Further Uncertainty Created by Section 232 Exemptions

US steel mills lifted selling figures rapidly, in recent months, due to the expectation of rising import prices and supply shortages, following the Section 232 investigation. After the announcement of a blanket 25 percent tariff, it was specified that NAFTA partners, Canada and Mexico, would be excluded from the measures. Subsequently, a number of countries sent delegations to the US to discuss the possibility of exemptions.

On March 22, the day before the tariffs went into effect, Trade Representative Robert Lighthizer stated that the imposition of duties would be “paused” for material sourced from the European Union, Argentina, Australia, Brazil and South Korea, while further discussions take place. It is expected that other nations, such as Japan, may attempt to petition the US authorities for a temporary reprieve. Despite the exclusions, US steelmakers are expected to continue to attempt to lift selling prices, in the coming months, as delivery lead times extend.

The manner by which the policy has been implemented has caused a great deal of uncertainty for supply chain participants, both in the US and globally. Domestic end-users voiced their concerns that elevated steel prices would result in a loss of competitiveness. Steel mills worldwide feared that imports would be redirected into their local market. Furthermore, the blunt nature of the proposed 25 percent tariff did not take into account the complexities of the steel sector. A number of finished steel products are not produced in sufficient quantity, in the US, to meet local market requirements. Furthermore, steel slabs imported by re-rollers, predominantly those located on the West Coast, are a fundamental part of the supply chain.

The appeals process for exclusions was formalised just days before the tariffs came into effect. The market is now likely to endure further uncertainty, in the coming months, as the full extent of the measures are revealed.

Source: MEPS – International Steel Review – March 2018 Edition 

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Primetals Technologies to supply EAF Quantum electric arc furnace and ladle furnace to Guilin Pinggang

  • EAF Quantum furnace has a tapping weight of 120 metric tons and can be charged with many different kinds of steel scrap
  • Twin ladle furnace has a capacity of 120 metric tons of liquid steel
  • Very low electrical energy consumption per metric ton of liquid steel
  • Plant concept reduces working costs and CO2 emissions
  • Short project duration

Guilin Pinggang Iron and Steel Co., Ltd. (Guilin Pingang), a Chinese steel producer, has awarded Primetals Technologies an order to supply an EAF Quantum electric arc furnace with a tapping weight of 120 metric tons and a 120 metric ton twin ladle furnace. The furnaces will be constructed in a new production facility in Pingle near Guilin in Guangxi Province, which is intended to serve the growing market for rebars. The EAF Quantum is designed to handle scrap steel of varying composition and quality. The electrical energy requirement of the electric arc furnace is extremely low because the scrap is preheated. This reduces both the working costs and the CO2 emissions. The new furnaces are scheduled to be commissioned in the second quarter of 2019.

Guilin Pinggang is privately owned and located in Pingle near Guilin city in Guangxi Province. The enterprise has an annual production capacity of 1.2 million metric tons, and produces rebars, wire and other steel elements for the construction industry. Primetals Technologies will supply the complete mechanical and electrical process equipment for the new EAF Quantum electric arc furnace and the twin ladle furnace. The balance of plant equipment and services will be provided by a local design institute.

The EAF Quantum developed by Primetals Technologies combines proven elements of shaft furnace technology with an innovative scrap charging process, an efficient preheating system, a new tilting concept for the lower shell, and an optimized tapping system. This achieves very short tap-to-tap times. The electric energy consumption is considerably less than that of a conventional electric arc furnace. Together with the lower consumption of electrodes and oxygen, this gives an overall advantage in the specific conversion cost of around 20 percent. In comparison to conventional electric arc furnaces, total CO2 emissions can also be reduced by up to 30 percent per metric ton of crude steel.

Source: Primetals Technologies

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Section 232 Reservations Unsettle the Emerging Steel Markets

The trading climate in the Brazilian steel market is unchanged since our February report. Risk-averse traders plan to retain minimum inventory in the interim, highlighting that the recent upward trend in local mill transaction values is unsustainable.

The business environment is challenging, in the Russia. Distributors conveyed frustration with the price increases proposed by their domestic suppliers. The latest initiative is viewed as unjustified and is not supported by underlying demand. We note a reluctance on the part of end-users to commit to forward orders.

Challenging trading conditions persist, in India. Bearish stockists are reluctant to sign contracts with the mills at the moment. Uncertainties persist regarding the sustainability of the latest price increases. Correspondingly, end-users are adopting a wait-and-see approach.

The trading atmosphere is unchanged, in Ukraine. Stockists plan to postpone purchases until the pricing scenario is more transparent. We note little appetite for purchasing at present amongst construction firms.

