US STEEL MARKET ROUNDUP FROM MEPS INTERNATIONAL LTD

US hot rolled coil delivery lead times remain at four to six weeks, according to MEPS. Demand is moderate to good, with the exception of the construction sector which is slow to recover. Domestic production levels are high. Transaction figures were steady in August but weakened recently, partly due to the availability of cheaper imports.

Hot rolled plate makers have recently announced another hike. This has been badly received by the consuming industries. Customers feel that, although the market is relatively good, high inventories at the service centres and the onset of winter do not support a rise. Delivery lead times are down to eight/ten weeks. Conditions are expected to remain strong into November. The biggest concern for steelmakers is whether the influx of offshore material will upset the balance between supply and demand.

The threat of anti-dumping law suites are keeping many potential buyers from importing cold rolled coil. Consumption, particularly by the auto sector, remains good.

Coated coil transaction figures were unchanged in August, but, more recently, imports have created downward pressure. However, buyers are cautious in regards to ordering overseas material because of the threat of anti-dumping suits.

Producers briefly lifted prices, for wire rod, in August but the move was short-lived. Current figures are similar to those in July. Demand from the construction sector is steady but many customers have sufficient stocks of Chinese and Turkish material at present. Order intake at the domestic mills is slow.

Wide flange beam prices remain flat. There has been no push from scrap costs and demand is somewhat subdued as service centres are looking to reduce inventories before the year-end.

Demand for rebar is healthy, with good order intake at the domestic mills. Turkish material has become a little more expensive. The US government has decided not to impose dumping duties on rebar imports from that country.

Merchant bar transaction figures have weakened marginally compared with July/August. The market is not strong enough to support a rise. Turkish suppliers are offering angles at a slightly higher price than in July.

Source: MEPS International Steel Review – September Issue

Shanxi Taigang Stainless Steel commissions the successfully revamped 80-ton Duplex RH-TOP plant No. 1 from SMS Mevac

After the successful commissioning of the new 80-ton Duplex RH-TOP plant No. 2 (Ruhrstahl Heraeus process) in last April, Taigang Group International Trade Co., Ltd., and the plant operator Shanxi Taigang Stainless Steel Co., Ltd. (TISCO), both located in Taiyuan, China, have successfully revamped and commissioned the existing 80-ton Duplex RH-TOP plant No. 1.

SMS Mevac, Germany (www.sms-mevac.com) supplied the new RH plant and revamped the existing one in cooperation with its consortium partner SMS Siemag Technology (Beijing) Co., Ltd.

Shanxi Taigang Stainless Steel can now use both 80-ton RH-TOP plants for the refining of various high-quality steel grades with low levels of hydrogen. The plants will primarily be used for the treatment of steel for electric sheet production.

In both plants, the vacuum is generated by a four-stage steam-ejector vacuum pump with variable pressure reduction (RH-SC) for optimized process control.

SMS Mevac’s scope of supply for this project included nearly the complete basic engineering, the main part of the detail engineering, the delivery of key components for the mechanical, electrical and instrumentation equipment, the complete level-1 and level-2 automation systems as well as supervision of installation and commissioning.

Source: SMS Group

SMS Mevac RH-TOP plant in operation.

SMS Mevac GmbH is a company of the SMS group which, under the roof of the SMS Holding GmbH, consists of a group of global players in machinery and plant construction in steel and nonferrous metals processing. Its workforce of more than 13,800 employees generates sales worldwide totaling EUR 3.5 billion.

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MEPS – GLOBAL STEEL PRICE FALLS FOR FOURTH CONSECUTIVE MONTH

Despite a recent slight softening in US flat products transaction prices, they are still very high relative to the rest of the world, according to MEPS. This is attracting substantial volumes of imported material. Demand is slowly, but steadily, improving. However, supply has grown – not only from an inflow of offshore steel but also from domestic sources as capacity utilisation moves up towards 80 percent. Inventories are adequate for current conditions. Possible protectionist moves by the US government have created some caution amongst buyers but have not deterred overseas suppliers, so far.

Canadian mills report strong order books into October. The auto and energy sectors are performing well. Strip mill product prices are holding up. Service centre buyers are expecting a little price weakness in December, in the light of cheaper imports that are due to arrive before the close of the Great Lakes navigation. However, domestic steelmakers are doing everything in their power to keep selling values firm.

In China, Baosteel has announced it will cut major flat product official ex-works prices for deliveries in October, which is, traditionally, a peak month for steel consumption. Buyers were anticipating the decreases, which reflect sharp downward movements in the market place over the last two months. Meanwhile, output continues to grow and inventories remain in surplus. Export volumes are expected to expand, year-on-year, as producers cut overseas quotations to boost trade.

We have noted some recovery in domestic sales in the Japanese market since July, following April and June’s weakness. The supply/demand balance is likely to continue to improve over the next few months due to the upcoming peak business season. However, exports dropped again in July, year-on-year. Import volumes grew in the same time frame. The main source of the rise was supply from China. Flat product prices, with the exception of hot rolled coil, were unchanged in August and September.

The outlook for the South Korean steel scene remains pessimistic. Domestic producers are not only having to cope with the prospect of slowing economic growth in the second half of 2014 but are also trying to contend with significant import pressure. Chinese steelmakers are increasing export volumes, with their share of the South Korean market now well over 20 percent. Stagnant demand and oversupply have led to further substantial discounting. In Taiwan, major integrated producer, CSC, will leave domestic list prices for October/November contracts unchanged from those of September in order to counter cheap offers of material from China. Local consumption is slowly recovering.

