| European sections come down by €5-10/mt on poor demand | ||
| European section prices have slowly moved down in the last ten days by around €5-10/metric ton due to the poor demand, market participants told Platts Tuesday. Across all Europe the lack of investment in construction is the reason why sections prices lost their upward momentum, with mills that did not achieve their target price of €650/metric ton delivered for February/March delivery. In northern Europe prices also came under pressure from the severe winter and some cheap imports, as well as the holidays in some regions. “In Holland for example most of the market participants are on holidays due to the spring and carnival vacations”, a trader said. Prices for category 1 sections in northern Europe are now around €610-615/mt effective delivered, with some cheap imports from Ukraine at €595/mt effective delivered. “The weather is very bad and the building site can’t work at the moment; we start to have offers from mills and not traders at €610/mt for prompt delivery”, a stockholder said. Added a producer: “We can talk about a correction… we offered for January rolling €620/mt, but for February rolling €615/mt… prices have increased a lot if we recall that in November-December they were at €560-570/mt delivered. For the moment we haven’t reached 650/mt but this is still our target”. In southern Europe prices for category 1 are reported around €600/mt delivered. In Italy more than other regional countries the situation is on hold due to the coming elections; here, according to local sources, prices are €230-235/mt base (effective €585-590/mt ex-works). According to the chamber of commerce of Brescia, in the period from 14 January to 4 February base prices of IPNs (80mm and over) and IPEs (80-100mm) moved from €245-255/mt to €230-240/mt ex-works.
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| UAE coil import offers hold, buyers await return of China | ||
| Hot rolled coil import offers to United Arab Emirates have remained steadfast in the last two weeks, despite no significant bookings having been reported following increases of around $20-30/metric ton in January. Whether current offers are accepted later this month depends on how the return from holiday of Chinese participants next week affects global trade, local HRC importers told Platts on Tuesday. Japanese suppliers have retained offers of $650/mt CFR for 2mm thick and above, SS400/ST37 grade HRC; while Indian mills remain aggressive with offers of $620-630/mt CFR. The view and outlook on fundamental demand in the local market is varied. “Demand on the ground is weak – not much business is happening. Everyone is waiting for China to reopen,” said one trader. “Buyers are starting to book larger tonnages. Sentiment is more positive than a week ago,” a UAE cold-roller executive countered. The latest transacted price was reported at $620/mt. The short-term domestic market outlook ultimately depends on how the global market reacts to the return of China after this week’s Lunar New Year holiday. On this, too, opinions are mixed. “Scrap prices in the US and Europe have come down, which signifies weak economic activity. I don’t see steel prices going up later this month. I would rather hold off on purchasing than taking a risk on a position now,” another trader said, adding that prices being pushed for by mills are unrealistic at current consumption levels. “Unless mills all over the world decrease their prices, we won’t see prices decline. It all depends on the Chinese factor – if mills there start dumping in other markets once they return from holiday, there may be a problem,” the UAE cold-roller executive said. Meanwhile, a major UAE galv producer is offering 0.7mm 120 grams/square meter zinc coating hot-dip galvanized coil at $820/mt ex-works.
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| Brazil’s flats imports expected to drop 50% in 2013 | ||
| Brazil's flats distributor group Inda is projecting a 50% reduction in flats imports for the country this year. According to Inda, the imports have already slowed since December. Flats imports declined 28.3% from 110,400 mt in November to 79,100 mt in December. In 2012, the imports reached 1.64 million mt, down from 1.94 million mt in 2011. "We estimate something between 800,000 mt to 900,000 mt (for 2013)," an Inda spokesman said. The expectation is that domestic flats shipments from producers Usiminas, CSN and ArcelorMittal Tubarão may grow 6% to 8% this year. Last year, the three companies shipped a combined 11.3 million mt of flats to the domestic market, a volume only 0.4% higher than in 2011. Flat product imports held an average of 9% of the Brazilian market in late 2012 compared with 22.4% in December 2011. In 2012, imports of cold-rolled and galvanized products held market shares of 17.7% and 15.4%, respectively. The Brazilian government began implementing higher import tariffs on some types of flat steels - upping rates from 12% to 25% - in Q4 2012.
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| Beams and sections prices increase in Korea | ||
| Korean domestic spot prices of beams and other structural sections produced by local mills have increased by Won 20,000-30,000/metric ton ($18-27/mt) compared with those seen in late last month, local dealers said on Tuesday. The country’s sections producers, Hyundai Steel, Dongkuk Steel Mill and Korea Steel Shapes, lifted their sales prices by Won 30,000/mt effective from late January, as Platts reported. They attributed the rise to the increase in scrap buying prices and higher electricity tariffs effective from mid-January. Korea’s leading longs producer Hyundai is currently offering SS400 grade junior-sized H-beams at Won 920,000/mt ($837/mt) though actual transaction prices are on a case-by-case basis due to differing terms and conditions, it said. In the meantime, restricted output expected for this month and next caused by some maintenance stoppages and fewer working days given the Lunar New Year holiday are likely to support higher prices of long products in the market, retailers said. Hyundai started conducting maintenance at its Pohang section mills during February 13-20 and has a similar plan for its Incheon section mill for next month, it said. Spot prices for imported China-origin sections in the Korean domestic market were also trending upwards in line with stronger exports prices from China. “It seemed that Chinese export prices are likely to increase by some $20/mt at least after their Chinese New Year holidays,” a trader said.
