| Russian coils gain $30/t, further increases likely | ||||||||||||||||||||||||||||||
Export prices of hot and cold rolled coils from Russian producers have increased by another $30/t this month, sources among producers and traders tell Steel Business Briefing. Limited availability and the apparent start of the recovery in markets such as Russia, Turkey and the Americas appear to be playing a major part, they say. Indeed, Russian domestic demand is looking to be improving, at least in sentiment, according to major players. Both Severstal and Novolipetsk say their March (rolling) export allocations were lower than February's, much to their chagrin, as demand exceeded supply. Turkey is also importing actively this month, along with Brazil, which these two mills have primarily sold to, sources say. Magnitogorsk is considered to be achieving good sales and price levels too, having been selling slowly and achieving good levels of sales in its traditional markets, such as the Americas, a source comments. Base price of March-rolled HRC is $580-600/t fob Black/Baltic Sea, whilst CRC is quoted $100-110/t higher. NLMK is said to have sold out over two weeks ago, Severstal is out too, it appears, whilst MMK still has what is described as "pockets of availability". The sentiment for Q2 is positive, with one producer-tied source confident the price will hit $600/t fob for HRC next month. Return of the south-east Asian market after the Lunar New Year celebrations could affect the market to go either way, but it appears more people think it will continue a slow ascent, rather than correcting downwards.
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| Japan's NSSC lifts prices for austenitic CRC and plate | ||
| Nippon Steel & Sumikin Stainless (NSSC) is lifting the price of its austenitic cold rolled coil (CRC) by ¥5,000/tonne ($56/t) and its plate by ¥10,000/t ($111/t) for domestic ‘miseuri’ (spot) contracts for February deliveries, Steel Business Briefing learns from the company. NSSC will add ¥10,000/t ($111/t) to the price of its austenitic CRC through its ‘alloy link’ surcharge component, reflecting higher London Metal Exchange nickel prices in December and January. But the company is cutting ¥5,000/t ($56/t) from the base price of austenitic CRC, which was lifted for January contracts, also because of higher nickel prices. This makes a net rise of ¥5,000/t. NSSC will keep its ferritic CRC prices unchanged for February contracts. The new price for austenitic CRC below 2mm for February contracts will be ¥360,000/t ($3,998/t), while ferritic CRC below 2mm is ¥252,000/t ($2,798/t). NSSC does not reveal its plate prices, but believes that plate demand will increase because it is receiving a high level of inquiries from companies involved in large LNG, petro-chemical and desalination projects. Plate production at its Yawata works will be 20-30% below capacity when annual maintenance is carried out from mid-February. SBB calculates that, as a result of this work, NSSC’s production volume in the January-March quarter will be about 7,500-8,700 tonnes/month.
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| US plate & N. Europe rebar prices rise, says The Steel Index | ||
| The latest reference prices released by The Steel Index show that US plate prices and northern European rebar prices rose slightly from last week. Southern European plate and rebar prices consolidated. The US plate reference price is now at $690/s. ton ($761/tonne) FOB Midwest mill, an increase of $12/st from a week ago. The average US plate delivery time is longer at 7 weeks. The southern European plate price ex-works was almost unchanged at €452/tonne ($619/t). The northern European plate reference price dropped from last week’s level but the average delivery time is unchanged at 7.1 weeks. The northern European rebar reference price ex-works rose 2.9% from last week’s level to €384/tonne ($526/t), with the average delivery lead-time just longer than last week at 2.8 weeks. The average LME Mediterranean billet price for last week was $423/tonne, making the spread to TSI's northern European rebar price $103/t. The southern European rebar reference price ex-works was also nearly unchanged from last week’s level, and the spread to the average LME Mediterranean billet price is down by $9/t on the previous week. The average delivery lead-time for rebar is longer than last week at 3.3 weeks. The Steel Index - which is owned by Steel Business Briefing - publishes coil, plate and rebar reference prices on a weekly basis. It also publishes two daily iron ore reference prices. Companies wishing to submit data, or receive the full set of reference prices published every week, can apply on the website www.thesteelindex.com .
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| Ecuador's Andec starts new furnace to meet billet needs | ||
| Ecuadorian steelmaker Andec recently commissioned the new 25-tonne ladle furnace at its Guayaquil works, Steel Business Briefing learns from Italian plantmaker Danieli, which supplied the equipment. The mill also put into operation a new exhaust fume de-dusting plant, which will serve the existing electric arc furnace and the new ladle furnace. The new ladle furnace will enable the steelmaker to increase its billet making capacity from 90,000 t/year to 135,000 t/y. This is a part of a US$40m investment plan that also involved a bar mill upgrade. Andec has now accomplished its goal of being self-sufficient in billets by 2010. The company had been importing around 60% of its billet needs.
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| Higher prices for coils consolidate in Southern Europe | ||||||||||||||||||||||||||||||||||||
Higher coil prices are seemingly being accepted in Southern European, with the upward trend expected to continue for now; this is regardless of sluggish demand in both Italy and Spain, learns from industry sources. In Italy, last month’s price push-up from the mills has been holding. It has prompted speculative buying in expectation of further increases. “Everyone has paid more for March deliveries than February’s. Everything seems to be going in the right direction. But real demand is not good, the state of the economy is not good. We are still facing the same problems as we were 6 months ago,” one Italian service centre tells Steel Business Briefing. In Spain the consolidation of prices is more uncertain. The weak market is showing no obvious signs of change. “Some say that the new prices are being accepted, others say they are not. It’s all based on rumours at the moment. Customers do not ‘believe’ in the increases and have decided not to buy as their stocks are manageable. They can therefore afford to wait,” a Spanish producer tells SBB. The current bracket for hot rolled coil is €400-440/t, whereas CRC and HDG are both at €500-530/t. However, there is better acceptability at the higher end of the spectrum, whereas last month transactions were below €500/t. The upward trend is expected to continue across Southern Europe, with further increases of up to €30/t likely in April and May. Some claim the increases may linger only till the summer.
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| Bad weather tightens scrap flows in northern US | ||
| When it comes to US scrap prices at this time of year, “it’s all about weather,” as one mill scrap buyer told Steel Business Briefing. Snow and cold have pounded parts of the midwestern and northeastern US, and even parts of the southern US, in recent days and weeks. “I would have said at the beginning of February that March (prices) would be down,” he said. “But now I think it’s going to be very firm and it may even be up.” All the scrap in the northeastern part of the US “is buried in snow,” he added. While it is normal for scrap flows to slow down during the winter, he noted, excessive snow and cold can further constrict flows and complicate shipping. “It disrupts. It’s a shock to the system. Raw material doesn’t flow.” A scrap procurer for mills in the mid-Atlantic region said daily flow into their scrap yard has been off at least 50%, though he was quick to add he didn’t anticipate any major disruption to customers. “I think there is some pent-up supply that will want to hit the market as soon as weather improves,” he said. He anticipates prices being flat-to-up next month. "It's hard to imagine (price) weakness at this time," he said. One large midwestern mill executive contacted by SBB said weather had not impacted its scrap flows, however. US shredded scrap is seling for about $330-345/long ton, delivered mill.
