| Indian galv export prices steady, buying interest declines | ||
| Indian hot-dip galvanized coil export prices have shown little change over the past week. Transaction prices for 0.3mm thick soft coils with 90 grams/square meter zinc coating continued to average $850-860/metric ton CFR USA including $50-60/mt freight, unchanged since late-December. Customers in the USA were resisting higher-priced offers from Indian suppliers, market sources said Friday. A leading Mumbai-based re-roller and galvanizer was said to be offering 0.45mm thick and 1,520mm wide coils with 90 gsm coating at $850/mt CFR Philadelphia. A Mumbai-based trader believed the galvanizer could attract bids were it to lower its offer price by about $20/mt. “The US market is not accepting higher prices,” a Singapore-based trader said. “Customers there are very insistent on keeping prices low,” he said, adding that the recent dip in scrap prices in the US seemed to be affecting steel market sentiment there. Sources also noted the decline in buying interest from European customers. “There was good demand from buyers [in Europe] last month,” another Mumbai-based trader said. “But this month, they are turning to domestic mills for supplies,” he said. Sources reckoned the weakening of the euro against the dollar has dented import buying interest in the region. Some Indian mills have been diverting most of their HDG output for sale to the domestic market, Platts was told. Indian market participants expected to see little change in offer and transaction prices this week; buyers would shun higher-priced offers while Indian mills see little reason to pare prices, they reasoned.
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| Sidor aims to export 1.2 million mt in 2013 | ||
| Venezuela's largest steelmaker Sidor has been out of the export market for over eight months, but announced plans last week to export 1.2 million mt of rolled steel products during 2013. According to the company’s operation plan for this year, export shipments will be directed mainly to Colombia, which would represent more than 33% of the company's exports. Ecuador would receive an estimated 192,000 mt of rolled steel products (16%), and Brazil would import 7% of the total - or 85,000 mt - of Sidor's exported products. “With the recent entry of Venezuela into the Mercosur economic group, it is expected that the country will enlarge its exports to Brazil in the coming years,” said Sidor in an official statement. Since June, the company's shipments have been focused on the domestic market, mainly supplying the country’s national housing program, the Gran Mision Vivienda Venezuela. According to the company, both flats and longs are in its export plans. For 2013, Sidor wants to more than double its crude steel output to 4.4 million mt/year; it produced 1.72 million mt of crude steel during 2012. Its liquid steel production capacity is 5.1 million mt/year.
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| N. EU stockholders to start Q2 coil discussions this week | ||
| North European coil stockholders are expected to start discussions over prices for Q2 deliveries with major integrated mills at the end of this week, Platts was told by market sources. While the spot market continues showing signs of strengthening, it remains well below the mills’ target level as buyers have been resisting some of the announced increases and the euro/dollar exchange rate has not helped the EU mills. last week sources confirmed HRC transactions at €500-505/metric ton ex-works base in northern Europe, but Tata Steel has started announcing new price increases this week in UK and EU market by as much as £30/mt, lifting some of the momentum in the sector. “In Germany we are still noticing sales done at €500/mt DDP base for HRC, nevertheless we don’t see any reason why the upward trend should stop,” a mill source said, adding that ArcelorMittal's offers remain the highest in the market. Regarding the Q2 supply agreements, sources noted that ArcelorMittal continues targeting €540/mt ex-works base for its HRC, as announced by the company in its latest price increase in January. All sources contacted agreed this level is unlikely to be achieved if the current market situation persists, but one stockholder in Benelux noted that April deliveries might see HRC sales done at some €520/mt ex-works base. "In January the €540/mt mark for HRC was difficult to imagine, but now I start thinking that the market could move near that level for Q2," a mill’s commercial director said, confirming Q2 discussions are expected to show price increases. “At one moment I was worried because of the euro/dollar exchange rate, but now I see the dollar recovering and this should help mills achieve higher prices,” a stockholder noted.
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| Iron ore weekly wrap-up: Pre-holiday buying lifts prices | ||
| A last minute shopping spree by traders in anticipation of stronger steel fundamentals after the Chinese New Year holiday lifted spot price for iron ore last week. Spot iron ore prices gained modestly on the week. The Steel Index’s reference price for 62% Fe fine ore edged 1.2% higher to reach $155.10/dry metric ton CFR Tianjin port on Friday. Platts 62% Fe IODEX assessment was up 0.8% or $1.25/dmt week on week to end at $155.25/dmt CFR North China. Spot trading was thinner as most mills had already completed purchases to cover the holiday period. "The iron ore market belongs to the traders now, they are actively taking position while the Chinese mills were mainly on the sidelines," said a Singapore-based trader. Some sources were upbeat about steel prices going forward, as they expect new political leadership in Beijing to roll out more pro-growth initiatives during the annual political meeting after the Lunar New Year, which would boost steel consumption. Sources also said that tight spot availability at the ports has already been supporting the seaborne iron ore price. Iron ore port inventories in China were heard to have fallen to about 67 million mt currently, from as high as 100 million mt in the second half of last year. "Spot availability for seaborne iron ore is also very tight as traders are actively taking positions," said the trader. "Sellers believe they can secure a better price after Chinese buyers return from their holidays Market participants reported resilience in demand for index-linked iron ore cargoes as buyers, due to uncertain steel market fundamentals, preferred to buy index-related rather than on a flat price. A Hong Kong-based trader pegged the price of February-delivery Pilbara Blend fines at a premium of $3.50/dmt to February mean of Platts IODEX values.
