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

Primetals Technologies to modernize hot strip mill “HSM 2000” of Severstal in Cherepovets

Width control, thickness tolerances and overall product quality is improved

Primetals Technologies has received an order from Russian steel producer PAO Severstal to modernize the company´s hot strip mill “HSM 2000” in its Cherepovets steel works. Main targets are to improve tolerances of product width and thickness control as well as to improve overall production quality for further processing and efficient production of new products. Also, operational safety and working conditions will be improved. To these ends, an edger of the hot strip mill will be upgraded, short stroke HAGC (hydraulic gap control cylinders) will be installed in the finishing mill, and the cooling line will be outfitted with a Power Colling unit. The latter allows for an alloy-saving production of high-end steel grades. In addition, a Primetals Technologies level 2 control model consisting of physical process models with advanced optimization strategies and neural network algorithms for adaptation will be installed.

New components improve product performance, operational and workplace safety

Severstal Russian Steel Division is a part of PAO Severstal, a vertically integrated steel and steel-related mining company with major assets in Russia as well as investments in other regions. Steel production volume of PAO Severstal in 2017 was around 11.65 million metric tons of liquid steel. The steel is used to make a large number of end products, including hot- and cold-rolled flat steel, galvanized and coated products, and long products. At the “HSM 2000”, Primetals Technologies will install new mechanic, hydraulic and electric equipment and implement the corresponding automation solutions and process models.

Level 2 process control with physical process models provide high degree of automation

To improve strip thickness control in addition to the existing mechanical screw down system, short stroke hydraulic gap setting cylinders will be implemented in the first three stands (F6 to F8) of the finishing mill. The technological key functions will be replaced with the latest state of the art control algorithms. The existing level 2 system will be upgraded to extend lifetime and include present technological models. Profile and flatness control models will be added as new functions.

Power Cooling from Primetals Technologies in a hot strip mill

 

Production of high-end grades is made more efficient, saving alloys, using Power Cooling

The cooling section will be controlled by an entirely new automation system, ensuring the correct cooling strategy and cooling path as defined by the coiling temperature and the cooling rate is followed. Strip temperature tracking already starts at the roughing mill exit. A Comprehensive Temperature Control will be supplied for coordinated control of finishing mill speed, inter-stand cooling and coiling temperature. The cooling section control includes intelligent water management to cope with the highly dynamic requirements of large water flow rates. The run-out roller table downstream from the finishing mill conveys the strip through the laminar cooling line to the down coiler groups 1 and 2. In cooling section 1, right after the finishing mill, a new Power Cooling system will be installed. Also, the laminar cooling headers in this section will be renewed. In section 2, only the trimming headers will be replaced.

Source: Primetals Technologies

People also read: EU Steel Prices Steady in May Despite Anxiety in Global Market

EU Steel Prices Steady in May Despite Anxiety in Global Market

The European steel market continues to be affected by rising uncertainty. Trade with non-EU countries is considered a risk because of the possibility of sanctions being applied for material already contracted. Moreover, steel buyers, where possible, are postponing their purchasing decisions while they consider the potential outcome of the USA’s Section 232 legislation and the EC safeguard investigation. Consequently, as buying activity slowed, prices either stabilised or, particularly in the south of Europe, registered modest downward movements, in May. Underlying demand remains healthy, supported by favourable economic conditions.

The German manufacturing sector made a robust start to the second quarter, with output rising substantially. Mill order intake is healthy as end-users are, finally, forced into placing orders. However, in the distribution sector, sales activity slowed, in May. Recent strip mill business was negotiated at figures similar to last month’s values. Service centres are cutting their resale prices, often quite significantly, in order to try to stimulate sales. Import offers are not competitive.

French basis values were generally unchanged, in May. Buyers expect this stability to continue, despite the steelmakers’ attempts to obtain further rises. A number of distributors are satisfied with sales volumes, but others report a noticeable slowdown. Nonetheless, demand from the construction and auto industries remains healthy. The high number of public holidays and extended weekends, in the month of May, reduced the amount of business but activity is expected to recover, in June. Meanwhile, planned industrial unrest, resulting in strike action through to June, plus a shortage of available transport, is complicating delivery logistics.

The recent slowdown in growth in the Italian manufacturing sector continued during April. Steel buyers successfully negotiated discounts from the producers, during May settlements. This was, partly, a reaction to reduced import pricing. However, overseas offers are now becoming more expensive due to changes in the euro/US dollar exchange rate. Downstream customers are less busy and service centres have enough stock to allow them to postpone purchasing decisions.