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| Weather closes order book at Severstal NA's Sparrows Point | ||
| Still digging out from more than 50 inches of snow over a five-day period, Severstal North America's Sparrows Point, Maryland sheet mill has temporarily stopped taking new orders, Steel Business Briefing learns. A company spokesperson said the Baltimore area mill is still producing, despite being hit hard by severe winter weather. However, it is not processing new inquiries for its hotrolled, coldrolled, hot-dipped galvanized, galvalume or tin mill products. "Our order book in April remains closed until we fully assess the impact storms will have on our overall objective to improve our delivery reliability," the spokesperson said. "We need to get current with back orders before we can open for new orders." Other US sheet mills apparently are also being impacted by a combination of weather and more robust demand. Market sources tell SBB that order books at US Steel's Mon Valley and Fairless works are on "inquiry" only status. A US Steel spokeswoman declined comment on the company's operations.
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| OneSteel's half-year profit falls 49%, steel output rising | ||
| OneSteel’s interim profit fell 49% year-on-year to A$117m (US$104.6m) on weak domestic demand for its steel, though iron ore sales to China increased in the July-December half. Australia’s second largest steel company said iron ore sales for the six months to end-December rose 19% to A$328m (US$293m) on the back of a 50% increase in production to 3m tonnes. It noted stronger demand in China for iron ore, reflected in higher spot prices though margins were hit by rising freight rates and the strong Australian dollar. OneSteel chief executive Geoff Plummer said the company remains on track to achieve its iron ore output target of 6m t/y by the end of this financial year. More than half of OneSteel’s iron ore is sold on a spot basis, Steel Business Briefing notes. Production at OneSteel’s electric arc furnaces in western Sydney and Laverton in Melbourne reached 70% capacity over the half, compared with 35% for the January-June half, as markets improved. Sydney produced 211,000t and Laverton 256,000t in July-December. Output at the company’s 1.2m t/y capacity integrated steelworks in Whyalla, South Australia increased to 565,000t for the half, up from 460,000t the previous six months. Whyalla produces slab, rails and structural products. Plummer said the Australian government’s stimulus package was starting to be felt but anticipated that most larger infrastructure projects will benefit the 2011 financial year. “Production and operating levels are expected to lift slightly for the second half, albeit still well short of full capacity,” he said.
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| Korean HRC exports to China tripled in 2009 | ||
| Korea’s hot rolled coil exports to China were three times higher last year than they were in 2008, surging to 591,000 tonnes from 161,000t the previous year. This was mainly due to Korea’s HRC producers, including Posco and Hyundai Steel, boosting their export volume to compensate for slumped domestic demand. Exports to other South East Asian countries were also significantly higher than in 2008. Vietnam and Bangladesh purchased 525,000 t and 272,000 t of HRC from Korea respectively, compared with 189,000 t and 81,000 t in 2008, according to Korea Iron & Steel Association data. As a result, Korea’s total HRC exports last year rose 8.8% year-on-year to 3.2m t. But exports to Japan and the US plummeted by 33% and 47% y-o-y respectively to 534,000 t and 347,000 t because their economies remained weak in the wake of the global financial crisis. By contrast, HRC imports from China plunged 64% to 1.5m t, down from 4.2m t in 2008. The continued lack of demand in domestic markets and high export prices from China resulted in little buying interest among Korean customers, Steel Business Briefing understands.
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| Korea's rebar stocks rise 40,000 t in a week | ||
| Sluggish demand for rebar in Korea has resulted in stocks held by the country’s seven major producers climbing to 330,000-340,000 tonnes by the end of last week. This represents an increase of 30,000-40,000 t in the space of just one week. A normal level of inventory for rebar for these producers is considered to be around 200,000 t. Industry sources attribute the higher than normal stocks to demand falling ahead of the Lunar New Year holidays in Korea and other Asian countries. They expect stocks to fall later this month, however, because of the reduction in domestic rebar output caused by scheduled maintenance work at the producers. Total rebar output from the seven makers is expected to reach around 600,000 t in February compared with January’s 740-750,000 t, as Steel Business Briefing has reported. Other sources say fewer working days this month could contribute to end-user demand falling, particularly in the construction sector. Further, heavy snow in many parts of Korea late last week is likely to impact rebar deliveries over the next few days. Higher prices from rebar makers led by Hyundai Steel last month have had little impact on the market because of the high inventories and stagnant demand. Hyundai lifted its prices by KRW 50,000/t ($43/t), citing the need to offset higher scrap costs, taking new prices for 10mm diameter bars to KRW 741,000/t ($637/t). However, some local distributors continue to discount rebar by KRW 20-30,000/t.
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| Indian rebar producer plans new plant to make wire rod | ||
| India’s S.K. Sarawagi & Co is expanding its capacity to include a new induction furnace and wire rod mill at its works at Siltara, Raipur in the central state of Chhattisgarh. “We are in the process of setting up a new induction furnace and wire rod mill in the same location, to make an additional 30,000 t/y of wire rods, by December this year,” a company official told Steel Business Briefing on the sidelines of the Global Steel 2010 conference in Goa. Sarawagi’s current mill makes 100,000 tonnes/year of coal-based DRI and 100,000 t/y of crude steel. This is cast into billets and ingots for rolling into 80,000 t/y of 8-32mm thermo mechanically treated (TMT) rebars. The mill also produces rounds of diameters up to 40mm. Its products are sold India-wide. Sarawagi is also planning an integrated steelworks in Chhattisgarh, with a 300 cubic metre mini blast furnace, sinter plant, coke plant and captive power plant. According to the company, a memorandum of understanding has already been signed with the state government and the land acquisition is in process. The company currently mines 200,000 t/y of iron ore (average Fe 63%), of which 40,000 t/y is lump ore for its DRI production, while the rest is fines exported to China. The company has also been allotted an 800 hectare iron ore mining lease in Chhattisgarh and it hopes to commence production of 2m t/y of ore by 2011 and increase that to 5m t/y by 2014.
