Monday, May 4, 2020

#SAILSteelNews 04th May 2020

The European Commission will bring forward its exceptional review of steel imports safeguards as EU steel producers struggle amid declining order books and a surplus of low-priced steel on world markets. The commission would be investigating whether the current safeguard measures on steel imports would need to be modified due to the effects of the coronavirus on the European market. Although a reduction in import quotas is a probable outcome of the decision, the cuts are not likely to amount to the 75% reduction requested by Eurofer. (Source – Steelonthenet)

Asia-Pacific metallurgical coal prices sank across all grades as more supply of spot cargoes were diverted from global steel mills into China. Platts assessed the Premium Low-Vol HCC down by US$ 12.50/T to US$ 109/T FOB Australia Thursday. Demand destruction continued to result in more cargoes being resold from the traditional FOB markets into China. (Source – Platts)

US flat-rolled steelmakers ArcelorMittal, US Steel and Nucor have increased sheet steel prices after widespread steelmaking closures related to Covid-19. US Steel raised hot-rolled coil (HRC) prices by US$ 60/s.T. to a target of US$ 500/s.T. while cold-rolled and coated products increased by US$ 60/s.T. to US$ 700/s.T. EAF based producer Nucor increased flat-rolled pricing by US$ 50/s.T. (Source – Argus)

Tata Steel India produced 18.21 MT of crude steel during the financial year ended March 31, 2020. The company achieved a 8% growth in production in FY20. This growth was led by a ramp up of Tata Steel BSL and acquisition of Usha Martin steel business by Tata Steel Long Products in April’ 2019. SAIL emerged in the second spot with a production of 16.15 MT while JSW Steel slipped to third slot with an annual production of 16.06 MT in FY20. (Source - Press Reports)

Ministry of Mines has proposed to reduce the life of captive mines by five years. The Ministry has also suggested that no mine should be auctioned as captive in future, doing away with the distinction between captive and merchant altogether. Another suggestion with far-reaching consequences is that leases that are un-operationalised for more than three years be taken back from Public Sector Undertakings and auctioned off. (Source - Press Reports)

Industry body Ficci has suggested various measures like infrastructure status to the steel industry, zero duty on critical raw materials and another three-month moratorium to revive the sector, which has been impacted by the lockdown. Granting infrastructure status to the steel industry will give access to finance at competitive rates from various markets and sources. Besides, the entire supply chain of the sector should be incorporated into essential services and be allowed to operate with precautionary measures as per the guidelines of the Government. (Source - Press Reports) 

Saturday, May 2, 2020

#SAILSteelNews 01st May 2020

US Steel plans to temporarily lay off up to 6,500 employees nationwide or more than a third of its total workforce of 16,000 in North America. The company will temporarily idle no. 6 blast furnace at Gary Works and no. 1 blast furnace at Mon Valley Works, effective immediately. As a result, the corporation also will indefinitely idle iron ore production at Keetac after the completion of a planned outage in mid-May and has extended coking times at Clairton Works to align coke production with steel production. (Source – Steelguru)

China's recovery in manufacturing in March was short-lived, as the two leading purchasing managers' indices fell in April, providing further evidence that steel demand from the sector will be weak in the near-term. The manufacturing PMI published by the National Bureau of Statistics, or NBS, fell to 50.8 points in April from 55 in March, while the PMI published by Chinese media company Caixin dropped back to 49.4 in April from 50.1 in March. The latest PMIs indicate that Chinese manufacturing remains hampered by a lack of export customers due to the global spread of the virus; and that domestic activity may not be strong enough to support flat steel prices. (Source – Platts)

Baosteel said in its 2019 annual report that China's steel market will face growing oversupply pressure in 2020, while overall domestic steel demand is expected to be stable. Newly commissioned steel capacity, through capacity swaps, will put added pressure on supply this year, while direct and indirect steel exports are expected to drop sharply, especially in the second-quarter. Baosteel said that the Chinese Government's economic stimuli would be focused on boosting investment, rather than on consumption. Therefore, construction and engineering machinery would benefit the most from this, boosting demand for rebar, hot-rolled coil and plate. (Source - Platts)

US hot-rolled coil prices fell again on Thursday, though mills were withdrawing lower offers and raising prices. The daily Platts US HRC index dropped by US$ 3.75/s.T. to US$ 460/s.T. and was down by US$ 7.50/s.T. since the start of the week. Most major mini-mill producers were trying to push prices toward US$ 500/s.T. for June production. (Source – Platts)