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| AMSA declares force majeure after fire damages plant | ||
| ArcelorMittal South Africa (AMSA) has declared force majeure on deliveries from its Vanderbijlpark plant after a serious fire on Saturday. The company said the fire “caused extensive damage to the steel making facilities at the plant, resulting in an immediate shutdown”. No injuries were reported, but it was unclear whether rolling mills were continuing to operate. AMSA chief executive Nonkululeko Nyembezi-Heita was quoted in local press as saying the fire would result in “disruption to production”. She added that the company “will not be in a position to completely fulfill current orders”. The company statement said “once detailed assessments of the damage and required repairs have been carried out, the potential loss of sales and estimate of the time to repair will be determined.” The CEO added that the firm will be assessing requirements and will “assist in resourcing their needs” from the ArcelorMittal group’s other plants. Vanderbijlpark plant produces 3.7 million mt/year of AMSA’s total output of 7.8 million mt. It is the largest supplier of flat steel products in sub-Saharan Africa and employs some 4,500 staff. AMSA also produces hot rolled coil at its Saldanha works. Vanderbijlpark produces plate, HRC, CRC, hot-dip galv, electrogalvanised and pre-painted sheet, plus tinplate. It has two blast furnaces, three electric arc furnaces and three basic oxygen furnaces. The incident comes after the company posted a headline loss of ZAR 518 million ($58 million) for 2012.
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| US coil pricing falls $10/st, sources say | ||
| US coil pricing appears to be slipping, though at least some market players are reporting fair demand. One stockist said the most recent round of flat-rolled price increases temporarily shored up pricing, though prevailing lackluster market conditions have tamped the market back down. “It did (stop prices from sliding), but nobody ran to the doors to place orders, did they?” he said. “They’re afraid today’s buy will be a bad buy tomorrow.” A mill source said demand was fair, but there is room for improvement. “We are trying to build our book,” he said. A second stockist said he believes a rally is inevitable, but he’s not sure when it might materialize. “Generally, the mills have very (short) lead times, and they’re rolling their eyes, not sure what to do next," he said. "It’s real, real, real quiet.” Another stockist said market sentiment might be allowing prices to decline marginally to spur orders without inducing a collapse in advance of a seasonal upturn. “The only reason we’re still above $600/short ton is it is mid-February, and there’s this psychological barrier,” he said, adding that he’s willing to accept lower pricing to contribute to an eventual market uptick. “You’ve got to get these books healthy, and sometimes the only way to do that is with pricing. Without an outside event – a furnace going down, or some global events – near-term, I don’t see anything pushing the numbers up.” Hot-rolled coil appears to have slipped by $10/st to $610-630/st, with cold-rolled following suit at $720-740/st. Hot-dipped galvanized sheet remains at $785-800/st. All pricing is normalized to an ex-works, Midwest mill basis.
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| Korean stainless steel sheet prices poised to raise | ||
| Spot prices of austenitic stainless steel cold rolled coil in the Korean domestic market are tipped to increase thanks to firmer nickel prices, sources in Korea said on Tuesday. Posco recently reduced its discount margins for 300-series stainless steel coils to local distributors and end-users by Won 100,000/metric ton ($91/mt) for February deliveries to offset high input costs, they noted. Nickel prices on the London Metal Exchange finished at $18,250/mt on February 11, up about $600/mt from two weeks ago. The country’s largest producer of stainless hot rolled and cold rolled coil had earlier announced that it would roll over its February list prices for austenitic and ferritic stainless coil from January, as Platts reported. But the steelmaker has been adjusting its discount margins to domestic clients depending on market conditions. As Tuesday was officially the first working day after the Lunar New Year holiday in Korea, the market seemed still inactive because some end-users and retailers still closed their businesses. Besides, nickel prices have slightly retreated last week after surging during late January-early February. “Consumers want to see further hike in nickel prices, then they will feel safe to start restocking materials,” a retailer told Platts, adding that he is still uncertain whether Posco’s new pricing strategy will be accepted in the market. Retail prices of 304 grade CRC (2mm thick) produced by local mills continued trading in the range Won 3.1-3.2 million/mt ($2,824-2,915/mt) among local dealers as it has since early January.
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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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| Dillinger Hütte raises plate prices by €30/mt | ||
| German plate producer Dillinger Hütte is to raise its prices by €30/metric ton with immediate effect, the company announced in a statement on Tuesday. Dillinger Hütte said that the price increase, applicable to orders for delivery from April, was supported by an improving market sentiment amongst end users and “positive effects from the restocking cycle.” The increase would help to cover increases in the cost of energy and raw materials, the company added. According to Platts assessment for plates in Europe, the latest transaction prices for S235 commodity grade was €540/mt ex-works Ruhr base on Tuesday, up €2.50/mt day-on-day. This level is slightly above the lowest point registered in mid-November 2012 but remains well below mills’ target prices.
