Strong Growth Predicted for Global Stainless Steel Production

MEPS forecasts that world crude stainless steel output will reach an all-time high of 51.75 million tonnes, in 2018. This would represent a 7.6 percent increase on the previous record figure, set last year. MEPS expects continued growth in global production, in 2019. A new peak volume of 54.2 million tonnes is forecast for next year.

China

China’s output, in 2018, is predicted to grow by more than 6 percent, year-on-year, to reach 27.35 million tonnes, or almost 53 percent of the global total. Further expansion, by around 5 percent, is anticipated, in 2019.

India & Indonesia

Crude stainless steel production in countries in the “Others” category is expected to increase by more than 1.7 million tonnes, or 33 percent this year. This is predominantly due to recently commissioned major developments in India and Indonesia. The rate of growth is expected to slow, as these plants reach their full output capacities.

Japan

Japan’s annual outturn is foreseen at 3.3 million tonnes, this year – an increase of over 4 percent, compared with the 2017 figure. Our forecast, for 2019, is for the addition of a further 100,000 tonnes.

South Korea

In South Korea, growth of nearly 4 percent, to a total of 2.5 million tonnes, is anticipated for this calendar year. MEPS expects this rate of expansion to decline, to around 2 percent, next year, amidst strong regional competition.

Taiwan

Following a steep upturn in 2017, Taiwan’s output, this year, is forecast to plateau, at around 1.375 million tonnes. A similar figure is foreseen for 2019.

United States

Protectionist trade actions, in the United States, have, so far, resulted in price inflation, rather than a substantial upturn in domestic stainless steel production. MEPS anticipates an increase of around 50,000 tonnes, year-on-year, in 2018. Further, moderate growth, of approximately 2 percent, is foreseen for next year.

EU

In the European Union, safeguarding measures prevented a rapid expansion in third country imports, helping domestic producers to achieve a small predicted output increment, of around one percent, this year. Further, modest expansion, on a similar scale, is forecast for 2019.

Source: MEPS Stainless Steel Review 

Protection Measures Support Steel Prices but Disrupt Trade Flows

Supply options for large exporters of steel, such as those in China and Russia, are becoming limited, owing to existing trade barriers, implemented by many authorities around the world. As a consequence, steelmakers are scouring the globe, for new destinations, in which to sell their excess capacity.

From MEPS’ research, in October, many Chinese steel market participants report that they are finding it increasingly problematic to sell into the neighbouring Southeast Asian market. This is due to the emergence of local mills and strong competition, from Russian, Indian and Iranian steel manufacturers.

As a consequence, Chinese producers are actively seeking new business relationships, in the Middle East and Africa, where the demand of steel is in excess of local production capacity. Chinese mills should be confident of increasing their market share, at the expense of regional suppliers.

Protectionist measures and trade cases, in many parts of the world, are disrupting traditional flows of material – affecting the ethos of free trade.

In the US, Section 232 legislation has given local steelmakers the opportunity to escalate selling values with little resistance, in the past twelve months. Although figures are softening, from their recent highs. Cross-border trade across North America has been disrupted by the measures. The United States-Mexico-Canada Agreement (USMCA) is expected to result in the removal of steel tariffs, and replacement by quotas, in the latter part of this year.

Following the introduction of temporary safeguarding measures, European steelmakers were able to solidify domestic steel selling values, during the traditionally slow summer period. Weakening sentiment has resulted in a reversal of the upward price trend, in recent weeks. Nonetheless, it is reported that a vast proportion of the steel quotas are being under-utilised. Local buyers appear to be procuring material from domestic sources rather than from third-party countries.

MEPS predicts that the current level of trade protection afforded to mills, in several regions of the world, will help them maintain prices, at their relatively elevated level, for the foreseeable future.

Source: MEPS International Steel Review

Economic Uncertainty Weighs Down The Emerging Steel Markets

Steel demand softened, this month, in many of the emerging steel markets surveyed by MEPS. Distributors are cautious to purchase material, due to uncertainty in both future steel price trends and wider economic conditions.

Brazil

The prognosis for the Brazilian steel market is unchanged. Steel demand is tepid. Several small price advances were noted, compared with September’s numbers. Buyers feel that current transaction values are unjustified, although the steelmakers are claiming higher figures for next year. The current inflated mill prices are proving problematic for independent distributors who are having difficulties in passing on the increases to their customers.

Russia

Russian steel producers are divided over the prospects for domestic steel consumption in the remainder of the final trimester. Service centres are eager to reduce their stocks, concerned that sales activity will be lacklustre, in this period. Construction-related steel demand is slowing down. This trend is expected to continue, as unfavourable weather conditions take hold across the country. Exporters cut prices further, to gain overseas business.

