New World Order is Reshaping Stainless Steel Market – MEPS

Global stainless steel production reflects the shift in relative size and influence between the world’s established and developing economies. China’s crude stainless steel output has grown almost five-fold, since 2006, to represent close to 55 percent of the worldwide total, in 2016. In that year, India overtook Japan, to become the world’s second-largest stainless steel producer.

Indian stainless steel output continues to expand at a rate of 8 to 9 percent, year-on-year. It is expected to reach 4 million tonnes, in 2018. This growth is supported by increasing domestic demand from the automotive sector, as well as housebuilding and infrastructure. If the country’s production capacity outpaces its internal consumption, the need to cultivate export markets will arise. In this endeavour, it will face the task of all unfamiliar suppliers – to convince customers, particularly in the West, that its product quality is acceptable.

China is several steps ahead of India on this journey. Its stainless steelmaking capabilities have increased immensely, over the past two decades. Output overtook domestic consumption several years ago, forcing Chinese producers to seek overseas customers. In the face of global competition and a widespread economic slowdown, Chinese sellers cut their prices, in an effort to secure sales. This led to antidumping charges – and punitive tariffs, or duties – being applied by many countries, against Chinese imports.

The recently announced joint venture between China’s Tsingshan Group and the US producer, ATI, will, subject to regulatory clearance, allow the former party to ship slabs to the USA, for rolling and further processing. The resulting cold rolled sheets will then be sold, by ATI, as, effectively, a domestic product. We should expect this model to become more widespread as cost-effective stainless steel output expands, in the developing world.

Source: MEPS – Stainless Steel Review – November 2017 Issue

North America Steel Price Forecast – MEPS

MEPS predicts that strip mill product selling figures will increase, modestly, in December. Price hikes by the domestic steelmakers are likely to be, only partially, successful because distributors are expected to purchase cautiously as they consider their year-end cash positions and keep inventories to a minimum. The upturn for hot rolled coil is forecast to be greater than that for cold rolled and galvanised material.

Plate transaction values should stabilise, in the immediate future. Mill price hike initiatives should prevent further erosion. However, gains will be difficult to achieve due to subdued demand.

MEPS anticipates that long product selling figures will be steady until the end of the year. Delivery lead times from local steelmakers are relatively short. However, third country imports are uncompetitive. Furthermore, scrap costs have bottomed out and expenditure on graphite electrodes remains elevated.

A degree of restocking in the supply chain and an upturn in scrap costs is predicted to aid North American producers’ ambitions to lift flat and long product prices, in the first quarter of 2018.

Source: MEPS – International Steel Review – November 2017 Edition 

Ultra high-strength steel Fives’ furnaces change the game

Shougang Jingtang United Iron & Steel, China again contracted Fives to design and supply a new galvanizing line furnace and inductors dedicated to the production of ultra high-strength steels at its Caofeidian facility.

Ultra high-strength steels (UHSS) are complex materials, with carefully selected chemical compositions and multiphase microstructures resulting from precisely controlled heating and cooling processes. Fives offered its best available technologies: Stein Digiflex® furnace and CELES inductors for this new continuous galvanizing line with 360,000 tons of annual production.

The Stein Digiflex® furnace will be equipped with a FlashCooling® system operating at 75% of hydrogen in order to reach unrivalled cooling performance. In addition, such system offers flexibility in operation in terms of a cooling rate and temperature cycle control, as well as it enables the uniformity of cooling which is critical for production of the third generation steel grades to meet stringent requirements for the automotive application. The proprietary combustion system AdvanTek® WRT 2.1 features energy efficiency, fuel flexibility and ultra-low NOx emissions, which has become the critical criteria for China’s environmental policy. As a part of a new thermal cycle, the three CELES longitudinal flux inductors for precise adjustment of the thermal processes will permit to produce high value-added steel grades, such as DP, CP, Q&P, etc. Moreover, Fives has engineered a selective oxidation system to accurately control the oxidation process and ensure a perfect coating mandatory for automotive steel grades.

In total, Shougang Jingtang United Iron & Steel will operate six Fives’ furnaces at the Caofeidian facility, including the new continuous galvanizing line, reaffirming the steelmaker’s target to become a major player among automotive steel producers.

Source: Fives

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EU Steel Market Prices and Demand Stabilise as Year-end Approaches

Strip mill product basis prices were relatively stable, in most European markets, according to the November edition of MEPS European Steel Review. Major mills continue to promote further increases, with little response from buyers. However, steelmakers remain confident that modest rises can be implemented early in 2018. Distributors, although working through their overblown inventories quite successfully, are under no pressure to purchase immediately. Nevertheless, availability has tightened as a result of trade measures. This, together with firm underlying consumption, continues to support the producers’ proposals.

The manufacturing sector, in Germany, continued to grow strongly at the start of the fourth quarter. Steel consumption remains robust, with both auto and construction companies requiring considerable quantities. Import volumes are restricted to, mainly, small tonnages. Despite this lack of competitive overseas opportunities, buyers relate that availability from domestic sources is adequate for their needs. Basis values were largely unchanged, in November, still failing to reach the targets set by local mills.

French prices remain relatively stable. Demand is quite good, although few orders were booked, in October. Buyers were expecting prices to decline but, as this was not the case, they have now resumed purchasing. Although the mills continue to propose increases, customers anticipate no changes up to the year-end.

