Cogne finalizes Mannesmann tubes acquisition to expand stainless footprint
Italian long stainless steel and nickel alloy producer Cogne Acciai Speciali has finalized the acquisition of Mannesmann Stainless Tubes from German steelmaker Salzgitter, it said Nov. 1.
The Eur135 million ($144.5 million) deal was first announced in February, with Cogne saying at the time that the acquisition would widen its footprint to encompass the market for seamless tubes and stainless steel nickel alloy pipes. The EC cleared the merger in June.
“With this new acquisition we realize a further step in our strategy, which brings us a historic player in the seamless tube market, whose upstream integration with Cogne will make it even more competitive,” Cogne CEO Massimiliano Burelli said.
Mannesmann Stainless Tubes produces seamless stainless steel and nickel-based tubes in Germany, France, Italy and the US.
Upon joining the group, the company will be renamed DMV. Cogne previously provided Mannesmann with semi-finished products.
Cogne manufactures long products in stainless steel and nickel-based alloys for the aerospace, automotive and energy industries, as well as supplying the medical technology, food, chemical and plant engineering, and mechanical engineering sectors.
Platts, part of S&P Commodity Insight, assessed European 18-8 stainless steel scrap solids at Eur1,1170/mt Nov.1 on a CIF Rotterdam basis, stable on the day and up Eur10 week over week.
The 18-8 stainless steel scrap clips and solids are a commonly used reference for the grade-304 stainless steel scrap. The scrap contains a minimum of 16% chrome content and minimum of 7% nickel content.
Cogne approves capital increase to buy Mannesmann
Cogne Acciai Speciali has approved a €45 million ($50m) capital increase. This decision will provide the necessary financial support for the acquisition of Mannesmann Stainless Tubes from Salzgitter AG, Kallanish learns from the Italian stainless long steel producer.
In a statement, Cogne highlights that this financial operation is a significant move designed to bolster the company’s ongoing expansion and strengthen its position in the special steel industry. It aims to enhance its portfolio and expertise in the global market.
The acquisition is expected to be finalised in the fourth quarter. Cogne, a subsidiary of Walsin Lihwa, is committed to expanding its global reach and catering to increasing demand from the aerospace, nuclear, medical, and energy sectors. As part of its ongoing efforts to improve operations, the company is currently investing in the modernisation of its Aosta plant in Italy. This includes revamping the cooling chamber of the continuous casting machine for special steel blooms. The upgrade was implemented during this year’s four-week summer shutdown.
The steelmaker recently expanded its operations by acquiring ComSteel Inox, its main stainless steel scrap supplier, and a portion of Outokumpu’s long products business in Degerfors and Storfors, Sweden.
Since it was acquired by Walsin Lihwa, it has grown through a series of mergers. Last year, it completed the acquisition of Sheffield-headquartered Special Melted Products (SMP). Walsin is investing over €110 million ($121m) in Cogne’s Aosta plant between 2022-2024. The growth strategy involves gaining market share in Europe and Asia, and developing the group’s presence in the US (see Kallanish passim).
Natalia Capra France
Salzgitter Mannesmann Handel introduces tool for carbon footprint
Salzgitter Mannesmann Handel GmbH, the distribution subsidiary of Salzgitter AG, is introducing a new calculation tool for the product carbon footprint (PCF).
The group describes the tool as a calculation methodology in accordance with the Greenhouse Gas Protocol and ISO 14067, determining the CO2 footprint along the entire value chain. It enables Salzgitter Mannesmann and its units to provide complete transparency concerning the carbon footprint of the steel products they are offering. Following successful validation by TÜV SÜD, the calculation tool will be made available to the market with immediate effect, Kallanish hears.
“The new PCF software solution calculates the PCF of the steel product, from raw material extraction through to the customer’s factory gate – cradle-to-customer entry gate,” says Tanja Jacobs, business development head at Salzgitter Mannesmann Handel. “The entire range of greenhouse gases are included and converted into CO2 equivalents,” adds Salzgitter Mannesmann Handel managing director Alexander Soboll.
Christian Koehl Germany
Hüttenwerke Krupp Mannesmann owners prefer sale over stake increase
Salzgitter and thyssenkrupp Steel, co-owners of Hüttenwerke Krupp Mannesmann (HKM), have no interest in taking over the 20% stake in the Duisburg mill still owned by Vallourec.
In fact, thyssenkrupp Steel, the largest owner with 50%, has now made it clear that it also wants to divest its stake. “We are aiming for a sale of [our stake in] HKM,” thyssenkrupp chief financial officer Jens Schulte told Kallanish during a conference call on Wednesday. He referred to a statement to that effect made last week by Sigmar Gabriel, the supervisory board chairman at tk Steel.