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| Turkish buyers unlikely to accept HRC import price hikes | ||
| The higher CIS import offers for March rolling to Turkey seen this week are unlikely to be accepted by Turkish buyers owing to persistently weak end-use demand, which is not forecast to strengthen in the short-term, market participants told Platts on Tuesday. As previously reported, Ukrainian suppliers are offering hot rolled coil at $570-580/metric ton FOB Turkey, while Russian offers have reached $580-590/mt FOB. These prices are $15-25/mt higher than January offers. “Buyers are unwilling to book product as lower-priced stock is available in the domestic market and end-use demand is still weak. HRC is available at $625-635/mt in the spot market, while local producers are offering product at $640-650/mt ex-works for March and April production,” a trader observed. “Discounts are still given depending on tonnage. I heard a HRC transacted price of $625/mt for a large cargo this week from a major producer. Mills have to be flexible in this market situation, as demand is low. They cannot target a price and insist on it. It is hard to predict future market direction, but the market should strengthen in the second quarter. Mills will then have more room for price increases. Consequently, CIS suppliers’ price hikes are unlikely to be accepted in the short-term,” another trader added. Meanwhile, producers are asking for $730-740/mt ex-works for cold rolled coil, $830-850/mt ex-works for 0.5mm thick hot-dip galvanized coil and $950-970/mt ex-works for 0.5mm thick 9002 code colour-coated galvanized coil (PPGI), Platts learned.
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| Tata Steel restarts UK blast furnace | ||
| Tata Steel announced on Tuesday the restart of production at the No 4 blast furnace its Port Talbot steelworks, in Wales, UK, after a £185 million rebuild which started in July 2012. "This rebuild has been a flagship investment, part of our strategy for long-term competitiveness in UK, EU and worldwide markets. The efficiency and sustainability of the new furnace will also make a major contribution to our efforts to create an ‘all-weather’ company in Europe," Karl Köhler, CEO of Tata Steel Europe, said. "We have been able to take advantage of a period of low steel demand to carry out this major engineering project and we are still operating today in an intensely challenging commercial environment." The restart comes despite market sources in the flat steel sector reporting continue demand weakness in Europe. The company, producing crude steel in UK and the Netherlands, noted that it will continue to manage output at its operations. "Restarting the furnace will help us improve our delivery performance which will enable us to better serve our customers, but we will continue to manage our output at levels appropriate to market conditions," Köhler added. Earlier in January two other blast furnaces were restarted by steel giant ArcelorMittal in Europe, one in France and one in Spain. The rebuilt Tata Steel blast furnace has a production capacity of some 2 million metric tons/year. Its restart is set to support the group's hot strip mill in Llanwern, Wales, which resumed production in December.
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| Klesch makes binding offer for Italian billet/bar producer | ||
| The Switzerland based industrial goup Klesch has made a binding offer for the Italian steel producer Leali. It deposited the offer with the Tribunal of Brescia on Tuesday morning , a source with knowledge of the matter told Platts. Leali was put officially on sale at the end of September when it presented a request to the tribunal of Brescia to go under “pre-concordato” – a sort of receivership procedure to save it from bankruptcy. It is understood that Leali is exposed to Italian banks (mainly Intesa and Ubi) for €100 million. Klesch is reported to have offered €40 million and is willing to buy the steel plant of Odolo and the melt shop in Borgo Valsugana, but not the reinforcing bar mill in Roè Volciano. As previously reported, Feralpi, one of the largest longs producers in the area, has expressed its interest too. It is believed that Feralpi has recently submitted an offer too, but thise is subordinate to the acceptation from the creditors of the restructuring of the debt. According to informed sources, the tribunal will appoint an administrator by the end of February who will deal with the owners of the company, Dario Leali (50% of the ownership) and Cesare Leali (43%) about transferring ownership to a new party. Leali in Odolo has a nameplate capacity of 500,000-600,000 metric tons/year and according to sources last year the company has produced around 300,000 mt of bars. The meltshop at Borgo Valsugana has a 1m t/y capacity, producing billet for rolling at Odolo and in theory at Roè Volciano. Borgo Valsugana last year worked at 40% of its capacity. The bar mill at Roè Volciano has a capacity for 400,000 t/y of rebar and last year did not work. When contacted by Platts Klesch declined to comment, while Leali and Feralpi were not reachable by deadline.
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| Eurofer warns the EU’s steel industry could disappear | ||
| “The steel industry in western Europe, to a high extent, will disappear in the next fifteen years or so because it is no longer cost competitive” unless it restructures in terms of costs and capacities, Eurofer president Wolfgang Eder warned yesterday. Speaking to Platts on the sidelines of a round table regarding the future of the European steel industry at the European Commission in Brussels, Eder said industry leaders, trade unionists and government ministers had to support each other to tackle the underlying problems. “What we have agreed today is identifying that we have an agenda outlining the key problems, the key issues which have to be tackled. And where we try to find solutions, the idea is to come to conclusions – at least in most areas,” he said. A document of draft recommendations placed initiatives such as ‘CARS 2020’ to promote steel-using sectors and trade liberalisation through FTAs at the heart of the EU’s action plan. But whilst immediate solutions were slow in forthcoming, Eder said the unilateral agreement between those who drafted the paper was a good start: “Nobody knows, of course, for the time being if we can find solutions so there is still a very long way to go. But it is a lot of progress compared to other areas of European discussions. I was surprised that so many ministers attended today, so I think they understand that it is something more and more important for Europe.” However, while Eder is a supporter of cutting back European production - recently stating that capacity should be cut by 40-50million metric tons - the Belgian regional economy minister, Jean Claude Marcourt, and France’s minister of industrial renewal, Arnould Montebourg, both fought tooth and nail to prevent ArcelorMittal shutting down its sites at Liège and Florange. Gordon Moffat of Eurofer said that whilst there were “different priorities” the members of the discussion group recognised the “underlying problems.” “I think the key point is how much overcapacity is structural, how much is cyclical. I think that’s the real division. The unions of course like to think of most of the overcapacity as being cyclical, we recognise that it’s more - clearly - the structural nature of some of the overcapacities,” he said.