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| Coal weekly wrap-up: Premium prices edge higher | ||
| The seaborne metallurgical coal trade was relatively stable last week as most Chinese buyers exited the market at the start of their longest annual holiday. Platts assessed premium low-volatile hard coking coal fifty cents higher at $173/metric ton FOB Australia Friday when compared to the previous week. Second-tier mid-vol coal was assessed fifty cents lower to $156/mt FOB in the same comparison. The low vol PCI market however continued to witness price upticks. Platts assessed low vol PCI $2/mt higher on week to $148.50/mt FOB on Friday. Although most Chinese participants last week were not actively scouting for spot materials, demand continued to remain firm with several buy-side sources seeing $185/mt CFR China as a "reasonable" price for top-tier Australian coal. A major Australian miner floated tenders for premium low-vol HCC and low-vol PCI, both for mid-March loading Panamaxes. If sold, the low-vol HCC would likely be transacted at $172-175/mt FOB, and the PCI cargo at $152-155/mt FOB, a number of bidders said. On the contract side, BHP Billiton-Mitsubishi Alliance (BMA) last week offered March loading premium hard coking coal to Asian steelmakers at $173/mt FOB Australia, market sources, including several BMA customers, said. This would be a $7-9/mt higher price than the price achieved in February. Platts assessment of US East Coast exports ended the week at $150.5/metric ton FOB for low-volatile hard coking coal, up from $149.0/mt seven days before.
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| Scrap wrap-up: Japan rises, most other markets weaken | ||
| Market sentiment for Japanese scrap rose during last week whereas the other Asian markets were sluggish due to the Lunar New Year holidays. Tokyo Steel Manufacturing raised its scrap buying prices by ¥500-1,000/metric ton for February 7 deliveries, taking its price for H2 grade material at its Utsunomiya works in the Kanto region north of Tokyo to ¥31,500/mt. Mills in western Japan were offering much higher prices for scrap than mills in eastern Japan in order to accumulate scrap to beef up production ahead of higher power costs, sources said. Next month eight of Japan's ten major power companies will raise their electricity rates. Traders anticipate that Japanese scrap prices for export will rise when auctions are held this week in Tokyo and Osaka for H2 grade scrap for March shipment. On the other hand, the scrap import markets in most of East Asia including Korea were quiet. Regional mills were staying away from the market because they were getting ready to close for the holidays which began last weekend. Hyundai Steel booked two bulk cargoes of West Coast US scrap for March shipment at $415/mt CFR Korea, HMS 1 basis. This is around $5/mt lower than bookings at end-January. Scrap import prices in Taiwan were stable and transaction prices of containerized HMS 1&2 80:20 from West Coast USA were unchanged from the previous week’s $385/mt CFR. February scrap price settlements in the US moved down compared to prior month settlements as weak mill demand set prices down by a minimum of $10/long ton and as much as $20/lt. Early markets to settle on Monday and Tuesday last week did so at the lowest prices, with northeast markets and Cleveland and Detroit moving down $20/lt. Dealers in other regions such as Chicago and the southeast were able to keep prices from moving down only about $10-15/lt. On a normalized basis, the US Midwest midpoint for shredded scrap purchases moves down $12/lt. The Platts assessment for February scrap purchases is $370-375/lt delivered midwest mill. Turkish import buying was active last week with over 300,000 mt of deep-sea deals concluded. The Steel Index’s weekly average reference price for 80:20 decreased by 1.5% to $390/mt CFR Iskenderun. It has fallen by $18/mt or 4.6% over the last four weeks.
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| Indian HRC buyers resist mill price increases | ||
| Prices in the Indian domestic hot rolled coil market remained largely stable over the past week, with buyers seen resisting the base price hikes announced by producers earlier this month. Some market participants surveyed by Platts Friday reckoned producers might be compelled to roll back their price increases, at least partially, through the month. “Sluggish demand is really taking its toll,” a Mumbai-based mill official said. “Every user knows mills are desperate to sell. It is all a question of domestic supply being higher than demand,” he said. Earlier this month, Indian mills had announced increases of up to Rupees 1,000/metric ton ($19/mt) in their base prices. “There is every likelihood that the full increase may not go through,” another Mumbai-based mill official said. “We may have to cut down our hike by Rupees 400-500/mt. There is a lot of resistance to the price hike,” he added. Although higher-priced import offers and a weak rupee gave Indian producers room to lift base prices, these moves are being thwarted by slack demand in the domestic market. Sources also noted that good export order bookings secured by producers in January had helped keep pressure off the domestic market. However, they were unsure whether a similar trend would be seen this month. Transaction prices in the market so far this month have remained unchanged from levels seen in January, averaging Rupees 33,500-34,000/mt ($625-635/mt) ex-works for IS 2062 grade A/B structural HRC, 3mm thick and above.
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| Korea's domestic rebar firms slightly | ||
| Korean domestic spot prices of rebar produced by local mills have seen a small gain over the past two weeks, retailers said on Friday. Steelmakers have decreased their discount margins for sales to the local market and effective retail prices were consequently pushed up by Won 10,000-20,000/metric ton ($9-18/mt), they added. However, market sources are skeptical about the chance of further hikes in spot prices given slow demand from end-users during the winter season. “Steelmakers will find it difficult to achieve their pricing targets," which may only partially be achieved, one dealer told Platts. Rebar inventories held by mini-mills stood at around 320,000 mt by the end of last month. “This is a little high in spite of several mill maintenances conducted during the last month,” he added. The country’s construction activity is currently very slow given severely cold wintery weather along with heavier-than-usual snow. “We are not in a hurry to accumulate stocks because we doubt that rebar prices will strengthen further,” one construction company manager said. Korean mills led by Hyundai Steel and Dongkuk Steel Mill informed construction companies in late January of a Won 47,000/mt increase in their rebar sales prices for February, as Platts reported. However, price negotiations between mills and contractors for January-February deliveries have remained deadlocked. Hyundai-origin SD400 grade 10mm rebars were being offered at Won 690,000-700,000/mt ($627-636/mt) from retailers last week.