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| China's Jiyuan Steel benefits from stimulus spending | ||
| China’s 30% year-on-year growth in fixed asset investment in 2009 has resulted in a high amount of orders for construction steel produced by Jinyuan Iron & Steel. This has helped the company gain a y-o-y increase of 27% in its 2009 profits, according to a local media report. Some 68 of the China Iron & Steel Association's (CISA) member mills have reported a collective y-o-y profit decline of more than 30%, as Steel Business Briefing has reported. Central China’s Jiyuan is also a CISA member. Profits realized by Jinyuan last year totalled around RMB 418m ($61m). The steelmaker produced 2.58m t of crude steel and 2.54m t of finished steel, respectively up by 2% and 22% y-o-y. Construction of high-speed railways - including the Beijing-Shanghai, Beijing-Shijiazhuang and Shijiazhuang-Wuhan rail links - alone consumed nearly 1m tonnes of rebar sourced from Jiyuan. The company also supplied steel for power plants and other construction projects last year. China’s longs output has seen rapid growth in the past year, spurred by Beijing's investment in longs-intensive infrastructure projects as part of its economic stimulus package. China produced 121.51m t of rebar and 95.86m t of wire rod in 2009, up 27% and 21% y-o-y respectively. However, CISA chairman Deng Qilin warned recently that China’s demand for long products could slow this year in line with lower investment in infrastructure.
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| India’s Shyam Steel expects land soon for new steelworks | ||
| India’s Shyam Steel Industries expects to obtain land from the state government of West Bengal by the end of March, for its planned 1.1m tones/year greenfield integrated steelworks project. The much-delayed land acquisition process was supposed to have been completed last November, as Steel Business Briefing reported. “The government has already acquired the land for us and should hand it over by the end of next month,” a senior company official told SBB this week. In the first phase Shyam Steel will invest Rs 15bn ($325m) in a 500 cubic metre blast furnace, a 1m t/y iron ore beneficiation and pellet plant, and a 100 MW power plant. The blast furnace will make 400,000 t/y of pig iron which will initially be used at the company’s existing longs mill in Durgapur, West Bengal. In the second phase, the company will make crude steel in EAFs using the pig iron and DRI, to make 1.1m t/y of thermo mechanically treated rebars. Meanwhile, the company is setting up a 2m t/y beneficiation and pelletization plant in Orissa. It has obtained majority shares in an Orissa-based 100,000 t/y DRI producer which also has iron ore mining leases in the state. Shyam Steel will use the leases to source its iron ore for the planned pellet plant.
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| More gas pipelines planned in China by 2015 | ||
| As predicted by Chinese pipe market insiders, the country’s line pipe sector is still seeing growth driven by continuous domestic pipeline projects. China National Petroleum Corporation (CNPC) estimates its total length of natural gas pipeline will reach 48,000 kilometres by 2015, Steel Business Briefing learns from a State-owned Assets Supervision and Administration Commission report. As the country’s largest integrated oil and gas enterprise, CNPC currently accounts around 80% of China’s total gas pipeline length. China’s gas pipeline length reached 34,000 kms by the end of last year, according to China’s National Energy Board (NEB). A welded pipe expert predicts that China’s gas pipeline construction will continue for a long time. This will not only drive demand of large-diameter line pipes, but also generate more demand for middle and small-diameter high quality line pipes when urban natural gas pipeline networks expand. SBB understands the country’s Second West-East Gas Pipeline (WPEG2) will be completed by 2011, and more cities are building networks to receive the natural gas transported by WPEG2 from Turkmenistan and China’s domestic gas fields. CNPC said on 9 February that it plans to build China’s largest natural gas storage terminal in the Changqing oil/gas field, located in northern China’s Ordos Basin. The storage terminal will be connected to planned pipelines including The Fourth West-East Gas Pipeline. China hopes to develop more natural gas for the coming decades as securing a stable energy supply is becoming much more urgent for the country, SBB notes.
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| Tokyo Steel lifts scrap buying prices | ||
| Tokyo Steel Manufacturing has increased scrap buying prices by ¥1,500-2,000/tonne ($16.7-22/t) for all grades at all its works, effective from 17 February arrivals. This is its first increase after a month of holding prices unchanged. A scrap trader explains that some other Japanese mini-mills have started paying higher prices to secure scrap for their steel production, because scrap generation in Japan is very low and some is going for export. “Collecting scrap for export is especially active in Kanto area, so that is why Tokyo Steel had to lift prices the most, ¥2,000/t, at its Utsunomiya works in the northern Kanto,” he tells Steel Business Briefing. The trader added that blast furnaces and special steel makers are also actively buying scrap in response to higher demand for steel from auto makers and export markets. This is another reason why mini-mills are anxious to secure furnace feed. Tokyo Steel’s new buying price for H2 grade scrap at Okayama for seaborne delivery has risen by ¥1,500/t to ¥31,500/t ($350/t), and those for truck delivery at Okayama and Kyushu have increased by ¥1,500/t to ¥30,500/t. Its H2 buying prices at Takamatsu and Tahara have also gone up by ¥1,500/t to ¥30,000/t, and those at Utsunomiya have gained ¥2,000/t to ¥30,500/t.
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| Inner Mongolia replaces Shanxi as No.1 coal producer | ||
| Northern China’s Inner Mongolia has become the country’s major coal producing region, replacing neighbouring Shanxi province, Chinese state media reported this week. Inner Mongolia produced 637m tonnes of coal in 2009, up 37% year-on-year, compared with Shanxi’s 615m t, according to Inner Mongolia’s administration of coal mine safety. Shanxi’s coal output in 2009 dropped 4.7% on the previous year as the province’s consolidation program began to take effect. Since May last year Shanxi has merged its mid-tier and smaller coal producers to the point where they now have a collective 30% market share, compared with 60% prior to the integration program. Coal producers with capacity lower than 300,000 tonnes/year were shut down. This has resulted in lower coal volumes and higher prices, as Steel Business Briefing has reported. Baotou Iron & Steel is one of a number of companies developing coking coal projects in Inner Mongolia. The steel producer is exploring a project in Wuhai city, 400km from Baotou, which is believed to contain at least 3bn t of coal reserves, mainly high quality coking coal. Hong Kong-listed Win Team Investments plans to invest $210m in a coking coal project in the same region, SBB notes.
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| 28% of Chinese steel producers made losses in 2009 | ||
| China’s Ministry of Industry and Information Technology (MIIT) said the country’s steel industry saw 28% of its companies make losses in 2009, resulting in a total loss of RMB 16.5bn ($2.4bn), Steel Business Briefing learns from an MIIT release. In the report published on 12 February on MIIT’s website, the ministry says China’s steel industry turned profitable in May 2009, after seven consecutive months of losses. The loss-making mills include eight of China’s major steel makers, which are members of the China Iron & Steel Association (CISA). These mills made total losses of RMB 6.3bn ($922m), compared to 13 CISA member mills, which had total losses of RMB 96.84bn ($14.2bn) in 2008. Last year, long products saw a higher increase of production than flats, while smaller mills, which mainly produce longs, had a higher increase in production output than large- and medium-sized mills. The MIIT explains the increased demand for longs products, which are used as construction materials, was driven by investment in fixed assets. The MIIT warns that some demand for steel products was brought forward by the country’s stimulus package. This may lead to more serious overcapacity given China’s crude steel capacity is already close to 700m tonnes/year.
