Tag Archives: Steel Industry News

Divergent Stainless Steel Price Trends Derive From Section 232

Stainless steel markets throughout the world have responded differently to the United States’ announcement, at the beginning of March 2018, of 25 percent tariffs on steel imports and 10 percent tariffs on aluminium.

Uncertainty persisted as temporary exemptions were granted to supplies from selected countries, until the end of May. A quota arrangement was agreed with South Korea. On May 31, the United States confirmed that tariffs will be imposed on imports from its NAFTA associates, Canada and Mexico, as well as the European Union effective from June 1.

In response, the European Commission has launched a safeguard investigation, in an effort to thwart the redirection of steel supplies, previously destined for the US market, into the European Union. This, like the US Section 232 action, is likely to lead to the imposition of import quotas or tariffs.

While some suppliers in Europe and Asia attempted to maximise shipments to the US, in advance of the application of trade measures, the attitude of most buyers and sellers has been cautious. Exports to the United States have declined. Meanwhile, we have many reports of producers elsewhere making competitive price offers in markets that they have not previously explored.

This has resulted in divergent price trends in the different regions. In the light of reduced import tonnages and the impending introduction of tariffs on future shipments, US domestic suppliers have met little resistance to substantial price hikes, in their home market.

Producers in Europe and Asia, conversely, have struggled, in recent months, to raise selling values, by even enough to cover the rising cost of raw materials.

Between February and May, MEPS’ North American average price, for grade 304 cold rolled coil, increased by 15.5 percent. During the same period, the corresponding Asian average rose by just 1.6 percent, in US dollar equivalent terms, while the EU figure dropped by 2.4 percent.

Source: MEPS – Stainless Steel Review

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.

Finishing mill to be equipped with modern actuators for setting strip geometry

SMS group has received from ArcelorMittal Atlantique et Lorraine an order for the modernization of the hot strip mill at Dunkirk, France. The modernization covers the installation of the CVC®plus bending and shifting system, of new drive spindles in all finishing stands, and the installation of a new PCFC® system (Profile Contour and Flatness Control). This modernization provides the hot strip mill with a powerful actuator for influencing the strip geometry and prepares the mill for future challenges.The CVC®plus system with integrated work-roll bending system of SMS group is the worldwide leading technology for the setting of hot strip profile, contour and flatness and is used in more than 400 hot strip mill stands all over the world. On the basis of the process parameters, PCFC® calculates for every strip the correct shifting position of the work rolls, which are provided with a special barrel grind, and the setting values of the work-roll bending system. This way the roll gap is ideally adapted to the changing conditions and the mill can produce strip with close geometrical tolerances. The drive spindles for ArcelorMittal’s Dunkirk mill will be SIEFLEX® toothed universal joint shafts.

Modernization will be implemented in three steps. PCFC® will be installed as early as at the end of 2017 and operate in parallel with the existing control system. This so-called shadow mode makes it possible to check all functions of the PCFC®, the inter-play with the automation environment, and allows adaptation to the products of ArcelorMittal Dunkirk. In the end, this way of proceeding guarantees a smooth start-up of the new system. This start-up of the PCFC® will take place after the installation of the new bending and shifting systems in the first four stands during the annual shutdown scheduled for August 2018. The modernization of stands F5 to F7 will follow one year later.

With this order, ArcelorMittal and SMS group continue their good cooperation in the modernization of the hot strip mill at Dunkirk. In the period between 2010 and 2014 SMS group replaced a total of nine main gear units of the roughing mill (R2 to R5) and the finishing mill (F1 to F5). Only some months back, at the end of 2016, SMS group had successfully completed the modernization of ArcelorMittal’s hot strip mill at Ghent, Belgium.

SMS group is a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry. It has some 13,500 employees who generate worldwide sales of more than EUR 3 billion. The sole owner of the holding company SMS GmbH is the Familie Weiss Foundation.

Source: SMS Group

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Cliffs Natural Resources Inc. Announces its First HBI Production Plant in the Great Lakes Region

CLEVELAND–(BUSINESS WIRE)– Cliffs Natural Resources Inc. (NYSE:CLF) announced today that it has selected a site in Toledo, Ohio for the development of its first hot briquetted iron (HBI) production plant. Midrex Technologies was selected to design, engineer and procure equipment for the new plant, which will have the nominal capacity to produce 1.6 million tons of HBI per year. Lourenco Goncalves, Chairman, President and Chief Executive Officer, said, “Today’s announcement marks a very important strategic milestone for Cliffs as we begin to implement our plans to be the sole producer of high-quality HBI for the EAF steel market in the Great Lakes region. We look forward to the strong margin and earnings potential this new product will generate for Cliffs shareholders.” Mr. Goncalves added: “We thank Governor John Kasich, JobsOhio and a number of local partners in the Toledo community for their efforts to help advance this project, including an offer of approximately $30 million in grants and other financial incentives. We will continue to work closely with the State of Ohio through the environmental permitting process, and are excited to bring a significant number of high-paying jobs to Ohio.”

Ohio Governor John R. Kasich stated, “This is great news for Toledo and we’re pleased that Cliffs chose Ohio for their new investment. In addition to our strategic location and strong business climate, our low-cost natural gas resources give job creators in this industry a competitive advantage, something Cliffs recognized when considering sites for this new technology.”