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| Asian stainless prices rise with nickel | ||
| Prices of East Asian-origin grade 304 2B 2mm stainless steel cold rolled coils rose to $2,730-2,760/metric ton CFR China, Hong Kong and Southeast Asia on Friday, up $60/mt from $2,670-2,700/mt CFR last week, after nickel prices strengthened. Traders said they were still in the midst of confirming offer prices from Korean suppliers late last week. But one Hong Kong-based trader said his Korean supplier had increased its offers by $100/mt to $2,800/mt CFR Hong Kong. Offers for Taiwanese CRC hovered largely at around $2,750/mt CFR main Asian ports last week, unchanged from the previous week. Transactions took place at $2,730-2,760/mt CFR Hong Kong and Southeast Asia. A trader in central Taiwan was heard offering at $2,770/mt FOB Taiwan last week. Most sources believed the offer to be too high but some believed the price could become the norm after the Chinese New Year holidays. “Some sellers can still offer lower as they are selling old stock. But new materials will be priced higher. Prices could rise to around $2,820/mt after the holidays,” said a southern Taiwanese trader. Other sources were more circumspect, noting that post-holiday stainless prices will largely depend on nickel price changes. Nickel cash prices on the London Metal Exchange closed higher at $18,215.20/mt on February 7. Meanwhile traders offered 304 2B 2mm CRC sourced from major Chinese mills at $2,750-2,790/mt CFR Southeast Asia last week, with trades possible at $2,700-2,750/mt CFR. Exporters of Chinese CRC said late last week trading was quiet due to the Spring Festival holidays.
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| China scrap firms line up for tax rebates | ||
| In order to lower operating costs, more and more Chinese scrap processors are angling to benefit from a possible tax rebate. China Armco Metal, Inc.(CAR), a scrap processor and distributor of imported metal ores, yesterday announced that wholly-owned subsidiary, Armco (Lianyungang ) Renewable Metals, has been granted “Demonstration base for Steel Scrap Processing and Distribution” status by the China Association of Metalscrap Utilization (CAMU). The company hopes this is the first stage in securing a 50% VAT rebate, Armco's Shanghai office told Platts. Facilities granted demonstration base status could be the first to benefit from the possible rebate in 2013, according to the Ministry of Industry and Information Technology (MIIT). The status is granted on the basis of registered capital, installed equipment, environmental permitting. Final approval for the rebate would come from the State Administration of Taxation. Meanwhile, Yonggang Yongbo Scrap Limited, a new subsidiary of eastern China's Yonggang Group, began to formally operate from February 1 2013 and plans to purchase large volumes of ferrous scrap after Chinese New Year. Demonstration base status is also available to mill-owned scrap traders. Yongbo hopes to achieve this status and traded volume is a decidiing factor for this. There are currently around 40 operational demonstration bases in China with another 10 awaiting approval, according to CAMU.
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| Subscriber note: Platts to publish iron ore lump premiums | ||
| Following industry feedback, Platts proposes to launch from March 1, 2013, contract price premiums agreed between suppliers and Chinese steelmakers for Australian lump iron ore. The lump premium would be published quarterly, in line with the frequency of most extant agreements between producers and consumers. The lump premium would be published on a dollar per dry metric ton unit basis, and would represent the most commonly traded brands like Pilbara Blend, Mining Area C and Newman lump. Platts is inviting feedback on its plan to publish the premiums that it understands most Chinese mills have agreed. Premiums that are settled under known, special circumstances, would be reported in news articles, but would be excluded from the published premium. The proposed lump premium would be published in a range. For example, for the first quarter of 2013, the range would be $0.115-0.116/dmtu, as per Platts December 21 2012 report on the matter. Lower contract price premiums of $0.10-0.110/dmtu were obtained by one particular buyer, but they would not be reflected as they may not be representative of the prices reached with the broader market. The lump premium would be published in Platts SBB Steel Markets Daily, Platts Metals Alert and the Platts SBB Price Analyzer. It would supersede the SBB Hamersley Pilbara Blend Lump 63.5% Fe FOB W. Australia Port (SB01111) assessment in the Platts SBB Steel Price Analyzer, which is a quarterly calculation of the price of lump based on the price of fines and the lump premium. Separately, due to there being limited liquidity in the spot market for lump, Platts continues to review the feasibility of publishing a spot price assessment for it, and invites industry feedback on the matter. Please address any feedback or questions by February 22, 2013, to Keith Tan, keith_tan@platts.com with a copy to iodex@platts.com and pricegroup@platts.com .
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| China’s steel output, exports up in Jan | |||||||||||||||||||||||||
| The China Iron & Steel Association (CISA) has estimated national crude steel output in January at 59.55 million metric tons, averaging 1.921 million mt/day, up 0.14% from CISA’s December estimate of 1.918 million mt/d, and up 3.3% from the National Bureau of Statistics’ December figure of 1.86 million mt/d. Meanwhile, China's Ministry of Industry and Information Technology predicted China would see crude steel output increase 4.6% to around 750 million mt in 2013. It also said apparent steel consumption would reach 700 million mt, without giving a comparison. In the last eleven days of January, China’s daily crude steel output was around 1.906 million mt/d, down 0.45% from mid-January’s 1.914 million mt/d, according to CISA. The average daily crude steel output of CISA’s 78 member mills was around 1.604 million mt/day in late January, down 0.53% from mid-January. By end-January, finished steel inventories at CISA mills totalled 10.59 million mt, down 129,700 mt or 1.12% over the last eleven days of January. A Shanghai-based industry analyst told Platts that the rising output and declining inventories were signaling a recovery of the Chinese steel market. Q235 5.5mm HRC prices in Shanghai increased 5% in January, while HRB400 18-25mm rebar prices in Beijing climbed 4% over the same period. Meanwhile, China's steel exports also increased in January, leaving domestic apparent steel consumption at around 52.19 million mt, up 3.3% m-o-m and 3.2% y-o-y. Some Chinese exporters believed the steel exports could remain low in the following month given high export offer prices.
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| Top ten's share of Chinese output drops in 2012 | |||||||||||||||||||||||||||||||||||||||||||||||
| The share of China’s crude steel output made by the country’s ten largest producers declined to 45.94% in 2012, from 2011’s 49.2% and 2010’s 48.6%, China Iron & Steel Association (CISA) data showed Friday. The trend highlights the significant increase in non-member mills’ output in spite of much slower domestic steel demand growth, Platts understands. The top ten steelmakers, led by Hebei Iron & Steel (Hegang), produced a combined total of 329.17 million metric tons of crude steel last year, out of China’s overall output of 716.54 million mt. The combined output of these major mills dipped by 2.08% year-on-year in 2012, while China’s overall crude output grew 3.1% y-o-y. CISA pointed out that the combined output of its 78 member mills declined by 0.6% y-o-y in 2012 to 589.05 million mt, while the remaining producers, mostly smaller than mills, produced 127.49 million mt of crude steel, up 24.8% y-o-y. CISA believed that its members had controlled output in response to slackening steel demand in 2012. With China's steel industry remaining fragmented, the Ministry of Industry & Information Technology (MIIT) unveiled new guidelines in January aimed at pushing consolidation to bring the top ten largest producers’ output share to about 60% by 2015. Media reports suggested the ministry expected to unveil detailed regulations on consolidation of the steel industry in the first half of 2013.
