Emerging Market Steel Producers Strive to Hold the Line on Prices

Brazilian steelmakers attempted to push through a price increase for October’s production campaign. Distributors and end-users condemned the latest initiative as “unwarranted”, considering the relatively quiet business conditions and soft economic fundamentals. Buyers are increasingly interested in purchasing third country material. Flat product suppliers are focusing on overseas sales.

Russian trading houses believe that price cuts are likely, in the short term, citing the close proximity to the end of the country’s construction season. End-users are keeping stock levels very low and only purchasing what is absolutely necessary, as a result. Export business is still slack, forcing producers to lower their export price quotations.

In the Indian steel market, sales volumes and selling figures remain subdued. Local trading houses are expected to persevere with cautious procurement strategies next month, in anticipation of weak shipments to the construction sector and other downstream industries. Third country import offers are available but buyers show little interest.

Business activity in Ukraine remains reasonable. Transaction values moved up, due to concerted efforts by the mills to cover their production costs. Nevertheless, local stockists are keeping inventories well under control. The year-end seasonal slowdown in demand is expected to begin, next month.

Procurement activity in Turkey was less vigorous, this month, than in September. Flat product selling values declined, owing to soft end-user demand, lower import quotations and decreasing raw material costs. Long product suppliers had mixed success in stemming the downward movement in prices. They supplemented poor domestic sales with increased shipments to overseas customers – particularly, in Southeast Asia.

Downstream demand for finished steel in the United Arab Emirates fell below market projections. Distributors are tightly controlling inventory levels because they expect the negative price trend to continue. Availability of foreign material at the ports is plentiful. Moreover, a pickup in shipments to the building sector is unlikely, in the short term.

Trading conditions are still lacklustre in the South African market. Service centres report that profit margins are being squeezed. With prices continuing to move up, traders are only buying what they need. The construction sector continues to suffer from a shortage of public and private investment.

Source: MEPS – Developing Markets Steel Review – October 2017 Edition

 

Star Wire (India) orders continues billet/bloom caster from Primetals Technologies

  • Improved quality of cast products
  • Improved yield from liquid steel to ready-to-roll-products
  • Automatized thus controlled casting process
  • First continuous billet and bloom caster for extended steel grade mix worldwide
  • First application of soft reduction for long products in India

Indian steel producer Star Wire Ltd. has placed an order with Primetals Technologies to supply a continuous billet/bloom caster for its steel plant in Ballabgarh, Haryana State. The caster is designed for the production of 30,000 to 60,000 metric tons per year, depending on the steel grades cast. It complements the existing ingot casting route. Goals of the project are to further improve the quality of cast products as well as the yield of the production process from liquid steel to ready-to-roll products. The casting process will be fully automated. This is the first continuous billet and bloom caster for an extended steel grade mix worldwide. It also features the first application of dynamic soft reduction for long products in India. The billet/bloom caster is planned to be started-up in late 2018.

The new continuous billet/bloom caster will have a machine radius of 12 meters and a metallurgical length of 20 meters. It will produce square billets with dimensions of 145×145 and 195×195 millimeters, with provisions being made for the future production of larger cross sections up to 350×350 millimeters. It will cast a wide variety of steel grades, including austenitic and martensitic heat resistant steels, tool and die steels, ferritic, martensitic and austenitic stainless steels, and other special steels.

Primetals Technologies will be responsible for the basic, detail and process engineering, the complete supply of caster process equipment including technological structure, hydraulic system, subsystems like auto-torch cutting machines and similar equipment. Among the key features are the level 2 process automation and technological packages, like DiaMold mold, the DynaFlex mold oscillator, LevCon automatic mold-level control and DynaGap soft reduction including the Dynacs secondary cooling model. The stopper rod mechanism, roller units, the withdrawal straightening unit (WSU) and electromagnetic stirrers are also part of the order.

Star Wire (India) Ltd. is an EAF-based mini mill for special steel grades located in Ballabgarh, near Delhi. Currently, production proceeds via Ingot and ESR (electroslag remelting) routes. The product portfolio includes special steel rolled products and forged products, steel castings and forging quality ingot. Star Wire (India) Ltd produces alloy steels for local and international automobile sector, aerospace, power sector and engineering sectors. In addition, Star Wire (India) Ltd operates a foundry to produce alloyed and stainless castings weighing up to 80 metric tons, mainly for the power sector, e.g. turbine casings.

The project is jointly carried out by Primetals Technologies Austria GmbH and Concast (India) Ltd., a Primetals Technologies Group Company.

Source: Primetals Technologies

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The MEPS World Average Steel Price Declines, in October, Despite Electrode Supply Shortage

The increased cost of consumables – notably graphite electrodes, which are used primarily in the scrap-based steelmaking process – has pushed European steel prices upwards. However, MEPS’ research, in October, suggests that the impact from the shortage of electrodes, has distinctly varied from region to region.

