Ukrainian flat steel producer Zaporizhstal, partially owned by Metinvest, is taking blast furnace No.2 out of forced hot preservation. It has been idle since March 2022 amid the Russian invasion of Ukraine.
The firm will thereby return to operation with three blast furnaces, Kallanish notes. Last April, blast furnaces No.3 and No.4 were put back into operation.
BF2 is currently being blown in and will reach its planned production capacity in the first ten days of April. With three blast furnaces, the productivity of Zaporizhstal’s blast furnace shop will increase to 8,000 tonnes/day of pig iron, the enterprise claims.
According to the company, during the period of forced hot conservation of BF2, specialists from the blast furnace shop and engineering services of Zaporizhstal carried out a comprehensive study, maintenance and repair of the main components of the unit.
In particular, mechanical and electrical equipment, as well as the furnace air heaters were revamped, and a technical inspection and testing of gas cleaning equipment was carried out.
“The launch of the blast furnace was preceded by thorough work to ensure production with sufficient volumes of raw materials,” says Zaporizhstal general director Roman Slobodyanyuk. “Today, we have a solution that will allow us to increase production, and at the same time increase contributions to state budgets and attract foreign exchange earnings to Ukraine’s economy.”
In January-February, the plant produced 209,200t of steel, down by 67.4% on-year, and pig iron output was down 61.5% to 291,600t (see Kallanish passim). Rolled steel production decreased by 65.3% to 174,200t.
Zaporizhstal operated at 50% of its capacity in 2022 due to logistical restrictions amid the war.
Last year, it launched the production of eight new types of cold rolled coil and hot rolled coil, which were previously produced at Metinvest’s destroyed Mariupol enterprises – Azovstal and Ilyich Steelworks.
Svetoslav Abrossimov Bulgaria
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The Unite Union has expressed its disappointment over the recent UK budget announcement not containing more support for the steel industry, calling on Prime Minister Rishi Sunak to ensure the sector’s competitiveness.
This comes as reports circulated of Tata Steel UK potentially closing a blast furnace at Port Talbot in July. Last July, Tata Group chair Natarajan Chandrasekaran warned that some UK sites might be closed in 12 months without government support towards decarbonisation.
In January, the government was reported in talks with both Tata Steel and British Steel over £300 million ($367m) in funding each for this purpose, but a deal is yet to be agreed, and some sources say the figure falls short of the steelmakers’ expectations.
“The government has legislated to reduce emissions to net zero by 2050. This means that to maintain UK steel production in future there needs to be proper support to transition from coke furnaces to new technologies using electricity or hydrogen,” Unite says in a note seen by Kallanish.
“This will require billions of pounds of investment. While it is welcome that the government is now reportedly preparing £600 million of sector support, this is small beer compared to countries like Germany and the US that have already provided billions of pounds worth of public investment. We now need adequate funding in the UK and we need it tied to job protection guarantees. Intervention is essential but cannot be about rescue packages that only end up helping investors, while jobs disappear,” it adds.
The government must also ensure UK infrastructure projects use UK-made steel, while high energy costs must be tackled to ensure UK steelmakers’ survival, it concludes.
Adam Smith Poland
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The Polish construction sector grew faster than expected in February, thanks to infrastructure projects, but residential housing continued to perform poorly. ING Bank says this trend will continue in the coming months.
According to figures from Poland’s Central Statistical Office (GUS), construction sector output rose 6.6% on-year in February, and by 10.6% versus January. This is versus the on-year growth consensus of 2.1%. The increase was thanks to 21.5% on-year growth in civil engineering construction and a 4.3% increase in speciality construction.
The growth is likely to be “the effects of finalising infrastructure projects in the last settlement year of the old EU [funding] perspective,” ING senior economist, Poland Piotr Poplawski says in a note sent to Kallanish.
Meanwhile, in the first half of last year, the number of housing units under construction was historically at its highest levels, but as demand declined, it began to decelerate rapidly. “The current supply of apartments from developers is able to cover the current demand for almost a year. Therefore, developers are completing projects already started, but not starting new ones,” Poplawski explains.
“The construction situation in the coming months is likely to be a product of the still unfavourable situation in housing and the completion of projects, from the old EU perspective (when local government authorities rushed to finish projects to use all of the remaining EU money),” he continues.
