2016 FORECAST TO BE ANOTHER DOWNBEAT YEAR FOR STAINLESS STEEL

The outlook for the global stainless steel market is disappointing, as purchasing activity remains weak and transaction values continue to slide. The downward price trend encourages buyers to delay placing orders, in the belief they may get a better deal if they wait. This adds to the usual, seasonal pattern, whereby stockists and end-users reduce their purchase volumes, in order to minimise their year-end inventories.

Market participants have, for some time, been, cautiously, predicting some improvement in business conditions during 2016. However, as yet, there have been few indications of any impending pickup in the fortunes of stainless steel-consuming industries.

Furthermore, the recent sharp drop in the LME nickel price has led MEPS to moderate its forecast for increases in the cost of the metal and, consequently, stainless steel selling figures during the first half of next year. Nickel costs are expected to peak in May 2016, with stainless steel prices reaching a high point during the following month. However, our forecast world average figure for type 304 cold rolled coil, in June, is only 11 percent higher than the low value in the cycle, recorded this month. Prices are predicted to soften, slightly, thereafter.

Nickel, along with other commodities, suffered a drop in value in the wake of the Paris terror attacks and the suggestion that the US Federal Reserve will raise interest rates in December. LME nickel daily figures reached their lowest mark since May 2003. Commodity prices have rebounded, somewhat, after reaching a minimum level on November 23.

The prospect of a sustained recovery in nickel prices is hampered by the combination of weak demand from stainless steelmakers, production overcapacity and extensive existing inventories. Although LME stocks have fallen from a peak of over 470,000 tonnes, in June, the current figure of around 411,000 tonnes remains far too high to support any fundamentals-driven price rally.

Global production capacity, for nickel, remains far in excess of the present, subdued demand from the stainless steel industry. Chinese producers are due to meet, in late November, to discuss the possibility of reducing nickel output. Other miners, around the world, are also being forced to consider suspending operations at their least cost-effective facilities.

If these measures can be combined with an upturn in stainless steel consumption, there may be some hope of a recovery in nickel and stainless steel prices.

Source: MEPS – Stainless Steel Review – November Issue

DEVELOPING MARKETS STEEL PRICE ROUNDUP FROM MEPS

The outlook for demand in Brazil is unchanged. Local steelmakers are under pressure to reduce production targets in line with steel consumption rates.

Russian steel producers are growing more pessimistic about the prospects for domestic finished steel consumption in the first quarter of 2016. The majority have continued to search for new overseas buyers.

The market for finished steel in India has remained subdued in the post-Diwali period. Local service centres are extremely reluctant to purchase material in, what they deem as, tricky trading conditions. End-users have been wary of finalising purchases in a falling market.

The Ukrainian steel market has entered a period of low seasonal demand. Shipments to industrial companies have continued to deteriorate in the trading period surveyed.

Turkish steelmakers are increasingly looking overseas for new buyers. Local stockists plan to persevere with conservative inventory levels in the short term.

The business environment remains challenging in the United Arab Emirates. Local construction firms are unwilling to purchase more steel than they need to meet their near-term requirements. The downward movement in import quotations has made them reluctant to do any significant deals at this stage.

Mexican distributors plan to hold off purchasing until January to see how demand develops. The National Chamber of Iron and Steel Industry (CANACERO) continues to press the government to impose stricter trading rules and criteria for importing steel.

Source: MEPS – Developing Markets Steel Review – November Edition

 

New contract for technical modernization of slab CCM into 12-strand billet CCM at EVRAZ West Siberian Metallurgical Plant

Technical modernization of slab CCM will provide the possibility for the enterprise to fully avoid casting to ingots, which will significantly increase production efficiency and will reduce production cost of commercial steel rolled product and improve its quality.

The new CCM will be able to use open stream casting method for the entire volume of steel cast, which will also allow reducing cost of production.

Due to technical modernization of slab CCM we will have a brand new 12 strand continuous billet casting machine. Such units are not yet available anywhere in Russia, – pointed out Aleksey Ivanov, vice president of EVRAZ, manager of “Steel” Division. – Up-to-date equipment will ensure high casting speed – over 6 meters per minute. With that the production capacity of CCM will make around 2,4 million tons of continuously cast billet annually. Provided that revamping of the existing billet CCM is being completed at the Works these days, we will be able to produce up to 4,6 million tons of square section billet with the two machines in the future.

Design documentation of slab CCM technical modernization shall be developed until the end of year 2016. During 2017-2018 DANIELI will manufacture and supply equipment, and following that will assemble and adjust operation of all units. Completion of modernization is scheduled for 2018.

With this new order, EVRAZ confirms DANIELI FastCast and PowerMould™ technology as their choice for high productivity CCM of long products.

