Global stainless steel production falls 8% on year in Q1: ISSF

Global Stainless steel melt shop production fell 8% year on year to 11.7 million mt in the first three months of 2020, Brussels-based International Stainless Steel Forum (ISSF) said July 2.

In Europe, Q1 stainless steel production was at 1.79 million mt, 6.3% lower year on year, ISSF said.

In the US, production of 627,000 mt was 10.9% down year on year, while in China output was 9% lower at 6.08 million mt.

In Asia, not including China and South Korea, stainless steel output was 3.8% lower year on year at 1.89 million mt.

Although priced higher than carbon steel, stainless steel has in recent years increased its market presence in construction, transport and hygiene applications due to its superior corrosion resistance.

Stainless steel production is the biggest consumer of nickel metal.

— Diana Kinch

UK grants emergency loan to help Celsa survive pandemic

The UK government confirmed July 2 it had provided an emergency loan to steelmaker Celsa Steel (UK) Ltd. to allow the company to continue trading amid difficult market conditions caused by the coronavirus pandemic.

“The agreement will safeguard a key supplier to the UK construction industry and secures more than 1,000 jobs, including more than 800 positions at the company’s main sites in South Wales,” the Department of Business, Energy and Industrial Strategy (BEIS) said in a statement.

A report in the Financial Times estimated the loan package to Celsa Steel (UK) at GBP30 million ($37.39 million), but BEIS said it could not immediately confirm the amount.

Celsa Steel (UK) operates an electric arc furnace in Cardiff, Wales and is the largest UK manufacturer of reinforcing steel with an annual long products capacity of 1.2 million mt.

UK steelmakers have been hard hit by the pandemic which caused a substantial drop in demand in their two main consuming sectors, construction and automotive, which continue to be overshadowed by concerns over future investments and costs in the current absence of a Brexit trade deal.

Celsa was not immediately available for comment July 2.

As part of the loan, which is expected to be repaid in full, the company must meet a series of legally binding conditions, which the government has negotiated to ensure the loan benefits the workforce, business and wider society, BEIS said.

“This will ensure public money is used to aid wider government policies to further benefit the UK. These conditions include commitments to protect jobs, climate change and net-zero targets, improved corporate governance, such as restraints on executive pay and bonuses, and tax obligations. It has also required further financial commitments from shareholders and existing lenders,” it said.

The government said it has brought together the firm’s management, shareholders and other lenders to create a strong package of support for the company, its workers and UK economy. “This is a good deal for all parties,” it said.

Tata Steel situation

The government is also understood to be close to announcing a support package for Tata Steel Europe, which operates a blast furnace at Port Talbot, Wales, and is the UK’s largest steelmaker. Tata, which has around 8,000 employees in the UK, is reported to have asked the UK government for a GBP 500 million loan. A BEIS spokesman could not confirm July 2 if Tata was among a number of companies receiving loans.

British Steel — recently purchased by China’s Jingye Steel Group — and Liberty Steel Group are also understood to have applied for UK government support. According to S&P Global Platts calculations, so far, cumulative loan requests to the UK government from steel producers are approaching GBP 1 billion.

The support scheme under which the steelmakers have applied for help as companies of strategic importance is dubbed Project Birch.

In March, the government established a broad package of support schemes for companies of all sizes across sectors, to protect businesses and livelihoods during the pandemic.

Through its Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme and the Bounce Back Loan Scheme, more than 1 million loans have been approved – while 9.3 million jobs have been protected through the Coronavirus Job Retention Scheme, BEIS said.

“In exceptional circumstances, where a company is of strategic importance and all other options have been exhausted, the government may consider providing bespoke support,” it said.

More broadly in support of the UK’s steel industry, the government has provided more than GBP 300 million in electricity cost relief since 2013, public procurement guidelines with annual reports on the proportion of public sector steel bought from British firms and details of a steel pipeline on national infrastructure projects worth around GBP 500 million over the next decade, BEIS said.

— Diana Kinch

Turkish flats imports continue to decline in May

Turkey’s imports of hot rolled flat steel rebounded again in May on-month, but they were considerably down on-year, Kallanish notes from data published by the Turkish Statistical Institute (TUIK).

May arrivals of flat products under HS code 7208 totalled 234,220 tonnes, 26.1% up on April, but down -30% on-year. January-May import volumes totalled 1.44 million tonnes, -16.3% down on-year, with the pace of decrease deepening by -3.3 percentage points on April. 