“The prospect of the government’s launch of mortgage support programmes may even weaken demand for housing in the near term … until the programme’s launch, among households hoping to take advantage of government support. In contrast, the experience of previous EU perspectives shows that the last settlement year is conducive to relatively high activity in infrastructure construction,” Poplawski concludes.
CMC, which has a long steelworks in Poland, said in January that after a strong period, Polish residential activity is showing signs of a slowdown due to rising mortgage interest rates (see Kallanish passim). Although Polish mortgage origination declined meaningfully over the last several months, programmes are being developed to support first-time homebuyers, which should attract more market activity by mid-2023, it added.
Adam Smith Poland
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Crude steel output in Germany continued to decline in February 2023 compared with a year earlier, national steel industry association WV Stahl said on Tuesday March 21. But other market sources suggested that substantial output cuts were partly intended to keep the market under control.
German domestic crude steel production totalled 2.994 million tonnes in February, down by 6.9% from 3.215 million tonnes in February 2022, the industry body said. This marked the twelfth consecutive month of decline in crude steel output in the country.
The decline was due to several steel production cuts announced by German mills during the fourth quarter of 2022, intended to balance an oversupplied market, especially in the flat steel sector.
Notably, steel output from Germany’s basic oxygen furnaces, mainly used in the production of flat steel, dropped by 4.9% year-on-year to 2.044 million tonnes in February, from 2.150 million tonnes in the corresponding month of 2022.
Even though flat steel prices across Europe have been recovering since the beginning of 2023, this recovery was mainly due to a rebound in apparent steel demand and tighter supply, rather than an improvement in real steel demand. Therefore, market sources suggested that European mills would keep output rates under control to “keep buyers hungry.”
Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe, averaged €768.42 ($823.62) per tonne in February 2023, sharply down from an average of €952.01 per tonne in February 2022.
The index, however, was up month-on-month, from an average of €720.36 per tonne ex-works in January 2023.
Meanwhile, Germany’s crude steel output from electric-arc furnaces (EAFs) amounted to 950,000 tonnes in February 2023, down by 10.8% from 1.065 million tonnes in February 2022, WV Stahl said. Steel produced via EAFs is mainly used in the production of long steel materials.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, averaged €715.00 per tonne in February 2023, down from an average of €840.63 per tonne a year earlier.
Demand for long steel products remained subdued in Germany due to a slow performance by construction, the key consuming industry, sources said.
European mills have made an attempt to increase prices recently to reflect higher costs, but buyers have been quite skeptical about the move so far, because demand was still low.
Published by: Julia Bolotova
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In February 2023, new vehicle registrations grew by 11.5% when compared with figures from the corresponding month the year before, reaching a total of 802,763 units, the European Automotive Manufacturers Association (ACEA) said on Tuesday March 21.
The association added that the increase should be considered in light of a low base comparison figure due to the semiconductor shortage crisis at the start of 2022.
Strong growth was reported in all EU automotive markets, with Spain showing the strongest gains at 19.2%. Italy also performed particularly positively with a 17.4% rise in new registrations.
New car sales saw double-digit increases in both January and February, with almost 1.6 million new cars registered in that two-month period, up a total of 11.4% from figures collected in January and February of 2022.
And, in the first two months of the year, Spain’s new car sales rose by 32.1% year on year, Italy’s by 18.2% and France’s by 9.1%. However, car registrations in Germany remained relatively flat during the same two-month period, at 0.2%.
However, despite the increases in new car sales, recent upward movement in flat steel prices have mainly been achieved due to limited supply resulting from cuts to production late last year, rather than a real steel demand rebound, Fastmarkets heard.
According to regional steel association Eurofer, the automotive sector consumed around 40% of EU strip mill products and 2.9% of quarto plate products on average in 2021, so the automotive sector is a major end-user for flat steel markets.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €845.63 ($902) per tonne on Tuesday March 21, up €0.63 per tonne from €845 per tonne the day before, and up €73.37 per tonne month on month.
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €950-970 per tonne on Wednesday March 15, up by €20-30 per tonne from €930-940 per tonne a week earlier, and up €50-70 per tonne month on month.
In January, ACEA director general Sigrid de Vries said the automotive market would “start embarking on a recovery process in 2023.”
“We expect around 9.8 million new cars to be sold across the region this year, up 5% from 2022. However, this remains 25% below the 2019 pre-crisis levels, showing that we are still in a fragile situation,” she added.
Published by: Holly Chant
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