531	23.8

Source: Joint Plant Committee

– Clement Choo

UK steel producers pay 61% more for electricity than their competitors in Germany and 51% more than in France, creating a barrier to the sector’s decarbonization, a new report released by industry body UK Steel shows.

UK Steel is calling on the government to act alongside the industry as higher electricity prices are eating in to capital expenditure and reducing the sector’s ability to achieve the transition to carbon neutrality.

The report, titled “A Barrier to Decarbonisation”, says higher electricity prices have cost UK steelmakers an extra GBP90 million this year, and GBP345 million over six years, “the equivalent of almost two years of capital investment in the sector.”

“All solutions for decarbonising the steelmaking process will increase electricity consumption,” the report said. “Converting the UK’s blast furnace steel production to hydrogen-based steelmaking could increase electricity consumption by 250%, while a complete shift to electric arc furnace production would increase consumption by 150%.” At current power prices it is estimated it would cost almost GBP300 million more to run a hydrogen-based steel plant in the UK than in Germany.

In the report, UK Steel recommends using UK state aid for energy-intensive industries and to follow the example of the French and German governments in providing network cost reductions. Another key suggestion is to introduce an industrial wholesale cost containment mechanism to prevent damaging price spikes.

“The UK steel sector is a big user of power, consuming as much electricity as 800,000 homes annually. We are also highly trade intensive, importing 70% of our steel needs and exporting 45% of everything we make,” said Gareth Stace, director general of UK Steel.

“The recent public recognition by the prime minister that the price gap needs to be tackled is hugely welcome,” he said. “But the proposed solution of investment in new nuclear will simply not have the immediate impact on electricity prices that the steel sector needs. I hope the government recognises the need to implement the steps set out in the report in addition to their long-term plans for investment.”

— Annalisa Villa