Egypt production resumes, rebar prices unchanged for Feb

Tuesday, 08 February 2011

Steel production is resuming in Egypt, and steel market sources report that the disruption caused by two weeks of political upheaval is now starting to ease slowly. Steel producers report that they are now back in operation but, due to reduced consumption levels, and the still uncertain political state in the country, capacity utilisation is reported to be only around 50%, Steel Business Briefing learns from informed market sources.

Ezz Steel and Beshay Steel are understood to have announced prices for February sales, retaining their rebar price level at the same level as January at EGP 4,350/tonne ($730/t) including sales taxes. The dollar equivalent was $750/t at the beginning of January.

SBB also learns from Ezz Steel today that none of its plants was totally idled during the last ten days, but there were logistics problem moving raw material into the plants. Now production continues at a better pace in all the plants, but full production rate is expected to be reached only gradually.

Market sources do not expect any change in the market prices. No imports are likely to be needed in the next month or so, as rebar demand is reported to be down to 25% of last month’s level. Current stocks are reported to be high and enough to cover the current steel consumption.

Construction still continues at some sites, although government projects have been interrupted and rebar demand for government projects is expected to come down by 50%.

Some branches of the banks are reported to have reopened, and working half-days this week.

Korean buyers pay more for Japanese HRC

Tuesday, 08 February 2011

Negotiations over hot rolled coil exports between the Japanese integrated mills and Korean re-rollers for January-March have been concluded at around $700/tonne fob, as Steel Business Briefinghad expected. But contract terms vary considerably, with some re-rollers agreeing to pay higher prices for March deliveries.

The price average of $700/t represents an increase from the previous quarter’s $650-670/t fob, but the Japanese mills had been aiming for $700-750/t fob.

Describing the result as “still unsatisfactory” for the mills, a Tokyo-based trader observed that “the rapid increase in raw material prices has made Korean re-rollers feel rushed and convinced them to sign the (purchase) contracts – even though they were opposing the rise for the current quarter.”

Another Japanese trading source tells SBB that the price for January-March is basically settled, but that the mills are lobbying for an additional rise during the period to reflect higher raw materials costs and stronger international market prices. 

“As raw materials prices for April-June are expected to become much higher, the mills want to lift their prices as much as possible this quarter,” he suggested. “The mills are aiming to add $30-50/t fob, maybe for March delivery. If not, then certainly for next quarter shipments.”

H-beam import prices rise further in SE Asia

Tuesday, 08 February 2011

Asian mills have hiked export prices of their imperial-size wide-flange beams to Southeast Asia in the past week or so to $850-860/tonne cfr, up from $830/tonne cfr. 

“The adjustment is being made to reflect the higher raw materials costs for the producers,” a Thai trader says. Since the mills made their price announcement just before the Chinese New Year break, “it is unclear if the market can accept this new price,” he tells Steel Business Briefing.

“There are no contracts at these higher prices yet,” a Singapore trader tells SBB. He explains that buying interest has slackened due to the Chinese holidays in many countries of the region. 

Bookings to SE Asia including Singapore and Malaysia were made at $820-830/t cfr for Taiwanese and Thai material in second-half of January, up from $780-800/t cfr earlier in the month, SBB understands. The sharp run-up in scrap prices is the main reason for this. 

Users have had to accept the higher prices because inventory levels are not high. Market sentiment has also improved in some markets. Domestic demand for beams is reportedly good in Taiwan and Korea. 

“We do not have to worry too much about export volumes,” says a manager with a Korean mill which exports regularly. “Prices have been rising day-by-day,” he adds. The most recent bookings to Singapore were at $830/t cfr and new offers are now at $860-870/t cfr, he reports.

Spanish scrap prices fall, rebar follows

Tuesday, 08 February 2011

Spanish scrap prices have fallen again this week, further pressuring the rebar market, which is afflicted by lacklustre demand, market sources tell Steel Business Briefing.

Scrap has dropped another €10-15/tonne, taking shredded (grade E40) to €315-320/t delivered ($426-433/t) and new arising (E8) to €335-340/t del, sources concur. “Some mills are currently buying scrap, but production is quite low at all sites due to the poor demand (for finished products) coming from domestic users and North Africa,” a scrap merchant explains to SBB.

As a result, rebar has also softened, with mills now quoting €270-290/t ex-works as a base price and stockists offering at as low as €250/t ex-works base price. Delivered prices from mills are now €530-540/t ($716-730/t) del, down from a maximum transaction price of €560/t del. 

“Prices have decreased for exports as well, as demand remains weak in Algeria and other export markets,” one mills source says. “Spanish mills have tried to sell to Saudi Arabia lately, but face competition from the Turkish producers,” the source adds. Export prices are somewhere around €510-530/t fob, sources concur.

Rebar prices are likely to fall further and producers are concerned by the rapid drop in scrap and rebar prices in Spain. “Prices are dropping too quickly compared to other markets in Europe, mills should hold on to prices better,” one source says.

Argentina's steel price freeze deemed 'illegal'

Tuesday, 08 February 2011

Following last week’s price freeze imposed by the Argentinean government on flats from domestic producer Ternium Siderar, the national steel association AA has labeled said action as “illegal” and “arbitrary,” Steel Business Briefing learns from the chamber. 

According to AA, the recent Ternium Siderar price hike that prompted the freeze was conservative compared to the increase in raw material prices, and energy and labor costs that steel companies have had to absorb. 

“In the last two years, steel prices locally have increased by 13% in Argentinean pesos, whereas raw materials prices have risen by 103% and manual labor by 54%. If measured in dollars, steel prices actually fell by 2% during the same period," notes AA in an announcement. 

The chamber indicates that although steel prices have seen a recovery in the last year, the increases have not been sufficient to cover cost increases and are well below the rate of inflation.

“In the last year, Siderar increased its prices by 22%, while inflation grew by 25%, iron ore by 157% and labor by 30%," says the association, which represents domestic steel producers. 

As previously reported by SBB, the Argentinean government held that Ternium violated a purported agreement that limited the frequency with which the steelmaker could raise prices through November 2011. As a result, the government instructed Ternium to rescind its February price hike and return prices to January levels. 

Ternium has yet to make an official comment on the matter.

US finds Chinese drill pipe a threat, duties to follow

Tuesday, 08 February 2011

The US International Trade Commission was split over whether domestic mills could be hurt by drill pipe imports from China. But with three of the six commissioners making affirmative determinations on the basis of threat, antidumping (AD) and countervailing duties (CVD) will now be applied.

The decision is the final ruling in a case that began in late 2009,Steel Business Briefing notes. It was initiated at the request of US petitioners TMK Ipsco, VAM Drilling USA, Rotary Drilling Tools, Texas Steel Conversions, and the United Steelworkers union.

