Global carbon steel demand could be supported by the continued growth in Europe and the United States registered over the past month. However, China’s new CO2 emissions reduction targets may slow steel production this year while output should increase in other Asian economies, French miner Eramet says in its first quarter financial report. It also confirms its manganese production target of 7 million tonnes in 2021 at its Moanda mine.
The alloys market in Europe is registering a short supply situation and a rebound in sales volumes and prices, the report adds. In Q1 global production of carbon steel slightly went down by 0.5% compared to Q4 2020 but increased 7.2% year-on-year reaching 484mt. While Chinese output showed a solid increase of 13% on Q1 2020 European and North American output fell 0.4% and 7% respectively.
“The ramp-up in steelmakers’ production capacities in these two regions is still not able to meet the rebound in demand.” Eramet comments.
The company’s first quarter 2021 turnover saw an 8% y-o-y growth reaching €838m ($1.013 billion), Kallanish notes.
Eramet’s ore production increased in Q1 by 17% y-o-y to more than 1.5mt at the company’s Comilog site in Gabon driven by ore prices rise and sales volumes growth. Manganese BU sales also increased by 8% to €389m in the first quarter while manganese alloy sales slightly decreased in Q1 2021.
In Europe manganese alloys prices increased in Q1 2021 due to a supply shortage. This is forecast to positively reflect in Eramet’s Q2 turnover.
Meanwhile, Eramet has noticed an increase in ore consumption of 9% y-o-y in Q1 2021.
“Global supply of manganese ore adjusted with robust growth of 18% over the period, supported by growth in volumes in Gabon, the return of production in Ghana and reduced price pressure on marginal producers (compared to low levels of production in Q1 2020, particularly considering ore production cuts in South Africa). Supply/demand is nearly balanced, and ore inventories in Chinese ports declined to 6.8mt at end-March 2021 (equivalent to less than 12 weeks of consumption).” The report says.
In Q1 Eramet reports 11% y-o-y growth in transported manganese ore volumes. Sales were reported to have increased 21% to more than 1.2mt and manganese alloy production rose to 194,000t.
Natalia Capra France