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| Baosteel's 2009 profit fell 11% | ||
| Baosteel’s net profit for 2009 reached RMB 5.75bn ($842m), down 11% on the previous year, China’s second largest steel producer told the Shanghai stock exchange on 13 February. No further details have been reported at this stage. The company did not provide any reasons for the losses, state media organisation Xinhua reported. The filing was lodged the day before Chinese New Year celebrations began when much of the country had gone on holiday, Steel Business Briefing notes. Baosteel’s revenues for fiscal 2008 were RMB 148.3bn ($21.7m) - down almost 30% on 2007 - as the global financial crisis began to bite in the latter part of that year. Earlier this month the China Iron & Steel Association said the top 68 mills among its 72 members had made a combined profit of RMB 55.39bn ($8.15bn) in 2009, down 30% on the previous year. Baosteel lifted its March prices last week, increasing most of them by RMB 200-700/tonne ($29-103/t) with hot rolled coil and cold rolled coil rising increasing by RMB 300/t ($44/t), as SBB reported.
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| Tata Steel Group’s deliveries flat in October-December | ||
| Tata Steel Group, with steelmaking operations in India, South East Asia and Europe, delivered 6.2m tonnes of steel products in its third financial quarter (October-December 2009), unchanged on the previous quarter, Steel Business Briefing learns from the company. Group turnover was also roughly stable at US$5.632bn in financial Q3 compared to $5.459bn in Q2, although earnings before interest, taxation, depreciation and amortisation surged to $731m in Q3 from $86m in Q2, due to a return to profit in Europe (see related article) and profit growth in India. At Tata Steel India, sales volumes of flat steel products increased modestly to 0.89m t in Q3 from 0.79m t in Q2, and long product sales moved to 0.71m t from 0.66m t. The Indian division’s EBITDA rose to $520m in Q3 from $430m in Q2. Deliveries at NatSteel Asia, headquartered in Singapore, amounted to 0.64m t in Q3, similar to the 0.68m t delivered in Q2. The division’s finished steel production was 0.45m t in Q3 and 0.46m t in Q2. Its EBITDA, meanwhile, dropped to $15m in Q3 from $19m in Q2. Tata Steel Thailand’s deliveries were unchanged in Q3 compared to the two previous quarters at 0.3m t. Its crude steel production fell slightly in Q3 to 0.28m t from 0.31m t in Q2, while its EBITDA more than halved, falling to $8m in Q3 from $18m in Q2.
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| European HRC traders buy domestically, not from China | ||
| European traders are opting to buy hot rolled coil from other nearby countries including France and Germany rather than from China, due to the strengthening of the dollar against the euro, Italian traders tell Steel Business Briefing. “The dollar is too strong now. Buying HRC in China has become too expensive and is no longer cost effective,” an Italian trader comments. In addition, the 90 days delivery time from China is pushing traders to buy locally. Italy is the largest third country importer of coil in Europe. “Buying from China with an immediate payment, but delivery in three months is more like buying a future than making a spot purchase,” another Italian trader adds. “There is a risk that you pay too much now, and prices fall in the three months before delivery” he notes. At the moment, Italian domestic and Chinese import prices are very similar. The Italian ex-works price for HRC is between €440-460/tonne, markets participants tell SBB, while Chinese export prices to Europe are $540-565/t fob. This places the effective import price from China at about €460/t cfr, they say. Meanwhile, Italian demand for HRC is not particularly strong. Whilst most traders see prices as being relatively stable over the next three months, a few see prices rising a little.
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| Turkish Erdemir stays out of export market | ||
| Turkey’s biggest steel producer Erdemir has not given any allocation for export for March production of flat products. Steel Business Briefing is informed by Turkish traders that the company received more orders than its capacity for March. Erdemir’s domestic base price for hot rolled coil is $570/tonne. This price is competitive compared to $620-650/t cfr offers from Russia. But, on the other hand, it is high for Europe, market sources say. So, Erdemir prefers to sell its material in Turkey instead of selling to Europe – its main export market. Turkish market players are expecting Ukrainian exporters to offer their new prices this week. The previous HRC prices were $550-570/t cfr. This price is expected to increase by $30-40/tonne. Furthermore, since some of the CIS ports are frozen, freight costs are rising. Demand for flat rolled steel is still sluggish in Turkey, but some consuming sectors are picking up, so demand may rise towards the end of February, sources say. Turkish traders think Erdemir will not give any allocation for export until April, and then it will depend on the market situation. The company is also expected to increase its prices by $20-30/tonne for April deliveries. But some traders believe the price increase will be small because the company is trying to avoid any reduction in import duties.
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| ArcelorMittal in talks to restart Liège blast furnace | ||
| Management and workers’ representatives at ArcelorMittal’s Liège steelworks in Belgium are holding discussions to see whether the necessary economic and social conditions are in place to restart blast furnace B at the works’ Ougrée site. The furnace has a capacity of 1.4m-1.5m tonnes/year of pig iron and was idled in May 2009 to adapt production to the “exceptional” economic conditions at that time. The steelworks’ other blast furnace, No 6 at its Seraing site, has been idle since November 2008. At present, ArcelorMittal’s Dunkirk steelworks in France is supplying slab to Liège to feed its 3m t/y hot strip mill, which was restarted in November last year. All the finishing lines at Liège – pickling, cold rolling, annealing, galvanising and colour coating – are in operation, a company spokesperson tells Steel Business Briefing. The hot strip mill is not working at full capacity, but remains flexible to respond to order entry and clients’ needs, particularly in terms of time management, the spokesperson adds. The social conditions necessary to restart blast furnace B mostly relate to competencies of personnel, he says.
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| ThyssenKrupp confirms mid-year start-up dates for new plants | ||
| German steelmaker ThyssenKrupp has reconfirmed that it aims to start production at its new plants in the USA and Brazil in the middle of this year. The Brazilian slab plant is due to begin operation of its first production line with a blast furnace and a steelmaking converter in mid-year. The start-up of the second converter and the ramp-up of the second blast furnace are currently planned for 2011, the company says. But it adds that planning is being kept flexible, if it needs to respond swiftly to an earlier market recovery, Steel Business Briefing is told. In the USA, the Alabama-based hot strip mill will begin production in the middle of this year as well. Subsequent processing lines are being prepared to come on line between mid-year and late September. Regarding the coating lines, “the economic situation has caused us to postpone completion until the next fiscal year”, TK says. At the Alabama stainless steel facilities, production is to begin in October 2010, initially with a cold rolling capacity of around 100,000 tonnes/year. Planning for the start-up of the other facilities is flexible and the ramp-up can be accelerated whenever necessary, TK says. The same applies to the start-up of the stainless melt shop, which was planned for early 2012 and could now be delayed by up to 24 months.