In January, the US Department of Commerce set final ADs of 69.32% for China’s DP Master Manufacturing, Jiangyin Liangda Drill Pipe, Shanxi Fenglei Drilling Tools, Jiangsu Shuguang Huayang Drilling Tool, and Jiangyin Long-Bright Drill Pipe Manufacturing. The “China-wide entity” rate for all other producers/exporters was set at 429.95%, except for two companies, Baoshan Iron & Steel and Shanxi Yida Special Steel, which were found to have not dumped pipe.

The final CVD was set at 18.18% for all companies.

Because no actual material injury was found, all preliminary duty deposits on imports up to the issuance of the final orders in the next several days will be refunded, according to Hogan Lovells, which represented importers in the case (see other story).

The duties cover finished and unfinished steel drill pipe and drill collars used in drilling rigs (particularly those intended to extract oil and gas) to transmit power and conduct lubricant during the drilling process, SBB understands.

Panzhihua Iron & Steel looks higher output in 2011

Tuesday, 08 February 2011

Southwestern China’s Panzhihua Iron & Steel (Pangang) says it is looking to produce about 8.56m tonnes crude steel in 2011, up slightly from 2010’s 8.42m t.

Pangang plans to commission a new 4m t/y integrated steelworks in late-2011 in Sichuan province’s Xichang city, which will boost the company’s crude steel capacity to over 12m t/y. 

This new works is the reason behind Pangang’s output increase in 2011, Steel Business Briefing notes. And it is expected that Pangang’s crude steel output will be approaching 12m t in 2012 as the new steelworks gradually reaches full operation.

Pangang’s new works will house a 3.8m t/y hot strip mill with a width of 2,050mm. A downstream cold strip mill is also being planned. However, the timetable for constructing the cold strip mill will not be available until the hot strip mill is commissioned.

Meanwhile, Pangang’s biggest competitor in southwestern China, Chongqing Iron & Steel (Chonggang), has also been strengthening its presence in flat steel business in the region. Chonggang plans to start operating a 2m t/y cold strip mill around 2013 as a downstream unit for its 3m t/y hot strip mill. The hot strip mill was commissioned around August last year.

Pakistan Steel increases its flats prices, demand weak

Tuesday, 08 February 2011

The country’s biggest steel producer Pakistan Steel has increased its price list with effect from 4 February. Steel Business Briefinglearns from the company’s list that flat rolled steel prices increased by PKR 500-1,500/tonne according to product.

Pakistan Steel’s HRC price was PKR 60,500-63,600/t ($695-731/t) in the list effective 22 January; prices are now PKR 61,500-65,100/t ($707-748/t). CRC has been increased from PKR 70,500-77,800/t ($810-894/t) to PKR 71,000-78,300/t ($816-900/t) and HDG increased from PKR 77,900-82,800/t ($895-952/t) to PKR 78,400-83,300/t ($901-957/t). 

Chequered plate price was PKR 66,200-70,000/t ($761-805/t) before the price change, and the new price is PKR 67,200-71,000/t ($772-816/t). Slab, which was being sold at PKR 48,000-50,500/t ($552-580/t), is now PKR 49,000-51,500/t ($563-592/t). Thick plates were PKR 51,000-53,000/t ($586-609/t) and are now PKR 52,000-54,000/t ($598-621/t).

Demand for flat rolled steel is not very good in the country, as reported. However, the market players were already expecting the price increase because of the global price rises.

China's rebar output climbed to new high in 2010

Tuesday, 08 February 2011

China’s rebar output hit a new high in 2010 at 130.96m tonnes, up by 8% compared with the previous record output of 121.51m t achieved in 2009, according to data from China’s National Bureau of Statistics (NBS).

Further capacity expansions in the wake of recovery from 2008’s financial crisis, increased steel prices, and continuing healthy growth in construction-steel intensive sectors such as infrastructure have caused rebar output to keep rising since 2009, after dipping in 2008. 

Steel Business Briefing calculates that new production lines in China for making rebar/bar that were brought on stream in 2010 reached a minimum total capacity of 14m t/y; and an additional 4m t/y or more are scheduled for commissioning in 2011. 

Rebar prices in 2010 were on average higher than in 2009 with price rises geared up towards the start of the last quarter on increasing production costs and domestic inflation. Shanghai market HRB335 rebar prices reached about RMB 4,590-4,600/t ($700-701/t), including 17% VAT, in December 2010, compared to RMB 3,550/t a year earlier. 

Under strong price-upwards trend and the winding down of an energy-saving campaign, rebar output in last December also reached the year’s monthly high at 11.81m t. Daily output was 381,065 t, up by 5% from November. 

Major rebar makers are further pushing up their ex-works prices to benefit from an expected demand increase in the spring season. Many will prefer to keep operating at high capacity utilisation and this is expected to result in rebar output in January and February staying at high levels.

India’s SEPL to expand capacity for DRI, billet and rebar

Tuesday, 08 February 2011

Indian steel producer Singhal Enterprises Pvt Ltd (SEPL) expects to lift the billet capacity at its plant in Raigarh in the central Indian state of Chhattisgarh by early-2012, Steel Business Briefinglearns.

SEPL is currently installing two 50-tonne electric arc furnaces at Raigarh to lift billet capacity to 215,000 tonnes/year from the current 48,000 t/y. These two EAFs will operate alongside its existing two 12-t induction arc furnaces.

Other additional equipment, as part of the expansion, includes a 90,000 t/y rebar mill and a 150,000 t/y coal washery unit. The company will be sourcing its coal from the domestic market.

SEPL also expects to lift production from its DRI plant to 280,000 t/y from the current 180,000 t/y during the same period to support its expanded billet output.

The billet and the rebar produced will be sold to the domestic market. “Currently, demand exceeds supply for steel products in the domestic market,” a company official tells SBB.

Meanwhile, the company is also looking at the prospect of adding a mini blast furnace, a sinter plant and a 300,000 t/y pellet plant in the future after the ongoing expansion project is completed. However, these plans are still not finalised, the official tells SBB.

Billet prices increase in Pakistan

Tuesday, 08 February 2011

Pakistan’s biggest steel producer Pakistan Steel has announced a price increase of PKR 500-1,000/tonne ($5.8-11.7/t) to PKR 54,000-59,500/t ($632-690/t) for billets, effective from 5 February. The latest increase comes two weeks after the increase announced on 22 January Steel Business Briefing learns from the company.

Prices for 150mm and 125mm square billets increased by PKR 1,000/t to PKR 54,000/t. 100mm and105mm billet prices increased by PKR 500 to PKR 56,500/t. 90mm-80mm-75mm billet prices to PKR 57,500/tonne and 65mm-50mm square billet prices increase to PKR 59,500/tonne increasing by PKR 500/tonne.

Previous price increase was PKR 500-5,300/tonne depending on the sizes; company revised its price policy and added the cost of rolling smaller sizes into the smaller sizes, and widen the price gap between rolled billet and cast billet.

