Steel Producers Look to Secure Volumes But Faced With Fluctuating Demand In Northern Europe

Demand for flat products, in northern Europe, varies by country and by end-use. Selling values, in mainland Europe, continued on the downward trend that began last month. In the Nordic countries, while many prices have been maintained, they are expected to decrease, in the near term. Third country offers are, for the most part, unattractive.

Industrial activity is, generally, stronger in Scandinavia than in the rest of Europe, although Norwegian consumption is a little subdued. Demand for hot rolled coil, in Denmark, from the building industry, is fair. The local economy in Sweden is healthy and delivery lead times from the domestic supplier, SSAB, are stretching. Order activity is weak, in Finland, with selling values unchanged, but under negative pressure. In the Netherlands, regional steelmakers are offering discounts, in an effort to compete with imports and secure market share. In Austria, availability is good and delivery lead times are short.

The Danish hot rolled plate market is relatively quiet and stockists’ margins are being squeezed. Demand is satisfactory, in Sweden and in Finland, but quite slow, in Norway. In the Netherlands, consumption is subdued, and availability is good. Machinery manufacturing is weaker than it was in 2018, in Austria.

Regional producers of cold rolled coil are offering very competitive selling figures, in the Netherlands, in an attempt to secure orders. Inventories are quite high, in Austria. Demand is slowing. In Norway, purchasing activity subsided, in early May, following a busy April. In Denmark, sales, to the offshore oil and gas sector, are good. Swedish domestic industries continue to prosper but a downturn is forecast. Mill order books are moderate, in Finland.

The Danish market for coated sheet and coil is subdued. Sales, in Sweden, Finland and Norway, continue to be adversely affected by the depressed automotive sector. Orders from manufacturers are decreasing, in Austria. No upturn is foreseen, in the near term.

Wire rod purchasing activity is stable, in Sweden. In Finland, demand from the automotive supply chain is weak. Low-priced offers are available, from southern Europe. The local market is quite strong, in the Netherlands, but customers in neighbouring countries are less busy. Ex-mill transaction values decreased in Denmark and in Austria. Most Norwegian domestic prices were unchanged.

Sales volumes of medium sections and beams are satisfactory, in Denmark, but regional mills have spare rolling capacity. In Sweden, the housebuilding and commercial construction industries are busy. Extremely short delivery lead times, in Finland, suggest that demand is weak. Sales are healthy in the Netherlands. Domestic construction activity is good, in Austria and Norway.

Suppliers of reinforcing bars, reluctantly, cut prices, in the Netherlands, amid patchy market conditions. Buyers, however, continue to seek new, competitive sources of material. The Danish market is steady. Sales for construction and infrastructure projects are good, in Finland and in Sweden. In Austria, local sales activity is at a high level. Norwegian domestic consumption is reasonably strong.

Merchant bar purchase tonnages are steady, in Denmark. Prices, however, decreased, in line with wider European markets. Swedish industrial activity remains healthy, but a slowdown is forecast. Sales to the manufacturing sector are good, in Finland. Domestic demand is reasonable, in the Netherlands. Offers from southern European suppliers are very competitive. Regional mills are making very attractive quotations, in a bid to secure order tonnages.

Source: MEPS European Steel Review Supplement

Nordic Steel Price Forecast

MEPS forecasts that Nordic average flat product prices will decline, in the short term. A number of factors are likely to exert downward pressure on transaction values. Demand from the automotive industry, a key steel-consuming sector, remains weak, as a result of new vehicle emissions testing procedures and softening consumer confidence. Steel purchasing volumes are reasonable in the Nordic countries. However, economic and political uncertainty across Europe is having a negative impact on sentiment in local markets. Furthermore, price weakness in other Western European nations is adversely affecting selling figures, in the Nordic region.

A price recovery is forecast, in late summer/early autumn. Steel mill profit margins are increasingly being squeezed. Iron ore prices have risen substantially since the Vale dam disaster, in late January. Furthermore, coking coal costs remain elevated. Consequently, the imperative for steelmakers to lift transaction values is becoming more acute.

Source: MEPS European Steel Review Supplement


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EU Steel Prices in Decline in May as Demand Falters

The recent negative trend in European strip mill prices continued, in May. Reduced demand from the auto sector is still undermining the steelmakers’ ambitions for increased basis values. Moreover, general activity in the marketplace is below projections for this time of year. Global trade tensions and political uncertainties led to a lack of investment and created a great deal of caution. Service centre inventories are in surplus for current requirements, leading to substantial negative pressure on resale prices. Procurement by distributors remains weak. New import offers are uncompetitive, at present. Large quantities of foreign material, booked at the turn of the year, will take time to be consumed.

Due to weak demand, and in order to try to stem further price erosion, ArcelorMittal announced its intention to temporarily idle production at the steelmaking facilities in Krakow, Poland, and reduce output in Asturias, Spain. In addition, the planned increase of shipments from ArcelorMittal Italia will be slowed down. These actions should result in a total reduction in supply of 3 million tonnes per year. In a later development, the company informed buyers of an intended price rise of €30/40 per tonne for all strip mill products.