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| UK slab plant closes on Friday | ||
| Corus will begin mothballing its Teesside Cast Products slab plant in the UK this Friday, a company representative tells Steel Business Briefing. The Redcar blast furnace, which has a capacity of 3.5m tonnes/year, will be ramped down at the end of this week, but could be restarted relatively quickly if the global slab market recovers. TCP has been under threat since April 2009, when a consortium of four international buyers prematurely terminated a ten-year off-take agreement, leaving the plant with no market for 80% of its slab. The plant represents around 15% of Corus’ European capacity. Member of parliament for Redcar Vera Baird indicated the plant could be sold and revived. “There are credible people interested in taking this plant on,” she said. “Corus has agreed to keep the blast furnace ‘like a baby’ so that it can come back to work again quickly,” she added. General secretary of the Community trade union, Michael Leahy, said “we still believe a viable deal can be done with a potential off-taker or buyer. The slab market is improving week by week.” Corus’ South Bank coke ovens and its beam mill, not part of TCP but located on the same site, will remain in operation. Corus chief executive Kirby Adams said yesterday that TCP’s losses over the last nine months exceeded $220m (€160m). The company, owned by India’s Tata Steel, has searched for both a strategic partner who could invest necessary capital into TCP and off-take the slab, as well as a short-term solution, but has been unable to find either, he commented.
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| ArcelorMittal Spain raises galv output on new auto contract | ||
| ArcelorMittal’s Spanish division has won a contract to supply annually around 1.2m laser-welded blanks to General Motors for its Opel Meriva plant in Zaragoza, Steel Business Briefing learns from the company. ArcelorMittal Tailored Blanks says the contract is equivalent to around 18,000 tonnes/year of galvanised sheet. The new contract, which has required an investment of €2m to upgrade production facilities at AMTB Zaragoza, will also lead to a higher capacity utilization of its in Avilés and Sagunto plants where the galvanized steel is produced.
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| Turkish rebar exporters cut prices | ||
| Turkish rebar producers are reported to be offering export rebar for $510/t fob. Market sources say that Turkish producers are trying to adjust their prices to market demand and that’s why their offers have come down to $510/t fob from $520-525/t two weeks ago. One producer says that the decrease in offers has made some more transactions possible. And if the market sees it is not likely that prices will go lower and that offers are more stable, then more demand could follow. Turkish market players reflect a very pessimistic sentiment. One says: “the offer levels are low compared to the costs of production, but also stopping the production is costly, so this situation will have to continue.” One producer adds: “in the current market, producing is not economic at all; it is better that we cut production and balance the low demand, then the pressure on rebar prices might ease slightly. Otherwise 2010 is likely to be worse than 2009.” The Egyptian market is reported to be asking for $510/t cfr, local sources tell Steel Business Briefing. Iraq has been in the market with high tonnage bookings. Billet export offers are reported at $480/t fob and wire rod at $520/t fob.
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| Duferdofin-Nucor bar mill to focus on small sizes | ||
| The new bar mill of Duferdofin-Nucor in Giammoro, Italy was inaugurated at the end of last year and, according to Danieli, the plantmaker, it has a design capacity of 700,000 tonnes/year. This is well above the 400,000 t/y previously reported. It will produce 8-25mm diameter rebar and a large range of sections. The Sicilian mill is intended to produce small rebar sizes. Bar finishing includes a continuous cut-to-length facility.
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| Stainless coil prices rise in Turkey on costlier nickel | ||
| Stainless steel sheet prices are increasing in Turkey because of the higher nickel prices, but demand remains low, Steel Business Briefing learns. Turkish traders report that the current the prices of type 304 2mm thick cold rolled coil have advanced by €80-100/t ($109-137/t) from the EU mills for May production and reach €2,280-2,300/t ($3,114-3,142/t). At the same time Far East mills also increased their prices for the same product by $50/t to $3,000/t. But demand for the EU product is currently better because of the low price gap and the holidays in China. A Turkish trader told SBB that the price increase on nickel might be speculative. Now the buyers are waiting for the market to be stable. “I believe stainless steel prices will soften in March-April and the demand may then improve,” he adds.
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| LKAB plans three new iron ore mines in Sweden | ||
| Sweden's LKAB hopes to start operating its new iron ore mine in Gruvberget within the first half of this year, Steel Business Briefing learns from the company. The state-owned miner confirms it is also looking at starting mining operations at two other nearby sites. The new mine near Svapppavaara, six kilometres south of LKAB's existing mine in Kiruna, will have a maximum capacity of 2m tonnes/year. The company could begin operations shortly after an environmental court hearing in March, SBB understands. “This will be the first time in over 50 years that we have opened a new mine,” company CEO and chairman Lars-Eric Aaro said yesterday. In addition, LKAB is looking into restarting operations at the Leveäniemi mine – also near Svappavaara – which was taken out of action during the mid-1980s. It plans to seek environmental clearance to pump the water out of the mine, a process which could take 3-5 years. The company will also seek approval to conduct explorations at nearby Mertainen – the least developed of the three sites – later this year. In total, the three new mines contain around 300m tonnes of reserves with iron content ranging between 40-55%, the company estimates. Access to crude ore is now described as the “bottleneck” in the company’s plans to reach a capacity of 37m t/y of finished ore products, as processing and delivery capacity currently exceed that of its mines (see separate article).
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| LKAB running at full capacity, aims for 37m t/y | ||
| LKAB ran its iron ore operations at full capacity in the final three months of 2009, as deliveries reached 7m tonnes in the quarter, Steel Business Briefing learns from the Swedish miner. The company says it intends to operate at full output (currently 28m tonnes/year) through 2010, and will raise its delivery capability to 37m t/y perhaps by 2015. “Our focus going forward will be expanding mining capacity”, CEO Lars-Eric Aaro says. LKAB has recently invested in new pelletizing capacity, as well as railway and port upgrades, as SBB has reported. Today, both processing and delivery capacity lie above 30m t/y, while the company’s mines have a maximum capacity of only 28m t/y. “We have built up our capacity above ground… now we need more iron ore,” Aaro explains. Investments in new haulage levels in its current mines in Malmberget and Kiruna in northern Sweden will continue, Aaro confirms. Additionally, the company yesterday announced plans to open three new mines in Sweden. The first of these should be operational by mid-2010 (see related article). The company maintains that the investments in new capacity, which could total around SEK 27bn (€2.7bn) up until 2015, are necessary to remain competitive. “We can’t risk being too small, or we’ll be marginalised,” Aaro warns. “When [our customers] increase their production, we need to be able to grow too”. LKAB’s full year revenues for 2009 fell 50% from the year before to SEK 11.6bn, while operating profits for the year fell 94% to SEK 659m.