Marubeni-Itochu, Magnum in Indian pipe venture

Tuesday, 08 February 2011

Japanese trader Marubeni-Itochu Steel and a long-time Indian partner will commission a steel flats and longs processing venture outside New Delhi next month to meet growing demand for mechanical tubes for motorcycles.

The company, named Magnum MI Steel, will start operating from March and will have a capacity of 10,000 tonnes/month for flat products, 3,000 t/m of welded mechanical tubes and a pickling capability of 5,000 t/m.

Holding the majority 65% of the venture will be India’s Magnum Group, owner of Magnum Strips & Tubes, a coil centre and mechanical tube producer in Gurgaon, Haryana. Marubeni-Itochu holds the remaining 35%. Facilities are being transferred from Magnum Strips & Tubes to the venture at Bawal, also in Haryana.

Magnum already has experience processing steel products and has previously received Marubeni-Itochu know-how to support Japanese transplants in India, a Marubeni-Itochu spokesman tells Steel Business Briefing. 

The Bawal venture will process mainly ordinary steel mechanical tubes up to 80mm in diameter to be used for frames for motorcycles. It will also produce very minor volumes of stainless mechanical tubes. The hot rolled, cold rolled and stainless strip will be imported from Japan or supplied locally, depending on customer requirements.

The new venture will be Marubeni-Itochu’s third steel processing base in India. Caparo MI Steel Processing Private, held 30% by Marubeni-Itochu and 70% by Caparo Engineering India, started operating from 2007 and produces tailor-welded blanks. GMP Processing, held 19.9% by Marubeni-Itochu and 80.1% by Gupta Machine Tools, will start processing silicon steel for electronics applications from end-2011.

China’s seamless pipe sector must meet low-carbon goal

Tuesday, 08 February 2011

As the steel industry will be crucial in determining whether China achieves its low-carbon-economy goals during the coming five-year plan (2011-15), capacity for seamless pipes – purportedly the most energy-intensive rolled steel product – must be controlled by lowering seamless's proportion in the pipe mix. This could be realized by closing outmoded mills.

This is the view of pipe expert Peng Zaimei, writing recently in China Metallurgical News (CMN), the organ of the China Iron & Steel Association.

Peng argued that seamless pipe production processes necessitate “excessive energy consumption” which results in higher carbon emissions compared with other steelmaking processes. He declined to provide precise data to support his claim, however.

The consultant’s suggestion was that seamless production in China – which accounts for 50% of the world’s total seamless output – should be “controlled” to weed out smaller, inefficient producers that usually lack their own round billet capacity and generally produce low value-added products.

The inference is they should be persuaded to diversify into welded pipes to reduce the ratio of seamless in overall output, as in other countries. Seamless accounts for about 40% of China’s total pipe production, much higher than the 30% in Russia, 18% in the US, 15% in Japan and 1% in Korea, according to CMN.

Just how the smaller non-integrated seamless producers should be “controlled” Peng does not say.

Steel Business Briefing notes China’s seamless pipe capacity has reached 30m tonnes/year. But the China Steel Pipe Association has warned that the country’s capacity continues to grow, with more expansions planned.

Chinese mills take different routes to seek higher profits

Tuesday, 08 February 2011

Chinese steel mills are struggling to secure profits as surging raw materials costs have made the industry’s margins the thinnest among all Chinese industries.

According to the business plan formulated by Wuhan Iron & Steel (Wugang) for the coming five years (2011-15), central China’s largest steelmaker intends to lift the proportion of its non-steel business from the current 8% to 30% by the end of 2015. These non-steel businesses include producing lithium batteries, electrical machinery and even wine. 

The Wugang data show that in 2010, its profit was RMB 3bn ($475m) while the profit margin was less than 2%. “Facing the low profit margin of the steel business, we have to expand other activities to ensure profits,” a Wugang spokesman told Chinese media recently.

However, some market observers suggest that the best way to ensure profits is to upgrade steel types and produce more value-added steel. Northern China’s Hebei Iron & Steel Group (Hegang), for example, has planned to focus on producing high-end steel including auto sheet, tinplate and high-strength construction steel over the next five years. 

Prompting Hegang’s decision was clearly the acknowledgement that as China’s largest steelmaker its 2010 profit was less than one-third that of China’s second largest steelmaker, Baosteel, which is famous for its high end steel products, Steel Business Briefingnotes.

According to China Iron & Steel Association (CISA) data, the total profit of its 77 members was RMB 88.1bn last year, up 52% year-on-year. However, the industry’s profit margin was only around 3.5% – much lower than the 6% average across all Chinese industries.

Eisenhüttenstadt blast furnace to restart this week

Tuesday, 08 February 2011

ArcelorMittal Eisenhüttenstadt’s No 1 blast furnace, which was idled in December, will be blown in later this week, as foreshadowed bySteel Business Briefing, and ramped up during the following week, a company spokesman says.

No 1 is the smaller of the eastern German steelmaker’s two furnaces, and has a capacity of 550,000 tonnes/year of pig iron. Due to its small size, it is a favoured furnace within the ArcelorMittal group to be taken off stream and brought back on stream in times of fluctuating steel demand, the spokesman explains.

SBB understands this flexibility may be a reason why the Eisenhüttenstadt furnace will be relit a month or so earlier than a 1.3m t/y idled furnace at hot and cold rolled coil producer ArcelorMittal Krakow in Poland. Eisenhüttenstadt, too, is a major supplier to the automotive industries in neighbouring eastern European countries. It produces hot rolled, cold rolled, hot-dip galvanised, galvannealed and organic coated coils.

Eisenhüttenstadt’s No 1 furnace was previously idled from the depths of the economic crisis in October 2008 until February 2010. When it restarted then, it took ten days to be ramped up in winter temperatures of minus 20 degrees centigrade.

ArcelorMittal is also currently bringing an idled blast furnace at its steelworks in Florange, northeastern France, back into operation, as reported by SBB. Florange produces hot and cold rolled, galvanised and organic coated coil and tinplate.

Third auction for Kremikovtzi's assets draws no bids

Tuesday, 08 February 2011

The latest auction of the assets of defunct Bulgarian steelmaker Kremikovtzi ended without attracting any bids, just as in the previous two auctions last November and September.

The starting price of the assets was set at BGN 395m (€202m), over 30% less than the figure of BGN 565.5m (€289.1m) set for the original auction in September. Unlike the first two auctions, the latest one included additional property that “covers infrastructure and buildings to the main gates of the plant,” but vehicles included in the first two auctions were removed.

The company’s administrator briefly thought he had found a buyer when a private investor claimed to be submitting a BGN 396m (€202.5m) bid for Kremikovtzi’s assets, only to later fall short when asked for proof of his 10% deposit to the Bulgarian development bank, a pre-requisite for taking part in the auction. Kremikovtzi’s shares rose 300% during this time.

