Category: Latest Updates

Following the latest scrap booking on Thursday, from Sweden, scrap suppliers further increased their offer prices on Friday.

The Swedish-origin deal was concluded by a long steel producer at $488/tonne cfr Turkey for HMS 1&2 80:20 and $498/t cfr for shredded and bonus grade. On the same day, numerous Baltic-origin bookings were concluded at $479-480/t cfr. Following the latest deal at $488/t cfr, scrap prices have taken one step closer to the $500/t cfr threshold.

On Friday, there were numerous Baltic-origin offers varying at $490-500/t cfr for HMS 1&2 80:20. European suppliers are heard offering at above $485/t cfr, while US suppliers, who are targeting higher prices, are not in the market.

Romania-origin scrap was concluded at $450/t cfr on Friday.

Most Turkish mills, facing higher scrap offers, meanwhile, were seen to have backed off from the export market on Friday. Iron ore and billet prices also further increased on the same day.

Most mills refrained from giving rebar and wire rod export offers on Friday, while preparing for higher prices on Monday. The ones that were offering material have increased their rebar prices to above $720/t fob actual weight from $700-715/t fob a day earlier. 

Kallanish hears that a Turkish mill has sold rebar to Singapore at a $710/t fob actual weight equivalent price. This was however not confirmed at press time. Containerised and smaller-volumes cargoes were sold at $710-720/t fob, depending on the region.

Wire rod offers have also seen a sharp increase. While offers are at above $800/t fob, a Turkish mill is heard to have sold 5,000 tonnes to Brazil at $800/t fob.

Domestic rebar offers also increased further on Friday, to $705-717/t ex-works, excluding VAT, from $691-710/t on Thursday.

Burcak Alpman Turkey

Scrap and rebar futures contracts on the London Metal Exchange jumped over the week to May 6, reflecting significant physical market strength on the back of the removal of Chinese steel export rebates for several products.

S&P Global Platts assessed the May scrap contract $45 higher on the week at $505.50/mt on May 6, while the June contract jumped $49 to $515.50/mt on week. The July contract also rose $33.50 on week to $515/mt.

Amid a strong hike in physical scrap prices, the forward curve contango structure for May to June contracts rose sharply over the week, suggesting futures traders expect significant near-term strength in the physical market, before shifting into slight backwardation over June-July contracts, albeit at significantly strong levels.

Spot prices for physical imports of premium heavy melting scrap 1/2 (80:20) gained $44.25 on week to $479.25/mt CFR Turkey on May 6, as the market reported fresh deals at elevated prices amid a significant increase in finished steel levels.

“With all this strength in the finished steel market, $500/mt CFR for scrap is a real possibility,” a Turkish trader said, adding that “the US is not there [offering yet] in the deepsea market.”

Weekly scrap futures trading volumes over the week to May 6 totaled 53,930 mt, down from 63,080 mt recorded last week.

Rebar futures also jumped on week in line with scrap. The forward curve also displayed a strong contango structure over May to June contracts, before shifting into a backwardation over June-July contracts, albeit maintaining significantly elevated levels.

This suggests that futures traders expect near-term price strength to continue in the physical market, while expecting a dip in prices although at elevated levels by the start of third quarter.

Platts assessed the May contract up $65 on week to $730.50/mt on May 6, while the June contract increased $90 on week to $750.50/mt and July contract rose $80 on week to $740.50/mt.

Turkish physical rebar export prices increased $35 on week to $690/mt FOB on May 6, as market sources reported fresh deals and mill offers at elevated levels reflecting the impact of Chinese tax rebate removal news released April 28.

Domestic rebar demand also appeared to have returned after buyers had postponed domestic purchases. Domestic consumers were keen to book material as they were seeing scrap and export rebar prices increase daily.

One UK trader expected the bullish sentiment resulting from the Chinese tax rebate news to continue at least for one month as mills were heard to offer rebar around $700-$715/mt FOB.

“I don’t think mills have to accept lower today, they can just wait for the market to catch up,” he said.

The daily outright spread between Turkish export rebar and import scrap was assessed at $210.75/mt May 6, down $9.25 on day.

Rebar futures weekly trading volumes this week on the London Metal Exchange totaled 3,830 mt, up from 2,650 mt recorded last week, reaching its highest level since March 31, when weekly trading volumes were recorded at 7,660 mt.

— Rabia Arif

The Czech government would be prepared to step in and take over the country’s biggest steelmaker, Liberty Ostrava, if such a move were to become necessary, industry minister Karel Havlicek told the country’s parliamentary lower house May 6. Ostrava’s parent company, Liberty Steel Group, announced May 5 that it might consider selling some units as it restructures and refinances after the March collapse of its major financier, Greensill Capital.

Havlicek said the state could “intervene” during a verbal report and debate on current concerns over the Ostrava steelmaker.