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| Limited activity in European ferro-chrome markets | ||
| Activity in the European ferro-chrome market remains quiet and prices mostly unchanged, Steel Business Briefing learns from trading sources. The price for low carbon FeCr is still around $1.90/pound (€1.39/lb), which is the same as last month. High carbon FeCr was also at the same levels as last month around $1.00/lb, with only medium carbon FeCr picking up to $1.30-1.40/lb from $1.25-1.35/lb last month. “The FeCr market is slower at the moment,” an analyst agrees. Production costs are going up and the market is anticipating a possible $0.30 cents/lb rise in the second quarter benchmark price, which could be contributing to the lack of interest at present, he adds.
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| Opel’s cutbacks 'will not affect steel purchases' | ||
| The capacity cutbacks in Europe announced by Opel should not have a noteworthy effect on the carmaker’s intake of steel, given that its capacities have long been under-utilised. The group plans to reduce its capacities by 20%, and completely close the plant in Antwerp, Belgium. According to a spokesman at the General Motors subsidiary, prior to the economic crisis it produced 1.5m cars per year, at full utilisation. Latest figures for 2009 however show that production was only around 1m units, an analyst tells Steel Business Briefing. “Actually, they are adjusting overcapacities to the effective production,” he says. Hence, the effective steel demand is not at issue in Opel’s current plans, he says. Some shifts could occur, though, depending on the proximity of the supplier to the car plant, and could affect those mills directly supplying to Antwerp. ArcelorMittal suggests that Opel’s measures could have an effect, which “will depend upon the outcome of Opel's industrial plan in Europe,” it says in a statement sent to SBB. Direct effects cannot easily be traced back to mills, which often supply material for cars indirectly via component manufacturers, “and they don’t tell us who they are producing for,” a spokesman at a German mill points out.
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| Corus to repair IJmuiden furnace; moves into the black | ||
| Anglo-Dutch steelmaker Corus intends to take down the No 7 blast furnace at its IJmuiden strip products plant in the Netherlands in mid-March for a four-week period to mid-April to carry out a “necessary repair”, Corus chief executive Kirby Adams said in a webcast yesterday. This means Corus will lose two weeks’ production at IJmuiden in March (as well as two in April) on one of the plant’s two blast furnaces, thus slightly reducing the company’s capacity utilisation in the January-March 2010 quarter compared to October-December, Adams added. In October-December, the third quarter of Corus’s financial year, its capacity utilisation was 81%. It expects its utilisation in the current quarter to be roughly 80%, excluding Teesside Cast Products in the UK, which is being mothballed (see related article). This utilisation is up from a low of 53% in April-June 2009 and 75% in July-September. Although Corus’s production will fall slightly in January-March, deliveries should be higher than in the previous two quarters and the company will continue to focus on reducing inventories. Corus, the European arm of India’s Tata Steel, turned around its earnings before interest, taxation, depreciation and amortisation by nearly $400m (€291m) quarter-on-quarter in October-December. EBITDA moved from a loss (excluding unusual items) of $250m in July-September to profit of $142m. This was due to better product mix in the volumes shipped, better selling prices and lower raw material and fixed costs, Adams said in the webcast monitored by Steel Business Briefing. Deliveries and turnover remained flat q-o-q.
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| Russia's Asha nears start-up of new electric arc furnace | ||
| The commissioning of a new 120-tonne electric arc furnace at Russia's Ashinsky Steel Works (Asha) is due to start in April 2010, the company tells Steel Business Briefing. The delay in the original start up, which was effectively one year, was due to funding issues, the company said previously. Switching from open hearth to EAF production will raise the plant’s crude steel production capacity from 650,000 tonnes/year to 1m t/y, the company says. The existing open-hearth furnace is to be decommissioned in July this year. Asha produces carbon and alloy steel plate and strip.
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| MMK to increase 2010 production and cut yield loss | ||
| Russia’s Magnitogorsk Iron and Steel Works (MMK) will increase rolled steel production this year to "not less than 11.2m tonnes." MMK will use "no more than 1.07 tonnes of crude steel for one tonne of rolled product," in a bid to implement stricter economy at the mill, the company says in a statement sent to Steel Business Briefing. This would suggest that MMK's crude steel output is planned to be at least 12m tonnes. Last year, the company produced 9.62m t of crude steel and 8.8m t of rolled steel products.
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| Market sources doubt reality of rising US plate prices | ||
| The Steel Index's US plate reference price rose again last week, despite continuing lackluster domestic demand. According to TSI - a unit of Steel Business Briefing - the fob midwest mill reference price for A36 plate stands at $690/short ton. That's up $12 week-on-week and $45 over the past four weeks. Domestic spot prices for A36 plate range from $640/s.t on the low end to approaching $700/s.t on the high end, sources say. Mills have cited higher scrap and other raw materials costs as the reason for the ramp-up in list prices. However, market sources downplay the impact of scrap prices, noting that the benchmark shredded price used to set surcharges on plate and many longs products actually fell recently. "It's not based on anything," one southern stockist said of rising plate prices. "Do you think the shredded scrap price really means anything to (the mills)? It's not a real number that we're seeing out there. It is a weird market."
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| N. American metalformers expect steady business | ||
| North American metalformers believe business conditions will remain fairly steady over the next three months, Steel Business Briefing learns from a Precision Metalforming Association (PMA) report. Some 45% of participants in a PMA survey expect economic activity to improve in the coming months, but this number is unchanged from January’s report. Another 49% expect activity to remain unchanged and only 6% anticipate a decline. A majority (54%) of metalformers are forecasting increasing orders in the next three months, while 32% expect no change. Only 14% predict a decrease. Shipping levels are increasing from metalformers, SBB learns, as more than half of responding companies indicated that their shipments are increasing. That is up from just 33% last month. Some 34% report no change compared to 54% last month. “February’s report continues to reflect improved orders and shipments among metalforming companies,” commented PMA president William Gaskin. “Anecdotal reports from member companies indicate that many companies are recalling at least part of the workforce they had laid off during 2009.” The PMA has nearly 1,000 member companies in North America. Its monthly report is an economic indicator for manufacturing, as it samples 124 companies in the US and Canada.
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| Nucor: rebar, MBQ prices steady for March deliveries | ||
| US longs market leader Nucor will not change transaction prices on reinforcing bar or merchant bar for March deliveries, Steel Business Briefing learns from market sources. The company also will not be making any transaction price changes for wide flange beams next month (see related story). Following two months of price increases due to rising scrap costs, rebar stands at about $560-590 a short ton, fob mill. Merchant bar is around $755-775/s.t, SBB notes. The recent price increases do appear to be sticking, despite lackluster demand, as SBB reported yesterday. This month, scrap prices stabilized, leading to the sideways long product pricing. According to a letter from Nucor to customers, the company is lowering its raw material surcharge by $5/s.t, and raising its base price $5/s.t, leading to no change in the transactional price.
