Tag Archives: Mexico

Trade War Speculation Unsettles Emerging Steel Markets

Brazil

Challenging business conditions persist in Brazil. Domestic buyers remark that the current initiative to lift prices is ill-timed, counterproductive and would only escalate import tonnages.

Russia

Russian trading houses are booking for only immediate requirements due to price fluctuations and working capital problems. Activity deteriorated further, once the 2018 FIFA World Cup started. Shipments to construction and infrastructure projects remain steady, but demand from the commercial and private residential building sector is weak. End-users continue to experience financial problems.

India

In India, steel distributors, operating in southern states, witnessed a fall in business activity with the early onset of the monsoon season. Buyers are reluctant to purchase finished steel material and are waiting for prices to decline. Meanwhile, the Modi government announced that it will impose retaliatory tariffs on US finished steel goods (effective August 4).

Ukraine

The prognosis for the Ukrainian steel market is unchanged. Bearish dealers prefer to wait and observe the current market situation. Buying sentiment is shaped by expectations of further price fluctuations. Exporters lifted selling figures, actioned by an upturn in the cost of billet, slab and steelmaking raw materials.

Turkey

Challenging trading conditions persist in Turkey. Deliveries to downstream steel consuming industries remain slow, amid weak post-Ramadan demand growth and political uncertainty stemming from the country’s presidential and parliamentary elections. Additionally, exporters report that the tariffs on steel, imposed by the United States, have increased the competitiveness of their finished steel products, relative to their Canadian, Mexican and European counterparts.

UAE

Emirati service centres are extremely reluctant to purchase material in, what they deem as, precarious business conditions. Shipments to the construction sector and pipe fabricators remained slow in the trading period. During the summer months, building activity is constrained by high temperatures. Export opportunities are limited outside the GCC region.

South Africa

The trading environment remains downbeat in South Africa. Distributors condemned the latest upward adjustments as “unwarranted” given the current trading climate. Construction activity in the public sector is at a standstill, at present, as the market awaits government decisions on new investments.

Mexico

Purchasing activity remains moderate in Mexico. The majority of local stockists are refraining from signing any contracts at the moment. Shipments of finished steel products to the United States have halted, this month, due to uncertainty over US trade tariffs.

Source: MEPS Developing Markets Steel Review

People also read: EU Steel Prices Slip As Purchasing Slows

Grupo Simec orders to Danieli a new greenfield minimill for SBQ products.

This will be the first complete greenfield mini-mill for specialty steel built in Mexico in recent years. The facility boasts specialized world-class technology including automation equipment that assists in producing high-quality steel grades to guarantee a globally competitive production cost (Capex + Opex).

The main features of the Danieli-contracted mini-mill facility include “Full-Advanced Technology” from scrap processing to steel melting, secondary refining, round billet casting, hot-rolling, on-line heat treatment of long products, in-line cold finishing bar inspection facilities as well as an advanced wire rod line. The new green-field steel complex will incorporate all auxiliary plants and services (i.e.: the main electrical substation, WTP, compressed air, workshops, laboratories, etc.). Danieli Automation will also supply all electrical components and an advanced level 1 and 2 automation system for the entire plant.

Grupo Simec’s overall investment is estimated at 600 Million USD, and the project will be fully funded by Grupo Simec’s internally generated Cash Flow. The plant start-up is anticipated by the end of 2017.

With this new investment, Grupo Simec continues to focus its strengths on improving its leading position as North Americas largest producer and processor of Special Bar Quality steels and strengthens its commitment to exceeding its customer’s needs in the Automotive, Energy, Capital Goods Industries among many others, supporting the significant growth occurring in Mexico and the NAFTA region.

Source: Danieli Group

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ArcelorMittal Montreal invests CAD27m in the Longueuil bar mill

To strengthen its position as a local producer of high-quality steel, ArcelorMittal Montreal has announced a CAD27m investment to update the finishing line at its Longueuil bar mill. The project, to be completed in 2017, will boost the mill’s production capacity to 500,000 metric tonnes per year and make new added-value products available to customers.

The funding will come from ArcelorMittal’s global capital expenditure fund for strategic projects at its best-performing facilities. “Approval of this investment is a mark of ArcelorMittal senior management’s confidence in our business unit,” said Sujit Sanyal, ArcelorMittal Montreal vice president, operations.

“This is a direct consequence of ongoing improvements in health and safety, quality, productivity and profitability, as well as our good labour relations. These factors have contributed to our past success and are more than ever necessary if we are to continue to stand out from the crowd,” said Luc Lacerte, Longueuil plant manager.

The Longueuil bar mill currently converts about 400,000 tonnes of steel billets per year. They are made into special quality and merchant quality bars, rebar and various other semi-finished products for customers in North America and Mexico. The bar mill is the world’s largest supplier of steel for leaf springs for the major automakers’ light and heavy trucks. The new finishing line will secure additional outlets for billets from the two ArcelorMittal Montreal steelworks in Contrecoeur and will increase the bar mill’s capacity by 100,000 tonnes per year.

Design engineering is currently underway and work on the finishing line will begin in the second quarter of 2016. The new line should be operational by the end of the second quarter of 2017.

The project constitutes an addition to the CAD220m in capital expenditures at ArcelorMittal Montreal facilities in Quebec and Ontario since 2008. Despite the volatile economy, the company is maintaining its position as a world-class Canadian steel producer.

