Steel Prices in the United States at Ten-Year High

The impact of 25 percent tariffs on imports of steel into the United States has been significantly eroded by the domestic mill price increases. Clearly, this situation would not have been anticipated at the beginning of the initiative.

The MEPS North American Average Flat Products selling figure increased by 34 percent, since the start of the year. In Western Europe, the steel price recovery, in US dollar terms, was just 3.5 percent over the same period. In Asia, an upturn of 6.5 percent was recorded.

How can the authorities in the United States square this circle? It is clear that, on a cost basis, domestic steel users will be in a position to return to purchasing from outside the country. This was not the original plan when the Section 232 plan was devised.

The answer will rest with the domestic steel producers. Overseas suppliers are likely to maintain their current offer prices. It will require action from the local steelmakers. This would, almost certainly, require them to adopt a different strategy to the one currently in place.

Source: MEPS International Steel Review

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Trade War Speculation Unsettles Emerging Steel Markets

Brazil

Challenging business conditions persist in Brazil. Domestic buyers remark that the current initiative to lift prices is ill-timed, counterproductive and would only escalate import tonnages.

Russia

Russian trading houses are booking for only immediate requirements due to price fluctuations and working capital problems. Activity deteriorated further, once the 2018 FIFA World Cup started. Shipments to construction and infrastructure projects remain steady, but demand from the commercial and private residential building sector is weak. End-users continue to experience financial problems.

India

In India, steel distributors, operating in southern states, witnessed a fall in business activity with the early onset of the monsoon season. Buyers are reluctant to purchase finished steel material and are waiting for prices to decline. Meanwhile, the Modi government announced that it will impose retaliatory tariffs on US finished steel goods (effective August 4).

Ukraine

The prognosis for the Ukrainian steel market is unchanged. Bearish dealers prefer to wait and observe the current market situation. Buying sentiment is shaped by expectations of further price fluctuations. Exporters lifted selling figures, actioned by an upturn in the cost of billet, slab and steelmaking raw materials.

Turkey

Challenging trading conditions persist in Turkey. Deliveries to downstream steel consuming industries remain slow, amid weak post-Ramadan demand growth and political uncertainty stemming from the country’s presidential and parliamentary elections. Additionally, exporters report that the tariffs on steel, imposed by the United States, have increased the competitiveness of their finished steel products, relative to their Canadian, Mexican and European counterparts.

UAE

Emirati service centres are extremely reluctant to purchase material in, what they deem as, precarious business conditions. Shipments to the construction sector and pipe fabricators remained slow in the trading period. During the summer months, building activity is constrained by high temperatures. Export opportunities are limited outside the GCC region.

South Africa

The trading environment remains downbeat in South Africa. Distributors condemned the latest upward adjustments as “unwarranted” given the current trading climate. Construction activity in the public sector is at a standstill, at present, as the market awaits government decisions on new investments.

Mexico

Purchasing activity remains moderate in Mexico. The majority of local stockists are refraining from signing any contracts at the moment. Shipments of finished steel products to the United States have halted, this month, due to uncertainty over US trade tariffs.

Source: MEPS Developing Markets Steel Review

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Groundbreaking cold rolling technology for Southeast Asia

PT. Sun Rise Mill selects Danieli for the supply of new pickling and cold rolling lines

High-quality Indonesian galvalume sheet producer PT. Sun Rise Mill placed an order with Danieli for the supply of mechanical, technological and automation equipment for a new push-pull pickling line and a 6-high cold rolling reversing mill.

The new push-pull pickling line is designed to be extended to a final production of 600,000 t per year.

The heart of the supply will be the 6-high cold rolling reversing mill, producing 200,000 tpy of high-quality strip with minimum strip thickness of 0.2 mm at a maximum strip width of 1250 mm and maximum tensile strength of 780 N/mm2.

The design of this new mill type is focused on optimizing the operating and maintenance costs, as well as safe and easy operation.

This mill is featuring integrated technologies like Danieli OSRT for best strip flatness tolerances also during thin gauge rolling as well as the new developed Danieli Yield Boost technology for reducing material losses at strip head and tail end by more than 60%, making it the new benchmark in Southeast Asia.

