DEVELOPING MARKETS HIGHLIGHTS – FROM MEPS INTERNATIONAL LTD

Brazilian steelmakers remain optimistic over the growth prospects for domestic steel consumption. The Instituto Aço Brasil (IABr) has reported that domestic finished steel sales in January totalled 1.58 million tonnes – down 8.5 percent, compared with last year’s figure.

Russian trading houses have questioned the necessity of the latest round of price hikes. The majority stress that the latest initiative is unsustainable and does not reflect real demand.

The outlook for the Indian market is unchanged. Local service centres plan to keep stocks to a minimum and only procure on a requirement basis..

The business climate in China is unchanged since our January report. Consumption volumes in the pre-Lunar New Year period were weaker than forecast. Inventories throughout the supply chain have expanded as a result.

Buying activity in Ukraine’s key consuming industries of construction and shipbuilding are expected to remain slow in March. Price volatility has hampered trading in Turkey. End-user groups envisage small price reductions next month, citing lower raw material costs.

Business sentiment has deteriorated in the United Arab Emirates. Local traders are extremely reluctant to purchase material in what they deem as precarious trading conditions. Several firms plan to observe the global reaction to the re-opening of the Chinese market. Moreover, Emirati rolling mills have opted to roll over their selling figures.

Source: MEPS – Developing Markets Steel Review – February Edition

MEPS GLOBAL STEEL PRICE DOWN 17.7 PERCENT IN PAST TWELVE MONTHS

Large volumes of imports, together with collapsing oil prices, have led to cuts in domestic steel production in the US. However, these have not been sufficient to stem the continual, month-on-month, decline in flat product transaction values. Buyers are reluctant to make large purchases as figures trend downwards. Moreover, the volumes of unsold foreign material at the docks are climbing. Some of this steel is now priced above current domestic levels as local steelmakers have responded to the import threat. Activity at the local steel plants in Canada is also slow due to high volumes of imported flat products. This, together with a dropping outlay on raw materials, has forced producers to make further substantial transaction price cuts.

Overcapacity problems, dramatically declining iron ore prices and disappointing economic indicators have driven steel selling values to record lows in China. Negative sentiment is growing. Recently, the Central Bank cut the bank reserve ratio in an effort to shore up flagging economic growth. Market players are waiting to see the impact on the steel sector. The Lunar New Year Festival (February 19-24) was later than it has been in the last few years. This led to buyers postponing steel order placement for a longer pre-holiday period than usual. Dealers were under pressure to sell ahead of the vacation. In overseas markets, export volumes reached a new high in January.

Japanese sources expect annual consumption in that country, in fiscal 2015, to be at a similar level to that recorded in the previous year. Competition from overseas continues to pose problems but the depreciation of the yen against the US dollar is acting as a slight deterrent. Nevertheless, recent figures show that annual imports, in 2014, increased for the first time in three years.

Concern amongst local South Korean steelmakers is growing as low-priced Chinese products continue to flood the market. There is also internal oversupply due to the number of new production facilities that have been brought on stream in recent years. All this material continues to weigh heavily on selling values, which have undergone further negative developments this month.

In Taiwan, flat product transaction values have continued to fall. Integrated producer, CSC, had anticipated further declines when it cut official domestic list prices for March by an average of 2.3 percent, compared with the figures published for the January/February period. Global markets are very competitive at present and both the steelmakers and manufacturers of finished goods have concerns about their ability to sell overseas.

Steel consumption in Poland during 2014 returned to pre-crisis levels. However, imports continue to gain market share. This month, domestic transaction values for flat products are unchanged in euros but have slipped a little when measured in zloty terms due to the weakening currency. Buyers say that these figures are valid until the end of March, although they admit that suppliers are talking of increases.

Czech/Slovak transaction numbers have not recovered since the Christmas holidays. Although the economy is improving there are no positive signals to support an immediate rise. However, since the political problems began in Ukraine there has been less pressure from the suppliers in that country, which used to be the main import influence on the Czech steel market.