Renewed commitment to Longueuil and the community

The investment will consolidate the 200 jobs at the Longueuil plant, a strategic location for ArcelorMittal Montreal which has been in the municipality’s industrial park since 1974. In 2013, the bar mill underwent a CAD24m upgrade with the installation of a new reheat furnace. That project improved the mill’s performance while reducing its energy consumption and greenhouse gas emissions.

In addition to being a major employer in the area, ArcelorMittal Montreal is committed to the Longueuil community. One example is the company’s support for the sculpture called “La force ouvrière” (the workers’ strength) by Quebec artist Armand Vaillancourt. The colossal work of art is a tribute to union leader Michel Chartrand currently being built in a park bearing Mr. Chartrand’s name in Longueuil. It requires over 500 tonnes of steel, all donated by ArcelorMittal Montreal. Mr. Vaillancourt’s initiative will garner worldwide attention for the City of Longueuil. “Our company has a rich history in Longueuil and our recent decisions show that we are securely anchored here, both economically and culturally”, added Mr. Sanyal.

Source: ArcelorMittal

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WEAK DEMAND GROWTH UNDERMINES PRICE SENTIMENT IN EMERGING STEEL MARKETS

Brazilian domestic steel distributors have begun to press for additional price concessions from their local suppliers. The Instituto Aço Brasil (IABr) has reported that finished steel sales in the home market during April totalled 1.51 million tonnes – down 22.0 percent, compared with the previous month’s figure.

Difficult business conditions persist in the Russian Federation. Local trading houses plan to postpone purchases until the pricing scenario is more transparent. Domestic steelmakers have delayed releasing their preliminary June basis quotations for both flat and long finished steel products.

India’s Ministry of Steel has proposed imposing stricter quality controls for semi-finished and finished steel products imported into the country. If the new measures are formally approved, materials covered by the new codes would have to be certified by the Bureau of Indian Standards (BIS).

The market remains challenging in Ukraine. The May trading period was shortened by the close proximity of the Easter and national holidays.

Turkish steelmakers have had mixed success in their efforts to obtain higher transaction values to distributors. The strength of the US dollar against the local currency remains a problem.

Uncertainty continues to unsettle business confidence in the United Arab Emirates. Local distributors are forecasting no significant price recovery in either the flat or long products segments in the interim. The majority plan to purchase only on a requirement basis until the pricing scenario is more transparent.

South African service centres are growing more pessimistic about the prospects for domestic steel consumption in 2015. Deliveries to downstream industries continue to underperform.

Challenging business conditions persist in Mexico. Local steelmakers are expected to shadow the pricing strategies of their US counterparts next month.

Source: MEPS – Developing Markets Steel Review – May Edition

Joint venture for steel wire rod processing to be established in Mexico

TOKYO, September 3, 2014 — Shinsho Corporation and Kobe Steel, Ltd. have agreed with Metal One Corporation; Osaka Seiko Ltd; Mexico’s Grupo Simec, S.A.B. de C.V.; and O&k American Corporation in the United States to establish a joint venture in Mexico to produce steel wire of cold heading (CH) quality.

Called Kobelco CH Wire Mexicana, S.A. de C.V. (or KCHM), the new joint venture will process steel wire rod into CH steel wire for sale to automotive parts manufacturers in Mexico. CH steel wire is used to make automotive fasteners and cold-forged products

KCHM will be headed by President Mitsufumi Konishi, who will come from Shinsho. The company will be established in the Santa Fe Industrial Park in Silao, state of Guanajuato, Mexico. Total investment is anticipated to reach approximately US$41 million (4.3 billion yen). KCHM will be capitalized at US$11.9 million (1.2 billion yen).

Shinsho is anticipated to hold 40 percent of KCHM; Metal One, 25 percent; Kobe Steel, 10 percent; Osaka Seiko, 10 percent; Simec, 10 percent, and O&k American, 5 percent.

The joint venture will employee about 80 people when it reaches full production. Operations are to start at the end of 2015. The new plant, with a production capacity of 40,000 tons per year, will have wire drawing machines, pickling equipment and heat treatment furnaces.

Mexico’s auto production of 1.5 million cars in 2009 rose to 2.93 million units in 2013, and solid growth is anticipated in the coming years. Many Japanese auto parts manufacturers are setting up operations in Mexico. This is anticipated to create substantial demand for CH steel wire, as well as a growing need for a local source of this material. By producing in an area of increasing demand, KCHM will be able to quickly supply CH steel wire of outstanding surface quality and contribute to expanding the business of its customers.

Source: KOBELCO

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DEVELOPING MARKETS’ STEEL MARKET ROUND-UP

In India, the Supreme Court has lifted the embargo on iron ore mining in Goa. Mining companies have been authorised to excavate a total of 20 million tonnes per annum. Meanwhile, flat product steel producers are under pressure to offer additional discounts and more favourable payment terms.Developing Markets Steel Review

Challenging trading conditions persist in Ukraine. Procurement activity by small and medium sized construction companies has stagnated across the country. Meanwhile, the European Union has removed import tariffs on several categories of Ukrainian industrial goods, including finished steel products.

Buying sentiment has improved in the United Arab Emirates. Local stockists are cautiously optimistic over the growth prospects for domestic steel consumption in the May-June period. It has become too risky for buyers to conclude any deals at this stage because of volatile import quotations.

Stable trading conditions are forecast in the Mexican market during the second quarter of 2014. Underlying demand is expected to be driven by shipments to the automotive and construction sectors.

Source: MEPS – Developing Markets’ Steel Review