The next auction of Kremikovtzi’s assets will take place in 1-2 months, a company representative tells Steel Business Briefing. The starting price for the defunct steelmaker’s fourth auction is expected to be slashed 20% from the previous auction.

German longs roller Einsal starts new drawing line

Tuesday, 08 February 2011

Walzwerke Einsal has started up the new drawing line it built last year with the support of public funds.

The German company is a hot roller of bar from billets, producing round and flat bar on one line, and special profiles on another. It has set up a new production line for the cold drawing of profiled bar in speciality grades in a project supported by the government for environmentally sound manufacturing processes. 

As Steel Business Briefing had learned earlier from managing director Bodo Reinke, the line’s input material is reheated via energy-saving induction rather than by immersion. The process minimizes material losses at the ends of the bars, as much as 150 tonnes/year, according to Reinke. The federal environment ministry has contributed one third of the investment costs of €2.5m. 

Walzwerke Einsal says that it has overcome the crisis, and is optimistic for the business in current year on the basis of good order intake. The company is located in Nachrodt, rural North Rhine Westphalia outside Hagen, and last year celebrated its 333th anniversary. It sales amount o around €100m with an output of 25,000 t/y.

UK rebar prices under pressure as scrap costs recede

Tuesday, 08 February 2011

Rebar prices in the UK are now pegged at around £500/tonne delivered, local market sources tell Steel Business Briefing.

By the middle of January rebar prices had increased by more than £100/t in about five weeks on the back of higher scrap costs. However, Turkey has been out of the market for some weeks now, which has fed into domestic and export prices for scrap in the UK and Europe. As a result, domestic rebar mills have lowered offers slightly.

Prices are around £490-500/t (€583-594/t) delivered from Celsa depending on customer. There are import offers about at similar/higher levels but they are likely to fall in line with offers from Turkish traders, which have dropped by around $40/t .

Thamesteel remains out of the market while maintenance is carried out on its reheat furnace, SBB understands. When it does come back, some sources believe it will be producing more billet feed for the Al-Tuwairqi group than rebar for the UK market. 

“The rebar price has come down a little bit but not a lot. If scrap costs and product prices in Turkey and other markets continue to fall, however, it should drop further,” a trader suggests. Lead times remain short and demand is poor, SBB notes.

Siderurgica Balboa to produce 600,000t of crude in 2011

Tuesday, 08 February 2011

Siderurgica Balboa, the main plant controlled by Grupo Alfonso Gallardo in Spain, is expecting to produce around 600,000 tonnes of crude steel this year, Steel Business Briefing learns from the company.

The plant, located in Extremadura, Spain, is divided between Siderugica Balboa I and the newly created Siderurgica Balboa II. At Balboa I, the rebar line is currently working but the melt-shop has not been operational since 2009.

Crude production is now focussed at the Balboa II melt-shop, which has a nominal production capacity of 1.2 million t/y. “Last year we officially finished the start-up phase of the new plant. This year we expect production to reach 50% of capacity, and this proportion is set to increase further over the next years,” Gallardo explains.

Following the sale of Gallardo’s assets to Brazil’s CSN, Siderurgica Balboa and Corrugados Getafe will be the group’s only mills in Spain, SBB notes.

Because of weaker dollar, Swedish scrap remains firm

Tuesday, 08 February 2011

In Sweden, the price of grade 11 scrap – equivalent to HMS 1 – has slipped by SEK 130/tonne ($20/t) for February, according to Järnbruksförnödenheter, the agency formed cooperatively to source raw materials and supplies for the local steel mills.

However, this fall is purely because of the effect of a weaker dollar, a Swedish scrap source tells Steel Business Briefing. It takes the price of grade 11 this month to roughly SEK 2,800/t delivered (or $431/t based on the latest krona-dollar exchange rate). 

This compares with roughly SEK 2,930/t for the grade in January, or $430/t using the exchange rate from 31 December of nearly SEK 6.8 to the dollar, SBB calculates.

February is still a winter month, and there are still weather-related supply issues to consider, an informed source adds. “We need to be able to attract scrap, and we need to remain competitive,” a local source notes. The SEK 130/t decline is not a reaction to falling prices elsewhere, such as Turkish cfr values, he says.

UK scrap settlements down £20-30/t

Tuesday, 08 February 2011

UK steelworks have settled their scrap purchases this month some £20-30/tonne (€24-36/t) lower than in January, market sources tellSteel Business Briefing. This takes the price for OA plate and structural scrap to around £270-275/t delivered, SBB hears.

“This fall was predictable. There has not been much action in Turkey since the latter part of January, and domestic demand has not been too sparkling either,” explains a trader.

Where prices fell by the larger amount of £30/t, sources suggest that this applies to a steelmaker, which reportedly bought its January scrap at a higher level than others at the time.

The UK’s Nos 1 and 2 old steel scrap grades are pegged around £260/t delivered, with last week’s deals settled at the bid price, a seller adds. 

Meanwhile, export prices in Liverpool have slipped to £245/t delivered to dockside for OA, and to around the £230/t mark for grades 1 and 2, sources say. In Avonmouth, levels are thought to be slightly firmer.

Recent events in Egypt have not overly affected the UK yet, “but people here are mindful of the huge political uncertainty,” notes one: “we know Turkey is not that far from Egypt.”

Danieli establishes Swiss EAF technical unit

Tuesday, 08 February 2011

Plantbuilder Danieli has added expertise to its newly-formed unit Danieli Centro Met Swiss by incorporating part of local company VWN Steel Solutions. 

The new subsidiary, located in Rheinfelden between Zurich and Basel, as of 1 February will be the centre of competence for the Italian group’s worldwide revamping business in electric steelmaking. Additionally, Danieli Centro Met Swiss will take charge of EAF projects in the German speaking markets, with VWN’s Bernard Villemin and Thomas Narholz as managing directors. 

VWN used to be a consultancy company with some 20 employees for the pre-engineering phase of steel plant projects, Steel Business Briefing learns from a spokesman. While two thirds of the formerly 20-odd people are now with Danieli, the remaining employees will be in a different company, VWN Steel Consulting, located in Liestal and headed by Horst Wiesinger, the former chief executive of plantbuilder Voest-Alpine Industrieanlagenbau (VAI).

Exports to help EU car production growth in '11, JD Power

Tuesday, 08 February 2011

The short-term outlook for European car production is positive, with output likely to rise by 2.2% in 2011, Steel Business Briefing hears from Arthur Maher of auto industry analysts J.D. Power.

This rise reflects the positive effect from rising demand for European auto exports, particularly from China and North America, Maher told a Eurofer conference last week. The broader alignment of auto manufacturing with consumer demand and the normalisation of stock levels are also contributing.

