SPANISH STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

Spanish hot rolled coil steelmakers managed to hold onto last month’s selling figures in April, according to MEPS. Russian and Chinese producers are offering competitively priced imports. Moreover, there are some new quotations from Turkey.

The hot rolled plate market is quite active but, as the domestic supplier is focussing on the higher qualities, most purchases are of overseas material, mainly of Chinese origin. There are smaller quantities of Russian plate on offer. Ukrainian mills are trying to sell but are not competitive. Moreover, buyers are not confident that delivery promises will be kept.

Local basis numbers for cold rolled coil are unchanged despite cheap third country material being offered from Russia and China. Demand from Spanish carmakers has improved. However, attractively priced overseas quotations are keeping the lid on domestic coated coil prices.

Wire rod producers have agreed a small discount, during negotiations for supplies of low carbon material. Although sales of the mesh quality are flat, selling figures have moved back up to the February level. Prices for structural section have been maintained as steelmakers focus on export markets. Local activity is quiet at present but some large public works projects are in the process of being announced.

Rapidly climbing scrap costs in Spain have not, so far, resulted in higher rebar prices, as the domestic market is quiet. Suppliers are exporting some material to the USA as well as to North Africa. Merchant bar suppliers have hung on to the March numbers, despite subdued sales to end-users.

Source: MEPS – European Steel Review – April Issue


EU STEEL MARKET STEADY BUT THE IMPORT THREAT STILL EXISTS

Activity in the European market for flat products slowed a little, ahead of the Easter holidays in early April. However, many domestic mills have delivery lead times extending into the end of June or even July, thanks to improved export business on the back of a weak euro. Second quarter prices in continental Europe are generally flat at similar levels to those in the first trimester. In contrast, price erosion continues in the UK as mainland European steel suppliers take advantage of currency movements which have enabled them to offer more cheaply than in the recent past.

The German market is quiet with few developments. Suppliers have continued to push for price increases but without any real success. In certain instances, customers may have paid slightly more but, overall, basis numbers for strip mill products are flat. Buyers are not expecting rises in the third trimester as mill costs are relatively low and demand is similar to 2014. At present, some customers are experiencing delays to their deliveries because of production problems at ThyssenKrupp. This has created a temporary feeling of supply tightness in some areas. However, the situation is expected to ease at the end of this month. Service centres continue to keep stock levels down. The utilisation rate in that sector is quite low and profit margins have shrunk.

A lack of substantial demand continues to mar the French market, where activity is still weak and producers are struggling to hold on to basis numbers. Prices are being affected by rising volumes of imported material. Chinese and Indian offers have now returned to European levels, despite the decline in value of the euro. There is not enough business available to satisfy all the distributors, who are finding it impossible to improve their poor margins. Market participants do not envisage any real improvement in the coming months.

With the exception of the auto sector, flat product consumption remains low in Italy. Mechanical engineering demand is particularly depressed. However, expectations are for a slow, if fragile, economic recovery. End-users refuse to pay more, so service centre profits are lacklustre. The weak euro is helping to deter prospective importers. Ilva is back in the market with offers for cold rolled and hot dipped galvanised coil, following an extended break. However, the volumes are small in comparison with past production levels.

UK distributors continue to report healthy business activity. Their sales in March were good and this has continued into April. Steelmakers are no longer pushing for increases. In reality, mill prices have declined again due to a weak euro, which has offered advantages to mainland European suppliers and allowed them to grow their market share. Although service centre resale values have fallen in tandem with the mill figures, margins remain acceptable.

The Belgian market is relatively stable. We have noted a small number of quarterly contracts being settled slightly higher than in the first trimester but, in general, basis figures are unchanged. Demand is rather quiet. Buyers expect little, or no, change before the summer holidays. However, there are some positive signals that activity will improve later in the year as the economy revives.

Despite attempts to lift basis figures further, suppliers to the Spanish market have been unable to secure increases. Customers are only purchasing for their immediate needs, although underlying demand is stable. Substantial volumes of third country material, due to arrive in June/July, could depress selling values in the summer. After increasing their prices when the euro first plummeted, overseas suppliers have now lowered their new offers back to the original level.

