Category: Latest Updates

The European Commission has opened an anti-dumping investigation into imports of Chinese graphite electrodes used in electric arc furnaces, Kallanish learns from an official document.

The investigation was launched following a complaint lodged in January by Graphite Cova GmbH, Showa Denko Carbon Holding GmbH and Tokai ErftCarbon GmbH.

The European Commission says the complainants proved there was an increase in volumes of graphite electrodes from China and a negative impact on prices. They also showed there was significant raw materials price distortion involved in the production of the electrodes in China.

“According to the evidence in the complaint, pitch needle coke, that accounts for more than 17% of the cost of production of the product under investigation, is subject to VAT refund withdrawal in the country concerned,” the Commissions says. “On the basis of a comparison of prices of pitch needle coke in Japan with those in the country concerned, the complaint establishes that the raw material distortions appear to result in prices significantly below those of representative international markets.”

If dumping is confirmed during the investigation, provisional measures are set to be imposed in the fourth quarter.

Oil and gas drilling activity is expected to stay subdued in 2021, Vallourec, one of the leading seamless steel pipe producers said Feb. 17, however the company expects to see an increased contribution from iron ore mining this year.

“Although Vallourec’s revenue in 2020 was strongly impacted by the considerable drop of its activity due to Covid pandemic impact on oil demand and E&P activity worldwide, the group has demonstrated its capacity to adapt, achieving an almost stable EBITDA margin year-on-year..,” Edouard Guinotte, chairman of the management board, said in the company’s fourth quarter and full year of 2020 earnings release.

“Looking ahead, we expect oil and gas activity to globally remain subdued in 2021. While drilling should gradually restart in North America, and continue growing off-shore Brazil, EA-MEA should face difficult market conditions with no recovery visible before 2022. Our Industry markets are expected to slowly restart in 2021, and Vallourec’s iron ore mine activity should bring an increased contribution. In this context, we will continue deploying our cost savings and cash management initiatives along the year.”

For the full year 2020, Vallourec’s EBITDA reached Eur258 million versus Eur347 million in 2019.

In North America, the oil country tubular goods market has started a gradual recovery which is expected to continue during the year and be accompanied by a positive price trend, although the start of the year will be impacted by the strong increase of raw material cost, the company said. .

In EA-MEA, in addition to overall activity still significantly impacted and prices remaining under pressure, the sharp decline in deliveries of high-alloy products is expected to negatively impact revenue and margin, Vallourec said.

However, in Brazil, oil and gas deliveries are expected to increase compared with 2020, with domestic iron ore production targeted to be stable compared to the prior year. Prices of iron ore delivered to Vallourec customers are expected to surpass 2020 levels, although gradually decreasing along the year, it said.

Vallourec’s 2020 full-year revenue declined by 22% to Eur3.24 billion compared with 2019, with a 30% decline in volumes as a result of lower oil and gas activity, the company said. Q4 2020 revenue amounted to Eur830 million, down 17% compared with Q4 2019. The volume effect was -22%, price/mix effect +17% and currency conversion effect -13%.

Oil & Gas, Petrochemicals revenue, which count for 68% of the annual consolidated revenue of the company, reached Eur2 billion in 2020, a (Eur745) million decrease, or down 27% year on year (-22% at constant exchange rates), reflecting lower revenue in North America and in EA-MEA.

Vallourec said Feb. 3 it reached a major step in its financial restructuring, with an agreement in principle with its main creditors to help the company rebalance its capital structure by reducing its debt.

— Annalisa Villa

US Big Three auto producer Ford is speeding up its electrification schedule in Europe, driven by a $1 billion electric vehicle manufacturing centre investment in Cologne, Germany. 

Ford’s new goals include 100% of its passenger vehicles in Europe being zero-emissions capable by mid-2026, with that shifting to 100% all-electric by 2030. 

Its European commercial fleet will reach 100% zero-emissions capable by 2024, Kallanish understands. 

“We successfully restructured Ford of Europe and returned to profitability in the fourth quarter of 2020. Now we are charging into an all-electric future in Europe with expressive new vehicles and a world-class connected customer experience,” says Ford of Europe president Stuart Rowley. 

A linchpin of the new European strategy will be the upgraded Cologne facility, which will begin operation in 2023 and may lead to a second, adjacent facility. 

“Our announcement today to transform our Cologne facility, the home of our operations in Germany for 90 years, is one of the most significant Ford has made in over a generation. It underlines our commitment to Europe and a modern future with electric vehicles at the heart of our strategy for growth,” Rowley says.  

Ford notes that additional details concerning Cologne will be “…shared over the coming months.”

thyssenkrupp AG late on Wednesday announced that it had ended talks on a possible acquisition of the group’s steel division by Liberty Steel. A sale of the division to Liberty Steel will therefore not take place.