Nevertheless, demand from consumers within the EU is likely to remain soft as consumer confidence is weakening before the recent slew of austerity programmes across the continent have even begun to bite. As such the outlook for the EU market remains “fragile”, Maher cautions. J.D. Power forecasts that sales will fall marginally by 2.2% in Western Europe, although sales are likely to rise in Eastern Europe.

The European market continues to face a challenge from excess production capacity for cars. Maher estimates this is equivalent to 8.5m units at present. This is driving down capacity utilisation rates, which are around 70% for the industry as a whole, well below the 85% target. In France, some plants are running at 20-25%, Maher notes. 

Maher predicts that European production will not surpass its pre-crisis 2007 peak until 2016, when production may reach 15m units. However, the 2008 level of 14m units should be reached by 2014.

AHSS auto steel to gain market share, Tata says

Tuesday, 08 February 2011

Advanced high-strength steels are likely to continue to gain market share among Europe-based automotive producers over the medium term, Steel Business Briefing learns from Maurice van Giezen, automotive strategy and business development manager at Tata Steel Europe.

However, the rapid slide in the share of the auto steel market held by mild steels seen between 2002 and 2008 is likely to slow, Van Giezen forecasts. Advanced high-strength steels (AHSS) are likely to come under pressure from both ultra high-strength and lower cost alternatives over the medium term. S600 material could well be “cannabilised” by higher value S800 and S4000 material for some applications. 

Underlying such developments will be the continuing efforts by producers to reduce the cost of high-strength steels by simplifying the processing of AHSS, as well as improving designs to reduce wastage during processing, or simply to reduce processing. Roll forming may well become more popular, van Giezen told a Eurofer meeting last week.

Steel manufacturers will continue to seek to bring new material to market. New alloys such as high aluminium or TWIP (high manganese) materials have been developed, while research is continuing into so-called “3rd generation” high-strength steels, which combine high tensile strength with high formability. 

Coating concepts, such as zinc manganese, or aluminium solutions for hot rolled material, as well as changes in steel processing (warm forming and semi-hot forming) and tailoring (such as novel annealing concepts) are other areas of research, van Giezen added.

Polish distributor sells foreign branches

Tuesday, 08 February 2011

Polish steel distributor, Cognor, has sold a 99.9% interest in the multinational part of its distribution business, Cognor Stahlhandel, to Vienna-based investment funds Eff eins Beteiligungsverwaltung and Eff zwei Beteiligungsverwaltung, Steel Business Briefinglearns.

A prerequisite for the sale of Stahlhandel was the acquisition by Cognor of a 25% stake in the company, which was retained by original owner Voestalpine, when Cognor purchased Stahlhandel in December 2006. Cognor obtained confirmation from Voestalpine over the weekend that the Austrian steelmaker had received full payment for the 25% stake from the Polish distributor, paving the way for the sale of Stahlhandel to the investment funds.

Cognor has now sold a 74.9% stake in Stahlhandel to Eff eins Beteiligungsverwaltung and the remaining 25% stake to Eff zwei Beteiligungsverwaltung. The combined total for the transaction is €32.7 million ($44.3m). It is expected that Mechel Service Global, the steel distribution arm of Russia’s Mechel group, will acquire Cognor Stahlhandel from the investment funds in the immediate future.

Cognor Stahlhandel has distribution centres in Austria, the Czech Republic, Slovakia, Hungary, Romania, Slovenia, Croatia and Bosnia.

Separately, Poland’s office of competition and consumer protection has given the go-ahead for ArcelorMittal to acquire Cognor’s domestic distribution network, following a conditional agreement signed last November. ArcelorMittal is to acquire 11 and lease another two of Cognor’s warehouses, along with their assets and stocks, at a cost of PLN 148.9m (€38.4m). The transaction is expected to take place in March or April.

Mechel ploughs on with Sibirginskaya expansion

Tuesday, 08 February 2011

Russian miner and steel producer Mechel has agreed to borrow 6.189bn roubles ($210m) to finance the second stage of construction of the Sibirginskaya coal mine in Western Siberia, part of its Southern Kuzbass Coal Company. Upon completion of the work, the mine’s production will reach 2.4m tonnes/year, according to Mechel.

The loan will finance equipment acquisition, construction of ancilliary buildings and the excavation of the Sibirginskaya mine’s second line, the company says. The firm states that production will increase gradually, with full commissioning due in 2014. This year, output at Sibirginskaya mine in western Siberia is expected, by the company, to reach 1.5m t.

Sibirginskaya’s first line is currently operating at an annual capacity of 1.2m t, its reserves are set at over 90m t. Mechel’s cfo, Stanislav Ploshchenko, says: “When the Sibirginskaya mine’s second line is launched, it will double the capacity of the plant, producing valuable coking coal grades, making this project particularly important.”

Mechel's coking coal output increased by 52% to 11.51m t in 2010; with other steelmaking grades of coal, such as PCI coal and anthracite, soaring by 176% to 1.99m t. The group has exceeded pre-crisis levels of coal mining and expects to achieve further growth of around 15% this year.

Metinvest to invest $1.2bn every year till 2015

Tuesday, 08 February 2011

Ukraine's Metinvest Holding has allocated $1.2bn investments for this year - double that of 2010 - and intends to continue investing at this level for the next five years, Steel Business Briefing learns from the company's prospectus for its eurobonds issue. 

The company's steel producing arm will see an overall investment of $5bn until 2015, with $2bn going to the Ilyich iron and steel works, as previously reported. The firm’s plan is to end all production by open hearth furnace and bring production capacity of oxygen converters up to 15m tonnes/year. The entire mill will switch to using pulverised coal injection (PCI) and continuous casting. 

This year investments into steel assets will amount to $531m. Additionally, 2011 will see $368m being invested in iron ore mining and processing and $279m into mining, coking coal washing and coke production, Metinvest says. 

Started in 2008 and planned to last 10 years, the initial $15bn investment programme had to be readjusted to the realities of the 2009 economic downturn. The programme did continue, but investments were modest; $324m was invested in 2009 and $497m in 2010. 

Both loans and company funds will be used for the modernisation programme and the current Eurobonds placement is likely to yield between $500 and $700m; previous placements secured $500m.

According to the company, the first nine months' turnover of 2010 amounted to $6,83bn, making a net profit of $873m. 

Metinvest's steel producing and mining facilities operate in Ukraine, Bulgaria, Italy, the USA and the UK.

Essar Algoma restarts No 7 blast furnace

Tuesday, 08 February 2011

Canada's Essar Steel Algoma has restarted its 2.8m short tons/year No 7 blast furnace, Steel Business Briefing learns.

The Sault Ste. Marie, Ontario mill shut down the BF in late January to cope with a cooling water leak exacerbated by “extreme weather conditions,” as SBB previously reported. 