Source: Danieli Group

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NORDIC STEEL MARKET ROUNDUP FROM MEPS

Nordic steel prices for flat and long products continue to be under pressure due to stock control measures. Meanwhile, import penetration from Russia and China remains high, according to MEPS.

In November’s issue of the European Steel Review Supplement, MEPS reports that business activity across the flat and long products sector is relatively weak going into the new year with no immediate signs of demand recovery in the first quarter of 2016.

There is growing evidence that Nordic customers are prioritising their end-of-year stock position, which is constraining demand on the steel mills. Increased import volumes from outside the EU are putting further downward pressure on domestic prices.

Significant price reductions have been secured by wire rod customers, while short lead times are reportedly being offered by medium section and beams producers.

Low-priced material from China and Russia is putting downward pricing pressure on the reinforcing bar supply chain. Market activity for merchant bar is fair but margins are low.

Source: European Steel Review Supplement – November Edition

Revamp by SMS group successfully completed in just four and a half weeks

ArcelorMittal Belval commissions world’s largest straightener for sheet piles.

ArcelorMittal Belval, based in Esch-sur-Alzette, Luxembourg, has started up the CRS® Compact Roller Straightener supplied by SMS group. It only took four-and-a-half weeks to dismantle the previous equipment and install the new straightener, including successful commissioning. The new straightener can handle the largest sheet piles currently produced in the world, expanding the range of products producible at Esch-sur-Alzette.

SMS group supplied the double supported CRS® sheet pile straightener on a turnkey basis.

The scope of supply comprised the mechanical equipment, electrics and automation, the media supply systems and all the roller change equipment.

The straightener, which features a fully hydraulic adjustment system, is the first of its kind to be used exclusively for sheet piles. It has been specially designed for straightening Z-type and U-type sheet piles as well as flat sheet piles. Equipped with double supported design instead of the conventional cantilever design, the machine provides for a balanced force distribution, leading to better straightening results especially for extra wide sheet piles.

The manipulator can change all nine straightening rollers in less than 40 minutes. To facilitate roller changing, operator side housing can be moved out.

Straighteners of the CRS® design, an SMS group development, have been successfully in operation in numerous rolling mills for sections and semi-finished long products. The machines are today’s state of the art.

The challenging revamping project for ArcelorMittal Belval, implemented on a turnkey basis, is yet another proof of the SMS group’s leadership position as a supplier of technology for section mills.

Source: SMS Group
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EU STEEL PRICES CONTINUE TO SLIDE IN NOVEMBER

The downward trend in EU flat product selling values persists. The poor economic outlook in many parts of the world, combined with global overcapacity, has led many international suppliers to focus on the West European steel market. Meanwhile, the traditional destocking period, before the end of the year, has resulted in a seasonal slowdown in demand. The differential between offers from producers in the north and south of the region continues at an unsustainable level.

German mills have reduced prices in an attempt to improve their unsatisfactory plant utilisation rates. Demand has slowed a little in the second half of the year, leaving distributors with surplus stock, which will negatively affect their balance sheets. Consequently, service centres are trying to adjust their inventory levels. This has led to reduced quantities being placed with the mills. Ordering may take place at the end of 2015, to provide them with the material to operate in early 2016.

In the French market, prices have continued to fall significantly, since our last report. They are still under threat from imported steel. Stockholders describe the general level of end-users’ activity, in terms of volume, as “fairly satisfactory”. Negotiations with the auto industry for first half 2016 contracts will start at the beginning of December, with the mills under pressure to make reductions. If they concede, it will prove difficult for them to raise first quarter prices for the rest of industry.

In Italy, domestic producer, Ilva, has been price-matching third country import offers, in November. Huge volumes of Chinese material, ordered earlier in the year, are sitting at the ports. Overall, underlying demand is quite stable. Service centres want to destock for the end of the year, even though they are already placing some orders for delivery in 2016. Resale values are very low as end-users constantly push for concessions.

UK basis values have been put under pressure by third country importers and mainland European suppliers, taking advantage of the strong pound. Distributors report that demand, although quieter than in the summer, has still been reasonably healthy. Their profit margins remain good. There is more intertrading than normal between service centres because their stocks are low, as are traders’ inventories at the docks.

Belgian selling values were under pressure, in November. Many cheap offers from China have influenced market values, despite few orders being concluded. Buyers have been purchasing from Russian sources at competitive levels. Large quantities of material have been arriving from southern Europe, especially from Spain, with very short delivery lead times – one week only, in some instances.

In Spain, sales have improved a little but competition from ever decreasing Chinese prices is hitting both the mills and service centres. Delivery lead times are short, enabling customers to work with lower stocks.

Source: MEPS – European Steel Review – November 2015 Issue