The decision makes sense from the view of thyssenkrupp, given the company recently decided to reduce its capacity and intends to sell 50% of its tk Steel division to EPCG. The Czech energy group recently bought an initial 20% and continues negotiations to take another 30%. While thyssenkrupp and EPCG did not disclose details of the transfer, Manager Magazin writes that EPCG paid €140 million ($155m) for its 20%, citing inside sources.
As far as Salzgitter is concerned, its chief executive, Gunnar Groebler, said on Monday the company does not intend to increase its 30% shareholding in HKM, although it earlier expressed an interest in doing so. Salzgitter has not specified if it wants to divest or keep it stake.
Pipemaker Vallourec has long kept its stake because HKM’s slab is ideal for making tube. It was however reported last year to be seeking to divest its interest. Retaining the stake would be a reasonable path for Salzgitter, too, considering its Mannesmann Tubes business, in addition to the obvious kinship of roots in the traditional Mannesmann company.
Christian Koehl Germany
German steelmaker Salzgitter expects lower strip shipments for rest of 2024
German producer Salzgitter expects strip steel shipments to continue at a somewhat lower level for the rest of 2024, with section shipments at around the same level, and crude steel production running at a slightly reduced rate, according to its interim earnings Aug. 12.
In the first half of the year, Salzgitter produced 2.69 million metric tons of crude steel, slightly up on the same period of 2023, when it registered 2.51 MMt. In the same period, shipments were 2.81 MMt against 2.77 MMt in H1 2023, but shipments sales moved down to Eur2.47 million mt from Eur2.69 million mt.
Salzgitter said it expects the economy to remain weak in the heavy steel plate market, with order intake forecast “to drop below the already weak year-earlier level, with prices under intense pressure.”
The company said that pipe plate output is only likely to benefit around year-end, following delays in awarding projects for large-diameter pipes, while there will likely be a significant downturn in volumes in its medium-diameter pipe segment. In the precision tubes group, demand remains hesitant following on from the previous year, it said.
In the company’s steel processing business unit in H1, Salzgitter rolled 520,000 t of steel products against the 538,000 t recorded in the same period of 2023.
A generally improved result is expected for the trading business unit in 2024, thanks to more stable prices than in H1 2023.
Platts, part of S&P Global Commodity Insights, assessed the 62% Fe Iron Ore Index at $98.85/dry metric ton CFR North China on Aug. 12, down 45 cents/dmt from Aug. 8, in line with tradable values.
Salzgitter said it is also on track in its low carbon transformation program, which aims to fully convert the integrated steelworks of Salzgitter Flachstahl by 2033. At the moment, the company is in the process of building a 100 MW electrolysis plant, a direct reduction plant and an electric arc furnace.
Platts assessed Northwest European hot-rolled carbon-accounted coil at Eur725/t ex-works Ruhr Aug. 9, down Eur10 on the day.
The assessment was calculated in line with the sum of Platts daily carbon-accounted steel premium assessments and Platts daily hot-rolled coil price assessments in Northwest Europe.
Annalisa Villa
Andritz to supply 100-MW electrolysis plant for Salzgitter green steel in Germany
Germany’s Salzgitter has ordered a 100-MW electrolysis plant from Andritz to produce green hydrogen, replacing coal in the steel production process at the company’s Salzgitter Flachstahl from 2026, the companies said in statements Sept. 20.
The plant will produce around 9,000 mt/year of hydrogen, with HydrogenPro supplying the high-pressure alkaline electrolyzers, using its 5.5-MW cell stacks, it said in a separate statement.
“This order represents a major milestone for our partnership with ANDRITZ, and the first step in our European expansion,” HydrogenPro CEO Jarle Dragvik said in the statement.
The project is part of Salzgitter’s Salcos program, which it will develop in three stages.
In a first phase from 2026, Salzgitter will commission a direct reduction plant, an electric arc furnace, and the 100-MW electrolysis plant.
The DRI unit will have a production capacity of over 2 million mt/year of direct reduced iron, while the EAF will produce 1.9 million mt/year of steel, according to Salzgitter Flachstahl and engineering company Primetal, which will build the EAF.
It aims to convert its operations to “virtually CO2-free steel production” by the end of 2033.
The first stage of Salcos is backed by subsidies from Germany’s federal government and the state of Lower Saxony, as well as by the company’s own funds.
Salzgitter Flachstahl Chairman Ulrich Grethe said the development of hydrogen infrastructure in Germany was key to unlocking industrial decarbonization.
“In order to enable us to reduce the CO2 footprint of our steel production in the future, it is imperative that we connect to the emerging hydrogen infrastructure as quickly as possible,” Grethe said in the statement.
German gas transmission system operators in July published a draft hydrogen pipeline network map, linking hydrogen production and demand centers, storage facilities, power plants and import corridors across the country.
The proposed network is made up of converted existing natural gas pipelines, along with newly constructed dedicated hydrogen pipes.