U.S. Steel has granted Stelco the option to buy a 25% stake in its Minntac mine and pellet processing plant in Mountain Iron. The announcement came as U.S. Steel, reeling from numerous layoffs and a drop in demand for its steel amid the COVID-19 pandemic, reported a loss of US$ 391 million in the first quarter of 2020. Hamilton, Ontario-based Stelco will pay U.S. Steel US$ 100 million throughout 2020 and another US$ 500 million by the end of January’ 2027 to obtain the 25% ownership stake in Minntac. (Source – Metal Junction)

India’s domestic steel makers are likely to face muted demand and oversupply which would lead to suppressed steel prices post-lockdown, according to a report by India Ratings (Ind-Ra). Besides, they are also expected to face issues with availability of workforce and logistics movement. Muted demand and oversupply is likely to create a loop leading to suppressed prices until either there is a substantial uplift in demand or a substantial volume goes out of the market. (Source - Press Reports) 

Friday, May 1, 2020

#SAILSteelNews 30th April 2020

Spot prices of hot-rolled coil in India's domestic market dropped for the fourth consecutive week, amid dented buy-side sentiment due to lack of positive signals for resumption of economic activity, even as mills turned actively to export market. Platts assessed 2.5-10 mm thick HRC delivered to Mumbai at Rupees 35,500/T, down by Rs. 250/T week on week. The assessment excludes GST of 18%. (Source – Platts)

China's steel demand coming from both domestic and export markets could drop by as much as 3.8% on the year to 842 MT in 2020, according to a recent analysis by the China Iron and Steel Association or CISA. China's indirect steel exports, averaged around 80-90 MT in recent years. But the association believed indirect and direct steel exports could drop by as much as 25% on the year in 2020. China’s exports of 14.3 MT in the first quarter of this year were down around 3 MT on the same period last year.

US hot-rolled coil prices dropped again on Wednesday, staying at the lowest point in over four years. Mills were frustrated by lower prices and the expected rise in May scrap prices, which will compress margins further. The daily Platts US HRC price dropped by US$ 4/s.T. to US$ 463.75/st. Since mid-March when many social distancing and stay-at-home orders began, US HRC prices have fallen by 21.5%. Mills face not only lower selling prices for finished steel but scrap costs for production are set to rise in May amid tight prime scrap availability. (Source – Platts)

Benchmark iron ore futures in China rose on Thursday and were on course to report a weekly gain, as hopes rose for better demand after the country reported a second straight month of expansion in manufacturing activity. The most-traded September iron ore contract on the Dalian Commodity Exchange gained 2.4% to US$ 86.24/s.T. (Source – Metal Junction)

Japanese crude steel production in the past three quarters fell back to levels not seen since 2009 as the industry grapples with downstream manufacturing and construction worksite closures brought about by the coronavirus pandemic, compounding issues faced through existing tepid domestic demand and export opportunities. Production in the first quarter totaled 24.4 MT, down by 2.4% year on year. (Source – Argus)

The price of iron-ore is set to drift lower in coming months as the coronavirus pandemic eats away at demand, moderating its outperformance against other industrial commodities this year. Spot prices of iron-ore with a 62% iron content for delivery to China stood at US$ 84/T on Wednesday and are expected to decline to US$ 75/T by the fourth quarter, according to BMO Capital. Prices could remain firm in the short term, but the impact of closed steel furnaces and improving supply is due to gradually chip away at prices. (Source - Press Reports)

#SAILSteelNews 29th April 2020

Italian steel producers, after losing 1-1.3 million tonnes of output during the stringent four weeks of coronavirus-prompted lockdowns, have resumed production but working at around 40-50% of their capacity with most of them executing COVID-19 precautions. Italy's steel mills had stopped production on March 16 with the only exceptions being ArcelorMittal Italia in Taranto and Arvedi in northern Italy. Steelmakers started to slowly reopen the week of April 13 after local prefectures granted them permission. Europe's second largest steel producer Italy is making about 23 MT of steel annually. (Source – Steelguru)

Nucor, USA has decided to delay planned capital expenditures associated with its sheet mill expansion at Gallatin and its US$ 1.35 billion plate mill project in Kentucky as the company looks to conserve capital amid the coronavirus pandemic. Nucor previously said it planned to spend US$ 3.5 billion on expansion projects through 2022. The company has lowered its 2020 estimated capital expenditures to less than US$ 1.5 billion, down from an initial projection of US$ 2 billion in spending for the year. (Source – Platts)