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| ArcelorMittal refuses to postpone EU closures | ||
| ArcelorMittal said on Tuesday that it is not possible for the company to "delay the progress of the information and consultation process" of its proposed restructuring plans in Europe, affecting sites in countries such as France, Belgium and Luxembourg. The company was responding to the words from the EU industry commissioner, Antonio Tajani, suggesting that the company should have postpone the announced closures, at least until the EU releases its action plan for the steel industry later this year. Tajani met on Tuesday with representatives from the main steelmakers, unions and EU governments at a round table in Brussels to discuss ideas to be included in plan for the steel sector from the EU (see related article). "The economic situation in Europe is extremely fragile and this has substantially reduced steel demand. Failing to take action in response to this will only serve to weaken the company in Europe, thereby threatening the viability of other plants," ArcelorMittal stated.
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| German scrap likely to drop by €15/mt in February: traders | ||
| Monthly scrap prices in Germany are expected to decline by around €15/metric ton this month from January levels, although settlements are yet to be reached, according to local market sources. A source at a German scrap company said domestic steel mills had shown resistance to price increases, delaying the conclusion of February’s settlement. “Price expectations of suppliers and buyers were very far apart, so the settlement is taking a long time,” he said. The settlement is expected to be reached this week. Another scrap merchant said the domestic market was quiet as mills’ inventory levels were higher. “German mills are producing on a normal level, but they’re well stocked so they’re not buying much,” said the merchant. Scrap merchants agreed that there was some demand from Turkish mills for German exports, but due to the unfavourable exchange rate of the euro against the dollar, imports from the US were more competitive than those from Europe. “Exporters are asking for €10-15/mt more, but there’s resistance in Turkey. My feeling is that Turkish mills are short, but then demand for rebar and billets isn’t good either,” said one trader. He added that March would bring an upturn in the market as construction projects would bring higher sales of long products. “I expect a full production month in March,” he said. According to the last official prices issued by German scrap association BDSV, old scrap was pegged at €262.4/mt ex-works, new arisings at €290/mt ex-works and shredded at €298.3/mt ex-works.
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| TK sees 'subdued' prospects after Oct-Dec profits drop 70% | ||
| German steelmaker ThyssenKrupp has attributed the 70% decline in its steel profits during the first quarter of its 2012-13 fiscal year to the persistently weak European market, the company said yesterday. “Low shipments and declining prices continued to weigh on business at Steel Europe,” TK said. The division’s pre-tax profit came to €30 million in the three months from October to December 2012, compared with €102 million for the same period in 2011. Although TK said order volumes had increased slightly, order intake and sales of steel both went down y-o-y by 11% over the quarter due to lower selling prices. Looking ahead to 2013, TK said the prospects for the steel market remained “subdued,” with demand from Asian, Latin American and Middle Eastern markets slowing compared with previous years. Demand from China and the US is expected to grow by 4%, while demand in the EU is expected to remain at 2012’s level, TK said. Its performance across the 2012-13 fiscal year would be “characterized to a very large extent by the continued absence of a global economic recovery, with an unsolved debt crisis in particular in the euro zone and slower growth in the emerging economies,” the company added. TK Materials Services – its steel and non-ferrous metals distribution business – reported a 10% decline in sales revenues, and profit fell by the same percentage. TK said ex-stock sales fell 1.5% to just over 1.2 million metric tons because of a decline in demand in all markets except North America. On the continuing efforts to sell its Steel Americas business, TK said yesterday that it still hopes to agree a deal by May.
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| Eurofer scrap index up in January, prices down for February | ||
| Eurofer's monthly scrap price indices were up in a range of 6-8 points across the three major grades in January, Platts learned from the European steel producer lobby’s monthly report. While according to an analyst close to the index and other market sources called by Platts, the outlook for February is for prices to decrease on the poor fundamentals. In January the demolition scrap index increased by 6 points to 305 from December, while new arisings rose by 8 to 298 and shredded by6 to 305. For this month the outlook is for prices to decline from the January levels. “The prices since November went up, with scrap dealers saying that there was no supply because the manufacturing industry produced small quantities”, the analyst said. “In December suppliers started saying that the weather was bad so that the collection slowed, but the point is that there are not fundamentals to sustain these prices because the demand for finished products is too low, therefore we expect prices to come down.” “On top of that we see that also the Turkish mills have difficulty to make margins in the sales of their finished products and are not willing to bid for higher prices”, he added. As Platts has reported, some European settlements for February are already down, with a decrease forecasted between €10-20/metric ton in comparison to last month, depending on the regions. The Eurofer index is based on scrap sales concluded in the five largest steel-producing EU countries: Germany, Italy, Spain, France and the UK.