Although Polish transaction values are unchanged in euro terms, they are slightly higher when measured in zloty due to currency fluctuations. Slab shortages, created by the crisis in Ukraine, are not affecting the production of strip mill products. Nevertheless, the mills are demanding price rises. In the Czech/Slovak region, the situation in Ukraine has negatively influenced supplies of raw materials and electricity. However, the outcome is not as bad as might have been expected. Market participants did not really anticipate any major developments in flat product demand, following the holidays, and this has proved to be the case.

In Western Europe, prices held steady through the summer. More recently, ArcelorMittal announced a proposed increase of €20 per tonne for all new business to be delivered in the final trimester. Nevertheless, most October orders have already been settled at the old prices. It remains to be seen whether the rise can be imposed for the remainder of the quarter. Most buyers believe that current consumption is not strong enough to support an advance, particularly as the producers’ raw material costs are reducing.
Source: MEPS International Steel Review – September Issue

FRENCH STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

In France, hot rolled coil prices are unchanged month-on-month according to MEPS. Negotiations are ongoing in many instances but buyers remain unsure that the higher price can be implemented.

Hot rolled plate basis figures are on the rise, following a significant reduction in volumes offered. German customers have been ordering large quantities in France, reacting to the slab shortages in Poland. This has led to expanding delivery lead times of nine to ten weeks.

Selling values, for cold rolled coil, are the same as those published in our July issue. Activity remains subdued.

The French vehicle manufacturers are faring slightly better than earlier in the year, which could help producers to lift coated steel prices. Consumption, in general, is tepid.

Prices for drawing rod are at the level reported two months ago. Those for the mesh quality are also the same as in July.

Producers are looking for an advance of €10/20 per tonne for Category 1 sections. This was still under negotiation at the time of MEPS research as many distributors still have sufficient stocks. The rise will be easier to secure on the larger sizes.

Construction activity is weak. Industry participants are still waiting for the government to implement measures to boost private construction. Public infrastructure is faring better. Producers have gained a modest, cost-driven price hike for rebar.

Merchant bar effective values are up through the application of the new size extras. There has been no revival in sales volumes.

Source: MEPS – European Steel Review – September Issue

Joint venture for steel wire rod processing to be established in Mexico

TOKYO, September 3, 2014 — Shinsho Corporation and Kobe Steel, Ltd. have agreed with Metal One Corporation; Osaka Seiko Ltd; Mexico’s Grupo Simec, S.A.B. de C.V.; and O&k American Corporation in the United States to establish a joint venture in Mexico to produce steel wire of cold heading (CH) quality.

Called Kobelco CH Wire Mexicana, S.A. de C.V. (or KCHM), the new joint venture will process steel wire rod into CH steel wire for sale to automotive parts manufacturers in Mexico. CH steel wire is used to make automotive fasteners and cold-forged products

KCHM will be headed by President Mitsufumi Konishi, who will come from Shinsho. The company will be established in the Santa Fe Industrial Park in Silao, state of Guanajuato, Mexico. Total investment is anticipated to reach approximately US$41 million (4.3 billion yen). KCHM will be capitalized at US$11.9 million (1.2 billion yen).

Shinsho is anticipated to hold 40 percent of KCHM; Metal One, 25 percent; Kobe Steel, 10 percent; Osaka Seiko, 10 percent; Simec, 10 percent, and O&k American, 5 percent.

The joint venture will employee about 80 people when it reaches full production. Operations are to start at the end of 2015. The new plant, with a production capacity of 40,000 tons per year, will have wire drawing machines, pickling equipment and heat treatment furnaces.

Mexico’s auto production of 1.5 million cars in 2009 rose to 2.93 million units in 2013, and solid growth is anticipated in the coming years. Many Japanese auto parts manufacturers are setting up operations in Mexico. This is anticipated to create substantial demand for CH steel wire, as well as a growing need for a local source of this material. By producing in an area of increasing demand, KCHM will be able to quickly supply CH steel wire of outstanding surface quality and contribute to expanding the business of its customers.

Source: KOBELCO

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ITALIAN STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

According to the latest report by MEPS, there are competitive offers, for hot rolled coil, from Russian suppliers in the Italian market. Domestic basis numbers fell to €400 per tonne in mid-July but have revived since then.

Hot rolled plate rerollers are attempting to lift basis values by €30/50 per tonne as their slab supplies have been curtailed, with a consequent increase in costs. However, freight rates to Germany, their target market, are sufficiently high to make their offers uncompetitive in that country. Domestic demand is stagnant. Nevertheless, we have noted a modest advance during recent negotiations.

Local steelmakers have secured a marginal rise for cold rolled coil during recent transactions, mainly due to a reduction in import competition.

The auto sector shows no real signs of improvement. The purchase of consumer goods is low due to the deflationary nature of the economy. Despite poor demand and fierce internal competition, buyers of coated coil have agreed to a very small advance.

Low carbon wire rod prices are static. A poorly performing construction sector continues to create lacklustre demand for recoil. Steelmakers have kept effective figures steady, after offering a small discount in July to try to stimulate sales.

Effective structural section prices continue to suffer from the state of the ailing building sector. Despite more expensive scrap, suppliers have been unable to persuade customers to pay more for steel products. Recent forecasts for investment in construction are quite pessimistic

Sales of rebar are at a very low level. The recent increase in September is likely to be short-lived. Merchant bar basis figures continue on a downward trajectory. The outlook remains bleak due to a lack of building activity.

Source: MEPS – European Steel Review – September Issue