JobsOhio President and Chief Investment Officer John Minor said he was thrilled Cliffs chose Ohio for this investment. “The Toledo Ironville Terminal site is a great location for this first direct reduced iron project in the Great Lakes Region,” said Minor. “JobsOhio, along with our regional partner RGP, the Toledo-Lucas County Port Authority and the City of Toledo are looking forward to supporting Cliffs as they construct this landmark facility that will create 130 permanent jobs and more than 1,200 construction jobs over the next two years.”

The estimated investment in the entire project is approximately $700 million, and Cliffs is currently in discussions with several passive financial partners. Cliffs anticipates breaking ground for the construction of the HBI production plant in early 2018, with the production of commercial tonnage of HBI beginning in mid-2020. Cliffs considers the brownfield site at the Port of Toledo a premier location for development due to its relative proximity to several future customers, as well as its logistics advantages, including affordable gas availability and access by multiple rail carriers.

About Cliffs Natural Resources Inc.

Cliffs Natural Resources Inc. is a leading mining and natural resources company. Founded in 1847, Cliffs Natural Resources Inc. is recognized as the largest and oldest independent iron ore mining company in the United States. The Company is a major supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore mining complex in Western Australia. Driven by the core values of safety, social, environmental and capital stewardship, Cliffs’ employees endeavor to provide all stakeholders operating and financial transparency. For more information, visit http://www.cliffsnaturalresources.com

Source: Cliffs Natural Resources Inc

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Primetals Technologies starts-up modernized continuous billet caster at Valbruna in Italy

Plant produces stainless steel and special alloy billets with a 180 millimeter cross-section
Basis created for conversion to even larger formats
Modernization will facilitate production of finished products with larger dimensions

The three-strand continuous billet caster modernized by Primetals Technologies was started-up at the Bolzano production site of Italian steel producer Acciaierie Valbruna S.p.A. The plant is now able to produce stainless steel and special alloy billets with larger cross-sections up to 180 millimeters. The machine radius of the plant also was increased from seven to nine meters, setting the stage for producing even larger cross-sections after further modernization at a later date. Primetals Technologies upgraded the continuous caster in 2015 to increase its availability. Modernization work on the caster was carried out during a planned shutdown in September 2016.

Acciaierie Valbruna – based in Vicenza, Italy – is a market leader in the steel industry, making and supplying stainless steel and special metal alloys. It is a private company with over 1,500 employees, and produces over 170,000 metric tons of high-quality special steels every year. The Bolzano production site specializes in stainless steel and special alloy rods with round and hexagonal cross-sections.

Primetals Technologies supplied the three-strand continuous billet caster to Acciaierie Valbruna’s Bolzano plant in 1992. It is designed as a bow-type caster with a machine radius of seven meters, and has an annual production capacity of 200,000 metric tons. As part of the modernization work, Primetals Technologies increased the machine radius to nine meters, essential for producing steels with a cross-section greater than 160 millimeters, providing new molds (160 and 180), hydraulic oscillator modifications, new secondary cooling. Also the runout area was completely reviewed with the installation of a new vertical hydraulic shear (800 tons capacity). This conversion also created the basis for subsequent production of billets with a 200 millimeter cross-section.

Source: Primetals Technologies
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STAINLESS STEEL PRICES SET TO STABILISE AFTER A YEAR OF GROWTH – MEPS

According to MEPS, alloy surcharges, for grade 304 flat products, in Europe and North America, will decline, marginally, for March contracts. This, because average LME nickel prices, during the reference period, were slightly lower than those during the previous month. Producers may try to lift basis figures in order to maintain stable transaction values. Ex-mill prices in China and Taiwan receded, this month, as purchasing activity levels were disappointing, following the Lunar New Year holidays.

Although these figures suggest a slowing in the most recent upturn in stainless steel prices, sellers will be encouraged by the positive trend displayed during the past twelve months.

February’s transaction figure for type 304 cold rolled coil in Germany is over 33 percent higher than that recorded at the same time last year. The value reported in China, this month, represents a similar increase, compared with the figure in February 2016. An even greater year-on-year advance, of more than 40 percent, is shown by the price reported for the United States, in February.

Raw material costs are an important factor in these increases. The LME nickel monthly average cash figure, for this month, is estimated at US$10600 per tonne – a gain of more than 27 percent, compared with the number for February 2016. Furthermore, the European quarterly ferrochrome contract price, for the first three months of this year, is nearly 80 percent higher than the figure for the same period, in 2016. This number is now used in the calculation of alloy surcharges in North America, as well as in Europe.

The leap in ferrochrome values, for the current trimester, will represent a high point in the current cycle, with prices forecast to soften, during the coming year. Nickel costs, on the other hand, are expected to continue on an upward trajectory. The situation regarding mine closures, in the Philippines, is ever-changing but our belief is that it will continue to contribute to supply tightness.

Our research reveals an optimistic outlook from many parts of the global stainless steel supply chain. Underlying demand is perceived to be strong, particularly in Europe and North America. Conversely, trade cases against Asian stainless steel producers, in many parts of the world, have resulted in oversupply in the Far East.

Falling chromium costs are expected to offset rising nickel values, over the next twelve months. With basis numbers predicted to be quite stable, we forecast little change in global stainless steel transaction prices, in the coming year.

Source: MEPS – Stainless Steel Review – February Issue