“We opened the door for negotiations, but in the end our ideas about the corporate value and the structure of the transaction were far apart. We have therefore decided to end the talks,” says thyssenkrupp ceo Klaus Keysberg, who is also in charge of the conglomerate’s steel activities. “We regret this step because we perceived Liberty Steel as a serious partner in the process,” Keysberg adds

Liberty Steel had submitted an updated, non-binding offer to thyssenkrupp AG to acquire thyssenkrupp Steel Europe. There was a close exchange between the two groups on a number of complex topics. As a result, however, no common solution could be found for key requirements addressed by thyssenkrupp, it states.

During recent thyssenkrupp conference calls attended  by Kallanish, executives reiterated that they sought the most sustainable solution for the group’s steel division. They emphasised that this could mean any option – either a sale, a stock market flotation – or by keeping it within the group.

thyssenkrupp will now continue to drive forward a sustainable position for steel on its own, it says in yesterday’s statement.

“Now it is important for us to ensure the future viability of our steel business on our own,” Keysberg says. “We are working flat out on this, as we have always underlined in the past few weeks and months.”

As Kallanish went to press, neither Liberty Steel nor its parent holding, GFG Alliance, had issued a statement on the matter.

Thyssenkrupp Steel Europe has prepared its business partners for a further delay in normalisation of supplies, which have been impaired for months by various factors stemming from the Covid-19 pandemic.

The company warned customers last week, when the situation was exacerbated by a sudden temperature drop and snowfall that caused disruptions in traffic and transport (see Kallanish 16 February).

In a letter dated 11 February, worded in English and sent to partners internationally, the company states that the “persisting instability… goes against our self-conception,” and expresses regret about the situation.

Executives Bernhard Osburg and Arnd Köfler declare that they had aimed at restoring supply levels and rebuilding inventories by February. To this purpose, tk Steel meant to increase production by purchasing additional input materials, despite the financial disadvantages this would entail, Kallanish reads in the company’s communique.

However, due to the “unforeseeable winter weather conditions”, tk Steel will not be able to stick to that timetable, the authors say. Given the complete stoppage of public railroad lines, the weather conditions have caused additional production loss, they say. Consequences for deliveries will be addressed with customers individually, they add.

Meanwhile, one week after the dispatch of that official circular, temperatures in Germany have seen a complete turnaround, with spring-like weather appearing in most regions. Temperatures of below 20C effectively lasted little longer than one week.

A tk Steel spokesman reports a normalisation in operations inside the steelworks, but notes that long-distance railway shipping is still subject to disruptions. The company has therefore refrained from giving the all-clear.

US raw steel capability utilization reached an eleven-month high last week, according to data released by the American Iron and Steel Institute on Feb. 15.

The raw steel capability utilization rate rose to 76.9%, up from 75.2% the previous week.

Production increased by 2.2% to 1.743 million st during the week ending Feb. 13, up from 1.705 million st the previous week, according to the data.

Last week’s production was still down 5.5% compared to the same week a year earlier, when capability utilization was at 81.5% and production totaled 1.844 million st.

Adjusted year-to-date production through Feb. 13 totaled 10.808 million st, with a capability utilization rate of 75.9%. The total is 8.7% lower than the 11.837 million st produced during the same period last year, when the utilization rate was 82.2%.

Last week’s production totaled 155,000 st in the Northeast; 599,000 st in the Great Lakes region; 189,000 st in the Midwest; 725,000 st in the Southern district and 75,000 st in the Western region.

The tonnage data is estimated, compiled from weekly production data provided by 50% of domestic producers combined with monthly production data for the remainder.

— Ingrid Lexova

Rio Tinto said Feb. 16 its Canadian iron ore venture has joined German steel group SHS-Stahl-Holding-Saar and engineering group Paul Wurth to explore production of low-emissions hot briquetted iron (HBI) using iron ore pellets and green hydrogen.

A feasibility study into potential industrial scale low-carbon iron production in Canada is scheduled for completion in late 2021, with an investment decision on a hydrogen-based direct reduction iron (DRI) plant at industrial scale expected to follow. The outcome may lead to additional demand for DR pellets, which is already in tight supply as new DRI plants start up in North Africa.

Iron Ore Company of Canada (IOC) will supply high-grade iron ores and expertise in mining, processing and pelletizing, Rio Tinto said in a statement on the low-carbon steel feedstock tie-up. Rio Tinto owns 58.7% of IOC, with Mitsubishi Corp. and Labrador Iron Ore Royalty Corp. holding the rest.

“Canada provides access to cost competitive hydro-electricity, and proximity to key markets in Europe and North America,” Rio Tinto said. “Transforming high-grade iron ore pellets into a low-carbon steel feedstock using green hydrogen, when processed in an electric arc furnace with carbon-free electricity, has the potential to reduce significantly the carbon emissions associated with steelmaking.”

Paul Wurth has process knowledge in the field of highly efficient hydrogen generation and Midrex direct reduction iron plants, while SHS group, which owns Dillinger and Saarstahl, brings deep iron and steel making expertise, according to the memorandum of understanding.

SHS and other steelmakers in Europe plan to use renewable energy and hydrogen to develop electric arc furnaces, to melt metallics and scrap, helping lower emissions from steelmaking using blast furnaces. A key consideration is renewable power availability and power prices, to help support green hydrogen production.