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| Special Report: Japan pitches energy tech to India | |||||||||||||||||||||||||||||||||||||||||||||||||
| The Japanese government has hosted an Indian steel delegation in Tokyo to promote the sale of energy-saving and environmental protection technology to Indian steelmakers. Similar events were held in China in 2004 and 2005. The two-day event from February 5, hosted by Japan’s ministry of economy, trade and industry, brought together representatives of Japan’s New Energy and Industrial Technology Development Organization (NEDO), the Japan Iron & Steel Federation, government-backed soft loan agency the Japan Bank for International Cooperation, plus key engineering and steel firms including Nippon Steel & Sumitomo Metal Corp (NSSMC). The Indian delegation included officials from the ministry of steel, Steel Authority of India, Essar Steel, JSW Steel and Tata Steel, and concluded with a tour of NSSMC’s Kimitsu works east of Tokyo. Japan’s largest steelmaker showcased its coke dry quenching (CDQ) and Top-pressure Recovery Turbine technologies that improve blast furnace efficiency and lower energy consumption. “We have been very successful selling CDQ systems in China but less so to India,” an NSSMC spokesman said. In 2006 NEDO and the then Nippon Steel secured a deal to introduce CDQ to Tata Steel’s Jamshedpur works, as Platts reported. The delegation coincided with the Indian steel ministry tabling its draft National Steel Policy 2012 that targets “achieving efficiency levels at par with the global bests” by the 2025-26 fiscal year. "The qualitative performance of the steel industry measured in terms of techno-economic parameters of efficiency and productivity has been much below expectations," the policy said. "It is also being felt that growth of the industry has come at a substantial cost to the environment and local communities," it added. Reducing energy and water consumption, pollution levels, and carbon emissions, while lifting material efficiency, quality of steel, and furnace productivity levels are among the targets in the draft policy.
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| SSAB price hikes 'not materialized' yet; market bottoms out | ||
| Sweden-based steelmaker SSAB has seen the prices of standard steel bottom out in Q1 from Q4 levels, although the hikes announced in December "have not materialized in contract and spot prices", its president & ceo Martin Lindqvist said on Friday. Local prices registered by SSAB’s Europe, Middle East & Africa (EMEA) unit in Q4 dipped 8% for standard steels and 3% for its niche steels from Q3 levels. The company expected Q1 2013 demand for steel in the EU to be somewhat higher than in Q4 thanks to customers’ restocking activity. Despite this, the general trend in Europe remains weak and difficult to assess, SSAB stated. Europe was the only loss making business area for SSAB last year with a full-year operating loss of SEK 930 million compared with SEK 1.57 billion achieved by SSAB America (see related story). Overall the group's operating result was negative with SEK 96 million loss last year. SSAB EMEA’s crude steel production for 2012 dipped 8.9% y-o-y to 2.96 million metric tons. The segment’s steel products output last year reached 2.26 million mt, which represented a 14% y-o-y drop. During Q4 the SSAB mills in Sweden were operating at 65% of their capacity. "In response to market conditions, one of the blast furnaces in Oxelösund continued to be out of operation throughout the quarter", the company explained. This quarter’s capacity rate will depend on “how strong restocking is”, it commented. The company said 2012 was challenging for the steel industry, with a recovery in the first part of the year followed by a downturn in both volumes and prices in the second half. Its overall shipments were gradually sliding throughout 2012 totalling 4.18 million mt for the whole group including 1.7 million mt for SSAB EMEA.
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| EU white goods makers cut output as market stays weak | ||
| The market for domestic electrical appliances (white goods) in Europe will remain subdued in 2013, as a consequence of low levels of consumer confidence, financing constraints and the overall depressed outlook for the residential property market in most EU countries, according to Eurofer. In 2012 the production of white goods in the EU is estimated to have declined by around 2%. The overall trend across the EU was mildly negative, with some countries such as Italy and Slovakia registering larger contractions than others. In Italy this is due mainly due to reduced activity in residential property, while in Western Europe generally the market is largely saturated and depends on replacement demand rather than first-time buyers. On top of that competition in white goods has been heating up, with increasing competition from Asian players. In Italy, domestic appliance output dropped by 12% in 2012. As a result the world’s second- biggest appliance maker, Electrolux, recently announced plans to lay off more than 1,000 workers at four of its factories in Italy. Electrolux recently reported lower-than-estimated earnings due to the decline in Europe and stated “the market situation in Europe is likely to get worse before it gets better”. Nevertheless the company said also that it registered a reduction in the raw materials costs. According to informed market sources, the sector’s annual supply contracts for galvanized and cold reduced coil for white goods registered a decrease for 2013 by around €10-15/metric ton compared to last year’s levels.
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| SSAB slides into losses in 2012, cost pressures now easing | ||
| Sweden’s largest steelmaker SSAB plunged into losses with SEK 96 million (€11 million) consolidated operating loss registered in 2012 after SEK 2.5 billion operating profit in 2011, the company said on Friday. The flat rolled steelmaking group experienced contraction of operating profits, sales and shipments across all its business areas with Europe hit the most heavily (see separate stories). SSAB’s consolidated full-year sales decreased 13% y-o-y to SEK 38.92 billion, while shipments fell 10% on 2011, to 4.18 million mt. Niche products (high-strength sheet and plate) accounted for 38% of steel shipments. Commenting on Q4, the group's president & ceo Martin Lindqvist said: “the steel markets continued to perform negatively following the deterioration in order inflow we witnessed at the beginning of the autumn. The weak trend pertains particularly to the European market, but N. American and Asian customers also adopted a wait-and-see approach." Moving into Q1 2013 the company is observing the prices to be stabilizing. It is also expecting certain easing on the cost side as the lower raw material prices will have a positive impact on earnings of approximately SEK 200 million in Q1. Separately, SSAB’s distribution subsidiary Tibnor, fell into operating losses of SEK 68 million in th second half of 2012 compared with SEK 172 million profit for the first half, finishing the year on the profits side with SEK 104 million. Its full-year sales declined 17% y-o-y, to SEK 5.96 billion. “Tibnor was clearly affected by weak consumption in the Nordics,” Lindqvist commented.
