Category Steel Industry News

RESTRICTED AVAILABILITY BOOSTS EU STEEL PRICES

European strip mill product prices continued to strengthen, in January. The substantial upward pressure from raw material costs diminished. However, supply remained extremely tight and domestic mill delivery lead times stretched into the second quarter. Moreover, third country import volumes were very restricted, due to trade defence measures and high third country quotations.

Purchasing activity in the immediate run-up to Christmas was subdued but steelmakers report increased order intake, in early January. Underlying demand is firm. Producers are looking to implement further increases in the second half of the month, when trading resumes properly. They continue to be very strict on pricing policy.

Germany’s manufacturing sector was buoyant at the end of 2016, with continuing growth. This year is forecast to be at a similar level, or even higher. Consequently, steel demand remains healthy. Strip mill products basis values continue to advance as a result of restricted supply and extended delivery lead times. Buyers believe that the steelmakers will continue to take advantage of the situation by claiming even higher prices in the short term. Service centre stocks are described as mid-range to low. Resale values are very high.

Buying activity remains moderate in the French market, except from the auto industry, which continues to boost demand, especially for coated coils. The absence of imports has caused availability problems, with domestic mill delivery lead times now stretching to April. In this context, EU producers intend to propose further price increases, which are likely to be accepted. Half-yearly contracts with the auto sector were settled at levels significantly above those of the previous six months. Spot market values, for the rest of industry, moved up a little in late December.

Italian strip mill product basis figures moved up, towards the end of last month, driven by tight supply. Antidumping legislation led to a considerable drop in import volumes, whilst delivery lead times from European steelmakers were extended. Transactions were slow at the start of 2017 as most companies did not return from the Christmas holidays until January 9. Service centre inventories are on the high side, due to speculative purchasing during September/October, when steel prices were low. Resale values remain depressed as some distributors continue to ignore the costs of replacement.

UK stockists are now heavily dependent on imported steel from continental Europe. Consequently, the weaker pound sterling creates additional upward price pressure. Suppliers are likely to impose an increase in excess of £30/40 per tonne for April business. Distributors’ sales were steady in early January, as resale values continued to move up, enabling them to preserve their profitability.

Quantities are still very limited in the Belgian market. Although basis numbers continue to rise, we detect more price stability. Buyers expect producers to push for further hikes, once new negotiations are underway. Service centres are reluctant to pay more because they have failed to pass on the full amount of previous mill rises to their customers.

Spanish steel demand is stable, or even expanding a little, as growth in the manufacturing sector continues to strengthen. The outlook for 2017 is positive. Ongoing constrained supply is expected to lead to higher basis numbers, once new negotiations are concluded. Customers expect a rise of at least another €20/30 per tonne, next month. Distributors still encounter difficulties when trying to pass on mill hikes to the marketplace.

Source: MEPS – European Steel Review – January 2017 Issue


Ton Dong A awards another order to Danieli

A new, triple-coat continuous coil coating line for high-quality products and production flexibility
Ton Dong A awards another order to Danieli
A new, triple-coat continuous coil coating line for high-quality products and production flexibility
Ton Dong A has contracted Danieli Fata Hunter to supply and install a 1,250-mm triple-coat continuous coil coating line at the new facility in Binh Duong Province, Vietnam.

With an operating speed of 120-m/min., the new line will process 120,000 tons per year of HDG steel coils, mostly for the building and appliance industries.

Strip size will be 1,250 mm (max. width) and 1.20 mm (max. thickness).

The scope of supply will include dry-in-place chemical coater and dryer to meet all the requirements of the various substrates and paints, as well as Single Slide Coaters with a closed-loop system for the best paint thickness control (Danieli Fata Hunter patent).

Printing section and tension leveling equipment are part of the supply. The flexographic printer type chosen for this installation is advanced technology for high printing quality on the substrate material, thus ensuring the quality of the final products.

The coil coating line will also include the energy-saving and environment-friendly Regenerative Thermal Oxidizer (RTO) system.

Low-maintenance and quick-change equipment will reduce maintenance time and increase line availability.

The line will be driven by a complete, modern Danieli Automation system.

Production of the first coil is scheduled in the first quarter of 2018.

This is the fourth order awarded by Ton Dong A Corporation to Danieli over the past four years.

Source: Danieli

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Primetals Technologies to supply automation and electrics for new blast furnace at EVRAZ NTMK

  • Process automation optimizes mode of operation and reduces coke consumption
  • Fully virtualized automation system reduces service costs

The Russian steel producer, EVRAZ Nizhniy Tagil Metallurgical Plant (EVRAZ NTMK), has awarded Primetals Technologies an order to supply the automation, electrical equipment and instrumentation for the new blast furnace #7. The basic automation (level 1) and the process optimization (level 2) will be installed as a virtualized automation system on central, redundant servers, which will drastically reduce service costs, especially those for future upgrades. The new process automation will also optimize the coke consumption. The order is worth several million euros and the new blast furnace is scheduled to be commissioned at the end of 2017.

The new blast furnace #7 has a production capacity of 2.5 million metric tons of pig iron per annum, and is intended to replace blast furnace #6, which is scheduled for overhaul. With an annual production of 4.9 million metric tons of crude iron and 4.2 million metric tons of steel, EVRAZ NTMK is one of the largest steel works in Russia. The integrated iron and steel works located in the city of Nizhniy Tagil in the Swerdlowsk Region of the Urals primarily produces train wheels, rails, structural steel, pipe blanks and semifinished products. Nizhniy Tagil is one of the oldest Russian steelmaking and mining centers.