The new lines are expected to start operation beginning of 2020.

Source: Danieli 

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TWO ITALIAN COMPANIES– ARLENICO AND FERALPI RELY ON SMS GROUP MEERDRIVE®PLUS TECHNOLOGY FOR THE PRODUCTION OF REBAR AND WIRE ROD

Arlenico SpA and Feralpi Siderurgica SpA, two key Italian wire rod producers, have each ordered a four-stand MEERdrive®PLUS finishing block from SMS group within one week. Both wire-rod finishing blocks will be integrated in the companies’ existing plants.

Arlenico, part of the Duferco Italia Holding, a special quality wire rod producer located beside the Lecco Lake, chose the four-stand MEERdrive®PLUS block to be installed in the existing wire rod line at its Caleotto plant. This will allow the company to serve the market with products of the tightest tolerances ever produced, as thanks to the heavy-duty machine supplied by SMS group and a sophisticated water cooling line included in the project, it will for the first time be able to apply the thermomechanical rolling process.

Feralpi, producer of rebar and wire rod for construction in Italy, located beside the Garda Lake, is investing in the four-stand MEERdrive®PLUS block in order to increase production and the rolling speed and be able to extend the size range produced and achieve enhanced final mechanical properties. Also in this case a sophisticated water cooling line will serve the four-passes wire rod sizing block.

MEERdrive®PLUS is a variant of the MEERdrive® technology, a revolutionary drive concept for modern wire rod production. It uses individual drives with small low-voltage motors for each stand. Since all finished sizes are rolled in the MEERdrive®PLUS block, it is possible to realize “one-family rolling” in the rolling mill reducing the otherwise required mill downtimes for size and ring changing.

The MEERdrive®PLUS blocks, which will both be installed after an existing ten-passes block, will be four-stand “oval-round-round-round” sizing blocks, capable of rolling wire rod diameters from 4.5 milli­meters up to 27 millimeters at speeds up to 120 meters per second – also at a temperature as low as 750 degrees centigrade. Excellent tolerances down to 0.05 millimeters and 50 percent ovality can be achieved.

These two new finishing blocks to be supplied to Arlenico and Feralpi are references number eleven and twelve, documenting the long success story of the MEERdrive® technology which started with block number one supplied to Sinobras in 2007. Arlenico and Feralpi will benefit from a wide range of outstanding economical and operational advantages. For example, it will be possible to reduce the required roll inventory to a minimum.

SMSgroup Image
From left: Marco Giacomuzzi, SMS group Vice President Bar & Wire Rod Mills; Domenico Campanella, Duferco CEO; Nicola Redolfi, SMS group General Manager Sales; Giovanni Dugoni, Duferco CTO; Filippo Verlezza, SMS group Sales Manager.

SMS group is a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry. It has some 13,500 employees who generate worldwide sales of more than EUR 3 billion. The sole owner of the holding company SMS GmbH is the Familie Weiss Foundation.

Source: SMS Group

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EU Steel Prices Slip as Purchasing Slows

During June, the European steel market continued to be affected by rising global trade uncertainty. Steel buyers, particularly at the distributors, were, where possible, postponing their purchasing decisions. Moreover, political upheaval, in parts of the region, led to a lack of investment. As buying activity slowed, prices, for strip mill products, registered modest downward movements, in June. Meanwhile, contract negotiations with OEMs, for the second half of 2018, are ongoing, with producers looking for small price increases. Healthy underlying demand supports the proposed hikes, although a softening in raw material costs does not.

Germany

In May, a further slowdown in the pace of German manufacturing growth was recorded. Availability of standard grade strip mill products is good. Steelmakers are well booked into the third quarter. However, a number of buyers note that restrictions on the purchase of additional quantities have abated. Third country imports are rarely competitive. Producers are demanding increased prices, from contract customers, for the second half of 2018. The initiative has met with a degree of resistance. Meanwhile, recent spot market business was negotiated at slightly lower figures than a month ago. Service centres continue to cut their resale values in order to try to stimulate sales and reduce stock levels.