Nucor has announced consolidated net earnings of US$ 20.3 million for the first quarter of 2020. By comparison, Nucor reported consolidated net earning of US$ 501.8 mn. for the first quarter of 2019. Net sales in Q1 totaled US$ 5.62 bn. as compared to US$ 6.09 bn. in Q1’19. Steel mill shipments in Q1 totaled 6.49 MT as compared to 5.98 million net tonnes in Q1’19. Included in the results are losses on assets of US$ 287.8 mn. related to company’s equity investment in Italy, Duferdofin, Nucor. (Source – Steelorbis)

JSW Steel USA is forging ahead with upgrades to its US operations even as the US steel industry suffers from Covid-19-related shutdowns in industries like automotive and a downturn in the energy industry. JSW Steel USA is making moves to upgrade its steel operations in Ohio, where it has an electric arc furnace (EAF) flat-rolled steel operation and Texas, where it makes plate and pipe products for the energy industry. (Source – Argus)

Tata Sons, the holding company of Tata Group, has refused to commit any further funds to support Tata Steel’s loss-making UK and Europe subsidiaries. As a result, a bailout by the UK government seems to be the only chance of survival for these businesses. However, the UK government is unlikely to offer more than one fifth of the funds required by these business. (Source - Press Reports)

Vale has cut its forecast for 2020 capital expenditure and warned that the novel coronavirus could hinder medium-term production, underlining the impact of the outbreak on the labor-intensive mining industry. Vale plans to cut its capital expenditure this year to US$ 4.6 billion from US$ 5 billion, as the coronavirus has made some construction and maintenance work unsafe. Vale has reported net income of US$ 239 million in Q1. (Source - Press Reports)

#SAILSteelNews 28th April 2020

India’s finished steel consumption edged past the 100 MT milestone mark for the first time. Total finished steel production in 2019-20 was 102.059 MT, up by 0.8% and consumption was at 100.067 MT, up by 1.4%. India was a net exporter of total finished steel with exports at 8.355 MT, up by 31.4% outpacing imports 6.768 MT, down by 13.6%. India’s finished steel production in March’20 was 7.09 MT, down by 23.7% y-on-y while steel consumption in March was 6.7 MT, down by 29.54% y-on-y. (Source - Press Reports)

SSAB Americas has decided to bring forward its planned maintenance outages for 2020. The mill in Montpelier, Iowa was going to be down for maintenance starting on June 22 and lasting three to four weeks. The plate mill in Iowa has an annual rated capacity of 1.13 million st. (Source – Platts)

German steelmaker Salzgitter is extending its production cuts and will reduce shifts from May onwards as the company sees a drop in orders. The cuts are primarily affecting the flat steel division, which is the largest business of Salzgitter and heavily affected from the recent automotive shutdowns. Salzgitter will formerly apply for the short-time working scheme, which entails financial support from the German Government for worker salaries.(Source – Platts)

British Steel said 300 workers would be returning to its Skinningrove plant from Monday after a three-week furlough period. Production was suspended at the site due to lockdown measures. British Steel also confirmed a smaller number of furloughed workers at its Lisburn service center in Northern Ireland would be coming back to work on a phased basis. (Source – Platts)

China imported 5.63 MT of coking coal in March this year, up by 8.04% y-on-y. In the January-March period China imported 20.9 MT of coking coal, up by 27.53% y-on-y. Following resumption of custom clearances in January, import volumes increases sharply. In March, China imported 4.3 MT of coking coal from Australia, up by 96.36% y-on-y. (Source – Steelorbis)

Scandinavian steelmaker Ovako and Linde Gas AB have conducted a full-scale trial using hydrogen to heat steel before rolling. The trial was performed with good results in one of the company’s pit furnaces at the Hofors rolling mill in Sweden. Ovako claims that the use of hydrogen in combustion would have a great positive effect on the environment since the only emission generated is water vapour. (Source – Steeltimesinternational)

Baoshan Iron & Steel Co Ltd., China’s top listed steelmaker, reported a 43.6% plunge in first-quarter net profit and warned of a big first-half drop citing the coronavirus pandemic. Its January-March net income fell to 1.54 billion Yuan (US$ 217 million) from 2.73 billion a year earlier. In the first quarter Baosteel produced 11.8 MT of steel. (Source - Press Reports) 

#SAILSteelNews 27th April 2020

Tata Steel, owner of the Port Talbot steelworks in South Wales, has approached Ministers to ask for a funding package worth GBP 500 million. The request is said to be under discussion with the British Govt. It is largely understood to comprise a commercial loan that would be repayable when demand for steel recovers. (Source – Steelguru)