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| Uncertainty continues to dominate longs market: Irepas | ||
| The long product market is stagnating in Europe, bullish in China but fluctuating and unstable elsewhere, the International Rebar Producers’ & Exporters’ Association, Irepas, said on Friday on its monthly report. The outlook for the mills is continuing to appear difficult as the market remains “so unpredictable”, although there are signs that the depression in Europe is starting to bottom out. In particular, inventory levels are low in the European and North American markets, giving hope for future orders. According to the association trade restrictions have shut down a few significant markets for reinforcing bar exports recently, and so some exporting countries have been obliged to divert significant quantities to other destinations, creating severe supply pressure on prices, and making profit margins practically non-existent. Demand for long products has not been picking up in the market as had been expected, especially in northern Europe due to very cold weather and the market uncertainty; however, demand seems to be maintaining its levels in the Asian, MENA, Central and South American markets, here in particular a slight improvement has been seen. Competition is extremely strong in the market and is heating up even further. As soon as supply in one market becomes tight, new offers appear from new sources. But Irepas said that raw material price changes have not been reflected in finished steel prices, while the significant price increases for flat rolled steel products could possibly provide support for price increases in the long product markets as well.
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| Kardemir moves closer to crude steel capacity increase | ||
| Turkish integrated long steelmaker Kardemir has installed the main body of its new blast furnace No.5 at its mill in Karabuk, which will raise crude steel capacity from 1.8 million metric tons/year to 3 million mt/y, Platts learned from the company. “Investments are on track at Kardemir and will be finished by the end of this year. The expansion plans envisage increasing hot metal capacity to 3 million mt/y and liquid steel capacity to 3.4 million mt/y. Our new blast furnace will also have a 10 MW roof electricity unit, the first furnace of this kind in Turkey. This is also a rare technology in blast furnaces worldwide. Kardemir’s investments will continue,” company general manager Fadil Demirel said. Kardemir’s ongoing investments include a new coke plant of 70 ovens, continuous casting plant and increasing converter capacities. The company plans to complete BF No.5 by mid-2013 and then start slab production in 2015, as reported.
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| Asil Celik to install new continuous caster | ||
| Turkey’s largest alloy steel producer Asil Celik plans to install a new continuous bloom casting plant worth €16 million ($21.5 million) to increase its product range, quality and productivity, Platts learnt from a company stock exchange filing on Friday. The new caster – supplied by SMS Concast – will produce 300-600mm round blooms, the firm said. Asil Celik has a 480,000 metric tons/year crude steel capacity at its mill at Bursa, northwestern Turkey. Its alloy steel bar products include spring, bearing and tool steels, free-cutting steels and stainless steels, used in the automotive, OEM, machinery and defence industries.
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| TK to close or sell coating lines in €500m savings plan | ||
| ThyssenKrupp is planning to dispose of several coating lines and rolling mills as it strives to make savings of €500 million by 2015, the company said Friday. TK is currently investigating the “closure, relocation or sale” of its No.1 coil coating line in Duisburg-Beeckerwerth, one of the two electrolytic galvanizing lines at its Dortmund plant and the cold rolling and coating plant in Neuwied. The grain-oriented electrical steel products of TK’s Electrical Steel business and the hot-dip galvanizing line at its Galmed plant in Spain are also being considered for closure, relocation or sale. The proposed closures would not mean a cut in overall capacity or reduced operating levels, a spokesperson said. “We are transferring production volumes from units to be closed to capacities that will remain, so as to improve their operating levels accordingly – which will create corresponding cost advantages,” the spokesperson added. But TK said it would be cutting 2,000 jobs in its steel business, where the workforce currently numbers 27,600. A further 1,800 jobs could be lost as a result of possible disposals, the company added. TK is aiming to improve the profitability and competitiveness of its steel business as the European steel industry as a whole continues to face major challenges. “The steel market climate is worsening due to high raw material and energy prices, CO2 allowance trading, Russia’s accession to the WTO and in particular economic uncertainties and sharply reduced consumption levels, above all in southwestern Europe,” the company said. Sales in its European steel division fell by 14% to €10.9 billion in TK’s last fiscal year, while order intake dropped by 15% to €10.5 billion. The division’s pre-tax earnings dropped from €1.1 billion to €188 million in 2011-12.
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| Severstal raises some coil prices for March in Russia | ||
| Severstal has announced plans to raise prices for its uncoated sheets next month by 2-3% from February levels and explained the move by globally strengthening steel prices and rising input costs. For March, Severstal intends to increase prices for hot and cold rolled sheet by 2% and 3% respectively over February; this month its transaction prices remained largely unchanged from January. The company refused to give any price figures. Severstal attempted to lift this month rollings by 3-3.5%, but a few traders boycotted the move, Platts heard from two traders. Severstal’s HRC and CRC eventually fell below those from NLMK and MMK. “In the first week of February, when we thought prices had been settled, Severstal gave 2% discounts on its February sheet production which was initially hiked by 3% compared to January”, said one Moscow-based trader. “It didn’t accrue enough orders to ensure high capacity utilization at the Cherepovets works and decided to back down at the last moment”, the trader suggested. “Some traders refused to place orders at higher levels considering the outsell market still hasn’t moved off the bottom”, another distributor observed. Although Severstal first lifted its 2mm HR sheet for February by 2% from January to Roubles 20,800-20,900/metric ton ($690-693/mt) in Moscow with 18% value added tax, it then corrected the price to Roubles 20,500-20,550/mt with the latest level representing just 1% increase from January. Its CR sheet offers remain, at Roubles 23,500-23,700/mt, which is both level month-on-month and unchanged compared to the initially announced offers, Platts heard.
