ThyssenKrupp continues to grow in China: New automotive supply plant opened in Changzhou

Components business is investment focus in China / New manufacturing process has opened growth opportunities in Asia, South America, Europe

ThyssenKrupp CEO Dr. Heinrich Hiesinger has today opened a new plant for automotive components in Changzhou. At the new location for powertrain technology in the Jiangsu province cylinder-head covers for the Chinese automotive market are manufactured. ThyssenKrupp has invested around 40 million euros in the new plant. From now on, up to 200 people will produce about one million cylinder-head covers there per year.

“As a broad-based technology company the Chinese market plays an important role for us. Our strategy focuses especially on China’s mobility sector. In recent years, we have strongly expanded in this industry with our elevator division and components business,” says Dr. Heinrich Hiesinger.

Five of ThyssenKrupp’s business areas have operations in China today. In the last three fiscal years, the Group has invested over 400 million euros in new production facilities. For the financial year 2013/14 ThyssenKrupp expects sales of 2.5 billion euros in China. This represents a growth of about 16 percent compared to the previous year. ThyssenKrupp operates currently more than twenty production sites in the country and employs about 16,800 employees in China.

ThyssenKrupp’s investment focus in China in recent years was on the component business for the automotive industry. In the last 24 months alone, the large industrial company has started operation in five new plants. The investment for those new facilities amounts to around 340 million euros.

“Since 1995 we are represented as a supplier of chassis and powertrain components in the country. Over the last years, we have been keeping pace with the dynamic growth in the Chinese auto industry and intend to continue growing with our customers in China,” said Dr. Karsten Kroos, CEO of the Business Area Components Technology at ThyssenKrupp.

The Components Technology Business Area, which manufactures components for the auto, construction and wind energy sectors, currently operates eleven production sites in China. They employ more than 4,000 people and in fiscal 2012/2013 generated sales of around 750 million euros, with automotive components accounting for around two thirds of this.

The product range extends from powertrain components like crankshafts, camshafts and cylinder-head covers to chassis components such as steering systems, shock absorbers, springs and stabilizers. Moreover, at three sites in China components for construction equipment and wind turbines are manufactured.

The new plant for cylinder-head covers with integrated camshafts in Changzhou is the fourth such plant being built or taken into operation around the world by ThyssenKrupp in the last 12 months. The company has already begun manufacturing cylinder-head covers in Dalian (China) and Ilsenburg (Germany) last year, while a further plant in Poços de Caldas (Brazil) is currently under construction and scheduled to start series production next year. Plans for a further plant in the NAFTA region are well advanced.

The strong demand and high growth potential particularly for cylinder-head covers are based on a new development in camshaft technology and a production process which has been perfected by ThyssenKrupp. In a special process, the camshafts and other components are integrated directly into the closed cylinder-head cover. As a result, ThyssenKrupp can now supply its customers with a complete valvetrain module instead of individual drive components as in the past. This delivers weight savings of up to 30 percent, lowers fuel consumption and reduces harmful emissions. Faster and more efficient engine assembly at the car plant is a further advantage.

Source: ThyssenKrupp

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JAPAN STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

Flat product prices, in Japan, were unchanged month-on-month, according to the latest report by MEPS. After failing to hold on to hot rolled coil transaction values in September, the mills have brought some stability back into the market. Consumption is picking up but import pressure persists. The export situation remains extremely competitive.

The shipyards are performing well, helping to boost sales of plate. The healthy construction sector is also fuelling strong demand. However, large tonnages of imported commodity grade material are limiting local price rises. Moreover, overseas sales have dropped significantly.

In the cold rolled coil market there is growing competition from elsewhere in the Asian region. Order intake at the domestic mills is reasonable, despite softening demand from the vehicle manufacturers.

Domestic vehicle production fell by 6.7 percent, year-on-year, in August, the second consecutive month of lower output. Domestic car sales have dropped, following a consumption tax increase in April. Imports of coated products continue to pose problems for local steelmakers. However, transaction figures have remained stable for several months.

Structural section inventories held by distributors, at end September, rose by 1.2 percent from the August figure. Major producer, NSSMC, has decided to keep official H-beam values unchanged for October contracts. This is the ninth month in a row that the company has kept prices flat. In the marketplace, transaction numbers have moved down by 1.3 percent.

Japan’s largest rebar maker, Kyoei Steel, announced it would lift official list prices for October contracts by ¥3000 per tonne, due to a combination of higher input costs and tight supply. However, market values have eased down during recent negotiations.

Merchant bar producers chose to roll over last month’s figures for October contracts as their material costs reduced. Sales to the building industry are reasonable, with supply and demand largely in balance.

Source: MEPS International Steel Review – October Issue

MEPS GLOBAL STEEL PRICE DOWN 3.4 PERCENT IN OCTOBER

US flat product transaction values continued to slip in October as many mills offered discounts to gain orders. Buyers were postponing the conclusion of deals in the hope of cheaper prices in the future. However, on October 28, AK Steel announced its intention to lift values by US$20 per short ton, with immediate effect. Demand has softened a little, partly for seasonal reasons. At the same time, availability has expanded, both from domestic and overseas sources. High prices in the US, relative to the rest of the world, have attracted a great deal of interest from steelmakers in other regions. Moreover, raw material costs are declining. Service centre inventories are also growing as their business slows.

In Canada, we have noted downward price movements on uncoated strip mill products. Buyers are expecting producers to be even more flexible when negotiations open for December deliveries. There is little optimism in the marketplace, with customers only purchasing for their immediate needs. Inventories appear to be steady, with no stock building.