“The state declares that if the situation becomes critical and if it appeared likely that the company would collapse and people would lose their jobs and that the whole region could be affected, then it is prepared for such an extreme solution [as state intervention] and we have already prepared for that option,” Havlicek said. The minister however indicated that the current situation probably did not call for such action.

Havlicek pointed out in his report that the previous government of Andrej Babis had taken a similar step and nationalized the country’s sole hard coal miner, OKD, in April 2018 when “no other path was possible.”

Havlicek’s comments come amid tension between the Czech government, local trade unions and Liberty Steel’s managers and owners over the future of the 3.6 million mt/year capacity integrated Ostrava mill amid the financial squeeze besetting Liberty Steel Group and its parent GFG Alliance. Tensions escalated when emissions allowances owned by the mill were sold April 30 to Liberty’s Galati mill in Romania, despite promises to Havlicek and Czech prime minister Andrej Babis that this would not happen.

Turned-around

Liberty Steel said May 5 that it “will fix or sell underperforming units” following the appointment to its board of a four-strong team of restructuring specialists. Sources close to Liberty however indicated that the company would opt to keep the Ostrava mill along with other performing businesses, including Liberty Galati, which have turned around their operations in recent months.

In a move likely to ease tensions May 7, Liberty Steel Ostrava said in a statement that all the proceeds from the sale of emissions allowances to Liberty Galati have been paid onto the company’s account.

“The Ostrava steelmaker now has on its account the whole of the Koruna 1.24 billion [$59 million dollars] from the sale of its unneeded 1.0 million carbon emission allowance] units to sister company Liberty Galati,” Liberty Ostrava said in the statement. Part of the amount has already been used to pay bonus to the Czech mill’s workers with the remainder to be used for investments at the Ostrava mill, it added.

Liberty Steel added in its latest statement that the Ostrava mill would be able to buy the emissions allowances back at a lower price than those prevailing on the market if they were needed in the future. “This legal transaction, at a high profit, has fulfilled the company’s pledge that the allowances owned by the Ostrava mill will continue only to be used for its benefit,” it added.

Management urges return to normal

Ostrava mill’s production director, Vaclav Habura, called in the statement for a return to normal working. “It’s now necessary that we continue with our normal business and focus on production and meeting the needs of our customers and attempt to take the best advantage of the current situation on the market, which is the most favorable in recent years,” he added, referring to the spate of high global steel prices and firm demand.

Labor unions at the Ostrava mill have been on strike alert since April 16 over concerns about the impact of the parent company’s financial problems on local operations. They stepped up their action April 26 with announcement of a work to rule, which includes a ban on overtime, adding that the moves will impact steel production at the Czech mill.

— Chris Johnstone

European HRC prices were heard higher May 7, with the market now executing higher prices after another offer increase from market-leading mill ArcelorMittal May 7, sources told S&P Global Platts.

One German distributor said the increase announced by ArcelorMittal to Eur1,050/mt for HRC was a theoretical price.

“The announcement is not connected with the allocation on quantities,” the source said, also citing a deal at Eur1,030/mt ex-works Ruhr.

A European mill source said: “A lot of industry is doing updates, as they postponed maintenance because of poor cash flow.”

European producer NLMK was heard to have returned from its maintenance period May 7, two sources said.

A second German distributor said sentiment was very bullish, with iron ore prices now higher than $200/mt.

“I’ve heard rumors at Eur1,100/mt, and I expect other people to test this. There is a limited portion of offers. I expect next week the market to try Eur1,100/mt or something close,” the source said.

While imports have been a viable buying outlet for some buyers, the same German source said it was going to be increasingly difficult to obtain foreign material from countries like India because of the severity of the coronavirus pandemic, as well as the pending decision from the European Commission regarding the quota allocation system.

“The quota [system] doesn’t make any sense. Domestic producers aren’t able to supply the market, so we are hurting ourselves,” the distributor said. “Asian region prices went up after [China] removed the export rebate. The Chinese domestic market dropped a bit. We are still well below the US market.”

In the Italian market, an Italy-based mill source said prices were Eur980-1,000/mt ex-works Italy but said the new Eur1,050/mt would be accepted by the market. Meanwhile, an Italy-based service center source cited a tradable value at Eur1,000/mt ex-works Italy.

— Amanda Flint, Laura Varriale

Sanjeev Gupta has agreed a term sheet with White Oak Global Advisors for £200 million ($278m) of financing for Liberty Steel UK. The loan will be subject to due diligence and the approval of Credit Suisse Group, an informed source tells Kallanish.

GFG Alliance declined to comment.

White Oak Global Advisors also agreed to provide financing to Liberty Primary Metals Australia earlier in the week (see Kallanish passim).

Liberty Steel meanwhile appointed four new board directors to lead and accelerate its restructuring and refinancing. The new appointments will join the Liberty board with immediate effect and form a new Restructuring & Transformation Committee (RTC), which will be led by an independent chief restructuring officer.