Source: MEPS – European Steel Review – April Issue


Business Deteriorates in emerging steel markets

ThyssenKrupp to sell VDM group

ThyssenKrupp is selling the VDM group to Lindsay Goldberg, represented in Europe by Lindsay Goldberg Vogel, Düsseldorf. The contract partners concluded a corresponding agreement today. The purchase price has not been disclosed. Completion of the sale is subject to the approval of the supervisory boards and the competent antitrust authorities.

On completion of the transaction, ThyssenKrupp will achieve a positive effect on net financial debt and pension obligations in the mid three-digit million euro range. The sale will also reduce the share of volatile materials businesses and thus support ThyssenKrupp on its Strategic Way Forward to becoming a diversified industrial group. The transaction will result in a book value adjustment of around € 100 million.

As part of the necessary refinancing measures at Outokumpu, all shares in VDM and AST were transferred to ThyssenKrupp at the end of February 2014. Comprehensive new business plans have been developed for VDM and AST over the past few months. ThyssenKrupp always emphasized that it did not intend to retain the two companies in the Group in the medium to long term. In Lindsay Goldberg an investor has been found who will push on with the already initiated restructuring and realignment of VDM.

Source: ThyssenKrupp

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SMS Siemag successfully commissions continuous slab caster at Puyang Steel

SMS Siemag Technology (Beijing) Co., Ltd, China,
(www.sms-siemag.com) has successfully put a continuous caster for medium-sized slabs into operation at the Wuan City works of Hebei Puyang Iron and Steel Co., Ltd. (Puyang Steel), China.

Puyang Steel is extending its slab production to include above all high grades, such as peritectic, microalloyed and high-strength steels, high-carbon and boron-alloyed steels, high-quality steels and pipeline grades.

The single-strand continuous slab caster is designed for a yearly production of 1.2 million tons of slabs with thicknesses between 150 and 180 millimeters and widths between 1,000 and 2,300 millimeters. The caster has been prepared for a future retrofit to twin-strand casting (two narrow slabs simultaneously in one strand).

The supply of the continuous casting plant included the complete plant and process technology, as well as X-Pact® electrical and automation systems complete with the technological process models (level 2). The caster is equipped with the technological process models Mold Monitoring System (MMS), Hydraulic Mold Oscillator (HMO), Remote Adjustable Mold (RAM) and dynamic soft reduction. The technology packages make it possible to cast the large variety of steel grades and ensure the manufacture of slabs with high surface and internal quality.

The continuous slab caster was installed in an existing building (brown field). The existing crane systems were retained. Due to the building situation, SMS did not plan a ladle turret, but instead developed a tailor-made ladle car concept. The containment zone has a very small main radius of only 6.5 meters.

The good cooperation with the customer was characterized by straightforwardness, few interfaces and efficient communication.

All this resulted in a steep start-up curve. Already on the fifth production day, 50 heats were cast in one sequence.

“The cooperation with SMS was very positive. The technical know-how impressed us. This was a very good basis for implementing our wishes and demands. This was done in a highly flexible and above all economical way,” says Dr. Cao Liguo, Vice President of Puyang Steel.

Puyang Steel is one of China’s leading private steel makers.

Source: SMS Siemag AG

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Business Deteriorates in emerging steel markets

NEW IMPETUS FOR COMPLIANCE WITH ANTI POLLUTION MEASURES IN CHINA

The Chinese authorities are, at last, exerting pressure on the steel and other polluting sectors to comply with regulations to improve air and water quality. For too long, they have turned a blind eye to malpractices.

Several factors have forced those responsible for enforcing the rules to be more proactive. The recent meeting, in Beijing, of world leaders prompted the authorities to take action to limit air pollution in the city. This involved the temporary closure of several of the worst offenders, including a number of steel plants.