At the start of the second quarter, UK manufacturing output continued to grow, albeit at a reduced rate. Distributors report that sales activity is slowly picking up. However, they still struggle to pass on mill increases, to their customers. A number of stockists note slightly improved resale prices, as cheaper inventories are now diminished. Both the auto and construction industries are underperforming. Basis values quoted by steelmakers, for third quarter delivery, are slightly lower than those reported in April.

No major price changes were noted in the Belgian market, in May. Service centres state that producers are unwilling to offer reductions prior to the summer holidays. Distributors only place orders for what they need each month. In the majority of cases, they can now incorporate the mill increases in their resale values to end-users. Deliveries from the domestic steelmakers are running late. Import pressure is lacking. Deals appear to be on hold as buyers await the outcome of the Section 232 measures.

The rate of expansion in manufacturing output increased in Spain, in April. Currently, the steel market is rather quiet, despite good underlying consumption. Expectations for lower prices, in the near future, have led to a ‘wait and see’ attitude amongst customers. Service centre inventories, although modest, are at a sufficient level to enable buyers to postpone placing new orders for large quantities. Quotations from overseas suppliers, with the exception of those for cold rolled coil, are unattractive. Domestic price corrections were noted for all strip mill categories, this month. Distributors failed to fully recoup recent mill hikes from their customers.

Source: MEPS – European Steel Review (May Edition)

People also read: Section 232 Continues to cast a shadow over emerging steel markets

Nucor Announces Plans to Build Galvanizing Line at Arkansas Sheet Mill

Nucor Corporation’s (NYSE: NUE) Board of Directors approved the construction of a galvanizing line at the company’s sheet mill in Arkansas to support Nucor’s growth into a wider and more diverse set of strategic end-market applications. The new galvanizing line is a $240 million investment with an annual capacity of approximately 500,000 tons. It is expected to be operational in the first half of 2021.

CHARLOTTE, N.C., May 11, 2018

This project complements the $230 million investment currently underway to construct a specialty cold mill complex at Nucor Steel Arkansas. These projects are important components of Nucor’s long-term strategy for profitable growth and will accelerate the company’s goal of increasing its automotive market share.

“At Nucor Steel Arkansas, we are building one of the most modern and efficient steel mills in the world,” said John Ferriola, Chairman, CEO & President of Nucor. “This new galvanizing line, coupled with our new specialty cold mill complex, will allow us to efficiently produce products beyond the capability of any North American mill, and to have the flexibility to meet current and future demand for advanced high-strength steel products.”

The company is also evaluating building additional galvanizing lines at its other sheet mills as part of Nucor’s initiative to further expand its sheet business.

“Building this galvanizing line will diversify the product mix at Nucor Steel Arkansas and allow us to better serve our automotive and value-added customers,” said MaryEmily Slate, Vice President and General Manager, Nucor Steel Arkansas. “We are positioning ourselves to become a major supplier to the growing galvanized market in the U.S.”

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.

Certain statements contained in this news release are “forward-looking statements” that involve risks and uncertainties. The words “believe,” “expect,” “project,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) U.S. and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (4) market demand for steel products; and (5) energy costs and availability.

These and other factors are discussed in Nucor’s regulatory filings with the Securities and Exchange Commission, including those in Nucor’s fiscal 2017 Annual Report on Form 10-K, Item 1A. Risk Factors. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.

Source: www.nucor.com

People also read: Fourth Arvedi ESP line from Primetals Technologies started up at Rizhao Steel in China

Fourth Arvedi ESP line from Primetals Technologies started up at Rizhao Steel in China

Casting-rolling plant produces 1.7 million metric tons of high-quality, ultra-thin hot strip

At the Chinese steel producer Rizhao Steel Co., Ltd. (Rizhao Steel), the fourth Arvedi ESP (Endless Strip Production) plant supplied by Primetals Technologies was started up in April 2018. The casting and rolling plant will produce 1.7 million metric tons of high-quality, ultra-thin hot strip with thicknesses of down to 0.8 millimetres and widths of up to 1,300 millimetres. The product portfolio ranges from carbon steel to HSLA (high-strength low alloyed) grades. To cater to capacity shifts of Rizhao´s crude steel production and a change in plant setup, the Arvedi ESP plant was re-engineered for the use of larger ladles as well as for decreased space availability during the ongoing project. The plant features a Through-Process Optimization solution (TPO) and Industry 4.0. The order was placed with Primetals Technologies in 2014.