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| NLMK wins auction for 35% share of longs producer NSMMZ | ||
| Russian steel group NLMK has consolidated the Urals-based long products making enterprise Nizhneserginsky (NSMMZ) through acquiring for 288.8 million roubles ($9.6 million) 35.6% of its shares to add to the majority stake NLMK already had in NSMMZ. NLMK now owns 92.6% of NSMMZ. The shares were put up for auction as part of the bankruptcy process of Urals-based Maxi-Group, former owner of NSMMZ. NLMK bought the shares with a view to protecting its interests as one of the largest creditor of NSMMZ, which owes it 52 million Roubles, the company explained in a statement. NSMMZ has three production sites with capacities of 2.2 million metric tons/year of billet in Revda, 1 million mt/y of rebar in Nizhniye Sergy, and 1 million mt/y of rebar plus 560,000 mt/year of wire products in Berezovsky. All three works are located in Russia’s Sverdlovsk region.
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| Chelpipe to supply 200,000 mt of pipe to Asian gas pipeline | ||
| Russia’s pipemaking group Chelpipe secured a contract to supply large diameter pipes to the Central Asia-China Gas Pipeline's Line C section, the company announced. Between February and June 2013, Chelpipe’s Chelyabinsk Pipe Rolling Plant (ChTPZ) will supply the pipeline project with 200,000 metric tons of 1,219mm diameter pipe with wall thicknesses of 17.5mm and 20.6mm made from API X80 grade plate. The 1,840 km long pipeline's line C section, whose construction begun last year under the management of KazTransGas of Kazakhstan, will deliver 25 billion cubic metres/year of natural gas from Turkmenistan, Uzbekistan and Kazakhstan to China once it is commissioned in 2014.
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| SSAB Americas expects new restocking in H1 after weak Q4 | ||
| Sweden-based steelmaking group SSAB is seeing improvement in the economic activity in North America and Asia during Q1 compared with the final quarter last year. “It is our assessment that volumes will continue to increase somewhat within SSAB Americas and SSAB Asia-Pacific during the first quarter of 2013, as compared with the fourth quarter”, its president & ceo Martin Lindqvist said on Friday. Some inventory restocking should take place during the first half of 2013 in SSAB North Amercian business area, which should have a positive impact on the volumes during the first quarter, compared with the fourth quarter of 2012. The shipments registered by SSAB Americas in Q4 slipped 2% on Q3, to 529,000 metric tons. The full-year shipments for the division 2.31 million mt, which represented a 5% y-o-y decrease. The crude steel production achieved by the steelmaker’s American arm was 2.29 million mt compared with 2.42 million mt in 2011. At the same time its steel products output declined 4.66% y-o-y, to 2.17 million mt. The full-year sales of SSAB Americas slipped to SEK 16.17 billion (€188 million) in 2012 from SEK 17.1 billion in 2011. The lower sales volumes together with lower prices in Q4 led to significant reduction in the operating profit for the period, at SEK 110 million, compared to SEK 414 million in Q3. For the whole 2012 the division’s operating profit dwindled 26% y-o-y, to SEK 1.57 billion. The steelmaker also expected the results for H1 2013 to be negatively impacted by a maintenance outage planned at the Montpelier works during three weeks in March/April. The second planned outage should take place towards the end of Q3 or beginning of Q4.
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| Japan's JFE quits Canada galvanizing joint venture: reports | ||
| Japan’s second largest steel producer, JFE Steel, has pulled out of its Canadian joint venture with ArcelorMittal, according to Japanese media reports that Platts could not immediately confirm. The joint venture, DJ Galvanizing, operates a 400,000 metric tons/year hot-dip galvanizing line in Windsor, Ontario, producing sheet for the automotive industry. Formerly called DNN Galvanizing, the line was set up in 1993 as a 50:50 joint venture between Canadian steelmaker Dofasco (now owned by ArcelorMittal) and JFE predecessor company NKK Corp. The reports said that ArcelorMittal purchased JFE’s shares in the joint venture. JFE and Dofasco additionally had a technical co-operation agreement for galvanized autobody sheet, but this has also been terminated, according to the Japanese reports. ArcelorMittal also has a North American coil-coating joint venture with JFE’s principal Japanese rival, Nippon Steel & Sumitomo Metal Corp, called I/N Kote. Its plant in New Carlisle, Indiana, operates a 500,000 short tons/year hot-dip galvanizing line and a 450,000 s.t/y electro-galvanizing line which also serve the auto industry. There have been reports, so far unconfirmed, that ArcelorMittal and NSSMC might make a joint bid for ThyssenKrupp’s newly-built coil rolling and coating plant in Alabama, currently up for sale. Since 2002 JFE has had a partnership with ThyssenKrupp Steel for joint development of autobody sheets. ArcelorMittal Dofasco had not replied to email and telephone requests for comment by deadline.
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| Ozkan USA looking into making rail along with niche sections | ||
| The US arm of Turkey-based Ozkan Demir Celik Sanayi plans to add rail to the list of niche products for its planned rolling mill. As previously reported, Ozkan plans to enter the US first as a scrap processor, most likely in southern Louisiana, and then establish a steel melt shop with a minimum capacity of 500,000 mt/year and an initial production of 300,000 mt/year. The third stage of the company’s five-year plan would be to build a rolling mill. The company looks to manufacture niche products Izmir, Turkey-based Demir Celik already produces: mining profiles special angle profiles for telecommunication transmission towers, cutting edges for heavy equipment, shipbuilding profiles and rails. M. Fehmi Nuhoglu, Ozkan USA vice president of investments and strategic development, said he could give more specifics on the products in June, when company plans to have the location of its scrap processor finalized. A market source said that rail would be the most difficult of these products to break into because of stiff domestic competition. “I think all of these have major hurdles,” he said, mostly because market demand might not be large for some of these products. “For these specialty products, they have their work cut out for them,” he said, noting some of the wide variety of sizes of cutting edges for heavy equipment in particular. He believes that the profiles for telecommunication transmission towers demand is strong with most of the manufacturing for these towers happening in Mexico.