“The blast furnace is ramping up smoothly and is expected to return to normal operating levels in the next few days,” Essar said. “Coke making operations remain in full effect and limited production continues at select downstream operations.”

Production at Essar’s companion No 6 BF was unaffected by the leak, though it only has an annual capacity of about 1m s.t.

Essar Algoma produces hot and coldrolled sheet and plate. 

TK Steel USA joins AISI

Tuesday, 08 February 2011

The carbon steel arm of ThyssenKrupp’s new mill complex in Calvert, Alabama has joined the American Iron and Steel Institute, Steel Business Briefing reports. 

ThyssenKrupp Steel USA CEO Christoph Lackinger accepted AISI’s invitation at the institute’s February 3 quarterly meeting in Washington, DC.

“We look forward to adding our voice to AISI’s efforts to strengthen the North American steel industry as a leader in the global marketplace,” Lackinger said.

ThyssenKrupp’s hot strip mill in Calvert is expected to produce just under 5m short tons/year of carbon steel coil.

US sheet price plateau continues

Tuesday, 08 February 2011

Sheet prices rose less than 1% in the US market last week and even fell slightly for hot-dipped galvanized coils, according to the latest market survey by The Steel Index.

The Steel Business Briefing affiliate reported benchmark prices of $808 per short ton for hotrolled coil, up $6, or 0.7% from the prior week. The coldrolled coil price rose just 0.3% in the same comparison to $894/s.t

Other fob mill prices were $928/s.t for HDG, down $7/s.t, and $887/s.t for plate, up $13/s.t

All US flats prices are at or near their 12-month highs.

Average delivery lead times were flat or down from the prior week at 5.8 weeks for HRC (down from 6.1 weeks), 7.3 weeks for CRC (down from 7.8) and 7.3 weeks for HDG (unchanged). 

Plate lead times were 6.5 weeks, down from 7.0, according to TSI.

US drill pipe importers irked with duties decision

Tuesday, 08 February 2011

US drill pipe importers are unhappy with yesterday's decision from the US International Trade Commission that will allow antidumping and countervailing duties to be placed on drill pipe imports from China (see other story).

Two importers, Downhole Pipe & Equipment and Command Energy Services, expressed disappointment with the ITC’s ruling that the US market is threatened with injury from the imports. The two companies argued that the domestic drill pipe industry as a whole was not injured by reason of Chinese imports.

“The petitioning firms represent a minority of US drill pipe producers, but won on a tie vote," commented Mark Lenhardt, who represented the importers. "We think the 'threat of injury' finding was unwarranted, based on the evidence in the case."

US petitioners fighting for the duties were TMK Ipsco, VAM Drilling USA, Rotary Drilling Tools, Texas Steel Conversions, and the United Steelworkers union.

Hogan Lovells, a law firm representing the importers, said drill pipe imports supply 10-15% of US drilling contractors’ needs. With these new restrictions on imports from China, the drilling community expects to see delivery lead times extend to 12 months or more,Steel Business Briefing understands.

"As a direct result of the vote, drilling companies will have to spend millions of dollars more on drill pipe, and less on hiring workers to do the drilling," said one Hogan Lovell attorney.

A decision on whether or not to appeal the ruling has not been made, said the law firm.

Plymouth hikes DOM prices 9% in US market

Tuesday, 08 February 2011

Plymouth Tube is hiking non-contract base prices for its drawn-over-mandrel and hydraulic fluid line pipe by 9%, roughly in line with recent similar increases by PTC Alliance, Metal-Matic and Wheatland Tube.

All DOM and hydraulic fluid line pipe produced at Plymouth’s Europa, Mississippi mill will be subject to the increase, which takes effect with shipments beginning March 14, Steel Business Briefing notes.

“In the last three months, hotrolled carbon steel products have risen more than 36%,” the Warrenville, Illinois-based company told customers in a February 4 letter, noting that an “increase of this magnitude” made the base price hike a necessity. 

In late January and early February, PTC, Metal-Matic and Wheatland announced DOM base price hikes of 8%, effective with shipments beginning February 21. 

Type 304 coil moves up 1.3% in US market

Tuesday, 08 February 2011

US type 304 coldrolled stainless coil pricing is up 1.3% week-on-week after falling nearly 2.7% last week, Steel Business Briefingreports.

Market sources report prices for bellwether type 304 CRC are hovering around $1.79/pound, though prices continue to be reported in a range between $1.77-1.88/lb.

Over the past four weeks, type 304 pricing has increased by an average of 4.3%. 

US output steady week-on-week

Tuesday, 08 February 2011

Raw steel production in the US was steady last week, with mills operating at 74% of capability utilization.

US mills made just under 1.8m short tons of raw steel during the week ended February 5, according to data sent to Steel Business Briefing from the American Iron and Steel Institute. Production was up 15% from the same week last year when mills were operating at 64% of capability.

Production was highest in the southern US, which saw output rise 4.5% week-on-week to 646,000 s.t. Output was down slightly in the Indiana/Chicago region to 424,000 s.t.

Production in the Detroit region was affected by the blast furnace outages at Severstal NA's Dearborn works and US Steel's Great Lakes works as a result of a disruption in industrial gases, as SBB has reported. Production fell to 89,000 s.t after the region made 110,000 s.t the week prior.

Mills regroup after US finds no currency manipulators

Tuesday, 08 February 2011

With another government report failing to cite China as a currency manipulator, American industry and lawmakers are stepping up their efforts to pass currency legislation, Steel Business Briefing learns.

A semi-annual report on exchange rates sent to Congress by the US Treasury Department concluded that no major US trading partner manipulated its exchange rate "for purposes of…gaining unfair competitive advantages."

The American Iron and Steel Institute said it is "extremely disappointed and dismayed" with the decision, "particularly considering that US Treasury reported last week that the yuan 'remains substantially undervalued' to the detriment of other nations."

Several US Congress members, including steel caucus chairman Tim Murphy, plan to reintroduce the Currency Reform for Fair Trade Act, which AISI strongly supports. Similar legislation is also being brought forward in the Senate, as SBB has reported.

Murphy said he was both "surprised and disappointed" with the Treasury report and said legislators plan to next week reintroduce the bill that would allow the US Department of Commerce to consider undervalued currencies as countervailable subsidies in US trade cases.

The AISI is encouraging the "swift passage of currency reform legislation by both chambers, which is urgently needed to prevent further damage to US manufacturers and workers."

With optimistic outlook, US buyers plan to expand

Tuesday, 08 February 2011

With expectations of improving economic conditions and increasing business, US steel buyers are returning to plans for expansion, according to the January steel buyers survey from the Institute for Supply Management.

The monthly survey reveals companies are anticipating flat (57%) or improving (43%) economic activity for the next six months. The companies are split 50-50 on whether the trend of industry sales and production will be up or the same in the same time period.