India

In India, orders, for the local mills, are not expected to improve, significantly, in the near term. Service centres are reluctant to commit to forward orders, anticipating reduced domestic mill prices, during the Festival trading cycle (October to November). Construction activity is limited. Meanwhile, ArcelorMittal is reported to be the preferred buyer of Essar Steel, subject to restrictions and approval by the National Company Law Tribunal.

China

Chinese stockists are cautious about the strength of underlying consumption in the November-December period. Several firms are only booking material for short-term needs, citing concerns over further price volatility, and the impact of impending government production cuts and rules on pollution. Support from external demand is limited, hindered by antidumping measures in overseas markets.

Ukraine

Business confidence is tepid, in Ukraine. Distributors are buying only what they need to cover immediate orders. They are wary of carrying too much inventory into the country’s winter trading cycle. Price support from foreign demand is limited. The local association of metal producers, Metallurgprom, reported that finished steel production, in September 2018, totalled 1.57 million tonnes – up 3.0 percent, month-on-month.

Turkey

Arduous trading conditions persist, in the Turkish steel market. End-user demand for finished steel products is subdued, while purchasing activity by stockholders is weak. MEPS is forecasting additional price concessions from domestic suppliers next month.

UAE

The Emirati steel industry is struggling to adapt to the unpredictable business environment. Distributors plan to persevere with conservative purchasing strategies, in November, citing the ongoing uncertainty surrounding future industrial activity and a lack of investment in construction.

South Africa

Downstream demand for finished steel, in South Africa, fell short of market projections. Stockists and traders report that profit margins are being squeezed. With prices continuing to move up, they are only buying for current demand. Traditionally, key consuming industries shut down for a four-week period in mid-December.

Mexico

Procurement activity in Mexico was less vigorous, this month, than in September. Service centres believe that further price cuts are inevitable, citing a slowdown in construction activity. MEPS notes minimal speculative purchasing. In general, inventories are in balance. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) is adamant that it is imperative, for the new government, to obtain exemptions from both U.S. steel import tariffs and Canadian import safeguards.

Source: MEPS Developing Markets Steel Review – October Issue

EU Steel Prices Slip in October as Sentiment Fades

EU Steel Prices Slip in October as Sentiment Fades

EU steel prices for strip mill products either remained stable or turned down slightly, in October. The negative movement was most pronounced in the south of the region, i.e. Italy and Spain. EU steel producers continue to target higher prices but face strong resistance to this initiative. This comes, particularly, from service centres, due to their inability to fully pass on previous increases to their customers. Moreover, inventories at the distributors are relatively high, enabling them to postpone immediate purchasing decisions until the future pricing trend becomes clear.

Domestic mill delivery lead times are no longer extended. Stockholders report that demand failed to recover after the holiday period. Cheap offers from Turkish mills also undermined confidence in the market. Nonetheless, EU steel prices are supported by a lack of competitive quotations from other third country sources, the existing safeguard measures and relatively high mill input costs.

Germany

Growth in the German manufacturing industry slowed, in September. New export orders dropped sharply. In the steel sector, strip mill product prices were, generally, stable, with some minor negative adjustments, in October. The steelmakers continue to try to secure increases. Market demand is reasonable, with the notable exception of the vehicle manufacturing sector. Service centre stocks are relatively high. Third country import offers are slightly below European quotations, at present.

France

Despite the steel producers’ continued push for rises, French prices remained stable, or declined, a little, in October. Activity has not picked up since the summer. Distributors complain of a slow September market – with reduced sales volumes, compared with the same period last year.

Italy

In Italy, last month’s upward steel price trend has reversed. Underlying demand is weak. Distributors report that sales reduced in October, compared with the previous month. Their customers are postponing order placement as they watch prices fall. Resale margins are poor, with many stockists discounting heavily. Because distributors’ resale prices are down, they are, in turn, pushing for reductions from the mills.

United Kingdom

Market sentiment weakened in the UK, in October. MEPS notes growing uncertainty over the potential outcome of the Brexit negotiations. Demand from the auto sector is particularly problematic. Prices for several strip mill products softened, partly due to currency exchange rate movements and pressure to match import offers from Turkey. Service centres have sufficient stock to enable them to postpone purchasing decisions.

Belgium

Despite price hike proposals by the major EU steel mills, Belgian market values softened, this month. Service centres report lower than expected levels of activity, leading to higher than average inventories. Their resale values are difficult to maintain as end-users refuse to pay more because underlying consumption has weakened. In some instances, payments to distributors are being delayed, indicating a decline in demand.

Spain

The Spanish manufacturing sector recorded a slowdown in growth, at the end of the third quarter. The €20 per tonne price hikes, secured by domestic steelmakers, in September, were virtually wiped out, this month, during negotiations for December/January deliveries. High stock levels at the service centres and weakening demand led to buyer resistance to the inflated prices. Volumes of imported material, ordered earlier in the year, are now arriving. New third country import offers are cheaper than a month ago, but few deals were struck because of quota issues.