Electrode prices rose significantly as a result of capacity cuts, in China, as the government took steps to curb pollution. Global steel manufacturers have expressed their concerns – with the likelihood that producers of long products will limit steel supply if the situation intensifies.

In an attempt to recoup their rising input expenditure, many European steelmakers proposed the introduction of a formal surcharge. MEPS understands that steel buyers are resisting this initiative – instead preferring the mills to include the increased cost in the negotiated basis price.

In contrast, many major North American steel producers have long-term price agreements with electrode manufacturers. As a consequence, the influence of rising electrode values on US and Canadian steel selling figures has been minimal, so far. Many US steel market participants remark that regional mills are struggling to implement proposed list price hikes, owing to a reduction in other input costs, such as scrap and iron ore, in a sluggish trading environment. In fact, a number of North American long product suppliers announced significant list price reductions, for medium sections, beams and merchant bars, in an attempt to secure fourth trimester orders.

As a consequence of the price downturn in North America, the MEPS world average steel price declined by 1.7 percent, month-on-month, in October. Global steelmakers, keen to stay ahead of rising electrode costs, are likely to take measures to prevent further price erosion, in the coming months. However, MEPS predicts that global steel values will remain on a mildly negative trend for the remainder of 2017, because of weakening demand conditions.

Source: MEPS – International Steel Review – October 2017 Edition

MEPS EU Annual Average Steel Price in 2017 to Reach Six-Year High

The MEPS EU flat product price will average approximately €620 per tonne, in 2017. This represents the highest annual average figure since 2011. Steel prices commenced this year at a high level. Following a downturn in the second quarter, selling figures recovered during the summer.

The European market for strip mill products continued to perform satisfactorily, in October. Consumption remained strong, particularly, in the northern regions. According to the October edition of MEPS European Steel Review, basis values are relatively stable, with a number of minor upward adjustments. Major mills are still pushing for a hot rolled coil minimum figure of €560 per tonne in northern Europe and €540 per tonne in the south. Although this target has still to be reached, reduced availability, resulting from trade measures, continues to support the steelmakers’ proposals.

In September, German manufacturing recorded its strongest growth performance for more than six years. Underlying steel consumption remains robust, with both auto and construction companies requiring significant quantities. Nevertheless, basis values were unchanged, in October, failing to reach the target set by the domestic mills. Despite a lack of competitive import opportunities, buyers relate that availability from domestic sources is adequate.

French activity, in general, is at a good level, driven by vehicle manufacturing and construction. However, the sheet processing sector is little changed. The flat products market was quieter during early October, when fewer price rises were noted, than of late. Producers are pushing for further hikes but buyers are becoming more sceptical.

In Italy, official domestic basis prices remained static but, as mill order intake slowed, in early October, local steelmakers began to offer modest discounts for large purchases. Inventories at the distributors remain stubbornly high. This is reflected in poor resale margins. Dealers hope that most of this material will be cleared by the end of the financial year. Import competition waned with the introduction of new antidumping duties on hot rolled coil. Indian material is on offer at similar prices to EU domestic supply. So far, the industrial unrest at Ilva has not compromised delivery schedules.

UK construction activity fell sharply, in September, with commercial building and infrastructure particularly hard hit. However, the outlook for the manufacturing sector remains positive. Nevertheless, service centres report that demand from end-users is less buoyant than usual for this time of year. Resale margins continue to contract. Inventories linger at undesirable levels, despite modest reductions. Producers, noting a decline in recent transaction volumes, are waiting before issuing target prices for the first quarter of 2018.

A number of small price advances were noted in Belgium, compared with September’s numbers. Buyers feel that the market will stabilise at the current level, although the steelmakers are claiming higher figures for next year. Steel demand is healthy. However, the inflated mill prices are proving problematic for a number of distributors who are struggling to pass on the increases to their customers.

Growth in the Spanish manufacturing sector picked up, in September, reversing the recent trend. In the flat products steel market, basis values remained generally stable, in October, following the substantial rises in the previous month. Demand on the local mills is unlikely to improve to any great extent, at present, as huge quantities of imported material, ordered when overseas prices were very competitive, have still to arrive. New import quotations are much more expensive than previous offers. Although service centres are relatively busy, many have not succeeded in recouping the full amount of recent mill hikes.