In Turkey, buyers are reluctant to purchase as they would like to get a clearer picture of the market. Speculation is rife that local steelmakers will persevere with aggressive pricing positions, in April. Meanwhile, Turkish exporters conveyed disappointment after the US Department of Commerce released its wire rod investigation findings. Wire rod products from Turkey were found to have received countervailing subsidies from the government.

Business sentiment is unchanged, in the United Arab Emirates. Distributors are holding off purchasing to see how demand develops. Moreover, Emirati rolling mills kept selling figures unchanged for April’s production programme. Export opportunities remain limited outside the GCC region.

South Africa’s Department of Trade and Industry (DTI) has stressed that the country’s steel and aluminium exports do not represent a threat to either US industry or jobs. As a result, the DTI made a formal submission for exemption status, in accordance with the Section 232 proclamation. Meanwhile, the South African Iron and Steel Institute (SAISI) and the Steel and Engineering Federation of Southern Africa (SEIFSA) highlighted that the exclusion from the US market put an estimated 310,000, steel related, jobs at risk.

In Mexico, distributors and service centres struggle to adapt to the unpredictable business environment. The majority are booking for immediate requirements only, due to continuing price fluctuations. The National Chamber of Iron and Steel Industry (CANACERO) welcomed the US government’s decision to temporarily exempt Mexican steelmakers from the Section 232 import tariff. However, the association expressed concern that the exemption is not permanent, and is being used as part of the re-negotiation of the North American Free Trade Agreement (NAFTA).

Source: MEPS – Developing Markets Steel Review – March 2018 Edition

Primetals Technologies to modernize continuous slab caster for Angang Iron & Steel

  • Modernization to improve productivity and product quality
  • Greater flexibility for product mix and casting formats
  • Fast project implementation will minimize downtimes

Angang Iron & Steel Group Co., a Chinese steel producer, has awarded Primetals Technologies an order to modernize the twin-strand continuous slab caster CCM1 in steel works no. 3 at its Anshan plant. The objectives of the project are to improve the product quality and productivity, and also to increase the flexibility of the processing of different steel grades and casting formats. The casting plant will be equipped with modern equipment and technology packages, including DynaGap Soft Reduction to improve the interior quality of the slabs. In order to minimize shutdown times, the project planning attached particular importance to a quick implementation. The modernization is scheduled for completion in the third quarter of 2018.

Angang Iron & Steel Group Co. is located in Anshan in Liaoning Province. It has an annual production of more than 33 million metric tons (2016), and is one of China’s leading steel producers. Steel works no. 3 in Anshan employs a conversion route through a basic oxygen converter, ladle furnace and RH plant. It has an annual capacity of five million metric tons and supplies two casting plants. Continuous slab caster CCM2 has already been modernized by Primetals Technologies and has been back in successful operation since July 2015.

Twin-strand continuous slab caster CCM1 in steel works no. 3 has a production capacity of 2.5 million metric tons per annum. Its machine radius is nine meters and metallurgical length 36 meters. The caster produces slabs with a thickness of 230 millimeters in widths ranging from 990 to 1,550 millimeters. The maximum casting speed is 2.1 meters per minute. The plant casts ultra-low carbon to high carbon steels, peritectic, deep drawn and HSLA steels, as well as micro-alloyed, low-alloyed and silicon steels.

The modernization project includes equipping continuous slab caster CCM1 with a new tundish car and a new tundish with LevCon mold level control. The straight cassette-type Smart Mold is equipped with the Mold Expert breakout detection system, DynaWidth for automatic width adjustment, and the DynaFlex mold oscillator. Bender and Smart Segments as well as I-Star rollers are used in the strand-guiding system.

The Dynacs secondary cooling system dynamically calculates and controls the temperature profile along the entire strand. This enables the working points of the strand cooling, and thus the final strand solidification, to be determined precisely as a function of the casting speed, slab format and steel grade. DynaGap Soft Reduction is used to improve the interior quality of the slabs. The roll gap is dynamically adjusted during the final solidification in accordance with the operating points calculated by Dynacs. This minimizes segregation in the center of the strand. The secondary cooling uses DynaJet spray cooling with a center/margin setting.

Primetals Technologies will handle the basic engineering of the tundish, the ladle shroud, the dummy bar system, the supporting structure and the maintenance stands, as well as the detailed engineering for the shroud manipulator, the tundish car, mold and mold oscillator, the segments of the strand-guiding system, the secondary cooling and the dummy bar. The automation system and the consulting services for the construction and commissioning are also part of the order.

