Category Archives: USA Steel

US Steel Mills Benefit from Elevated Prices, as End-Users Face Rising Costs

The threat and subsequent imposition of a 25 percent tariff on imports of steel into the United States has benefited just a small proportion of the country’s population.

Domestic steel selling values for flat rolled products increased by almost 35 percent, in the first half of this year. A modest reduction developed in the second half, but current prices are substantially above the figures recorded in January 2018.

The main beneficiaries of the steel price hikes have been the local steel mills. The losers have been the numerous producers of manufactured goods and those companies engaged in the construction sector. These have seen their steel costs rise by 30 percent, in the past nine months.

Will the steel producers be able to maintain their current elevated prices in the long term? Probably not! Steel mill selling values are already slipping, as local buyers suffer a reduction in orders for their manufactured goods.

Source: MEPS International Steel Review – September 2018

US Hot and Cold Rolled Coil Prices Slip, Plate Values Firm

The downward momentum of US hot rolled coil prices continued, for the second successive month, in September. Amid a seasonal slowdown in activity, domestic mills are being forced to lower prices, in an attempt to secure bookings, for the fourth trimester. Many US buyers report that they are delaying purchases, in anticipation of further price reductions, owing to reduced raw material costs and greater spot availability, in particular from scrap-based producers. A number of planned mill outages, for scheduled maintenance, and a decline in imported volumes, notably from Canada and Turkey, are likely to minimise the extent of further price erosion, in the coming months. Small quantities of Serbian and South African material are being offered in the US market, at competitive prices.

Weakening demand conditions contributed to the modest decline in US cold rolled coil figures, this month. Several US buyers report that local mills are struggling to halt the negative price pressure, amid poor order intake, particularly from the automotive sector. Price deterioration should be minimised, in the coming months, owing to tightening supply, domestically, and from foreign outlets. Offshore volumes, into the US, declined by 31.7 percent, in July, year-on-year. MEPS’ research suggests a sharp decline in Canadian and Mexican imports, due to ongoing trade legislation.

US hot rolled plate values increased slightly during the past four weeks. Strong activity from a range of plate-consuming sectors contributed to the modest price rise. Many US steel market participants note that domestic plate selling values are bucking the trend of their strip products counterparts. This is due to significant supply-side shortfalls – with mill availability extremely restricted. It is reported that the majority of US plate customers remain on allocated supply tonnages. A decrease in competitively priced imports, notably from Canada, has given the US mills the opportunity to retain their, already elevated, price levels with little resistance from buyers. Local producers will be confident of maintaining the status quo, in the coming months, due to firm demand projections for the remainder of the year and tight supply created by mill outages.

Source: MEPS International Steel Review – September 2018

Primetals Technologies to modernize electric steel plant for Gerdau Special Steel North America in Monroe, USA

  • Modernization of the existing electric arc furnace
  • New twin ladle furnace and new material handling system
  • Capacity scheduled to rise by 160,000 metric tons per annum
  • Overall plant to be optimized by a high degree of automation and the use of LiquiRob systems
  • Robot systems will further improve occupational safety

Primetals Technologies has received an order from Gerdau Special Steel North America to modernize its electric steel plant in Monroe, Michigan, USA. The project involves modernizing the existing electric arc furnace. The electric steel plant will also be equipped with a new twin ladle furnace and a new material handling system. The aim is to increase the plant’s annual production capacity by 160,000 metric tons of rolled end products. End-to-end automation and the use of LiquiRob robot systems will increase productivity and reliability, optimize workflows in the steelworks, and reduce operating costs. At the same time, robot systems will make work safer. The ladle furnace and material handling system are scheduled to come into operation at the end of 2019, the modernized electric arc furnace in the middle of 2020.

Gerdau Special Steel North America is a leading manufacturer of special bars steels, which are mainly used in the automotive industry. The order awarded to Primetals Technologies is part of an investment package totaling around 80 million US dollars. Primetals Technologies will be responsible for the engineering and supplying the process equipment for the electric arc furnace, the 110-metric-ton twin ladle furnace, the material handling system and the structural steel work, and will also supervise the construction and commissioning of all the installations. The scope of delivery also includes the associated electrical installations and automation, the power supply – including transformers – and the complete, end-to-end process automation. Three LiquiRob systems will handle potentially dangerous tasks, such as taking temperatures and samples. Solutions such as the automatic sand refilling, a weighing system and the automated tap hole manipulator will optimize operation of the electric arc furnace.

Steel Plant
Electric arc furnace operated by Gerdau Special Steel North America at the company’s electric steel plant in Monroe, Michigan, USA. Primetals Technologies will modernize the electric arc furnace and supply a new twin ladle furnace and new material handling system (photo: Gerdau Special Steel North America).

 

Source: Primetals Technologies

Safeguard Measures Embolden EU Steel Mills to Lift Prices

Nucor Announces Plans to Expand Sheet Mill in Kentucky

Nucor Corporation’s (NYSE: NUE) Board of Directors approved an investment of $650 million to expand the production capability of Nucor Steel Gallatin, the company’s flat-rolled sheet steel mill located in Ghent, Kentucky.  This investment will increase the production capability from 1,600,000 tons to approximately 3,000,000 tons annually and will increase the maximum coil width to approximately 73 inches. The project is expected to create 70 full-time jobs.

This expansion complements the $176 million investment currently underway to construct a hot band continuous pickle galvanizing line at Nucor Steel Gallatin.  The pickle galvanizing line is expected to be operational in the first half of 2019 and will produce approximately 500,000 tons per year of galvanized hot band steel. Nucor continues to evaluate additional expansion projects as part of the company’s initiative to further grow its sheet business.

“This investment is another major component of our planned strategy for long-term profitable growth,” said John Ferriola, Chairman, CEO & President of Nucor. “Together with the new galvanizing line, this expansion increases our presence in the important Midwest market, specifically in the automotive, agriculture, heavy equipment, and energy pipe and tube sectors.” Nucor acquired the former Gallatin Steel Company in late 2014 for a purchase price of approximately $780 million.

“We would like to thank Governor Matt Bevin, our local officials, East Kentucky Power Cooperative and Owen Electric, our teammates and the entire community for their support,” said John Farris, Vice President and General Manager, Nucor Steel Gallatin. “The project will allow us to better serve our automotive and value-added customers.”

Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel — in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America’s largest recycler.

Source: Nucor Steel

Stainless Steel Market Disrupted by Escalating Trade Tensions

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

People also read:  Trade War Speculation Unsettles Emerging Steel Markets

US Steel Industry Protection Measures are Increasing Domestic Inflation

The concept of imposing a 25 percent tariff on steel imports into the United States appears to be a good way to protect the local steel industry. Unfortunately, this action has generated unintended consequences for consumers. Domestic steel prices have increased significantly, since the start of the year. US steel producers are taking advantage of the reduced import threat by increasing their selling values to consumers and service centres. Local manufacturers in steel intensive industries have, already, seen their input costs rise significantly.

Impact on Industry

MEPS calculates that the cost of steel supplied to autobody parts makers, in North America, increased by 22 percent during the first five months of the year. The figure for the construction industry is even greater, at 25 percent. Companies providing household appliances report a similar increase. The situation is even more dramatic for US companies which utilise large quantities of steel in their manufacturing processes. These include shipbuilders and suppliers of shipping containers, which have been subject to steel price increases of 43 and 36 percent respectively, so far this year.

SOURCE: MEPS International Steel Review