Further contraction was noted in Germany’s manufacturing sector, in April. In the steel market, sentiment is negative with activity still at a relatively low level, amidst continuing falls in selling values. Buyers are cautious, hesitating to place new orders. They anticipate further price reductions, as producers try to plug gaps in their order books. The differential between domestic offers and those from overseas is narrow, which has a dampening effect on new import activity.


French basis values decreased since last month. Activity remained at a reasonable level, although below that in April. MEPS detects substantial competition between distributors, who have been forced to adjust their resale prices accordingly. They then negotiated discounts with the steelmakers, in order to preserve their profit margins. Now, with the expectation of further price decreases, major service centres are delaying purchases until June, at the earliest. A number of traders are reported to be selling at a loss. Very few new offers are quoted by third country importers.


The downturn in the Italian manufacturing sector continued, in April, for the ninth consecutive month. This has badly affected the steel market. Moreover, the number of working days, in April/early May, were severely curtailed by holidays, thus negatively impacting domestic sales volumes. All strip mill products show price weakness, mainly due to import pressure and low underlying demand. Expectations remain fragile because of the problems in the auto sector and the fear of further steel price reductions. Service centres are using the stock they have on hand. They see little possibility to lift resale values as end-users refuse to pay more.

United Kingdom

The UK economy is reasonably robust, remaining one of the better performing countries in the EU. In the steel sector, distributors report acceptable sales volumes but profit margins are reduced. Independent service centres complain that integrated mill-owned distributors are selling aggressively. In general, inventories are in balance with current sales activity. In May, strip mill product selling values were revised downwards.


Demand for flat products is stable, in Belgium. Distributors, viewing the current price trend as negative, are buying very cautiously. Delivery lead times from domestic suppliers are short. Recent service centre activity was slow due to public holidays. Both sales volumes and resale prices are decreasing. As a result of this negative scenario, the steelmakers, whose order books remain poor, have further discounted basis values of strip mill products. MEPS notes little influence from third country imports.


Spain’s manufacturing sector continued to expand during April but at a faster rate than in March. The steel market is relatively stable, with regional variations between the north and south of the country. Service centre sales volumes turned down slightly, in May. Current resale values do not reflect replacement costs. Offers from importers are slightly more interesting to buyers than they were a month ago. Domestic ex-mill basis values underwent further downward movement.

Source: MEPS European Steel Review – Keynote (May 2019)

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Primetals Technologies to replace BOF converter at HBIS Serbia in Smederevo

Primetals Technologies has received an order from HBIS Group Serbia Iron & Steel LLC (HBIS Serbia) to replace BOF converter #2 at its production site in Smederovo, Serbia. The aim of the project is to improve the process and to raise production capacity. This will be achieved by increasing the converter vessel´s shell volume. At the same time, the critical outer dimensions will remain the same, so that adjacent interfaces may be kept. Modifications of the BOF pedestal or revamping of civil works are not required. The new converter will have a tapping weight of 105 metric tons and will receive, among other equipment, a Vaicon Link 2.0 suspension system and a new tilting drive. Start-up is expected for the second quarter of 2020.

HBIS Serbia is a producer of steel, hot and cold rolled products and tin plate in southeast Europe, and its facilities are located in the village Radinac near Smederevo, in Šabac and Kučevo. The plant in Smederevo produces iron at two blast furnaces, then converts blast furnace iron to raw steel at a three-furnace converter shop and continuous casting complex. Steel processing includes a hot strip mill, sheet cold reduction mill, annealing and tempering units. The converter #2 vessel shell and trunnion ring had reached the end of their useful lifetime

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For the new BOF converter #2, Primetals Technologies is responsible for the engineering to increase the vessel shell volume, while keeping supporting bearing distances the same in order to avoid the necessity for civil works. The scope of supply includes the new vessel with detachable BOF bottom part, the trunnion ring, the Vaicon Link 2.0 suspension system, new supporting bearings with housings a new tilting drive including a pneumatic emergency drive system, bottom stirring system, a dart machine for slag retention as well as the implementation of slag Primetals Technologies will also supply the electrics and the new basic (level 1) automation system for the new tilting drive and existing melt shop equipment, e.g. ferro-alloy system, transfer cars, etc. Furthermore, the scope covers the execution of the erection works and related advisory services. Dismantling of the old BOF equipment and installation of the new one are planned to be executed within approximately 55 days.  Installation will be carried out jointly with a local Serbian company.

BOF Converter meltshop of HBIS Group Serbia Iron & Steel LLC (HBIS Serbia) in Smederovo, Serbia. Primetals Technologies will replace BOF converter #2 (Image courtesy HBIS).

Source: Primetals Technologies

Poland’s Cognor contracts Fives for furnace renovation

Polish steel producer Cognor S.A. contracted Fives to implement a challenging project – the renovation of a reheating pusher furnace at its Krakow plant. The steelmaker was looking to improve furnace performance, both in terms of production availability and operational cost reduction.