Hyundai Steel has announced its financial results for the first quarter. It has posted a net loss of US$ 103.5 mn. for the first quarter, compared to a net profit of US$ 102.6 mn. in the CPLY. Loss was due to sluggish operations in China. Meanwhile, the company's sales revenues fell by 8% year on year to US$ 4.2 bn. in the period in question. In the first quarter this year, the company’s finished steel production amounted to 5.09 MT decreasing by 4.5% year on year. (Source – Steelguru)

The Asian HRC market continued its downward trend on Friday after staying stable a day earlier, due to competitive Russian material along-side Indian mills’ aggressive export bookings in South-east Asia and China. Platts assessed HRC at US$ 397/T FOB China Friday, down US$ 3/T on the day. On a CFR Southeast Asia basis, the same grade was assessed at US$ 391/T, down by US$ 5/T on the day. (Source – Platts)

US hot-rolled coil prices dropped to a four-year low Friday as falling prices did not improve demand conditions. The daily Platts US HRC index dropped by US$ 5.25/st to US$ 468.75/st, down by US$ 122.25 since March 17. Weak business activity and market uncertainties dominated HRC pricing. Uncertainty about the restarting schedule of the domestic automotive plants still was pressuring the sentiment. (Source – Platts)

Metallurgical coal prices continued to lose support as supply of spot cargoes increased given the demand destruction seen from the global steel mills. Platts assessed the Premium Low-Vol HCC down by US$ 13.50/T week on week to US$ 118.50/T FOB Australia Friday and delivered prices to China fell US$ 15.75/T to US$ 126.25/T CFR China. (Source – Platts)

China has bought at least 4.6 MT of semi-finished steel imports to arrive over the next two months at a pace eight times the 2019 monthly average. China's rapid recovery from the Covid-19 outbreak has stabilised its ferrous demand and prices, while other countries have slashed output. The resulting price premium in China has led to an influx of finished and semi-finished steel imports. Russia and India were the biggest source of billet with total deals of 540,000 T and 480,000 T respectively. (Source - Argus)

Monday, April 27, 2020

#SAILSteelNews 24th April 2020

Vietnam was India's leading export destination for finished steel products for the fiscal year ended March 31, 2020, receiving 2.34 MT or a 28% share. The volume shipped to Vietnam more than tripled from 709,000 MT sent the previous fiscal year. Also, Vietnam accounted for the bulk of hot-rolled coil exports or 49%, during fiscal 2019-20. Volume-wise HRC was India's most exported steel product for the year at 4.82 MT.

 Asian rebar prices came down on Thursday as a new low Russian deal was concluded in Hong Kong. Platts assessed 16-20 mm diameter rebar at US$ 401/T FOB China actual weight, down by US$ 5/T day on day. The most actively traded October’ 2020 rebar futures contract on the Shanghai Futures Exchange closed at US$ 500/T, down by US$ 6/T, day on day. (Source – Platts)

 POSCO, South Korea's biggest steelmaker, posted a double-digit fall in the firstquarter profit on the economic fallout from the COVID-19 outbreak. Revenue slipped by 9.2% to US$ 11.7 billion and net income came down by 44.2% to US$ 351.6 million. The double-digit fall in profit was ascribed to weaker global demand for steel products, caused by the COVID-19 outbreak across the globe. POSCO has lowered its production and sales forecasts for 2020 by 7%. Crude steel production is now forecast at 34.1 MT, down 7.1% and sales at 32.4 MT, down by 7.4% earlier. (Source – Metaljunction)

European steel distributors have seen a demand decline of as much as 60% due to the coronavirus pandemic, according to trade group EUROMETAL. The most impacted sectors are construction, machines building, manufacturing. Looking forward, the trade group said its members expect a step-by-step recovery to begin at the start of May and that most recent sales forecasts would be around 55- 65% of budgeted sales plans. (Source – Platts)

With lockdown extended till 3 May, the Indian steel industry may lose a large part of the peak demand season. Tata Steel Ltd. reported a 14.6% fall in March quarter (Q4) sales. Tata Steel’s sales volume in India declined by sharp 15% yearon-year to 4.03 MT as the lockdown led to logistic issues and lower demand. However, production volume grew by 6% yoy to 4.74 MT. Tata Steel India also achieved 8% y-o-y production growth for full year FY20, along with the best-ever annual sales. (Source - Press Reports)

Stocks of steel products held by Chinese traders fell by 1.15 MT to 20.13 MT as of Thursday. More than 70% of the fall was accounted for by construction use rebar and wire rod. The construction sector has picked up rapidly since late March. Daily trading volume of steel products is even slightly higher compared with this time last year due to the Government’s stimulus for infrastructure and resumption of projects. (Source – Press Reports)