When asked if they plan to build or buy new manufacturing facilities within the next year, 43% said yes. That’s the highest level in at least three years, Steel Business Briefing notes. 

The employment situation continues to improve, with nearly 86% (the highest amount since April 2008) of surveyed companies reporting none of their workforce on short-time or layoff.

Respondents to the ISM survey are required to purchase a minimum of 50,000 short tons of carbon steel, or the dollar equivalent in specialty steels, in order to participate in the monthly survey.

Brazil reroller now under German control; investment pending

Tuesday, 08 February 2011

Brazilian cold rolling company Brasmetal Waelzholz has been fully taken over by one of its partners, Germany’s group C.D. Wälzholz, which has also stated that long-planned investments may go ahead this year. 

The São Paulo-based rolling mill was established in 1973 by the German cold rolling group, together with Brazil’s Banco Mercantil, then owned by the Souto Vidigal family, Steel Business Briefinglearns from Wälzholz’s finance chief, Holger Bierstedt.

The family divested Banco Mercantil in 2002, but retained its 51% stake in Brasmetal Waelzholz. Biersted explains that the spin-off is a by-product of a generation change within the family.

Three years ago, a major investment of 200m reais (€88m) was projected, but never came about owing to the economic crisis. The plan will return to the table in the coming months, Bierstedt says, adding: “as most believe that the market will stay stable”.

Brasmetal Waelzholz produced 70,000 tonnes of cold rolled strip in 2009 and last year reached 90,000t. It is currently running near maximum capacity and anticipates an output of 95,000t for 2011.

Peru ends AD duties on Russia, Ukraine flats

Tuesday, 08 February 2011

Peru’s government has decided to eliminate antidumping duties (AD) on hotrolled and coldrolled sheets and coils from Russia and Ukraine, as a result of the conclusion of a “sunset” review begun in July 2010, Steel Business Briefing learns from regulating bureau Indecopi.

According to Indecopi, the AD margins are not necessary anymore, since Peruvian imports of HRC and CRC from Russia and Ukraine have been replaced by steel products from China, Brazil and Venezuela. Also, it notes that domestic flats production declined after domestic mill Gerdau's Siderperú idled its flats facilities last year, boosting the need for imports. 

The bureau did not disclose the former AD margins on these products, SBB observes. 

Meanwhile, Chinese flats exports to Peru came to 278,166 tonnes from January to October 2010 compared with 16,642 t during the same period in 2009. "Currently, we are worried about the amount of Chinese imports into the country - not only flats - so we are especially monitoring products from there," adds Indecopi.

Brazilian pig iron export prices up in early February

Tuesday, 08 February 2011

Brazilian pig iron export prices are rising, as expected, from both the country's northern and southern regions, with improvements starting at the beginning of this month, Steel Business Briefinglearns from market participants.

The blast furnace raw material export prices have risen an average of US$10/tonne fob in the north. The hike is a bit more significant in the south, where export prices have increased around US$25/t fob.

In the past week, iron producers and traders have closed two deals from northern Brazil of 70,000 t each to the US at US$525/t fob. Prices were around US$515/t fob in early January. 

Meanwhile, a trader tells SBB that current export prices in the southern region are at about US$500/t fob, up from the US$475/t two months ago.

Spanish exports rise to LatAm's Southern Cone

Tuesday, 08 February 2011

Exports from Spain to Latin American countries in the Southern Cone - Chile, Argentina and Uruguay - grew notably during the first 11 months of 2010, the Spanish steel exporters association Siderex informs Steel Business Briefing. 

Sales particularly increased to Argentina and Chile, rising by 315% and 389%, respectively, to €39.2m (US$53m) in Argentina and €16.7m (US$22.6m) in Chile, compared with the 2009 period. 

The trade balance with Argentina was favorable for Spain for the first time since 1995, given that Argentinean imports had been the highest and exports to the country had been the lowest for 15 years. Exports to Argentina mostly consisted of longs for construction at 61.5%, and flats at 27%. Total exports reached 66,045 tonnes, up 70.6% from 38,705 t in the first 11 months of 2009. 

“Unlike Argentina, the commercial balance between Spain and Chile has always favored Spain because of Chile's traditionally limited exports to the Spanish market; the margin especially widened over the last year,” states Siderex.

Chile imported 109,385 t of Spanish steel from January to November 2010 compared with 25,562 t during all of 2009. Siderex said much of the increase was generated by last year’s earthquake, which halted Chilean steel production, boosting imports. However, high import levels are likely to be maintained in 2011, given Chile’s ongoing reconstruction projects and increasing consumption.

Experiencing a lower growth rate in the same geographical zone was Uruguay, where imports from Spain grew 60% during the first 11 months of 2010, SBB notes.

Auto sales in Brazil fall 36% in January, output down

Tuesday, 08 February 2011

After ending 2010 with record output and helping drive domestic steel demand, Brazil's auto industry registered January drops in both production and sales compared with December, Steel Business Briefing learns from domestic automakers group Anfavea. 

Automakers produced 261,777 vehicles last month, a 9.1% decline from December's 288,052 units, but a 6.4% increase year-on-year. Meanwhile, domestic consumption came to 244,873 vehicles, down 35.8% from the 381,552 units sold in December, but 14.8% more than the 213,312 vehicles sold in January 2010. 

According to Anfavea, import concerns have increased as Brazil imported about 660,000 vehicles in 2010, 20% of the country's total consumption. By comparison, 2005 imports represented only 5.6% of consumption at 90,000 units.

SBB also notes that last month's exports totaled 53,607 vehicles, representing increases of 5.8% m-o-m and 10.7% y-o-y.

The Argentinean auto sector, the second largest automotive market in Latin America, also registered a m-o-m production decline in January (see related article).

Argentina auto production down m-o-m, but up y-o-y

Tuesday, 08 February 2011

Production from Argentina's automotive sector decreased again month-on-month in January, confirming the slowdown expected for the first month of 2011 due to a seasonal decline. In an annual comparison, however, the industry continued to register an increase.

Steel Business Briefing learns from the country's auto group Adefa that Argentinean carmakers produced 46,948 vehicles in January, down 28.8% from December. Last month's output, however, was up 48.6% year-on-year.

Meanwhile, vehicle exports declined 9.2% in January m-o-m to 36,444 units, but increased 87.1% over January 2010. Sales to the domestic market reached 57,931 vehicles during January, a 16.6% drop m-o-m, but up 15.8% from January 2010.

Local sources say that despite the expected m-o-m declines, the Argentinean auto industry continues to play a relevant role in domestic steel demand, along with the construction sector.

Despite challenges, Brazilian steel grows in 2010

Tuesday, 08 February 2011

The Brazilian steel industry was the nation's best performer among industrial sectors in 2010 compared with previous year. Despite an unfavorable exchange rate and an excessive volume of imports, buoyant domestic demand drove the sector's performance upward.

