INTERNATIONAL STEEL PRICES PEAK AS CHINESE VALUES TUMBLE

The recent slide of Chinese steel prices is likely to threaten the short-term sustainability of world steel values. MEPS’ research indicates that decreases in selling figures in China are usually a precursor for negative price pressure to be applied on world markets.

Chinese steelmakers, which are responsible for around half of the world’s production, have previously been accused of selling material at below cost, in order to offload their excess supply. Amid a weak domestic trading environment, Chinese suppliers could be encouraged, in the coming months, to increase their export volumes. However, MEPS have reports that a number of Chinese steel manufacturers intend to bring forward planned maintenance work, as a consequence of the sliding spot prices.

Despite the likelihood that world prices have reached their peak in the current cycle, MEPS forecasts that global steel producers should retain a large proportion of the price gains they secured from the beginning of 2016. The introduction of a number of countervailing and antidumping cases, notably in North America and Europe, will give steelmakers, in these regions, a degree of protection from the direct threat of low priced imports.

No country is immune to the ripple effect caused by reduced Chinese export prices, which are traditionally the lowest in the world. However, the global steel marketplace is now, arguably, better prepared to withstand the repercussions.

Source: MEPS International Steel Review – April 2017 Edition

Order for the Reline of ArcelorMittal Zenica Blast Furnace No. 4

Project will increase working volume by nearly 15 %

Danieli Corus and ArcelorMittal have signed a contract for the reline of the Blast Furnace No. 4 operated by ArcelorMittal at their integrated plant in Zenica, Bosnia Hercegovina. This contract follows a number of successful blast furnace and hot blast system repair projects completed by Danieli Corus in the United Kingdom, Sweden and Germany.

After the reline, the furnace will have a 2003 m³ working volume, which is an increase from the existing 1765 m³. From the tuyere band upwards, the furnace will be rebuilt in-kind to its current design based on stave cooling. The hearth refractory and part of the hearth shell will be replaced based on a new design by Danieli Corus. Outside the furnace, portions of refractories in the hot blast main, bustle pipe and trough and runner systen will be replaced.

During the project, an Above Burden Probe with ancillary instrumentation and automation systems will be installed following the very satisfactory performance of such a system implemented by Danieli Corus in 2016 at a plant operated by ArcelorMittal elsewhere.

Finally, a thermocouple system for thermal monitoring of the furnace lining will be installed under this contract and Danieli Corus will provide operational assistance services during blow-down, salamander tapping and blow-in. The furnace reline is scheduled to take place during the first quarter of 2018.

Source: Danieli

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Liberty agrees in principle with ArcelorMittal to buy Georgetown steelworks

‘First step in major US growth plan’
Global industrial and metals group, Liberty House, has reached an agreement in principle with ArcelorMittal to purchase Georgetown Steelworks in S.C., including its 600,000-ton a year electric arc furnace and 750,000-ton a year rod mill.

The proposed deal, which follows several months of discussion, is subject to agreement on final terms between the two parties and completion of due diligence by Liberty over the coming weeks.

If completed as planned, the acquisition will give Liberty the opportunity to reopen and revitalise this pivotal business, which was an important part of the state’s industrial infrastructure for 47 years before its closure in August 2015. It would also mark the first significant step in Liberty’s plan to make major investments in the US steel industry.

Confirming the provisional agreement, John Brett, president and CEO of ArcelorMittal USA, said: “We are pleased to have an agreement in principle with Liberty House on the sale and restart of our former wire rod mill in Georgetown, S.C. We have achieved our goal of identifying a purchaser with extensive steel experience and a commitment to returning this site to its steelmaking capability. We hope the community will welcome this opportunity that will preserve the facility and equipment and create good jobs with good wages. We look forward to working with the city of Georgetown and all impacted stakeholders while we finalise this important agreement with Liberty in the near future.”

Executive chairman of the Liberty House Group, Sanjeev Gupta said: “This is a landmark day for Georgetown and its residents, particularly families with a previous stake in the steel industry who will now get a chance to rediscover what was lost. Our agreement in principle with ArcelorMittal opens the door to the eventual restoration of several hundred jobs, both directly and in the supply chain, and it gives this region’s economy a new industrial focus. We look forward to completing this agreement with ArcelorMittal and to securing the support of various stakeholders, including State Government and other authorities, to help make this vision a reality.”

Mr. Gupta added: “This is a key first step for us in the USA. We’re keen to apply the same low-carbon GREENSTEEL vision here as we are doing in the UK. Acquiring the plant at Georgetown, with its ability to recycle scrap steel in an arc furnace, gives us a strong platform from which to launch our strategy in the USA. We’re confident that, with the right support from the community and authorities, we can make Georgetown and other US steel plants competitive profitable and sustainable.”

Source: Liberty House Group

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NORDIC STEEL MARKET ROUNDUP FROM MEPS

According to MEPS, declining raw material costs and shrinking delivery lead times, from the mills, are putting negative pressure on hot rolled coil prices. Demand from the construction sector continued to be strong in some areas.

Hot rolled plate selling figures advanced in April, supported by fair consumption and decreasing import volumes. The mills continue to push for increases.