A lack of high-grade ferrous scrap availability by region may require HBI and pig iron to play a leading role in the planned green steel transition. High-grade steelmakers need to maintain feedstock quality to meet steel specifications, and ensure steel production and energy efficiency.

“Dillinger and Saarstahl adopted a future-focused strategy with the motto ‘proactive, carbon-free and efficient’. Within this strategy, we have defined various options for the transformation to carbon-neutral steel production,” SHS-Stahl-Holding Saar board director for technology, Martin Baues, said in the statement. “The use of hydrogen in steel production is a key factor in reducing carbon emissions. This partnership can further help us to reduce our carbon emissions on the basis of this technology, while gaining important experience in using hydrogen in steel production.”

Rio Tinto largest iron ore supplier

Rio Tinto was the world’s largest iron ore producer in 2020 and is seeking to develop higher value-added iron ore supplies to promote lower emissions at steel mills in China, the world’s biggest buyer, and elsewhere. The group earlier entered into low-carbon emissions steel development studies with China’s Baowu Steel, Tsinghua University and Japan’s largest steel producer, Nippon Steel Corp.

Rio Tinto’s share of IOC’s pellet shipments totaled 6 million mt in 2020, with 4.9 million mt in concentrate, up from 5.64 million mt of pellets and 4.5 million mt of concentrate in 2019. IOC pellets comprise blast furnace grade and higher-spec DR pellets with fewer impurities. Rio Tinto manages rail operations from Newfoundland and Labrador-based iron ore mining and processing to Sept Iles port in Quebec province.

Rio Tinto is committed to being part of the solution on climate change and supporting customers and other stakeholders in the steel value chain as the industry transitions to a low-carbon future, according to IOC president and CEO Clayton Walker.

Rio Tinto supplies Canadian iron ore as well as group Pilbara production and third-party iron ore into its port-based blending sales in China, with 5.5 million mt of port sales in 2020, including 1.8 million mt in Q4.

Larger iron ore pellet producers Vale and LKAB have plans to develop HBI. LKAB studying direct reduction of high grade iron ore fines, and already supplies fossil fuel-free DR pellet production from Malmberget using biofuel rather than fuel oil, for the HYBIT pilot DRI plant in Lulea. Vale is looking into HBI using the Midrex DRI process and through Tecnored, which uses biomass, syngas and hydrogen, signing a JV with Japan’s Mitsui & Co. and Kobe Steel.

Miner BHP, which is the largest coking coal producer, earlier this month signed a memorandum of understanding with Japan’s JFE Steel Corp. for the study of technologies and pathways toward low emissions from the integrated steelmaking process. BHP signed an accord in November with China Baowu to share knowledge and invest in low-emissions initiatives, and invested into molten oxide electrolysis technology developer Boston Metal.

— Hector Forster

SHS Group, the holding for Saarland mills Dillinger Hüttenwerke and Saarstahl, has entered into a long-term cooperation with e-commerce platform Metalshub. Since the beginning of the year, SHS has concluded a large number of contracts for the raw materials procurement of the two mills via the digital platform.

Düsseldorf-based start-up Metalshub trebled the volume of transactions last year for metals and ferroalloys on its B2B online platform versus 2019 to around €300 million ($364m). It claims it now has 1,000 active customers, and that it responded to this increase by introducing a live chat function. Among other things, the function means to facilitate a “much easier exchange between buyers and sellers of metals and ferroalloys”.

For the negotiation process itself, Metalshub has developed two new functions: supplier management data and an auction mode.

Last autumn it also launched the first fully transaction-based price indices for ferroalloys (see Kallanish 5 November). With this tool, suppliers and buyers are able to use transaction-based indices for their annual and quarterly contracts, while spot market participants can have access to reliable price information, Metalshub states.

The beginning of the coronavirus crisis last year initially created insecurity in the market environment, says co-founder Sebastian Kreft. However, “in the course of the months that followed, more and more companies realised how they can benefit from a platform like Metalshub, particularly in difficult times like these,” he says. “That’s why we are very optimistic with our outlook for the current year.”

Thyssenkrupp Materials Services says it has started providing UK customers with access to the group’s Steelbay Exchange online shop.

With Steelbay Exchange, thyssenkrupp Materials UK says it has now complemented its offering. “Steelbay Exchange allows our customers to easily digitalise their purchasing and innovate their business,” says tk Materials UK chief executive Terry Sargeant.

An element highlighted by the company is the omnichannel approach which offers customers cross-channel access to products and services, Kallanish understands. Customers can place orders via individual customer portals, EDI interfaces, apps as well as online shops.

Tk Materials Services relied on its own expertise for the development of Steelbay Exchange. “With Steelbay Exchange we have created a scalable application that allows us to achieve significant synergies across all areas of the group,” says Jörn Ossowski, head of digital transformation at tk Materials Services. The store thus also serves as a blueprint for other units of the globally positioned distribution group, he continues.