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| Russian mills hold scrap prices; small rise due by end-Feb | ||
| Russian steelworks haven’t yet raised their bids for ferrous scrap and an increase is not expected until the beginning of March. Then scrap may start inching up by Roubles 200/metric ton with steelworks most in need lifting their bids first, according to several scrap merchants in Russia. Byelorussian Steel Works (BMZ), which procures some of its scrap in Russia, is understood to hold its bids for 3A scrap (equivalent to HMS 1&2 80:20) from Russia’s western regions, unchanged from a fortnight ago at Roubles 8,300/mt ($276/mt) excluding delivery – or Roubles 8,700/mt and 9,100/mt delivered by rail from nearby Bryansk and remoter Moscow regions respectively, according to a northwestern scrap dealer. Prices for HMS 1&2 for export from southern Russia have already gone up by Roubles 200/mt from a month ago to Rubles 8,800/mt ($292/mt) delivered to Rostov-on-Don port, excluding 15% customs duty, truck unloading and vessel loading charges, as well as freight rates. Mills in south Russia’s Krasnodar and Rostov regions are understood to pay for the same quality scrap up to Roubles 8,800-9,200/mt delivered by road. However, they haven’t used up their scrap stocks to an extent one would expect them to at this late point in winter and therefore are not constrained to vigorously compete for supplies, Platts is told. Mills in the Urals haven’t lifted their bids and are procuring 3A grade at Roubles 9,500-10,100/mt including rail delivery. Evraz’s ZapSib and NTMK works, the bulk scrap users in Siberia, have cut their buying prices just a tad, by Roubles 100/mt, from a fortnight ago to Roubles 9,400/mt including delivery. It has got warmer, snow has thawed off in a few regions and scrap collection will accelerate to spring mode shortly, several merchants noted.
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| Ukraine reduced exports and imports in 2012, usage fell 12% | ||
| Ukraine decreased steel exports, imports and its own consumption last year, but the country’s imports fell less markedly than consumption and exports, Platts learnt from Kiev-based analyst UkrPromZovnishEkspertiza. Last year, Ukraine exported 22.44 million metric tons of steel products or 78% of its 28.9 million mt output. The exports decreased by almost 7% from 24.1 million mt in 2011. Ukraine’s exports to Asia (including China) fell most steeply, by 37.5%, year-on-year to 2.1 million mt. Europe remained Ukraine’s largest buyer, but exports there saw a double digit dip too, mainly due to a 25.6% decline in shipments to the EU-27. Total exports Europe thus fell by 15% to 7.6 million mt. Ukraine continued ramping up exports to Africa. Last year, its shipments there grew almost by half from 2011 to 2.4 million mt, but were still below the 3.7 million mt Ukraine sold to Africa in 2007. A solid 10.7% growth occurred in Ukraine’s exports to other CIS countries which approached 4.2 million mt. Shipments to the Middle East remained in positive territory too; Ukraine sold there almost 5.7 million mt, 2.3% more than in 2011. In 2012, Ukraine imported 1.78 million mt of steel products, 5.2% less year-on-year. Just over 60% (1.1 million mt) of this came from Russia, and Europe was the second largest supplier (412,100 mt) accounting for 25% of Ukraine’s imports. Ukraine’s steel products consumption totaled 8.2 million mt and was 12% down from the 9.36 million mt Ukraine used in 2011.
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| MMK to spend $7 billion to expand in home market till 2022 | ||
| Russian steel producer Magnitogorsk Iron & Steel Works (MMK) said this week that it will remain largely focused on its home market and will invest to upgrade its production technologies, according to its newly updated strategy for the period up to 2022, with a $7 billion estimated cost. Steelmaking will remain MMK’s core business and here the company will do its best to establish itself as a leader in implementing innovations and upgrades, with especial focus on raw material saving technologies in sintering, coking, blast furnace and steelmaking processes. Advanced steelmaking technologies are the area that will gain most of the company’s capital expenditure, as there are no serious expansion plans in the pipeline. “The global economic environment will make new acquisitions a highly risky business”, MMK’s chief executive officer Boris Dubrovsky said in a statement e-mailed to Platts. “Steelmakers will need to focus on strengthening their position in their local markets and improving control over production costs”, he added. This commitment and MMK’s proximity to Russia’s key steel-consuming regions (the Urals, central Russia and along the Volga river) should help the company keep expanding output of high-value added products, which by 2022 should account for more than half of its production. MMK will remain focused on the domestic market first because it expects growth in Russian steel consumption to outpace the world average, and second because it is less competitive as an exporter due to its remoteness from Russia’s major sea ports. To make up for this drawback, MMK aims to further ramp up domestic sales. Thus it aims to provide up to 30% of the Russian pipe mills’ needs in hot rolled coil and up to 50% of shipyards’ requirements in plate.
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| Dofasco confirms 100% takeover of galv line from JFE | ||
| Canada’s ArcelorMittal Dofasco has confirmed that its galvanizing joint venture with Japan’s JFE Steel has been terminated, as Platts reported on Monday. It declined to say how much it paid to buy out JFE’s 50% share of DJ Galvanizing, which operates a 400,000 metric tons/year hot-dip galvanizing line in Windsor, Ontario. Asked why the joint venture was dissolved, an ArcelorMittal spokeswoman pointed to a 2003 lease agreement under which Dofasco utilised JFE’s 50% share of production capacity, meaning that ArcelorMittal (which now owns Dofasco) was using 100% of the line’s capacity. She said there would be no change to DJ Galvanizing’s production or strategy as a result of the change of ownership. The line produces sheet for the automotive industry.
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| Ahmsa completes maintenance at cold-rolling line | ||
| Mexican integrated steelmaker Altos Hornos de México (Ahmsa) has completed the annual maintenance program at its No. 2 tandem Hitachi cold-rolling line. The company invested about Pesos 6 million ($470,690) in the program, which was mainly directed to improvements in the mill's electrical system. The mill can roll 800,000 mt/year of material that is further processed for auto and appliance applications. According to the flats and longs producer, work at the cold-rolling mill was focused on maintenance of four electric motors, two 4,000KW generators and one 400KW generator. Additionally, transmission boxes were manufactured and installed, and the bearing system and other worn equipment parts were replaced.