Source: Primetals Technologies

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EU Steel Prices Rise Despite New US Import Tariff Announcement

The recent US announcement of a 25 percent tariff on steel imports certainly created a great deal of speculation and uncertainty in the EU market. It dominated discussions during MEPS research, in March. However, purchasing and prices were not directly affected by the news.

European strip mill product basis values continue to move up. Figures are still below the steelmakers’ proposed minimum target levels but producers appear confident that these will be reached. The initiative is supported by good order books, extending delivery lead times and the low availability of imports, as a result of trade defence measures. Moreover, quotations from third country suppliers remain largely uncompetitive.

Despite easing, in February, manufacturing output growth remains high, in Germany. This is reflected in strong steel demand. Recent strip mill product business was negotiated at figures above those reported, last month, but not yet at the minimum target levels proposed by the domestic steelmakers. Order intake at the domestic mills is positive and delivery lead times continue to lengthen. Distributors’ stock levels are acceptable when compared with expected activity levels. Third country imports are available but buyers consider that prices are too high to be competitive.

In France, activity, in the main steel consuming sectors of automotive and construction, is good. This, together with a lack of imports, helped, once again, to push up strip mill product basis values, in March. Nonetheless, several stockholders report quite high inventories and, consequently, no immediate need to purchase. School holidays and adverse weather conditions – floods and snow – slowed demand in late February and delayed deliveries from a number of mills. Steelmakers continue to claim further price rises into the second trimester.

The Italian steel market is quiet, at present, with substantial speculation surrounding the political situation. First quarter ordering is finalised. Now, as steelmakers demand high prices for the second trimester, buyers, especially service centres, are postponing purchasing decisions as they are loath to pay more. Distributors are already struggling to pass on recent mill increases to their customers. Resale values are undermined by the large number of small, family-owned, stockists who are able to operate on a low fixed cost model. Underlying demand remains in a state of recovery but restocking is now complete. Flat product basis figures rose, in March, although the pace of the increase slowed. Attractive third country offers are scarce.

UK demand remains subdued. However, a number of distributors reported a slight improvement in activity over recent weeks. Inventories are reducing. Nevertheless, they are still too high at several service centres, creating negative pressure on resale values, despite higher mill prices. Third country quotations are limited. Those that do exist continue to be unacceptable to many buyers. Port stocks are at their lowest for several years.

In Belgium, basis values continue to escalate. Further rises are anticipated. Domestic delivery lead times are well into the second quarter, with a number of mills quoting for the third trimester. Demand is brisk and customers are optimistic regarding future business levels, as the economy continues to perform well. Offers from third country sources are hard to locate. Service centres report that implementing replacement costs into their selling prices to end-users remains problematic.

The Spanish steel sector is performing well, with good demand. Distributors of strip mill products are busy. Service centre stocks are considered to be at the correct level for today’s operations. In March, buyers settled orders for May delivery at higher prices than in the previous month. Although distributors’ selling values are also rising, they are still some way from transferring the recent mill increase to their customers. Margins remain acceptable only because inventories still contain cheaper material. As European basis figures moved up, a number of companies closed deals with overseas suppliers. However, the volumes involved were quite small.

Source: MEPS – European Steel Review – March 2018 Issue

SANDVIK MATERIALS TECHNOLOGY COMMISSIONS SMS GROUP TO REVAMP AOD CONVERTER

Sandvik Materials Technology, Sweden, has awarded SMS group the contract to revamp a 75-ton AOD converter at its stainless steel mill in Sandviken, Sweden. Commissioning is scheduled for August 2018.

SMS group’s scope of supply comprises a new converter tilt drive system, a hydraulic torque retainer, performance of the erection work, supervision of erection and commissioning.

The AOD converter to be delivered by SMS group will be equipped with a new tilt drive system featuring a new gearwheel design developed by SMS group. The optimized tooth and flank profile ensures the pressure is distributed evenly across the whole load spectrum, while the surface pressure itself is far lower than with conventional wheels. With this new design, the drive torque capacity and thus the productivity of the converter can be increased without the need for additional space.

The SMS group competence center for industrial gear manufacturing, based in Hilchenbach, developed the new gearwheel design and manufactures industrial gear units such as these for worldwide applications.

The purpose of installing the hydraulic torque retainer from SMS group is to minimize the destructive forces on the gears, bearings and foundations during the AOD converter blowing process. The use of the new electrohydraulic torque retainer means the previously uncontrollable dynamic loads, to which the converter equipment as a whole is subjected, are significantly reduced.

Sandvik Materials Technology was impressed with the positive results of the new torque retainer in use at another European customer of SMS group.

Sandvik Materials Technology operates around the world as a developer and producer of advanced stainless steels and special alloys.

Source: SMS Group

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