Source: Primetals Technologies

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PT. Gunung Raja Paksi orders a light section mill from SMS group

PT. Gunung Raja Paksi, based in Cikarang City, Indonesia, has awarded SMS group the order to supply a continuous light section mill. The new mill will be installed at PT. Gunung Raja Paksi’s new industrial site close to their existing facilities, with production scheduled to commence in 2018.With this mill PT. Gunung Raja Paksi will be able to expand its product portfolio and meet the increased demand for structural sections in Indonesia.

SMS group is supplying a reheating furnace with a capacity of 100 tons per hour, a one-strand rolling mill equipped with 15 housingless (HL) stands in horizontal, vertical, convertible and universal arrangement, a cooling bed, straightening machine, cold saws, magnetic stacker and tying machines.

The furnace will be a walking beam type, designed to achieve excellent heat efficiency and enhanced process control by means of the renowned SMS Prometheus software. Low-NOx burners ensure a substantial reduction of pollutants released to the atmosphere, markedly contributing to the plant’s objective of becoming a local benchmark for environmental awareness.

The rolling mill will include a roughing mill consisting of six HL mill stands, an intermediate mill consisting of five HL mill stands and a finishing mill consisting of four HL mill stands each equipped with multi-groove rolls. Between the stands of the intermediate and finishing mill vertical loop lifters will be arranged allowing tension-free rolling to closest tolerances. The intermediate and finishing mill will be designed for flexible operation in horizontal/vertical, horizontal only or universal arrangement.

Starting materials will be 150 and 200 millimeter square billets with a length of 12 meters and 300 x 250 millimeter beam blanks, heated in a walking beam type reheating furnace.

The mill will be designed to produce 500,000 tons per year of a wide range of products, such as equal and unequal angles, channels, H-beams, squares and hexagonal bars for the Indonesian market.

Source: SMS Group

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MILL INPUT COST INCREASES DRIVE GLOBAL STEEL PRICES UPWARDS

Global steel selling figures have been on an upward trend throughout 2016. MEPS’ world steel price soared by more than a third, in December, year-on-year, mainly because of a rapid rise in flat product values.

Further, strong gains are likely in the first quarter of 2017, as a result of escalating mill raw material expenditure. In recent months, spot coking coal prices more than tripled, to top US$300 per tonne, while iron ore values are fluctuating in the US$70-80 per tonne range. Steelmakers, keen to stay ahead of higher input costs, announced a series of price hikes, in November/December.

Despite a stable trading environment, we believe that most producers have been successful in recouping, at least, part of their higher outlay on raw materials. In December, the MEPS world all products composite steel price increased by 6.9 percent, month-on-month.

Trade actions and a shortage of competitively-priced imports supported mills’ efforts, in the US and Europe, to lift selling values. Amid tight supply conditions, steel buyers are likely to accept the higher prices tabled by their local steel producers, in order to secure sufficient material.

We believe that global transaction values will strengthen, further, in the coming months. A slight uptick in worldwide steel demand is expected in the first trimester, as customers replenish their inventories following the year-end. However, MEPS predicts that a prolonged recovery in world steel prices is unlikely unless a significant change in market fundamentals develops.

Source: MEPS International Steel Review – December 2016 Issue


STEEL PRICE RISE IN EMERGING MARKETS DESPITE LOW SEASONAL TRADING

According to MEPS, Brazilian stockists remain adamant that any move by domestic suppliers to pursue price growth would be counterproductive and stifle what little buying interest exists. Most consignments are small bundles. Strict lending conditions and shrinking credit facilities are negatively affecting trade.

The outlook for demand in the Russian Federation is unchanged. Underlying consumption for finished steel products fell short of industry projections – particularly, from construction firms and pipe fabricators. The situation has been exacerbated by the aggressive pricing positions adopted by domestic steelmakers. Despite this, distributors plans to persevere with conservative inventory levels over the winter trading period.

Activity remained subdued, in India, in early December. Traders intend to tightly control inventory levels due to limited buying activity. Construction firms continue to be hampered by working capital problems – a consequence of the government’s currency demonetisation policy. However, this has not deterred local producers from lifting their domestic finished steel offers. Third country imports are in short supply.

Purchasing activity continues to be limited in Ukraine. Distributors report that trading remains light for both the number of bookings and volumes transacted. Tight lending conditions have squeezed investment in construction and infrastructure projects.

The Turkish finished steel market shows no signs of a substantial improvement amid weak demand. Producers, operating EAF steelmaking facilities, responded to the escalating cost of ferrous scrap with caution. They highlight the volatile nature of the global scrap markets – with peaks, quickly followed by significant drops.

The business climate remains tough in the United Arab Emirates. Local construction firms are unwilling to purchase more steel than they need to meet their near-term requirements. Emirati rolling mills opted to raise their selling figures to offset higher production costs.

Procurement activity in South Africa is forecast to deteriorate further, ahead of the festive holidays. Local distributors plan to persevere with conservative inventory levels in the short term.

The trading environment remains challenging in Mexico. Flat product dealers are holding off purchasing until January to see how demand develops, citing both tepid end-user consumption and the strength of the US dollar against the Mexican peso.

Source: MEPS – Developing Markets Steel Review – December Edition