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| US rod exports steady, while other longs trade drops | ||||||||||||||||||||||||||||||||||
| While most long products exported from the US saw large declines from 2008 to 2009, the latest data from the US government show that exports of wire rod held steady year-over-year. Rod exports actually increased 5% from 2008 to 2009 to more than 137,300 tonnes. Drawn wire exports, meanwhile, fell 29% from 2008 levels to 134,800 t in 2009. Heavy structurals were the most impacted long products group with exports falling by more than 50% to about 512,900 t in 2009. Hotrolled bar exports also declined dramatically from about 714,100 t in 2008 to about 382,000 t in 2009. Rebar exports declined by 38% y-o-y to about 390,000 t last year. Steel Business Briefing notes that Canada and Mexico received most of the long products exported from the US, at 65% and 21%, respectively.
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| Nucor, SDI to keep US beam prices stable for March | ||
| Both Nucor and Steel Dynamics Inc will leave their wide flange beam prices for March deliveres unchanged, Steel Business Briefing learns from market sources. Stable prices are what several market insiders expected, they told SBB last week, due to essentially unchanged shredded scrap pricing. SDI is leaving prices unchanged; Nucor is raising its base price by $5/short ton and lowering its raw materials surcharge by $5/s.t, having the net effect of no change to the transaction price. In a letter to customers, SDI added that the company “reserves its right to provide prices competitive on a delivered basis with those of any domestic or foreign producer” and that it will monitor imports to the US. “We will work hard to ensure that any and all transactions comply with US trade laws and we will participate in enforcing US trade laws if and when we discover said transaction prices violate these trade laws.” The letter echoes a similar statement by Nucor last month that one market observer said is a “warning” to ArcelorMittal about imports. US mill WF beam prices are around $710-730 per short ton, fob mill.
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| Tenaris announces new $75/s.ton OCTG increase | ||
| North American OCTG prices continue to rise along with the price of raw materials. Tube producer Tenaris has announced what appears to be a leading $75/short ton transaction price increase, effective February 15 for its NA OCTG casing and tubing, according to a customer letter. It wasn’t clear from the letter whether the price increase will be applied to new shipments or orders. Requests for clarification were unanswered. The Luxembourg-based tube producer attributes the increase to recent hikes in hotrolled coil and scrap prices. Additional raw material increases are expected in March due to winter storms that paralyzed scrap processors in the middle and eastern US, as Steel Business Briefing reports (see other story). Tenaris is a global producer with manufacturing centers in the US, Canada and Mexico. It produces OCTG for a variety of specialty drilling applications from 1 1/3-inch to 28-inch outside diameters. The company's price increase follows an identical increase in late January by Tenaris and Lakeside Steel of Canada. US Steel and V&M Star USA opted for a $100/s.t. increase in the same time frame. Mid-February pricing for carbon ERW OCTG in the NA market appears to be in the $1,100-1,175/s.t range for grade J55, in 4 1/2 through 8 5/8 inch diameters. Import pricing remains competitive at just under $1,000/s.t, sources report.
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| Market: V&M's US OCTG expansion a 'pretty good move' | ||
| Pipe industry observers are saying that V&M Star USA’s decision to expand in Ohio is a smart move, considering the lack of Chinese OCTG in the US market and the potential of massive natural gas deposits nearby. V&M recently confirmed a $650m expansion of its Youngstown rolling mill operations. A new smaller diameter seamless mill will begin with an annualized production rate of 385,000 short tons/year, with the potential to produce 550,000 s.t./y, Steel Business Briefing notes. Though Korean producers are starting to pick up the slack left over from recent trade cases against Chinese OCTG, domestic producers also are aggressively pursuing China’s former market share, sources report. A distributor of seamless OCTG said he’s seen shortages in both carbon and alloy grades of OCTG as a result of development in the Marcellus and other shale plays, evidence of needed capacity. But an industry observer noted that expansions underway at several Mexican mills and Boomerang Tube’s decision to open a $200m mill in Texas are narrowing the field. “I think it’s a pretty good move,” he said. “Especially considering where they are, with the Marcellus Shale right next door, so to speak. I wouldn’t be surprised if we see even more of this.” He added that existing seamless OCTG suppliers likely will complain, but that doesn’t mean that extra capacity isn’t necessary. “Most of the time the reaction will be, ‘We don’t need another supplier.’ But that’s a knee-jerk reaction, really.”
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| V&M drops melt shop, price tag on its Ohio expansion | ||
| V&M Star USA has put its plans for a new melt shop at its Youngstown, Ohio facility on hold, dropping the long-awaited expansion’s price tag from almost $1bn to about $650m. Steel Business Briefing and other media outlets had been reporting the $1bn figure before V&M formally announced that it was ready to go forward with the expansion Monday. A company release notes a final price tag of $650m without mentioning plans for a new melt shop. The $650m is for heat-treating and threading facilities as well as a new, smaller diameter seamless tube rolling mill with a potential capacity of 550,000 short tons/year. The mill is expected to be in production by the fourth quarter of 2011 and will produce seamless OCTG with outside diameters of 2.375 inches to 7.0 inches. A spokesman for V&M said the company is keeping its options open regarding future construction of a melt shop. “The thinking there is to get (the new mill) moving and then assess,” he said. “The company continues to re-evaluate its options.” The spokesman also noted that the company is reviewing several sources of billet for the new mill, though he could not comment on specifics.
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| $400m Marcellus Shale pipeline already booked up | ||
| The owner of the largest natural gas pipeline system in North America has already committed two major natural gas producers to a planned $400m pipeline upgrade in the Marcellus Shale formation, highlighting opportunities for steel tubular producers. El Paso Corp of Houston has inked a 20-year deal with subsidiaries of Chesapeake Energy Corp and Statoil for 100% of the planned pipeline from the Marcellus Shale in Pennsylvania to an interconnect in New Jersey. The gas will be destined for large northeast markets and the pipeline should be operational by November 2013, Steel Business Briefing notes.
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| Stainless and alloy pipe bouncing back, Synalloy says | ||
| Distributor restocking, rising stainless surcharges and stimulus funds trickling in from the federal government are aiding a general recovery in US stainless and alloy pipe, according to US producer Synalloy Corp. Reporting a 2009 year-end backlog of about $44m, South Carolina-based Synalloy expects business to pick up in both commodity and non-commodity pipe as 2010 progresses. Particularly strong growth is predicted in water and wastewater treatment and power generation due to “Buy America” provisions tied to stimulus funds. “While the impact from current economic conditions both domestically and worldwide makes it difficult to predict the performance of this segment going into 2010, we are seeing improvements in business conditions within our markets,” the company states. “However, business opportunities remain extremely competitive, hurting product pricing in all of our markets.” Synalloy's metals segment reported 2009 sales down 46% year-on-year with a concurrent 37% decline in average selling prices, Steel Business Briefing notes. That resulted in a segment operating loss of $12,000 for the year compared to a $9.3m profit in 2008.