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| January US wire rod import data may be muddled: market | ||
| The way the International Trade Administration reports import data and categorizes wire rod has possibly allowed tens of thousands of tonnes of Chinese rod to be categorized as hot-rolled bar, and market participants worry that this could affect market perception of rod imports. US import licenses in January showed that there were 6,681 mt of Chinese wire rod licensed to enter the country that month, which is far below what market sources have noted anecdotally. A rod buyer, who received imported rod in Q4 2012 and expects more this month, said, “That just clearly is not right,” referring to the 6,681 mt of licensed Chinese rod. “It’s in everyone’s interest that the data is correct and believable.” He believes Chinese exporters are purposely categorizing the rod to benefit from export credits and avoid taxes. January wire rod imports from China were up 35% from 4,952 mt imported in December and 816% from 729 mt in January 2012. Meanwhile, licensed hot-rolled bars from China surged to 60,210 mt in January – a 33% increase from 45,147 mt in December and up nearly 10-fold from the 6,324 mt of Chinese hot-rolled bar imported in January 2012. The ITA has a dozen 10-digit HTS codes that are all considered wire rod, but one product, HTS code 7227906020, was broken out as a new code in July 2008, a US Department of Commerce official said. The 10-digit HTS code comprises “other bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel, of welding quality wire rods.” New codes are only made when import volumes become significant enough to protect confidentiality of the data. The official also said that the DOC’s Steel Import Monitor truncates the 10-digit HTS codes to 6-digits so the department can report the data on a weekly basis. The DOC official noted an overlap at the six-digit level. Among all the 10-digit HTS codes that can be categorized as hot-rolled bar, there are three that share the 722790 six-digit HTS code. One trader said he does not believe the Chinese exporters are purposely categorizing the wire rod imports, noting it could just be a clerical issue. Another market source said the addition of boron may have skewed the product's categorization. The DOC official said there is one category that fits any product and that it is unlikely that a product would be categorized incorrectly.
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| TransCanada pushes ahead on pipelines despite profit dip | ||
| Lower fourth-quarter profits aren't slowing down Canada's largest pipeline company, as TransCanada said it plans to complete $12bn of projects over the next three years, including the long-discussed/long researched, $5.3 billion Keystone XL pipeline, projected to be in service in late 2014/early 2015. The approval of the 830,000-BPD bitumen pipeline from Alberta to Cushing, Oklahoma, has been pending for more than four years. The US State Department has said that a final decision on XL wasn't expected before the end of March. TransCanada also plans completion of the $2.3 billion Gulf Coast Project, previously the southern leg of Keystone XL, which is roughly 45% complete, and runs between Cushing and Nederland, Texas. Another major TransCanada project, to get Canadian crude to new markets will convert one of its cross-Canada natural gas lines to Eastern Canada to flow oil. Last month, TransCanada learned it was selected by Progress Energy Canada to design/build/own/operate the $5bn Prince Rupert gas transmission pipeline, that will flow natural gas within British Columbia. Fourth quarter net income at TransCanada fell to $304m, from $374.94m, one year ago. Revenue rose 4%, to $2.09bn.
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| US DOC continues to find dumping of Japanese line pipe | ||
| The US Department of Commerce (DOC) has determined, as part of an expedited five-year "sunset" review, that the revocation of the antidumping duty orders on welded large diameter line pipe imports from Japan would likely lead to the continuation or recurrence of dumping. The DOC initiated its review last October and decided to expedite the review after no foreign party expressed interest in participating. Duties are typically continued as a result of expedited reviews. The ultimate decision as to whether the duties will remain in place for another five years lies with the US International Trade Commission (ITC), which is currently conducting a full review of the import orders. The commissioners recently determined that both the domestic and respondent group responses were adequate to warrant a full review, which includes a public hearing and issuance of questionnaires. The ITC will determine if revocation would lead to continuation or recurrence of material injury to the domestic industry. The Japanese line pipe duty orders have been in place since December 2001. The DOC said in its final results that the magnitude of dumping that would likely prevail if the orders were revoked would be 30.80%, which is the current AD rate, for specific producers/exporters as well as all-other entities.
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| Cliffs: 2013 end markets to be 'healthy,' pricing 'volatile' | ||
| Cliffs Natural Resources said Tuesday it expects raw materials end markets to "remain healthy" in 2013 - primarily due to continued demand from China's steel industry - but global iron ore sales are likely to be comparable to last year's levels and pricing probably will "remain volatile." The Cleveland-based company said in a statement it expects its US iron ore sales and production volumes will be 20 million long tons for the year. The projections assume 2013 North American blast furnace utilization of about 70% and average hot-rolled steel pricing of $650/st. About 50% of the expected sales volume is linked to seaborne iron ore pricing, Cliffs said. The comments came as Cliffs released its 2012 financial results. It logged a full-year net loss of $899 million, due to special Q4 charges, on revenue of $5.9 billion. Revenue was off 11% from 2011, when the company recorded net income of $1.6 billion. "The lower revenues were driven by a 23% decrease in year-over-year seaborne iron ore pricing," Cliffs said. For Q4, the company recorded a net loss of $1.6 billion, compared with net income of $185 million in the same quarter of the previous year. Revenue in Q4 totaled $1.5 billion, down slightly from Q4 2011's $1.6 billion. Cliffs recorded non-cash impairment charges of about $1 billion in goodwill related to its 2011 acquisition of Consolidated Thompson Iron Mines, as well as $365 million related to the Amapa mines. Cliffs also recorded a $50 million non-cash impairment charge related to its Wabush Mine in Eastern Canada. "While 2012 had some noteworthy highlights, including the operational turnaround of North American Coal and record sales volumes in Australia, the year proved to be challenging both from a market perspective and operationally," Cliffs CEO Joseph Carrabba said. Cliffs maintained its full-year 2013 sales and production volume expectations of 9-10 million mt for Eastern Canada, while Asia Pacific iron ore expected sales and production volumes are roughly 11 million mt. The Asia Pacific product mix is expected to be about half lump and half fines iron ore. Cliffs' full-year 2013 North American Coal expected sales and production volumes are about 7 million st. Sales volume mix is anticipated to be roughly 67% low-volatile metallurgical coal and 25% high-volatile metallurgical coal, with thermal coal making up the remainder. About 70% of its expected 2013 North American Coal sales volume is committed and priced at roughly $111/st.