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| DOC rescinds review of Chinese welded pipe | ||
| The US Department of Commerce is rescinding its administrative review for countervailing duty orders on circular welded carbon quality steel pipe from China. The review covered 24 companies, and the period of review was January 1, 2011-December 31, 2011. LDR Industries, Inc. and Wheatland Tube Co. requested the review, and on September 11, LDR withdrew its request for review of Xuzhou Global Pipe & Fitting Manufacturing Co., Ltd. On November 28, Wheatland withdrew its review request for the remaining 23 companies.
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| US rig count slips back, Canadian rig count advances | ||
| The US and Canadian rig counts swung in nearly equal but opposite directions in the latest weekly tally by energy services firm Baker Hughes. The US lost five rigs for a total of 1,759, or 230 rigs below the equivalent weekly count in 2011. Rigs geared for oil production decreased by two, while rigs geared for natural gas collection fell by three. Louisiana led the notable gains by state with five new net rigs. New Mexico led the losses with three, followed by Texas and North Dakota with two apiece. The Canadian rig count increased by six net rigs for a total of 631, or 78 rigs below 2011’s count.
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| Weather causes US Great Lakes iron ore shipments to fall | ||
| US flagged-vessels lost more than 300 hours of ore-hauling time in January due to weather-related issues and at least one iron ore cargo was canceled during the month. Locks at Sault Ste. Marie, Michigan were closed on January 15 this year, three days earlier than last year and one iron ore cargo had to be canceled out of fear the vessel would not be able to reach the locks in time. Overall shipments of iron ore on the Great Lakes in January fell 11% year on year from 3.6 million short tons to 3.2 million st. Locks usually close from mid-January to March due to ice buildup on the Great Lakes. Last year the locks stayed open to accommodate delayed vessels the Great Lakes Carriers Association noted that a similar extension could have been justified this year because of weather-related issues but ultimately there was no extension.
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| LB Foster looks for stronger construction sales in 2013 | ||
| LB Foster is expecting double-digit growth in construction product sales to propel the company’s projected 5-6.5% sales growth for 2013. “Following a number of difficult quarters, order trends indicate that an upturn is likely despite continued pressures on government budgets,” the company said. The expected gains in the company’s construction segment experienced a 27.8% drop in sales the fourth quarter 2012 to $37.1 million, from $51.3 million in the year-ago quarter. The company said the piling product line and the fabricated bridge business were behind most of the lower sales – as well as lower margins relative to 2011. The Pittsburgh-based manufacturer, fabricator and distributor added that it expects low- to mid-single-digit growth in its rail and tubular segments. Tubular product sales rose by 48.6% to $12.3 million in the fourth quarter of 2012, up from $8.3 million. The company said gross profit margins expanded, but it also benefitted from stronger a stronger backlog in Q4 2012. Rail segment sales increased by 23.2% to $91.3 million, from $74.1 million in 2011. Gross profit margin declined relative to Q4 2011, but the company benefitted from its contract for the Honolulu elevated transit system project. Full-year net income dropped by 29% in 2012 to $16.2 million, from $22.9 million. Fourth quarter income was $6.7 million, up from $6.1 million in the year-ago quarter. Total net sales in 2012 were $588.5 million, a 2% decrease from $575.3 million in 2011.
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| Mexican car production rises 19% m-o-m in January 2013 | |||||||||||||||||||||||||||||||||||||||||||||
| Vehicle production in Mexico increased 19.8% year on year in January, according to the latest data released by the national automotive association Amia. In the first month of 2013, the country manufactured 242,855 units - 40,154 more than in the same month last year. Compared with December 2012 production, January output grew 34.4%, or by more than 62,258 units. Automobile exports, meanwhile, increased 14.2% year on year to 178,562 vehicles in January, an increase of 22,145 units from January 2012. Amia said in a statement that year on year Mexico saw increases in light vehicle exports to five of its six major export destinations: Africa, Asia, the US, Europe and Canada (see table).
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| Atkore gleans uptick from non-residential construction | ||
| The slowly improving US non-residential construction market buoyed diversified manufacturer Atkore International’s sales for its fiscal first quarter ended December 28, 2012. Atkore, which produces tubular products, wire and framing systems, recorded total sales in its fiscal Q1 of $385 million, up from $371 million in the prior fiscal year's Q1. The company’s adjusted EBITDA was $35 million, up from $34 million last year. The company’s pipe, tube and conduit segment accounted for $249 million in quarterly sales, up from $236 million a year ago. The segment’s operating income increased from $1 million to $8 million in the same comparison. In the company’s earnings review, Atkore attributes the uptick to a 12% increase in shipments to the non-residential construction market. “The increase in operating income was due primarily to higher volume and lower average raw material steel costs for (tubular) products partly offset by lower average selling prices,” the company stated. “Average selling prices were 6% lower and average raw material steel costs were 11% lower during the three months ended December 28, 2012, compared to the three months ended December 30, 2011.
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| Colombia tubes facility on track for year-end startup | ||
| US-based Corpac Group is progressing with its plans to build a new tubes processing facility in the Colombian province of Atlántico. The facility - which is being designed to supply both domestic and export markets - is expected to be operational by the end of this year. It will be Corpac's first plant in Latin America. "We believe that if everything follows the script, we may start producing between the third and fourth quarter," a source from the company told Platts. "We prefer not to define a specific month, but we already started the construction and purchased part of the required machinery." The new Corpac unit "will allow manufacturing of more than 150,000 mt of pipe products (casing and tubing) and pipeline casings for pipes of up to 48 inches, using cutting-edge technology," stated Droshn Vishnoff, director general of the Corpac Group in Latin America, in a release. The global supplier and trader of pipe and steel products and services chose Colombia for the plant because of its antidumping measures against Chinese imports, among other reasons. "Colombia is an appealing country for investment in the hydrocarbons sector, opening the doors for the arrival of companies that offer goods and services to this industry," stated Corpac. The company also highlighted Colombia's position as third highest oil producer in South America. The oil sector grew 87% in the country between 2004 and 2011, reaching 980,000 barrels in 2011. Corpac has already started negotiating shipments from the new Colombian unit. "We are not new to this market; we already have offices in Colombia and regular clients. The construction of the plant will enable us to reduce the delivery time for local customers," said a source.