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| Stockist shipments pick up y-o-y in Canada, but not in US | ||||||||||||||||||||||||||||||||||||||
While January shipments and inventories at US service centers were down from year-ago levels, business in Canada was up. However, both nations saw last month’s stockist shipments increase from December, up 38% for Canada and up 15% for the US. According to the Metals Service Center Institute, steel shipments from Canadian service centers totaled 444,400 short tons in January – a 9% increase from the same month last year. Average shipments per day rose to 22,200 short tons – the highest level in the past year, Steel Business Briefing observes. Canadian inventories also rose in January, up 1% from December to 1.18m s.t. That was a 14% increase from January 2009. At current shipping rates, month-end Canadian inventories in January were equal to a 2.7-month supply, says the MSCI report. For US service centers, January inventories and shipments are down 1% year-on-year to 2.58m s.t. Shipments per day averaged 128,900 s.t, also at the highest level of the past year. Month-end US inventories stood at 6.26m s.t – a 26% decline from January 2009 and a 2% increase from December. At current shipping rates, inventories were equal to a “lean, 2.4-month supply.” SBB notes that US inventories appear to have bottomed out in August at 5.6m s.t while supplies in Canada bottomed out in September at 957,300 s.t.
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| Brazilian flats imports rebound in January | ||
| Brazilian hotrolled and coldrolled coil imports in January reached levels not seen for several months in the country, driven by stronger demand from northeastern buyers and an overall increase in purchases by distributors in other regions. Steel Business Briefing learns from government data that Brazil imported 82,129 tonnes of HRC last month, up from 25,050 t in December, while CRC imports reached 69,745 t in January, up from 41,731 t in the previous month. Imports of both CRC and HRC from Russia have been increasing steadily since November 2009 and should rise further, according to market sources.
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| Vale increases iron ore exports from Itaqui port | ||
| Vale's iron ore exports through Brazil's Porto do Itaqui, one of its top exporting ports, increased again in January, Steel Business Briefing learns from authorities at the port in the northern state of Maranhão. January exports registered a 38.5% increase over the same month in 2009, rising from 5.79m tonnes to 8.02m t. In a month-on-month comparison, January’s exports were up 2.5%, from 7.82m t shipped in December. SBB notes that Vale didn’t export any pellet cargoes in January, since its São Luís pelletizing plant output hadn’t restarted yet.
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| ArcelorMittal: bigger drop for longs in South America | ||
| ArcelorMittal's longs operations in South America ended 2009 with output substantially lower than in 2008 at many of its facilities, Steel Business Briefing learns from the company. Flats production - represented by ArcelorMittal Tubarão in Brazil - was only down 13%. ArcelorMittal's Acindar longs mill in Argentina showed one of the biggest declines in the region, producing 28.5% less in 2009 at 1m tonnes of crude steel, despite having its nominal capacity increased from 1.4m t/year to 1.7m t/y. Production was almost 20% lower at ArcelorMittal Point Lisas in Trinidad and Tobago, reaching 400,000 tonnes last year. In Brazil, production was not too bad, and four longs sites produced 3.1m t from a total capacity of 4m t/y last year, a 13.9% overall drop from 2008, SBB notes. ArcelorMittal Tubarão reduced its slab production from 6.1m t in 2008 to 5.3m t in 2009, a 13% decline. Operations haven't changed much at the mill’s No 1 & No 3 blast furnaces, whereas the mill’s No 2 BF was mostly idle.
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| Saudi Arabian market faces CRC shortage | ||
| Demand for flat rolled steel in Saudi Arabia is very good, and there is still a shortage of cold rolled coils. Steel Business Briefing is informed by an executive of Hadeed SABIC, the biggest producer, that the company is almost fully booked until the end of April, and will start receiving orders for May production early March. Hadeed SABIC is selling HRC at $630/tonne, and the import offers to Saudi Arabia are $610-630/t cfr. Adel Al Tamimi, sales and marketing manager of Albawardi Steel Industries, tells SBB that there is shortage of CRC in Saudi Arabia. Demand from CRC consuming sectors is high, but it is hard to find good-priced material in the country. Hadeed’s CRC price is $750/tonne, while Indian CRC is offered to the country at $810/t cfr. But, the domestic producer is almost fully booked. A Saudi Arabian market player says it is hard to make any forecast of the market in March and onwards before China comes back from holidays. He believes prices will rise, even maybe to $700/tonne for HRC, because of the global increase in raw material prices. He thinks that an increase in prices is unavoidable because all the steel industry had losses last year and has to make some profit in order to survive in 2010.
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| Israeli rebar demand stable, more imports are booked | ||
| Israeli rebar trade volumes are reported to be down by 70% compared to the pre-crisis period, but market demand is regarded as stable, Steel Business Briefing learns from market sources. Rebar imports to the country are reported at $540-550/tonne cfr mainly from Turkey. Although Israel and Turkey experienced political problems recently, the steel trade has not been affected by that, SBB was told. Market sources report that the investigation into imports still continues, to come to a conclusion as to whether the imports are harming the domestic industry. But most traders believe that there is no foundation to set safeguard measures against steel imports, since the market demand is strong enough to support both the local production and imports. In the longer term the Israeli market expects the prices to rise another $5-10/t, but this is not expected to happen in the next couple of weeks, SBB was told.
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| Saudi scrap prices increase on higher international prices | ||
| Scrap prices have increased in Saudi Arabia under pressure from the international price trend, and despite low finished steel demand, Steel Business Briefing learns from local sources. HMS 1&2 80:20 scrap is currently being offered to the mills in the Eastern province of the country at SAR 880-900/tonne ($235-240/t), which is SAR 80-100/t ($21-27/t) higher than the beginning of the month. The same material is being offered at SAR 1,000/t to the mills in the Western province, which is SAR 50/t higher than the first week of February, SBB understands. A local trader says: “the end product demand is not so high, but the prices of scrap have escalated in line with international markets.”
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| Nickel price moves upwards on weakening dollar | ||
| Nickel prices on the London Metal Exchange are on the move again, but this time rallying to a four-month high as opposed to the drop they did a week ago, Steel Business Briefing learns from LME data. The three-month price for nickel was at $19,050/tonne (€13,948/t) by the end of trading on Monday, which is up from $17,100/t at the beginning of last week. “Nickel held well when all other commodities fell off, but this rise is due to the pick-up in other commodities prices, particularly copper,” a trader tells SBB. “The market has been dollar-oriented in its movements over the past couple of weeks,” he says. The dollar strengthened last week and prices began to drop, but now the dollar has weakened and prices are picking up. “We’re looking at the top end of the nickel price,” he says and “we don’t expect it to go much over $20,000/t”. The trader adds that other commodity prices will likely continue upwards, but nickel will stay around where it currently is. “Nickel is being priced up on expectation” rather than fundamentals, an analyst says. “Stocks of nickel are high and there’s plenty for the rest of the year,” he adds.
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