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| CN suspends Labrador iron ore rail feasibility study | ||
| Canadian National (CN) said Tuesday it is suspending the feasibility study for construction of its proposed rail line and terminal handling facility to serve the Quebec/Labrador iron ore range. The railway company initiated the feasibility study in August with its partner, La Caisse de dépôt et placement du Québec (Caisse), along with a group of six mining companies. "The study has been progressing steadily over the past several months. However, the current market realities have resulted in anticipated delays with mine development projects in and around the Labrador Trough," CN said in a statement. "A joint review of the project together with the mining companies indicates that mine construction schedules and diverging needs for each specific individual project will make it difficult to obtain the critical volumes of iron ore necessary to support the building of new rail and terminal infrastructure by CN." CN said decisions by some miners in the region not to join in support of the project were also a factor in the "much-lower-than-projected iron ore volumes that are now expected to be shipped in the foreseeable future." Luc Jobin, executive VP and chief financial officer of CN, said in the statement his organization had "invested considerable effort and resources towards the feasibility study, but in light of the circumstances, CN has concluded that it is not advisable to continue with the feasibility study at this time." Caisse president and CEO Michael Sabia his organization understood that current global economic conditions prevent the project from moving forward. "As a long-term investor, the Caisse remains open to participating in infrastructure projects that will facilitate the development of Northern Québec, always in partnership with an experienced partner that can minimize the operational risks," Sabia said in the statement. "The Caisse is convinced that the long-term structural trends in the global economy will be favorable to the development of Québec's natural resources sector."
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| US steel exports set full-year record, despite December fall | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
US steel exports dropped to a 15-month low in December 2012, after a 16% decrease in November. However, full-ear 2012 exports were at a record high of nearly 14 million st. In December, the US exported 879,053 mt of steel products, down from 905,404 mt in November. Cut plate topped the export list with a 22% month-on-month jump to 108,026 mt, up from 88,245 mt. Heavy structural shape exports also increased by 13% to 103,742 mt. 2012 exports reached about 12.5 million mt (13.7 million st). Hot-dip galvanized sheet and narrow strip exports decreased by 20% in December to 74,070 mt, down from 92,316 mt. US exports to NAFTA partners fell - down 11% to 447,861 mt to Canada and down 12% to 233,125 mt to Mexico (see table). Shipments to Brazil jumped 82% to 31,206 mt in December. Panama and the Dominican Republic climbed into the fourth and fifth spots for countries receiving US exports in December with 20,511 mt and 19,656 mt, respectively. Both started from a smaller base – less than 1,000 mt each in November. Exports of semi-finished steel bounced up to 17,096 in December, compared to 2,371 mt exported in November. “Steel exports set a new record in 2012, increasing 2.2% over the previous record year of 2008. The weaker conditions at the end of 2012 showed up in the year-to-year comparisons ... with the growing Mexican market posting the best (full-year) results, increasing nearly 700,000 tons,” David Phelps, president of the American Institute for International Steel, said in a release. “The slump at the end of the year is cause for concern - at least about early 2013 export business opportunities.”
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| Chile's HRC prices jump 5-8% | ||
| Static demand and competition from imports did not prevent a 5-8% increase in hot-rolled coil prices in Chile, Platts learned from domestic traders and distributors. According to market sources, HRC currently is priced at $700-730/mt delivered, excluding the 19% IVA tax. "CAP, which is the country's sole HRC producer, elevated the price by $12/mt for deliveries in January, an additional $12/mt for deliveries in February and $7/mt more for deliveries in March," said a distributor. Demand in Chile is driven by the heavy machinery and construction sectors and is mainly for 2-10mm thick material. Currently, the supply of these sectors is spilt "around 50-50" between domestic and imported products, the distributor said. China and Brazil remain Chile's main rivals in the domestic HRC market. Domestic market sources are uncertain as to what the coming months will bring. "Chile is inserted in the global market and, as in all other countries, every change will depend a lot on what the Chinese do," said a source.
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| Brazilian traders fail to push up billet export prices | ||
| Brazilian traders have attempted to export billets at prices that reflect increasing raw materials costs, but have not succeeded in achieving higher prices, market participants told Platts last week. An offer of $530/mt FOB Brazil's Vitoria port for 5,000 mt of square billets for March shipment was not accepted by a Taiwanese buyer in the past week, which countered with a bid price lower by some $15/mt. Another trader is said to be negotiating a 8,000 mt cargo with a Indonesian customer at $515/mt FOB Vitoria - the same pricing level that billet was traded at in December. "We are not able to hike prices; the market continues at a standstill," he said.