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| Sidor posts 50% higher year-on-year shipments in January | ||
| Venezuela’s largest integrated steelmaker Sidor began 2013 with higher shipments of rolled steel year on year. In January, the company shipped a total of 118,000 mt of long and flat products, a jump of 50.5% from the 78,000 mt shipped in the same month of 2012. A month-on-month comparison was not available as Sidor did not disclose its December 2012 shipment level. December was known to be the company's worst month in 2012 as far as productivity and shipments. Last week, Sidor reported that it produced 157,258 mt of crude steel in January, up 89% from December. In November, Sidor shipped around 110,000 mt of steel products, versus 78,916 mt in October. The company's average monthly shipments were at 124,000 mt through the first 11 months of 2012. Sidor's official distributor in Venezuela, Ferresidor, received only 340 mt from the company in January, against 3,000 mt in the same month of 2012. Since July of last year, all of Sidor's shipments have been directed to the domestic market, as the company ceased exports to focus on supplying the country’s national housing program. However, Sidor recently said it plans to export 1.2 million mt of rolled steel products throughout 2013 (see related story).
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| Dubai's Al Rama International starts new coil service centre | ||
| Dubai-based steel trader Al Rama International has commissioned a new coil service centre to supply local steel fabricators and widen exports to Gulf Cooperation Council countries. The firm sells some 6,000 metric tons/month of flat and long steel, as well as pipe. The new centre possesses a 300 mt/day throughput cut-to-length line for 3-12mm thick and up to 2.5 metre wide coil, as well as 30 mt/d cut to size line. Hot rolled coil is sourced from Japan, India, Korea and China. Product will also be bought from Emirates Steel’s hot strip mill, due to come on line in 2014. Other services offered are plate rolling, plate profiling and steel blasting. Although fabricators find it more difficult to drum up business since the 2008 global economic crash, which badly hit steel demand in the UAE, the need for flat steel in the Gulf Cooperation Council is likely to increase in future as the region’s economy matures, according to Al Rama; the company is therefore taking a more long-sighted approach. “During the boom time, yes, everyone [fabricators] had gone into one particular [activity]. Some went into warehouses, some into pressure vessels, some into trailers. There was so much demand for everything that they didn’t need to look elsewhere. Today that’s not the same. Any fabricator will take any job,” Al Rama business development manager Rohit Ramsinghani told Platts. “Flat steel is in the process equipment everywhere. You see tanks, you need steel. The more gas stations you come up with, you need more tanks, you need more piping. That’s the industry which we look at. As an economy grows, you need more trucks, more trailers, you need tippers. Whatever you need is entirely made of steel and 80% of that is flat products,” he added
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| Vale agrees lower pellet premium for Japan in 2013 | ||
| Brazil's Vale has reached initial agreements with steelmakers in Japan for an annual blast furnace pellet premium of $28/dry metric ton, industry sources said last week. The settlement, reached for the 2013 calendar year, marks a $4/dmt decline from the previous year's premium of $32/dmt. Contracts with some customers use the April-to-March fiscal year. Other steelmakers in South Korea and Taiwan were said to have received Vale's offer at $28/dmt and were evaluating it. Sources at European mills meanwhile said they were less keen to close one-year deals with Vale at that price, citing their desire for more frequent pricing. "We are always in negotiations on pellet with Vale," a source at a European mill said. "And, we are still fighting on a quarter-by-quarter basis to get a price in line with the market." Another source at a European buyer said pellet prices were typically bilaterally negotiated, and stressed that any annual deal struck with a mill in northeast Asia wouldn't be considered a benchmark. A marketing official in Vale's Singaore office declined to comment on the matter. The Brazilian miner has offered a lower premium this year because steelmakers, facing high raw material costs and weak margins, have reduced pellet procurement volumes, sources at two of the miner's customers said. Other buyers pointed to lower-priced pellet premiums seen from spot transactions into China, and said there was a need for Vale's price to be more in line with the spot market. Spot pellet from Ukraine and Russia was said by some sources to have been sold into China at a premium of about $21/dmt, with other sources citing premiums in the mid teens/mt. But while the quality of pellet from these sources was considered "good," some have said Vale's product was superior in terms of chemical and physical properties.
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| US domestic scrap down 3%; Turkish, Indian imports slip: TSI |
| The latest scrap reference prices released by The Steel Index (TSI) last Friday show that its weekly US scrap reference price fell by 2.8%. The weekly average of its daily Turkish scrap reference prices dropped by 1.5% since the previous week, with the daily Turkish reference price stabilizing later in the week. The Indian containerised weekly scrap reference price slipped slightly. In the US, the weekly domestic shredded obsolete scrap reference price fell by $11/long ton to $376/long ton delivered US Midwest mill. Although there were price differences between states, the volume-weighted average dropped sharply as mill buyers exerted pressure on the scrap-yards. This reference price is 3.6% or $14/l.ton below the level of four weeks ago. The weekly average of daily Turkish scrap import reference prices was €6/metric ton below last week's average. A large number of deals were concluded during last week with European sellers active again together with North American material. The weekly reference price is $14/mt lower than the level published four weeks previously. TSI's daily price weakened steadily early in the week before firming slightly later and finished $3/mt below the previous week's level. The weekly Indian containerised shredded scrap import reference price slipped again by $2/mt or 0.5% since last week. Weaker mill demand and the stronger euro meant that the reduced activity was mainly with US material as offers fell. This reference price is $2/t lower than four weeks ago. TSI - a separate pricing unit within Platts - specialises in compiling steel, iron ore and scrap reference prices by collecting and averaging actual transaction data. Further details of TSI's methodology and specifications can be found on its website www.thesteelindex.com. |