Cold rolled coil customers have healthy stock levels after increased buying activity in the early part of 2017. Consequently, order placement is slowing. Selling figures are holding up, so far.

The supply of hot dipped galvanised material remains tight. Delivery lead times are longer than for other strip mill products. Sales to the auto supply chain are being maintained at a high level.

Demand for wire rod is at a high level. The mills remain busy. Prices rose this month. With summer approaching, sales to the construction sector should pick up.

Rebar prices have held steady in April. However, declining raw material costs may lead to softening prices in the near future. In Finland, demand is said to be coming from the housing and commercial building sector, rather than from infrastructure projects.

Source: European Steel Review Supplement – April Edition

Hyundai issues final acceptance certificate for continuous bloom caster supplied by Primetals Technologies

Machine is part of Hyundai’s new special steel mill in DangjinContinuous caster produces 1.1 million metric tons of blooms per year

Korean steel maker Hyundai Steel issued the final acceptance certificate (FAC) for a continuous bloom casting machine supplied by Primetals Technologies to the Dangjin production facility. The caster is designed to produce 1.1 million metric tons of blooms per year. It is part of a new plant set up for the production of special steels for the automotive industry, for which Primetals Technologies also supplied a bar mill and a wire rod mill. The order had been awarded to Primetals Technologies in early 2014. The caster was started up in October 2015, one month ahead of schedule.

Hyundai Steel, situated in Incheon and Seoul, South Korea, belongs to the Hyundai-Kia Automotive Group and runs six production facilities in South Korea and a further one in China. The company has finished constructing a new plant at the Dangjin site to produce special steels for the automotive industry. In future, bar and wire are to be produced here as primary material for engine and gearbox parts. Annual production of 400,000 metric tons of wire rod and 600,000 metric tons of straight bar and bar-in-coil is planned.

The four-strand continuous bloom caster from Primetals Technologies has an annual capacity of 1.1 million metric tons. The caster is equipped with the mold-monitoring system Mold Expert. In combination with Dynacs 3D secondary cooling system and DynaGap 3D fully automatic roll-gap control with dynamic soft reduction in the strand guidance system ensure a uniformly high quality of the blooms cast. Still hot, these are then fed for direct use in the section rolling lines. This saves energy during reheating and improves operating safety because there is no need for transport of blooms, for example by crane.

Special mechatronics packages and an integrated automation solution ensure the necessary high product quality throughout the plant.

Source: Primetals Technologies

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EU GALVANISED COIL PRICES REACH EIGHT-AND-A-HALF-YEAR HIGH IN APRIL

The MEPS EU average hot dipped galvanised coil transaction value has soared, during the last twelve months, due to tight supply and rising zinc prices. The figure in April now stands at its highest point since October 2008. However, the upward price trend slowed significantly, this month.

Slight negative sentiment was noted, in several countries, during negotiations for purchases of hot rolled coil, in April. The tendency was strongest in the south of Europe, where cold rolled coil figures also softened.

Order books at domestic mills are healthy and capacity utilisation is high. However, third country import prices, from sources not affected by antidumping measures, are lower than a month ago and attractive to steel buyers. Moreover, many of these exporters quote delivery lead times that compare quite favourably with those of domestic steelmakers. For the moment, local producers are not targeting further price advances.

Conditions within the German manufacturing sector continue to strengthen. Steel consumption is firm. Service centres purchased substantial quantities of strip mill products in advance of recent price hikes. Inventories are now higher than at the start of the year and still growing. Availability of third country material, in standard grades, is plentiful, from the docks at Antwerp, at advantageous prices. The upward price momentum on domestically produced hot and cold rolled coil has stalled.

The French market remains stable in terms of activity and price. Buyers anticipate little change in the short term. Decoilers are carrying relatively large inventories, leading to reductions in the selling values of their hot and cold rolled sheets. Distributors are reported to be quite well-stocked or awaiting deliveries of orders already placed.

The weakening sentiment that hit the Italian market, this month, is reflected in domestic basis figures. Local demand appears to have slowed, whilst inventories at the service centres are high. End-users no longer need material urgently. Resale values, in general, are keeping pace with mill movements.

UK manufacturing output continued to expand, in March. Distributors report that sales of strip mill products are good and profit margins are maintained, in most instances. With the exception of hot rolled coil, forward prices are firm, this month. However, inventory levels throughout the supply chain are high. This has prevented further increases from being implemented. Buyers are behaving cautiously as they anticipate small price contractions over the summer.

Belgian suppliers no longer target an increase in basis figures for hot and cold rolled coil. Few advances were noted, with the exception of hot dipped galvanised coil prices, which were driven up by the cost of zinc. Distributors’ inventories are bloated, allowing them to postpone purchases at today’s prices. Customers now show more interest in third country imports.

Spanish manufacturing output continued to rise, in March. However, the rate of growth eased, for the third consecutive month. Underlying steel demand is satisfactory. However, the market is quiet. Service centres hold sufficient stock to cover present requirements, with no urgency to re-order. Consequently, basis values have softened. Distributors need to manage this reversal in the price trend to impart the least damage on their profit margins. For the moment, their selling values are decreasing at a faster rate than their purchasing prices.

Source: MEPS – European Steel Review – April 2017 Issue