Steel Business Briefing learns from the national institute of geography and statistics, IBGE, that domestic steel demand resulted in a 30% growth in domestic sales and a 4% increase in exports in 2010 compared with 2009, while the industrial sector as a whole recorded only a 2.5% gain in total sales.

Although the steel industry performed well in 2010, market players are still concerned about the international scene, saying that it is necessary to create protection mechanisms against fierce import competition to avoid losses and potential de-industrialization, SBB notes.

According to Brazil's development minister, Fernando Pimentel, the government is studying the sectors most affected by currency issues and Chinese competition in order to take further measures to increase Brazilian competitiveness and develop a favorable industrial policy.

AMSA announces another price increase for March

Tuesday, 08 February 2011

ArcelorMittal South Africa will increase its steel prices once again from March after already announcing price increases for February,Steel Business Briefing learns from the company.

Price increases for deliveries from 1 March 2011 will see flat steel products’ prices rise by an average of 7%, while long steel prices will rise by an average of 11%.

“These increases are in line with the global surge in steel prices as a result of escalating raw material costs and stock replenishment,” an AMSA official tells SBB.

AMSA issued new price lists to its customers at the end of January, which saw a 5% increase in prices. The base list price (single all-in price) of all general flat and long steel products rose by between R308/tonne ($45/t) and R388/t for all orders confirmed for delivery from February 2011.

Saudi Hadeed increases flat steel prices

Tuesday, 08 February 2011

Saudi Arabia’s biggest steel producer Hadeed SABIC has increased its flat steel prices by $20-40/tonne for bookings to be made in February for April production. Steel Business Briefing learns from a company spokesperson that demand from especially the country’s western region, which was affected by flood recently, is expected to increase soon.

Hadeed SABIC was selling hot rolled coil at $750-760/t and now the price is $770/t. CRC, which was $830-855/t is now $860-865/t, and the HDG price has increased from $930-955/t to $970/t.

The price increase was expected by the Saudi market as the local flat steel prices are lower than global markets, as SBB reported.

UAE pipes market is sluggish with higher prices

Tuesday, 08 February 2011

Prices for tubes and prices are continuing to increase in the United Arab Emirates despite the sluggish demand in the market. 1.2mm thick pipes prices are expected to increase because of the disturbances in the Egypt as Ezz Steel is the main supplier of this thickness of coils, Steel Business Briefing learns from the market sources.

In the local market, 0.5-4 inch diameter welded pipes between 2.5-3.8mm wall thickness are now being offered at $815-840/tonne. Pipes 1.2-2mm thick in the same diameters are offered at $980-1,000/t/. Galvanized pipe 2mm thick and above is priced at $950-975/t. These prices are about $15-30/t higher than in mid-January. 

Some market participants expect the 1.2mm thick prices to go up further because of the production cuts in Egypt and further possible shortage in the market.

Sharp increases for European coil prices - The Steel Index

Tuesday, 08 February 2011

Most coil prices in northern and southern Europe have moved sharply upwards, according to the latest reference prices released by The Steel Index (TSI). US coil prices rose more slowly. Plate prices also rose again, but rebar prices were more stable. 

In southern Europe, HR coil ex-works reference price rose more than 3% to €624/t ($856/t). CR and HDGalvanised prices also increased by similar amounts, while plate reference price ex-works is 3.1% higher at €707/t ($970/t), a new annual peak. Average lead-times for all coils are shorter than last week.

The CRC price in northern Europe rose by €35/tonne to €705/t ($968/t). HRC and HDG also increased firmly since last week, while plate was unchanged. 

In North America, HRC and CRC prices FOB Midwest mill reached new peaks, and are both around $100/s. ton higher than four weeks ago. Plate went up to $887/s.ton ($978/t), also a new high.

Northern European rebar reference price ex-works was unchanged at €575/tonne ($789/t). The average LME billet price moved sharply down by $29/t from the previous week to $527/tonne, so the spread to northern European rebar price jumped to $262/tonne. Southern European rebar price increased slightly, and its spread to LME billet price rose by $38/t from last week. 

TSI is owned by Steel Business Briefing . Companies wishing to receive TSI's full set of reference prices every week or submit their own price data into the index calculations can apply on TSI's website www.thesteelindex.com .

LME price softens after little buying activity

Tuesday, 08 February 2011

The price of the steel billet futures contract on the London Metal Exchange has softened in the last week after both slow buying and unrest in Egypt has affected sentiment, Steel Business Briefinglearns from trading sources.

The price for the three month contract was $548-555/tonne at the end of business last week, which is down slightly from $552-553/t at the end of trading for January. The price at the start of January was $565-570/t.

“There were slow sales last week and it caused some sellers to drop their prices,” a trader tells SBB. “It’s been relatively quiet and the Egypt crisis has had some effect on sentiment, but there’s been no direct physical effect on markets.”

“The LME is not that far away from the physical market and it seems reflective of a relatively quiet physical market,” another trader says. Scrap sales have also not been going well in Europe and distressed sellers have been trying to get rid of material, he adds. 

“We expect LME prices to stabilise and also some fresh buying interest over the coming weeks as it has been quiet really so far this year,” the trader says.

Both traders agreed that market sentiment is likely to remain less bullish the longer that instability reigns in Egypt.

Hedging and risk management will be central to SBB's Italian Forum: "Managing price volatility," taking place in Milan on 11 April.

Nickel and zinc strong price increases to come: RMG

Tuesday, 08 February 2011

Swedish mining and metals analyst Raw Materials Group expects prices for nickel and zinc to increase this year and next, but to stabilise the following year. In a new report sent to Steel Business Briefing, it says: “prices are expected to increase at a slower rate in 2012 and be maintained at 2012 levels throughout 2013”. 

RMG says that the speed and strength of recovery from the crisis is “surprising.” For 2012 it names zinc as the strongest performer, resulting from “tightness in the metal balance driven again by shortfalls in supply as production from existing mines decreases and is not replaced”. It forecasts average prices of $2,400/tonne for 2011 and $2,800/t for 2012, a 16.7% rise.

On nickel the report says that the next two years’ price increases are subject to further delays in large output operations coming online – referring to the Goro project in New Caledonia and the Ambatovy mine in Madagascar. If the delays are minimised, these projects will be “the cause of a bear market if successfully commissioned”. RMG projects the nickel price will be around $25,000/t for 2011 and $27,000/t for 2012, a rise of 8%. 

Looking further ahead, RMG says that from 2013 to 2015 prices are likely to soften owing to new supply coming on-stream. For the decade ahead RMG cites “on-going industrialisation and urbanisation of emerging markets” as factors that will “ensure a high demand regime,” The increase in Chinese power grid investment and “budding material intensive consumer consumption,” plus the Chinese/Indian auto-sector, will support demand.