France

French demand for strip mill products continues to be supported by the auto industry. Mills in northern Europe are reporting full order books, with delivery lead times at fourteen weeks, in some instances. Basis values continued to decrease a little, in June. Activity slowed, in May, and the expected pickup has not yet materialised. However, according to distributors, sales volumes remain acceptable, although inventories are relatively high. Moreover, ongoing strikes are adversely affecting transportation.

Italy

Italy’s manufacturing sector continued to expand, in May, albeit at a slower rate than earlier in the year. Spot market prices are under negative pressure as a result of political upheaval, market uncertainty regarding the US Section 232 disruption and reduced purchasing by distributors. Further price falls cannot be ruled out. Underlying consumption is reasonable. However, customers believe that the downward price trend will continue, as a result of weak order intake at the mills.

United Kingdom

UK distributors report that sales activity is slowly recovering. However, their resale margins are still unsatisfactory. Independent service centres complain that mill-owned distributors are selling aggressively, thus lowering customers’ price expectations. Both the auto and construction industries continue to underperform. Basis values quoted by steelmakers are similar to those reported, in May.

Belgium

Small negative price changes were noted, in the Belgian market, in June. The economy is slowing, with growth forecasts revised downwards. Buyers are slow to make purchasing decisions. In general, distributors’ resale prices reflect replacement costs but margins are below recent norms. Service centre stocks are relatively low. Domestic mill quantities are limited. Import pressure is lacking. Overseas deals were on hold, in early June, as buyers awaited the outcome of the Section 232 measures.

Spain

Spanish manufacturing output growth eased downwards, in May. The steel market remains quiet, despite healthy underlying consumption. Expectations of lower prices, in the near future, led to a ‘wait and see’ attitude amongst buyers, especially at the service centres. Distributors reported reasonable sales, in May, but complain that June order books are shortening. Although current import offers are not particularly attractive, overseas material, booked earlier in the year, is now arriving, resulting in high inventories. Domestic price corrections were noted, for all strip mill product categories, this month.

Source: MEPS European Steel Review – June 2018

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Ruifeng Orders Continuous Hot-Dip Galvanizing Line from SMS Group

350,000 tons per year of galvanized steel strip for the Chinese construction and home appliances industries.

Ruifeng (Shandong Ruifeng Stainless Steel Co.), China, has selected SMS group to supply a continuous hot-dip galvanizing line for steel strip, which is to be erected in Binzhou in the Chinese province of Shandong and is scheduled to start production in the second half of 2019. The new galvanizing line will enable Ruifeng to anneal and galvanize 350,000 tons annually of cold strip that is produced on the company’s own pickling line/tandem mill. To protect it against corrosion the strip will be coated with a layer of zinc or aluminum-zinc. The material will mainly be used for applications in the construction industry and to produce home appliances.

The line is to be completely supplied by SMS group. All mechanical and process-technological components, including furnace and air-knife system, as well as all electrical and automation systems are part of SMS group’s package, too. Also included in the scope of supply is the supervision of erection and commissioning.

The strips to be processed in the line will first run through a cleaning section including electrolytic cleaning segment. Subsequent heat treatment will be accomplished in a horizontal Drever furnace with direct-fired zone and radiant-tube zone. In addition, a DUMA-BANDZINK BASIC Jet air-knife system for the homogeneous and precise thickness setting of the zinc layer will be integrated to meet even extremely high surface quality demands. To be able to coat the strips with both aluminum-zinc or zinc, it is planned to install a change system with two zinc pots. For post-treatment, the line will be equipped with a skin-pass stand, a tension leveler and two vertical roll coaters, as well as an oiling machine in the exit section.

The hot-dip galvanizing line will be designed to process strips up to 1,350 millimeters wide and between 0.30 and 2.0 millimeters thick. The maximum strip speed during the galvanizing process will be 180 meters per minute, whereas in the entry and exit sections maximum speed may reach up to 240 meters per minute. The product range will comprise commercial grades and deep-drawing grades, among others.

Source:  SMS Group

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