Most fourth quarter deals are now finalised, in Italy, at similar values to those recorded last month. A degree of uncertainty surrounds the forward pricing scene. Buyers are waiting before committing to large volume orders. In fact, several major service centres are still destocking for the year-end. New import deals are virtually at zero. Quotations from Turkey, India and Vietnam are close to European levels.

Although the UK market is quiet, some service centres report increased activity levels, in early November. The outlook for the manufacturing sector remains positive but auto output is slowing and construction activity has fallen sharply. Resale margins, at the distributors, continue to be problematic as old, cheaper priced stock is still working though the supply chain. Producers, noting a decline in recent transaction volumes, are slow to issue target prices for the first trimester 2018.

Belgian demand is robust, although sales tonnages are shrinking, in view of the need to cut inventory levels before the end of the year. Strip mill product basis values are stable, for the moment. Suppliers are proposing small increases for January 2018 production. However, distributors do not believe that present demand can justify the imposition of further hikes. They are already struggling with their resale margins. Third country imports are no longer attractively priced.

The Spanish manufacturing sector gained further growth momentum, in October. Demand for strip mill products is stable. Basis values remained steady, in November. Orders, for the local mills, are unlikely to improve, to any great extent, in the near term. Large quantities of imported material, especially cold rolled and galvanised coil, ordered when overseas prices were very competitive, are still arriving. New import quotations recovered, this month. Service centre activity is fairly slow.

Source: MEPS – European Steel Review – November 2017 Issue

Nucor to Build Rebar Micro Mill in Missouri

CHARLOTTE, N.C., Nov. 21, 2017 /PRNewswire/ — Nucor Corporation (NYSE: NUE) announced today that it will build a rebar micro mill in Sedalia, Missouri, about 90 miles east of Kansas City. Following its approval by the Missouri Development Finance Board, the project was formally announced at an event with Governor Eric Greitens held at Lowell Mohler Assembly Hall.  The new micro mill project represents at least $250 million in new investments and is expected to start-up in 2019 pending the final approval and award of state and local incentives as well as required permits and regulatory approvals.

“This rebar micro mill project is consistent with our long-term strategy for profitable growth and builds on our position as a low-cost producer,” said John Ferriola, Chairman, CEO & President of Nucor. “Strategically positioning this micro mill in the Kansas City area will give us a sustained cost advantage over other domestic steel producers supplying rebar from outside the region.”

Rebar supply to the Kansas City, upper Midwestern and Plains markets currently travels long distances, giving the micro mill in Sedalia a logistical advantage. This location will also allow the Company to take advantage of the abundant scrap supply in the immediate area provided by Nucor’s scrap business, The David J. Joseph Company.

The rebar micro mill investment is expected to create 255 full-time jobs paying an average annual salary of approximately $65,000. In addition, the project will create 450 temporary construction jobs.

“We would like to thank state and local officials who have assisted us with the project, including Governor Greitens, the Missouri Department of Economic Development, the City of Sedalia, Pettis County, and Kansas City Power & Light,” said Dave Sumoski, Executive Vice President of Merchant and Rebar Products. “Our bar mills have been the foundation of our company, and we believe strategically supplying underserved markets will allow our bar business to continue to generate significant value in the future.  We are encouraged by the tremendous support received by the state and local community in Missouri, and Nucor has decided to pursue an additional micro mill project.  Two regions are currently under consideration in the Southeastern United States for this additional project.”

Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada.  Products produced include: carbon and alloy steel — in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh.  Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America’s largest recycler.

Source: Nucor Corporation

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Nucor to Build Merchant Bar Mill at Nucor Steel Kankakee, Inc.

CHARLOTTE, N.C., Nov. 15, 2017 /PRNewswire/ — Nucor Corporation (NYSE: NUE) announced today that it will build a full-range merchant bar quality (MBQ) mill at its existing bar steel mill located in Bourbonnais, Illinois. The MBQ mill will have an annual capacity of 500,000 tons and is expected to cost $180 million. The project will take approximately two years to complete.

“This new MBQ mill is right in line with our long-term strategy for profitable growth. It takes advantage of our position as a low-cost producer to displace tons currently being supplied by competitors outside the region. It also builds on our market leadership position by further enhancing our product offerings of merchant bar, light shapes and structural angle and channel in markets in the central U.S.,” said John Ferriola, Chairman, CEO & President of Nucor. “Combined with our other full-range bar mills, we are now strategically located to supply all markets with high-quality bar products and exceptional service.”

The Midwest region is one of the largest markets for MBQ products, and Nucor is ideally situated to take advantage of existing operating and commercial capabilities to meet this regional demand. This project will allow Nucor to fully utilize the Company’s existing bar mill by optimizing its melt capacity and infrastructure that is already in place. It will also take advantage of an abundant scrap supply in the region, as well as the Company’s commercial footprint in the central United States. Nucor Steel Kankakee, Inc. will continue to be a supplier of quality reinforcing bar products.

“We are very excited to bring new investment and jobs to the Kankakee community and the State of Illinois,” said Johnny Jacobs, Vice President & General Manager of Nucor Steel Kankakee. “We would like to thank Governor Rauner, state and local officials, our teammates and the entire community for their support of this project.  Nucor’s bar mills have been a cornerstone of our company and, as this project demonstrates, they are an important part of Nucor’s future.”

Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada.  Products produced include: carbon and alloy steel — in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh.  Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America’s largest recycler.

Source: Nucor Corporation

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