This brought the problem into focus and led to an intensive campaign on the internet about the need for stricter compliance to regulations on pollution. We understand that the videos have now been withdrawn but, as a result of the extensive publicity and interest generated in the subject, we expect more adherence to the rules in the future.

It is difficult for companies in the heavy industries to be involved in significant expenditure on pollution control because it adds to the cost of the manufacturing process. However, investment is a necessity. Most industrial companies in the developed and emerging nations have been required to observe the regulations for many years.

It is not satisfactory for the Chinese authorities to put regulations in place and then be slow to insist on companies observing them. Now that there is more awareness of the problem, more pressure is likely to be placed on adherence to the rules to minimise pollution in all its forms. This is not specifically a steel industry problem. It applies to many industrial sectors and power generation.

Source: MEPS China Steel Review – March Edition


EVRAZ North America Announces $200 Million Investment in Regina Facility

Regina, Sask. (March 31, 2015) – EVRAZ North America announced today that it will make its largest single investment – approximately $200 million – at its Regina, Sask., facility. Premier of Saskatchewan Brad Wall, Saskatchewan Minister of the Economy Bill Boyd, Regina Mayor Michael Fougere, EVRAZ and Enbridge executives, and local dignitar-ies participated in the announcement event.

“This investment will secure our position as the highest quality, lowest cost integrated producer of large diameter pipe in North America,” said Conrad Winkler, EVRAZ North America President and CEO. “We greatly appreciate the Government of Saskatchewan’s role in working with us on issues facing primary steel production, in helping to create a favourable business environment, and in providing an important tax incentive for new investment in the recent provincial budget. It also allows EVRAZ to provide stability and long-term viability for more than 1,000 employees at the Regina mill as we continue to meet increasingly stringent industry standards and supply our customers with 100% ‘Made in Canada’ pipe.”

“Not only did the budget avoid any tax increases, we also wanted to provide an incentive for new job creation in export manufacturing and processing and so we are very pleased to see EVRAZ respond to these revenue neutral incentives with a $200 million invest-ment that will create about 40 new jobs,” said Premier Brad Wall.

Spanning the next two years the investment, which is being entirely funded by EVRAZ North America, will include installation of a new two-step large diameter line pipe mill (primarily from assets recently purchased from United Spiral Pipe LLC). It will enable the production of larger, thicker-wall pipe and increase annual production capacity by over 100,000 tons. EVRAZ is also making state-of-the-art upgrades in steelmaking including degassing and the ability to make larger steel slab sizes. Additionally, the power and size of its rolling mill will be increased to make thicker, wider steel coils.

EVRAZ and Enbridge also announced that the two companies will partner on a joint re-search and development program to enhance pipeline performance. Along with industry and academic institutions, EVRAZ and Enbridge will help drive continuous improvement with the ultimate aim of optimizing industry-wide safety and reliability.

“EVRAZ has the largest pipe Research and Development Centre in North America and it has played an important role in Canadian steel advances since 1982,” Winkler said. “Now we will combine our experience with that of Enbridge to further augment the per-formance of large diameter pipe.”

“The pipe we put in the ground is at the heart of our business. Over the next three years, we’ll build more than $22 billion of pipelines to open new markets for Canadian produc-ers – that requires certainty of the highest quality steel, available when it’s needed. EVRAZ is a proven partner and we’ve built a long term relationship on our shared com-2 / 2

mitment to making safety and quality the highest priorities, and to investing in communi-ties,” said Al Monaco, President and CEO, Enbridge Inc. “Today’s announcement is a great example of the economic benefits energy infrastructure projects create along the energy value chain and in communities.”

Large diameter line pipe is integral to oil and natural gas distribution, and EVRAZ has produced more than 51,000 kilometres (32,000 miles) of project pipe from millions of tons of recycled metal over its 59 years in Regina. The Regina site and its employees currently contribute about $30 million per year to the federal and provincial economy in direct taxes. EVRAZ also creates another $600 million per year in economic benefit through the purchase of raw materials, goods and services.

Source:  EVRAZ

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