Imports of HR flat products under 3mm thickness (HS code 720839) rebounded in May to 96,948t, 20.5% up on April, but they were still -29.5% down on-year. Ukrainian-origin shipments prevailed in May at 41,732t, 147% up on April and 42.2% up on-year. Russian shipments remained low at 30,669t, 18.7% up on-month but -56.6% down on-year. The Netherlands sent the third largest volume at 8,272t, compared to almost nothing in April and five times the May 2019 volume.

Arrivals of HR unpickled wide strip of 3-4.75mm thickness under HS code 720838 continued to decline, with 27,428t received in May, -17.5% down on-month and -60.1% down on-year. Ukraine again overtook Russia as the largest supplier, shipping 10,257t, as compared to 4,604t in April and 12,346t in May 2019. Russia’s shipments were 5,778t and France’s at 4,173t.

May imports of hot rolled coil/plate with 4.75-10mm thickness (HS code 720837) rebounded on-month, with France again sending the largest volume at 11,453t. Total import volumes came to 23,636t, 29.7% up on-month but -43.3% down on-year. France’s shipments were up 14.9% on-month and 68.9% on-year. Ukraine was the second-largest supplier with 5,250t, and Russia third with 3,924t.

Finnish technology suppliers complete merger

Metso Outotec has commenced operations following the merger of technology supplier Outotec with its rival Metso’s Minerals Business. Trading in the shares of the new firm has begun on the Nasdaq Helsinki stock exchange.

The two Finnish firms announced the merger plan last year (see Kallanish passim).

The new firm employs over 15,000 professionals in more than 50 countries and its illustrative combined sales for 2019 were about €4.2 billion ($4.7 billion). “The combination offers potential for significant cross-selling and cost synergies and an even stronger platform for innovation, digital leadership and growth,” says Metso Outotec.

“The growing interest towards the environment and the impacts of climate change, urbanisation, decreasing ore grades and electrification are forcing traditional industries like aggregates, minerals processing and metals refining to redefine their license to operate,” the firm adds. “Metso Outotec can drive these industries towards a responsible use of the world’s natural resources.”

Metso Outotec consists of six business areas: Aggregates, Minerals, Metals, Recycling, Services, and Consumables. Metso’s chief executive Pekka Vauramo is the new firm’s ceo, with Eeva Sipilä chief financial officer.

Among other technology, Metso Outotec manufactures iron ore beneficiation and pelletising plants. Last year Metso secured a contract to supply Tata Steel India with a scrap shredder – India’s first – as well as an order to deliver a large-scale iron ore pellet plant for Tata Steel’s Kalinganagar steelworks. NLMK, meanwhile, contracted Outotec last year to boost its Stoylensky iron ore pelletising plant’s capacity. China’s Mingtuo Group is building a high carbon ferrochrome products line supplied by Outotec.

Metso Flow Control, which was not included in the merger, has become the focused standalone flow control company Neles Corporation. It also offers solutions for the metal recycling, mining and oil and gas industries.

Cedar completes Stemcor acquisition

Guangzhou-based commodity conglomerate Cedar Holdings has completed its acquisition of UK-headquartered steel trader Stemcor. Stemcor will retain its name and autonomy.

The deal was agreed in January (see Kallanish passim). Although unconfirmed by either side, the deal is reportedly valued at $150 million and sees ownership transferred fully from US investor Apollo group.

Cedar, which has so far been largely focused on non-ferrous metals and chemicals, said the acquisition will help to develop its ferrous metals industrial chain. Cedar is China’s largest private commodity trader, with 2017 revenue of $32.7 billion.

In 2019 Stemcor sourced and delivered 3.1 million tonnes of steel and raw materials, up 5% on-year. Revenue fell -10% to $1.74 billion due to a higher proportion of raw material shipments and lower prices. Profit before tax halved to $8m.

“The Group faced a number of external challenges to the business throughout 2019, from a softening global economy, declining industrial activity, continuing Brexit-EU and trade war uncertainty and increasing levels of protectionism,” Stemcor chief executive Steve Graf said last month.

Stemcor has a 70-year history in steel trading. It was once one of the top three global traders of steel and raw materials. Around 20% of its business is focused on the Chinese market, Kallanish understands.