Western European flat product makers claim that they have good order books, as the devalued euro gives them an advantage when selling in US dollar denominated export markets. Nevertheless, buyers have remarked that for first quarter business, which is now virtually closed, steelmakers did not push very hard to implement their proposed €30-40 per tonne advance. It is believed that the mills will try to enforce the hike when second trimester orders are discussed.

Source: MEPS International Steel Review – February Issue

NORDIC STEEL MARKET ROUNDUP FROM MEPS

Business activity levels are stable in northern Europe, according to MEPS. In Denmark, the mills managed to achieve a small part of their proposed price increase for hot rolled coil, due to material being quite scarce. Elsewhere, selling figures were unchanged, month-on-month, in local currency terms.

Commodity plate transaction values are unchanged from January, in the majority of countries researched. Demand is slow. Low-priced material is being offered from suppliers in Russia and China as they try to establish new markets. Transaction values remain depressed in Norway. The outlook for the first half of 2015 is gloomy.

No significant upturn in demand for cold rolled coil is foreseen in the first half of 2015. Most suppliers in Scandinavia were unsuccessful in their attempts to increase selling figures. However, producers in Denmark secured a small price hike. Hot dipped galvanised steelmakers struggled to implement planned increases despite relatively steady demand.

Selling figures for drawing quality wire rod were unchanged in February. Activity in the construction sector is disappointing. Consequently, demand for mesh is subdued and is expected to remain so for the foreseeable future.

Order intake for structural sections is at a reasonable level. Rolling schedules are filling up. An uptick in transaction values was secured before the reduction in raw material expenditure had any effect.

Rebar prices have not changed, month-on-month, following subdued demand and a drop in scrap costs. An increase is unlikely in the short term. There are competitive offers, in the market, from producers in Russia and Belarus.

Merchant bar prices have bottomed out. A small increase has been accepted by buyers. The mills are likely to seek further advances in the near term.

Source: European Steel Review Supplement – February Edition

Beisteel Group from China orders JCO® pipe forming press for 18-m pipes from SMS Meer

Beisteel Group from Haicheng, Liaoning Province, China, has placed an order with SMS Meer (www.sms-meer.com) for the supply of a JCO® pipe forming press for its plant in Yingkou, Liaoning Province. With this machine, the company will be able to expand its product spectrum to include longitudinally welded large-diameter pipes (LSAW) with a length of up to 18 meters. The annual capacity of the plant is approx. 250,000 tons.

Beisteel’s new JCO® pipe forming press is equipped with a variable-speed pump (VSP) control system. VSP drive units are suitable for installation in all pipe forming presses and can reduce energy consumption by up to 30 percent.
The JCO® pipe forming press produces the up to 18 meters long, longitudinally welded pipes in wall thicknesses up to 65 millimeters and steel grades up to X100. The pipe diameters range from 16 to 64 inches.

For the company the new machine offers the advantage that the JCO® forming process can be quickly changed to other pipe dimensions. This allows even small lot sizes to be produced cost-efficiently.

The new modular frame design will be used on this press for the first time enabling overall height and foundation depth to be minimized and flexible press lengths to be created. The press is equipped with a variable-speed pump (VSP) control system that permits an efficient hydraulic system with pressures up to 450 bar. As a result, the energy consumption is reduced by 30 percent compared with a conventional hydraulic system.

The SHAPE automation system developed by SMS Meer performs the fully automatic control of the forming process and thus enables consistently high pipe qualities to be produced, despite differing starting material properties.

The press is scheduled to go into production in the fourth quarter of 2016.

Source: SMS Group

EU STEEL PRICES RECOVER SLIGHTLY IN FEBRUARY FOR MOST PRODUCT FORMS – MEPS

European flat product suppliers claim that they have good order books, as the weakened euro gives them an advantage when selling in US dollar denominated export markets. This should contribute to an increase in their bargaining position during negotiations with domestic customers. However, buyers have remarked that for first quarter business, steelmakers did not push very hard to implement their proposed €30/40 per tonne increase. Indeed, we have noted only small changes from the December price level. It is believed that the mills will try to enforce the hike when second trimester orders are discussed. Although material from the Far East is not so attractive at present, the massive devaluation of the rouble has led to aggressive selling by Russian suppliers.