The core network will include key infrastructure expected to be operational by 2032, with scope to expand the network further in later stages.
Germany is targeting domestic renewable hydrogen production capacity of 10 GW by 2030, and is also eyeing large-scale imports through schemes such as H2Global.
Platts, part of S&P Global Commodity Insights, assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur6.15/kg ($6.58/kg) Sept. 19 (Netherlands, including capex), based on month-ahead power prices. Proton exchange membrane electrolysis production was assessed at Eur7.23/kg.
Author: James Burgess
Salzgitter partners with freight carrier HGK to develop inland shipping for steelmaking needs
HGK Shipping and German steelmaker Salzgitter AG plan to enhance their cooperation and jointly promote and develop sustainable logistics concepts for inland waterways, Salzgitter said Aug. 15.
With Salzgitter’s reliance on inland waterways set to increase as the transition to low-carbon steelmaking progresses, the German steel company will enhance its partnership with HGK Shipping, Europe’s leading inland waterway shipping company, to ramp up its inland cargo shipping volumes to above 1 million mt/year.
HGK Shipping, like Salzgitter native to Lower Saxony, has a fleet of 350 company and chartered vessels and transports 43 million mt/year of freight.
Two subsidiaries of Salzgitter — steel coil manufacturer Salzgitter Flachstahl and distribution company DEUMU-Deutsche Erz- und Metall-Union — have signed memorandums of understanding with HGK Shipping outlining their commitment to developing and establishing low-emission logistics chains as a norm.
Both subsidiaries are aiming to make much greater use of inland waterway shipping in particular, and their co-operation with HGK will focus on setting up paired transport operations.
The aim is to prevent empty runs through generating return loads and optimizing the use of available shipping space by combining transport operations, for instance.
Salzgitter Flachstahl specializes in making flat steel products for vehicle and pipe manufacturers and construction, and DEUMU recycles scrap steel, metals and alloys and acts as a trader for them.
The two are connected to the inland waterway system at numerous sites, with the result being over 1 million mt/year of the Salzgitter group’s steel is transported via European waterways. The steel company believes in it can grow these shipping operations further if the right conditions are in place.
In May, Salzgitter contracted a consortium comprising Tenova, Danieli and DSD Steel Group to build a 2 million mt/year direct reduction plant at Flachstahl, which takes it a step closer to low-CO2 steelmaking.
The first stage of the Salzgitter Low CO2 Steel, or SALCOS, project will go into operation in late 2025 and consist of the direct reduction plant, an electric arc furnace and a 100-MW electrolysis plant for hydrogen production.
With the EAF up and running, the currently blast furnace-based Flachstahl will convert into a mill smelting direct reduced iron, but also steel scrap, hence why it is looking to develop logistics for shipping in significant scrap volumes.
“One key element [of SALCOS as a circular economy project] will involve using scrap to obtain crude steel [and] … having sustainable logistics operations for this very important secondary raw material,” DEUMU Managing Director Sandrina Sieverdingbeck said in a statement Aug. 15.
Author Katya Bouckley
Salzgitter expects safeguard non-renewal, Section 232 reapplication risk
“It will then be possible to import steel products into the EU market from July 1, 2024 onward without any restrictions by tariff quotas, which will likely drive up import volumes,” the steelmaker said in last week’s second-quarter earnings report.
EU steelmakers have in recent months voiced fears over the potential expiration of safeguard measures in mid-2024, with the EU’s Carbon Border Adjustment Mechanism (CBAM) due to come into full force only on 1 January 2026. This would leave an 18-month gap that would see the EU’s market unprotected, Kallanish notes.
According to WTO rules. safeguard measures can be implemented for a maximum of eight years and then must be rescinded for the same duration as they were applied before they can be re-applied.
Their renewal is likely to depend much on whether the EU and US can agree a steel trade pact, the Global Sustainable Steel Agreement (GSSA), which is currently under negotiation. If no deal is agreed by the October deadline, the US could reapply Section 232 duties on EU steel. “The various negotiation positions are currently still very far apart, which makes arriving at a consensus by October 2023 difficult. The loss of preferential market access to the US would considerably hamper exports again,” Salzgitter says.
As for the EU’s sanctions on Russian steel, importing steel products of Russian origin processed in non-EU countries will be prohibited as from October 2023; importing semi-finished products will no longer be possible starting with October 2024.
“Risks arise from the new sanctions to the extent that the long transition periods through to autumn 2024 continue to facilitate Russian steel imports that are frequently offered at prices significantly below the customary market price level. Owing to the complexity of the directive and the difficulty in its implementation, this risk continues to prevail and may lead to distortions in the market on the back of low prices for Russian steel products,” Salzgitter observes.
The German steelmaker saw shipments drop 3% on-year in the second quarter to 1.32 million tonnes.
Adam Smith Poland