Arvedi ESP Plant was adapted to changes in crude steel production and space availability during the ongoing project

Rizhao Steel Co., Ltd. (Rizhao Steel), a company of the Rizhao Steel Holding Group, is located around 30 kilometres outside of the port of Rizhao in the south of Shandong province. The company has a production capacity of approximately 15 million metric tons of crude steel. Rizhao Steel’s product portfolio includes hot-rolled coils, wire, rods and small-dimensioned I-beams, which are mainly sold to Chinese customers. The new Arvedi ESP plants enable Rizhao Steel to further expand its production capacities for high-grade thin strip products and production of cold-rolled substitutes.

Plant features Through-Process Optimization solution (TPO) and Industry 4.0

Primetals Technologies was responsible for the engineering of the Arvedi ESP plant and supplied the mechanical equipment, the media systems, technology packages and the automation technology. The casting and rolling lines are controlled with the aid of consistent and integrated basic (level 1) and process automation (level 2). This ensures a finely coordinated interaction of the casting and rolling process. The installed Through-Process Optimization solution (TPO) compromises of the intelligent Through-Process Quality Control System (TPQC), a newly developed Industry 4.0 IT system and Through-Process Know-How (TPKH) modules. The TPO system will continuously monitor and manage product quality by recording all process parameters as well as measured production and product data, starting from the liquid phase up to the final processing lines.

The Arvedi ESP system produces hot strip directly from liquid steel in a continuous and uninterrupted production process in a linked casting and rolling plant. In this type of plant, the power consumption and the related costs are up to 45 percent less than in the case of a conventional plant with separate casting and rolling processes. It also means a significant reduction of CO2 emissions. Furthermore, with a length of only 155 meters, the dimensions of these plants are clearly more compact than those of conventional casting and rolling plants.

Shaking hands in front of the first coil produced on the fourth Arvedi ESP line at Rizhao Steel: Yu Yao, Plant Manager ESP lines, Rizhao Steel; Harald Monn-Weiss, Site Manager Primetals Technologies; Xie Jibiao, Overall Plant Manager ESP Melt shop, Rizhao Steel (from left to right).

Primetals Technologies, Limited

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.

Section 232 Continues to Cast a Shadow Over Emerging Steel Markets

Brazil

Brazilian steelmakers are optimistic about the strength of domestic consumption in 2018, highlighting improving market fundamentals in both the local and global steel markets. Additionally, Brazilian exports to the United States are temporarily exempt from measures related to the Section 232 investigation.

Russia

Negotiations in the Russian Federation remain arduous. Trading houses continue to be frustrated with the pricing positions adopted by their domestic suppliers. The latest initiative is viewed as unwarranted and not supported by underlying demand.

India

The Indian steel industry is forecasting that underlying demand will remain strong until mid-June, supported by government infrastructure spending and strengthening consumer demand. Nonetheless, MEPS notes growing resistance from end-users to the recent price increases. Moreover, the Modi government signalled it planned to formally lodge a trade dispute against the United States, at the World Trade Organisation (WTO), if the Trump administration does not exempt Indian steel goods from rising tariffs.

Ukraine

Supply chain participants report no changes to business activity, in the Ukrainian steel market. Stockists are concerned about carrying too much inventory over the next two months, fearing a downward price correction. Export activity is stable, with prices under renewed negative pressure following developments in the Chinese market.

Turkey

End-user demand in Turkey is tepid, disrupted by Mustafa Kemal Atatürk (National Sovereignty and Children’s Day), and renewed political uncertainty. Presidential and parliamentary elections are scheduled for June. The depreciation of the Turkish lira against the US dollar further exacerbated the situation. Scrap brokers predict that the domestic mills will try to push scrap prices down again in the near future, as both export and local demand remains slow.

UAE

Challenging business conditions persist, in the United Arab Emirates. Distributors are adopting a “wait-and-see” attitude, expecting purchasing activity to slow down ahead of the festive month of Ramadan. However, the outlook for the remainder of 2018 is positive, after the announcement of new commercial, residential and infrastructure projects, in Dubai and Abu Dhabi. Outside the GCC region, export opportunities are limited.

South Africa

South Africa’s Department of Trade and Industry (DTI) failed to persuade the US government to exempt the country’s steel and aluminium exports, from the tariffs, stipulated in the Section 232 proclamation. In further submissions, the ministry proposed a settlement based on 70 percent of the 2017 exports as a quota to the US. South Korea negotiated a similar quota arrangement with provisions, in late March.

Mexico

Mexican steel traders retain a cautious outlook for the second quarter. Downstream buying activity is unsettled by the aggressive pricing strategies adopted by domestic suppliers. Moreover, developments across the border in the United States continue to be watched carefully. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) pressed the government for additional measures to protect the domestic manufacturing and steel industries from foreign competition.