Chinese steel consumption is contracting due to slower economic growth. This has put even more negative pressure on raw material costs and on the price of steel. Meanwhile, inventories continue to grow, both at the mills and in the marketplace. Traders are attempting to reduce their stocks. Consequently, steelmakers’ orders are reducing. Major producer, Baosteel, has announced that it will cut official ex-works domestic prices for strip mill products for deliveries in November. Overseas sales volumes hit record highs in September.

Japanese steel consumption continues to improve but much of the increased business is being picked up by importers. Indeed, in August, domestic mill orders were down by 3 percent, year-on-year, as export volumes also fell away. Flat product values were unchanged in October. However, Tokyo Steel has cut all official list prices for November delivery by ¥3000 per tonne to try to counteract cheap imports from China, despite higher energy costs. The company’s outlay on scrap has reduced considerably over the last few weeks.

South Korean producers are trying to cope with slowing economic growth and significant import pressure. In September, supplies of steel products from Japan increased for the first time in six months as the weak yen helped to push down prices. Chinese steelmakers are also gaining market share. The outlook remains pessimistic, with stagnant demand and oversupply, leading to further discounting this month. Producers are increasingly looking for export opportunities.

In Taiwan, local consumption is slowly recovering. However, major integrated producer, CSC, has announced that it will cut domestic list prices by an average of NT$646 per tonne (just over 3 percent) for December contracts, after three months of no change. Although this is a period when, traditionally, steel demand is at a peak, there is a great deal of competition from cheap imports, particularly of Chinese origin.

Source: MEPS International Steel Review – October Issue

SSAB commissioned SMS Siemag to modernize the tandem cold mill at Borlänge

In September 2014, Swedish steel producer SSAB awarded SMS Siemag (www.sms-siemag.com) Germany, the order to modernize the tandem cold mill at its Borlänge works. The rolling mill, supplied by SMS Siemag, has been in operation since 1970. The most recent revamp of the mill in 2004 was also performed by SMS Siemag.

The five-stand tandem cold mill has an annual capacity of more than 1.2 million tons. It produces carbon steel strips in widths ranging between 600 and 1,550 millimeters and with final gages down to 0.32 millimeters.

To be able to roll new materials cost efficiently and with better flatness on the tandem mill, SMS Siemag will supply new mechanical systems for mill stand No. 4. These will include systems for roll gap lubrication, roll cooling and an oil wiper system.

The revamping work, which will take one week, is scheduled to take place during the regular shutdown in summer 2015. In mid-August 2015, SSAB will be able resume production on the revamped tandem cold mill.

Source: SMS Siemag

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GLOBAL STAINLESS STEEL OUTPUT IN 2014 TO BE ANOTHER RECORD HIGH – MEPS

World crude stainless steel production is predicted to reach an all-time high of 41 million tonnes in calendar year 2014. This represents a 7.8 percent increase on the previous record figure, set last year.

Amongst the established stainless steelmaking regions, total output for 2014 is forecast to be higher than last year in the EU, United States, Japan and Taiwan but lower in South Korea. Production in all these countries remains below the peak figures recorded in 2006.

Chinese output continues on a steady, upward trend. The proportion of the world’s stainless steel made in China has increased from 18.5 percent in 2006 to an estimated 51 percent in 2014.

Demand in the EU has been strong during the summer but has now begun to slow. Nevertheless, year-on-year output is forecast to grow by 6.4 percent, to 7.6 million tonnes, in 2014.

The economic recovery in the United States continues to gather pace. Stainless steel production is expected to total 2.2 million tonnes in 2014 – 8.4 percent more than last year.

Japan’s 2014 outturn is foreseen at 3.375 million tonnes, representing a healthy, year-on-year increase of 6.3 percent. Another disappointing result is anticipated for South Korea. The 2014 total is likely to be 1.6 percent less than last year’s figure.

Source: MEPS – Stainless Steel Review – October Issue

NORDIC STEEL MARKET ROUNDUP FROM MEPS

Mills in northern Europe continue to have difficulty implementing advances for strip mill products according to the latest report by MEPS. Hot rolled coil sales activity has slowed since the end of September. Market participants believe that business in the final quarter may be more subdued.

Business is fair in the cold rolled coil market but there are few big orders. Local producers are trying to lift their selling values but they cannot succeed while iron ore costs are falling and demand is weak. Many automotive and other manufacturers are buying large tonnages of galvanised coil from the mills. There is little threat from imports as the price differential is not enough to make up for the longer shipping times.

Commodity plate prices were unchanged month-on-month. Manufacturers of agricultural equipment report losing sales to customers in Russia and Ukraine because of the unrest there. Demand from truck makers is fair, in Sweden. However, other heavy industries have slowed significantly. Project activity is fluctuating, in Norway. Sales to offshore applications are at a low level compared with recent years.

Wire rod consumption picked up a little, immediately after the summer break, but has now returned to the previous level. No change in activity is anticipated in the short term, although a small seasonal downturn is likely during the final months of 2014. The conflict in the Ukraine has had some negative effect on sales. Producers proposed a small increase, in October, for structural sections but were unsuccessful. Sales volumes and transaction values are stable. Building activity is fair. No great change is foreseen during the final quarter.

Activity in the rebar market has shown some improvement of late. However, there is a risk that scrap costs and consequently, steel prices, will follow the downward path of iron ore values. Furthermore, demand will diminish if there is a severe winter. Day-to-day business for merchant bar is subdued and there are few enquiries. Orders for farm machinery have been adversely affected by the unrest in the Ukraine. Local suppliers are struggling to lift selling figures due to the generally depressed market in Western Europe.

Source: European Steel Review Supplement  – October Edition