Source: MEPS European Steel Review – October Issue

MY VIET INDUSTRIES Grants Final Acceptance for Push-Pull Pickling Line and Compact Cold Mill Supplied by SMS Group

Vietnamese cold strip producer MY VIET INDUSTRIES Co. Ltd. has granted Esmech Equipment Pvt. Ltd., a company of SMS group, the final acceptance for the supplied push-pull pickling line and the CCM® (Compact Cold Mill).

pickling tanks of the push-pull pickling line in steel mill
The pickling tanks of the push-pull pickling line are completely made of granite.

My Viet had put the push-pull pickling line and the twin-stand cold rolling mill into operation in May 2018. In July 2018, after six weeks of hot commissioning and performance optimization, Esmech Equipment Pvt. Ltd. received the final acceptance certificate.

MY VIET INDUSTRIES Co. Ltd. is a reputed supplier of coated steel products for the construction industry. The new cold strip mill in the Hung Yen Province, south of Hanoi was added to an existing works, as a backward integration in order to provide the existing facilities with the required cold rolled strip and to supply the additionally produced strip to the Vietnamese industry. The mill will produce approximately 400,000 tons per year of low carbon strip in widths of up to 1,250 millimeters and final thicknesses down to 0.15 millimeters for numerous construction and industrial applications.

The push-pull pickling line is realized as a turbulent pickling bath, comprises a double entry section and four pickling tanks completely made of granite. The design allows for high process speeds and safe and eco-friendly processes.

The pickling line can process strips with widths in the range from 600 up to 1,250 millimeters and thicknesses of up to 4 millimeters. The process speed can be varied between 15 and 120 meters per minute.

The CCM® is equipped with high-tech components manufactured at the German workshops of SMS group. The components include the well-proven CVC®plus (Continuously Variable Crown) roll shifting technology and roll bending devices, which ensure premium rolling results and high production efficiency. The mill also features automatic flatness control, modern actuators, an interactive roll pass calculation module and level-2 automation. All this makes MY VIET INDUSTRIES Co. Ltd. perfectly set not only for current but also for future customer requirements.

The Compact Cold Mill of MY VIET INDUSTRIES Co. Ltd
The CCM® of MY VIET INDUSTRIES Co. Ltd. delivers premium rolling results.

 

Source: SMS Group

Global Stainless Steel Trade Plagued by Quotas

Wuhan Shunle orders two EAF Quantum furnaces and two ladle furnaces from Primetals Technologies

Chinese steel producer Wuhan Shunle Stainless Steel Co. Ltd. (Wuhan Shunle) has placed an order with Primetals Technologies to supply two EAF Quantum electric arc furnaces and two ladle furnaces for its production site in Hubei Province. The EAF Quantum furnaces are designed to handle scrap steel of varied composition and quality. The electrical energy requirement of the electric arc furnaces is extremely low because the scrap is preheated. This reduces both the operating costs and the CO2 emissions. The twin ladle furnaces set the desired steel grades and the correct casting temperature. The new furnaces are scheduled to be commissioned in the third quarter of 2019.

Wuhan Shunle manufactures and distributes steel products. The company produces screw thread steels, steel wires, steel tubes, carbon steels, alloy steels, stainless steels, and other products. For the new EAF Quantum electric arc furnaces and the twin ladle furnaces, Primetals Technologies will supply the complete mechanical and electrical process equipment and the automation technology. This includes the automated scrap yard management, the automated charging process, automation of the oxygen injection and sand refilling, as well as the Level 2 automation which makes the plant ready for Industry 4.0.

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 all adds up to very short melting cycles. The electricity consumption is considerably lower 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.

EAF Quantum electric arc furnaces from Primetals Technologies
EAF Quantum electric arc furnace from Primetals Technologies

Primetals Technologies, Limited headquartered in London, United Kingdom is a worldwide leading engineering, plant-building and lifecycle services partner for the metals industry. The company offers a complete technology, product and service portfolio that includes integrated electrics, automation and environmental solutions. This covers every step of the iron and steel production chain, extending from the raw materials to the finished product – in addition to the latest rolling solutions for the nonferrous metals sector. Primetals Technologies is a joint venture of Mitsubishi Heavy Industries (MHI) and Siemens. Mitsubishi-Hitachi Metals Machinery (MHMM) – an MHI consolidated group company with equity participation by Hitachi, Ltd. and the IHI Corporation – holds a 51% stake and Siemens a 49% stake in the joint venture. The company employs around 7,000 employees worldwide. Further information is available on the Internet at www.primetals.com.

Source: Primetals Technologies

EU Stainless Steel Prices Forecast to Decline in the Fourth Quarter, Recovery Expected in Early 2019