Source: MEPS – European Steel Review – October 2017 Issue

Tosyali-Toyo starts sheet production with cold rolling complex supplied by Primetals Technologies

Produces cold rolled tin-plated, hot-dip galvanized and painted sheets
Marks expansion of Tosyali into the flat product sector
First application of the patented iBox pickling process in the Europe/MENA region

A cold rolling complex supplied by Primetals Technologies has commenced operations at the production site of Turkish steel producer Tosyali-Toyo Celik A.Ş. in the city of Osmaniye. The cold rolling complex consists of a coupled pickling line-tandem cold mill (PL-TCM), a tin-plated steel-sheet continuous annealing line (Tin-CAL) and a temper double-cold-reduction (Temper/ DCR) mill. It is designed to produce cold rolled tin-plated, hot-dip galvanized and painted sheets, mainly for export markets as well as for the domestic market. This marks the expansion of Tosyali into the flat product sector. The PL-TCM features the first application of the patented iBox pickling process in the Europe/MENA region. Primetals Technologies had received the order in late 2014.

Tosyali-Toyo was established in April, 2012. It is a 51%/49% joint venture of Turkish flats, longs and pipe producer Tosyali Holdings and the Japanese steel producer Toyo Kohan. For the new production complex in Osmaniye, Primetals Technologies was selected as the main contractor for the supply of PL-TCM, Tin-CAL and DCR, including the technological mechanical equipment, the electrical equipment and automation systems, as well as the field engineering, supervision of installation and commissioning, and training for operating personnel.

The PL-TCM features the patented iBox pickling process and a 5-stand 6-high Universal Crown Control Mill (UCM) for all stands. The stands are driven by an all-digital AC drive system and the high-response hydraulic gauge control (HGC) system Hyrop-F. A new state-of-the-art automatic gauge control (AGC) system is installed to ensure highly precise rolled strip thicknesses. With this equipment, the PL-TCM is designed to roll one million metric tons of high-quality, cold-rolled steel strip and black plate per year. Furthermore, the technology increases production efficiency and improves production yield and quality, and thereby obtains a higher return on investment. The PL-TCM processes strip with an entry gauge of 1.6 mm to 4.0 mm. Exit strip gauge is between 0.16 mm and 2.0 mm at widths ranging from 700 mm to 1,300 mm. Maximum line speed at the mill exit reaches 1,440 m/min. Grades processed include ULC (IF), HSLA and DD11-DD14 (DIN EN 10111). The maximum coil weight is 30 metric tons.

The Tin-CAL has an annual production capacity of 240,000 metric tons and further processes strip produced by the PL-TCM with a maxium strip thickness of 0.8 mm. The vertical-type annealing furnace consists of pre-heating (PHS), heating (HS), soaking (SS), first-cooling (1CS), second-cooling (2CS) and third-cooling (3CS) sections, all developed by Primetals Technologies. The annealing furnace is designed to flexibly produce T1 through T5. A compact-type tension leveler is installed after the cleaning section in order to correct material strip-shape deviations. This is important to ensure smooth and reliable operation in the annealing furnace, even at a maximum line speed of 500 m/min.

The temper DCR has an annual production capacity of 303,000 metric tons at a maximum line speed of 1,500 m/min. It consists of a two-stand UCM and is designed to perform double-cold reduction as well as two-stand temper rolling. In the DCR process, the annealed strip, after reduction in a tandem cold mill, is reduce rolled on the No. 1 stand and temper rolled on the No. 2 stand. This process imparts the strip with its prescribed mechanical strength. In two-stand temper rolling, the strip is temper rolled in both stands 1 and 2 to the prescribed elongation ratios to obtain the desired mechanical characteristics. Like the Tin-CAL, it processes strip produced by the PL-TCM. Entry strip gauges of 0.16 mm to 1.2 mm are used for temper-rolling, gauges from 0.18 mm to 0.4 mm for DCR-processed strip. DCR strip exit gauges range between 0.12 mm to 0.3 mm. Steel grades include T1 to T5 and DR6 to DR10.

Source: Primetals Technologies

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Global Construction Sector Bears the Brunt of Recent Steel Price Hikes

MEPS International Ltd. reports that in the period January to September 2017, the average cost of steel, purchased for use in the global construction sector, increased by 18.7 per cent. Less substantial, but double-digit steel price rises were also recorded for steeWorldCon16-17l used in the shipbuilding industry and machinery manufacturing sectors – according to data contained in the company’s September report – International Steel Review.

It is interesting to note that, despite the substantial upturn in the company’s published global average steel price for the construction sector, North American steel producers were, largely, unable to join the latest recovery in selling values, during the same period.

MEPS’ analysis indicates that global market prices, for steel products, used in construction, may falter in the medium term. However, average steel selling figures in early October, for supply to the main consuming regions, remain reasonably firm. Mill selling figures are predicted to continue to follow a similar pattern to the end of the year.

Traditional steel price decreases resulting from, weather related, market demand are likely to be partially offset by the high cost of mill input raw materials and consumables. However, the prospects of declining prices in the early months of 2018 are ever-present.

Source: MEPS – International Steel Review & MEPS World Construction Index