At the end of March UK business secretary Kwasi Kwarteng said the UK government wants to see what new financing GFG can arrange before taking any action to support its UK plants. At the start of April the firm resumed partial production at its Rotherham plant following a period of intermittent operations. The Stocksbridge furnace, and the Stocksbridge, Thrybergh and Brinsworth rolling mills are expected to follow.

Adam Smith Germany

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Die KALTENBACH.SOLUTIONS GmbH unterstützt Unternehmen der Stahlbranche mithilfe IoT-basierter Gesamtlösungen. Sie vereint alle relevanten Bereiche vom Performance-Management über das Order-Management, das Maschinen-Monitoring bis hin zum Energy-Monitoring auf einer integrierten digitalen Branchen-Plattform. Diese ist modular aufgebaut und passt sich an die kundenspezifischen Bedürfnisse, Prioritäten und jeweiligen Rahmenbedingungen an.

Quelle und Foto: KALTENBACH.SOLUTIONS GmbH

05.05.2021 von Hubert Hunscheidt

Thyssenkrupp Schulte, the German steel distribution unit of thyssenkrupp Materials Services, has started operating a new logistics centre in Rotenburg, Lower Saxony.
 
It has invested around €60 million ($72m) in the new logistics site, Kallanish learns from the company. This makes it one of the group’s biggest projects in recent decades and points the way to the future of the materials business, it claims. The entire process chain has a high level of automation and digitisation, and means to serve as a blueprint for other sites in the future.

The layout of the site is aligned with the optimum flow of materials and no longer has to take into account the ideal loading sequence of the trucks, as was previously the case. Driverless transport systems move the goods directly to the truck, which is loaded in bays at ground level, the company explains. The time-consuming process of moving from one loading point to the next in the hall, which was common in the past, is no longer necessary. As a result, several trucks can be dispatched at the same time.

The inhouse-developed IIoT platform – known as “toii” – is the heart of the digital processes at the site. By connecting the plants digitally, data is exchanged directly without any manual intermediate steps. As a result, the materials flow is controlled in line with demand. The centre was completed after around a year of construction, and comprises 36,000m² of warehouse space where around 20,000 tonnes of materials like steel or aluminium can be stored.

Christian Koehl Germany

Thyssenkrupp Steel Europe will upgrade the combustion system of its hot-dip galvanizing line FBA 8 in Dortmund.

The order for delivery, assembly and commissioning of 195 modernised self-recuperative burners has recently been placed with WS Wärmeprozesstechnik. The newly implemented heating system will provide drastically lower emissions, Kallanish learns from the supplier company. It claims that the heating system will achieve exceptionally low NOx emissions due to a proven double P-tube design and its patented “Flox” combustion process. The retrofit is to be completed by mid-2022.

The order complements the construction of an all-new galv line next to FBA 8, which is projected to start operating this year. Together with another colour-coating line, up to 2 million tonnes of coated strip will then be processed annually in Dortmund. According to WS, the technology employed is suitable for a future with green combustion gases. After the conversion, approximately 800 low emissions burners will be in operation at the Dortmund facility.

WS aims at providing “solutions for all continuously operated strip lines which can reliably attain NOx emissions well below 100 mg/Nm³, with simultaneously high combustion efficiency over 80%”, says company president Joachim G. Wünning.

Christian Koehl Germany

Metalshub, the digital trading platform for metals, has completed a financing round that has netted $11 million, Kallanish learns from the Düsseldorf-based company.

The round was led by growth venture capital firm Acton Capital, with participation from existing investors Point Nine, Chromo Invest and several business angels. Using the fresh capital and the strong momentum of a record year, Metalshub intends to expand beyond Europe and targets a revenue of $1 billion by the end of 2021.

Metalshub claims that so far 1,100 companies have participated in activity on the platform, reaching more than $750 million in trade since its launch in 2017. The investment follows a quantum leap year in which turnover increased fivefold and in which it published its first price indices. Steelmakers Outokumpu, Saarstahl, Dillinger and Swiss Steel have in recent months moved their raw materials purchasing onto the platform.

Christian Koehl Germany

Tata Steel Europe saw performance increase significantly during the fourth fiscal quarter through March, thanks to a jump in demand, Kallanish notes.

Deliveries increased 17% quarter-on-quarter and 3% year-on-year in the March quarter to almost 2.5mt. Ebitda jumped to $125 million.

Crude steel production across Tata Steel’s European mills also returned to Q1 2020 levels, at above 2.6mt.

“The EU steel demand recovery is ongoing; the automotive segment is witnessing a robust recovery,” Indian parent Tata Steel says in a presentation. “Steel demand improvement is outpacing supply, leading to a strong increase in steel prices and spot spreads.”

Emanuele Norsa Italy