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| Brazil's domestic rebar prices stable in early February | ||
| The domestic Brazilian rebar price remained unchanged in early February, despite market chatter pointing to increases from major longs producer Gerdau. "Mills have not yet passed on any price adjustment to distributors ... seems like it was just rumors," said a distribution source in Brazil's Sao Paulo state. The source did not dismiss the possibility of an increase late in 2013's first half. Rebar's pricing stability was confirmed by a reseller in the northeastern area of the country, who said buying prices are unchanged. Brazil's rebar prices have been static since last year's H1 at R$1,968/mt ($997/mt), ex-mill, excluding taxes.
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| Venezuela says Sidetur’s former owners to pay past debt | ||
| Venezuela’s former Siderúrgica del Turbio (Sidetur), now the Complejo Siderúrgico Nacional (national steel complex), has less than two months to pay off the company’s debts to past investors. The country’s minister of industry Ricardo Menéndez said on Friday, “the government will not pay a dime” for debt the company incurred when it was still private. According to the minister, the former owner of Sidetur, Sivensa, has the responsibility to satisfy the debt. Sivensa is the largest private steel group in Venezuela. “Who generates the debt has to pay it,” said Menéndez, adding that the national public attorney also said the responsibility for the debt payment lies with the prior owner. Sidetur's debt is estimated at $70 million by the country’s official newspaper and at $77 million by the domestic media. Sivensa did not comment on the matter by Platts’ deadline. Sidetur was nationalized in November 2010, however the nationalization process wasn't completed until early 2012. The national steel complex produces rebar, beams, profiles, sections, billets, mesh, trusses, bars, plates, joist and wires. It has units in Caracas, Puerto Ordaz, Guarenas, Valencia and two in Barquisimeto, as well as 15 scrap yards.
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| Kumba produces more iron ore despite strikes | ||
| Kumba Iron Ore had record production of 43.1 million metric tons for 2012, marking an increase year-on-year of 4%, the South African miner said in a statement Tuesday. The company cited “excellent performance” at its new Kolomela mine which “significantly exceeded” its scheduled ramp-up to produce 8.5 million mt. Kumba achieved record export sales of 39.7 million mt in 2012, up 7%, which it said is directly related to “continued demand from Asian markets, mainly China”. At its Sishen mine production was down 13% to 33.7 million mt as a result of the strike in Q4. CEO Norman Mbazima said “annual production volumes from Sishen mine are expected to increase… to at least 37 million mt in 2013”. Kumba said that, despite the recent rapid price recovery in iron ore prices, “the consensus view is that this rally will not be sustained throughout the year”. It added that “some positive sentiment in relation to Chinese steel consumption growth has been restored and is expected to provide support to prices throughout the year… Kumba's view is that, on average, iron ore prices should be firmer than in 2012”.
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| World oil/gas drilling rig numbers move up | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The number of oil/gas drilling rig numbers active worldwide in the opening month of 2013 was higher than the December 2012 total, but down on January last year (see table). However, the figures amply illustrate the step change in Canadian activity at this time of the year as frozen ground conditions allow access to remote drill sites for a few months. Active rig numbers in that country jumped by more than 40% month-on-month in January, and have continued upwards so far in February to more than 630 units, as previously reported. However, January’s total was 10-13% lower than the same month in the two previous years. Elsewhere there was very little change month-on-month, but a year-on-year comparison shows a sharp increase in numbers in Africa (up 47%) and Europe (up nearly 25%). The 22% jump in Middle East rig numbers is partly due to the inclusion of Iraq since January 2012. Crude oil prices have moved upwards over the past month and are currently around $97/barrel for West Texas Intermediate and $118/bbl for Brent Crude. US natural gas prices have been oscillating in a narrow range of late, and currently stand at $3.2/mmbtu.
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| TSI survey shows more bullish views on demand outlook | |||||||||||||||||||||||
All US companies which participated in The Steel Index (TSI)’s weekly survey expect higher or stable demand in the next three months. There was also a rise in the number of companies globally which expect demand to increase, according to the latest carbon steel market survey results released earlier. There was a significant gain in the number of companies in North America which foresee higher prices. Around 70% of companies reported unchanged stock levels compared to the previous week. 47% of US companies expect higher demand in the next three months, up from 42%, with 53% foreseeing stable demand, down from 54%. (See table.) 35% of respondents in Europe expect higher demand, down from 36%, while 47% expect demand to be steady, down from 55%. The number of companies globally expecting higher demand rose to 43% from 41%, with 46% predicting stable offtake. Among US companies, 47% predict higher prices in the next three months, up from 25%, and 37% expect stable prices, down from 58%. 41% of European respondents expect higher prices and 41% foresee stable prices, up from 30%, while 18% predict lower prices, down from 21%. Globally, 46% of companies expect higher prices, up from 41%, with 16% foreseeing lower prices, down from 18%. 68% of respondents globally reported unchanged steel inventories compared to a week earlier, up from 58%, while 18% had lower stocks, down from 21%. 72% of US companies noted steady inventory, up from 55%, with 17% showing lower inventory, up from 14%. For European companies, an unchanged 69% noted stable stocks and 16% had lower stock levels, down from 22% in the previous survey. More information about TSI, a specialist pricing unit within Platts, is available on its website www.thesteelindex.com . | |||||||||||||||||||||||