In Germany, buyers report that they have placed most of their first quarter orders at the same price as in the final trimester of 2014. All that is left to settle is a small amount of spot business. Customers are not anticipating the successful implementation of a significant rise in April either. They see no argument to support the initiative when mills are profitable and raw material costs have become so much cheaper. There is virtually no interest in third country offers at present. Service centres are quiet and have no urgent need to purchase.

Activity remains weak in the French market. Nonetheless, producers have started to implement a number of small price increases. They are benefitting from the situation at Ilva Taranto, which has been declared insolvent. Deliveries of sheets have been blocked – even material already on board ships. Buyers need to find other suppliers quickly. As a result, mills have increased their offer prices and customers are accepting them. In contrast, at the end of January, a number of large automotive service centres negotiated reduced prices for the benchmark hot rolled coil in the second quarter.

Italian steelmakers have followed ArcelorMittal’s lead by proposing small increases. Output from a number of local suppliers has been curtailed and the euro’s weakness against the US dollar is making import quotations more expensive. Nevertheless, the market is extremely quiet. Many customers, who bought in December for delivery in the first quarter, are now waiting to see how prices will develop. Final demand remains slow. However, basis values do appear to have moved up slightly in the marketplace. More time is necessary to verify if this will be the definitive direction.

UK buyers report that major suppliers offered similar prices to last month, for March business. Continental mills are not pushing for an increase because the fall of the euro against the pound sterling has already given them a price advantage. Most producers have yet to discuss April selling values but many customers do not envisage a rise. Distributors enjoyed good January sales and, overall, their profits are reasonable. However, resale margins have come under a little pressure since mill prices weakened in January.

Belgian customers concluded the majority of first quarter deals at the January level. Steelmakers have informed buyers that their goal for the second trimester is a hike of €10/20 per tonne. Purchasers are not sure that this is achievable but stocks are low, so companies will need to buy. Moreover, producers are more successful in export markets now and imports have become more expensive.

Suppliers continue to try to improve their prices in Spain but clients report that their efforts are less robust than expected. Although inventories are not particularly high, many distributors can afford to wait before ordering more material. Service centre sales are stable and there is a renewed confidence in the market.

Source: MEPS – European Steel Review – February Issue

Zhejiang Kingland puts spiral pipe plant from PWS into operation

Zhejiang Kingland Pipe Industry, based in Huzhou City, Zhejiang Province, China, has successfully commissioned a spiral pipe plant supplied by PWS (www.sms-pws.com). With its use of “PERFECT® arc” the plant meets Ecoplants criteria in terms of sustainability and offers energy savings of up to 30 percent compared to competitor plants. What’s more, productivity is increased by up to 20 percent.

Shaping and high-speed tack-welding of a pipe.
The plant comprises a spiral pipe forming and tack-welding machine for forming and pre-welding hot rolled steel strip as well as three downstream offline finish-welding stands. It has a capacity of 200,000 tons per year. Zhejiang Kingland is able to extend the spiral pipe welding plant by a fourth finish-welding stand and thus increase capacity to 260,000 tons per year.

The newly developed “PERFECT® arc” welding current sources are used for the welding machinery. No transformers are required here, the systems are operated using IGBT (Insulated-Gate Bipolar Transistor) power electronics, with the welding current completely digitally controlled. As a result the welding machines can attain an efficiency rate of over 90 percent. Compared to older welding techniques energy savings are up to 30 percent, depending on the operating point. In addition, productivity is increased by up to 20 percent, while process stability remains consistent.

Another benefit is the reduced transfer of heat into the pipe. For this purpose, the process parameters are adapted for each individual welding wire, in order to prevent unnecessary heat being transferred into the pipe material. This is particularly important for high-strength steels.

Zhejiang Kingland uses its offline spiral pipe welding plant to produce pipes to API 5-L PS2 standard with an outside diameter of 508 to 1,626 millimeters (equivalent to 20 to 64 inches) and wall thicknesses of 6.35 to 25.4 millimeters (equivalent to 1/4 to 1 inch). The pipes are 8 to 12.5 meters in length. The plant processes high-strength steels up to API grade X100.

Source: SMS Group

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