The existing furnace, with an initial production capacity of 90 tons per hour, is integrated into a rolling mill producing merchant bars and rebars. Over the past years, the plant experienced difficulties sustainably operating the furnace at the designed production rate. The furnace has also required frequent maintenance and consumed gas excessively. The project faced a technical constraint: a furnace foundation could not be modified. Therefore, furnace dimensions have to remain the same. Fives was the only company capable of offering its proprietary technology to sustain production capacity at the reduced operational costs with the same footprint.

AdvanTek® technology for any operating conditions

In order to significantly improve furnace performance, Fives will use its proprietary combustion system – AdvanTek® technology. The AdvanTek® technology fully separates the burner capacity control and the flame length control. It is also the only combustion technology that operates the burners at the optimum capacity at any production rate and operating conditions.

As a result of this renovation, the pusher furnace capacity will be sustained at the designed level. The operational costs will decrease thanks to a 25% reduction in fuel consumption and a 40% decrease in scale. The scope of work also includes repairs of the refractories and steel structures of the soaking zone.

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The site work is  planned to start in March 2020 with the first hot product being scheduled in the second quarter of 2020.

The project will be executed by a Fives’ subsidiary in Spain, which historically specializes in long product thermal solutions worldwide. Recently, its offering has been expanded through the acquisition of certain activities of RDI-Met, a subsidiary of Fagor Arrasate (Spain), and today it covers mechanical engineering for strip processing lines, including coating lines. More information about the acquisition.

Source: Fives Group

Zekelman Industries Contracts SMS Group for Supply of the Largest Continuous ERW Tube Mill in the World

Zekelman Industries selected SMS group as partner and main supplier for a complete new 28″ ERW tube welding line to be installed at its “Atlas Tube” structural tube division.

With the new 28-inch electric resistance welding line, Zekelmann Industries will be installing the biggest continuous line in the world, capable to produce more than 400,000 tons per year and thus extending its product range and sizes.

The new line will allow Zekelman Industries to produce structural and piling products with diameters ranging from 10 ¾ up to 28 inches (273 to 710 millimeters) and wall thickness up to 1 inch (25.4 millimeters). Furthermore square and rectangular hollows in dimensions from 8 x 8 inches (203 x 203 millimeters) up to 22 x 22 inches (559 x 559 millimeters) or 34 x 10 inches (863 x 254 millimeters) will be produced. All products are mainly intended for demands of the construction and the building sector.

The key aspect of the design and layout development of the new line are the highest requirements for quality and production output. The computer-controlled SMS group CSS Quicksetting® system ensures that the rolls can be adjusted automatically to their working positions after the size change. Further to an operational speed reaching 35 meters per minute, the line offers superior diameter/wall thickness ratio capability which, along with a quick product change-over time, results in great product flexibility.

Zekelman Industries and its structural tube division, Atlas Tube, rely on SMS group´s tube welding technology for years. The company has placed several orders with SMS group for the expansion and improvement of the product spectrum of the ERW lines installed in Harrow, Canada and Blytheville, U.S.A. This latest order marks the next step in a successful cooperation between both companies.

Source: SMS Group

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 14,000 employees who generate worldwide sales of about EUR 3 billion. The sole owner of the holding company SMS GmbH is the Familie Weiss Foundation.

MEGASA Chooses SMS Group Reheating Technology for Its Portuguesa Bar Mill

  • New walking beam furnace with ZeroFlame, DigiMod and SMSPrometheus systems

SMS group has been chosen by MEGASA GROUP for the supply of a new walking beam furnace to be installed in the existing bar mill of SN Seixal Siderurgia Nacional S.A. in Aldeia de Paio Pires, Portugal. The new furnace, rated at 160 tons per hour cold charged and 210 tons per hour hot charged, will include latest technological packages developed by SMS group. Start-up is scheduled for the end of summer 2020.

In particular, MEGASA banks on the SMSPrometheus Level 2 system, the SMS DigiMod combustion management system and SMS ZeroFlame burners. The combination of these three features installed on the sturdy and reliable structure of the SMS furnace will ensure outstanding performance in terms of reductions in fuel consumption, scale formation and pollutant emissions. ZeroFlame, DigiMod and SMSPrometheus will provide reduced NOx emissions down to 90 mg/Nm3, less scale formation down to 0.4 percent, and a decrease in fuel consumption down to less than 27 Nm3 per ton. With this investment, MEGASA will consolidate its leading position in the market of construction steel.

SMS group’s sales and technical teams have found the right technical solution for the wide product range and the requirements of the customer. The furnace will be able to reheat billets starting from as slender as 120 millimeters up to 160 millimeters in various lengths up to 14.5 meters. SMS group will supply the furnace on a turn-key basis, including erection and supervision to commissioning.

(read more about SMS Group)

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 14,000 employees who generate worldwide sales of about EUR 3 billion. The sole owner of the holding company SMS GmbH is the Familie Weiss Foundation.

Source:SMS Group