According to MEPS, despite relatively healthy demand, US flat product transaction values have continued to slip over the last month, mainly as a result of cheaper raw materials and import pressure. High prices in North America have attracted a great deal of interest from steelmakers elsewhere in the world. Imports are at historically high levels. Domestic mill delivery lead times have shortened. Service centres report that sales have already slowed as we head into December. Their inventories are adequate to high. However, they are anticipating robust demand in 2015, with many projects about to come on stream.

There has been some softening in the Canadian market for seasonal reasons. Mill delivery lead times are reducing. Import volumes are on the rise. There has been some marginal price erosion but producers are trying hard to resist further downward movements. Recent mill price rise announcements are viewed as a tactic to keep transaction numbers stable.

Chinese manufacturing growth continues to slow, leading to weaker domestic steel demand at the same time as supply increases and the producers’ raw material costs tumble. Market players are pessimistic about the future direction of steel prices. Overseas sales volumes hit record highs in October. However, increasing anti-dumping and anti-subsidy measures against Chinese steel products could hinder future developments, as could the speculation regarding the removal of VAT rebates on exports.

The Japanese economy slipped back into recession in the third quarter. September statistics show that steel orders dropped by 2.8 percent, year-on-year. Exports are weak. Domestic demand was relatively stable. Flat product values were all revised downwards in November, reflecting fierce import competition, especially from China and South Korea. Tokyo Steel has decided to keep official list prices for December deliveries unchanged from the previous month. The company cited an imbalance in supply and demand. Inventories stood at a thirteen year high at the end of September. Moreover, the rapidly declining yen is making imported raw materials more expensive for the producer.

Steel output continues to climb in South Korea as more new capacity comes on stream. Local estimates suggest that annual production will reach a record high by the end of the year. However, domestic mills continue to struggle with significant import pressure and slowing economic growth. Chinese and Japanese steelmakers are gaining market share. Local mills continue to reduce transaction values in an effort to compete.

The overall Taiwanese economic outlook is said to be moderately optimistic. However, major integrated steelmaker, CSC, has decided to cut domestic list prices for the January/February 2015 period by an average of 1.7 percent, compared with figures for December contracts. Demand in the home market has weakened as downstream mills and finished goods manufacturers are facing increased competition in export markets as the Japanese yen and South Korean won devalue against the US dollar. Moreover, iron ore costs are declining.

Polish activity has improved slightly but service centres are expecting it to slow in December for seasonal reasons. The mills have failed to lift prices in euro terms but exchange rate fluctuations have pushed up selling figures when measured in zlotys. Czech/Slovak prices have hardly changed on a euro basis. Economic forecasts have recently been revised in the Czech Republic and, although there are some optimistic signals, overall expectations are a little lower than previously estimated.

West European flat product prices remain under negative pressure due to domestic oversupply, weakening raw material costs and flat demand caused by poor macro-economic conditions in several nations. Third country imports are unattractive as local offers are at similar prices, with shorter delivery lead times.

Source: MEPS International Steel Review – November Issue


CSI commissions pipe welding line from SMS Meer

CSI Tubular Products, Inc. (CSITP), a wholly-owned subsidiary of California Steel Industries, Inc. (CSI), based in Fontana, California, U.S.A., has successfully commissioned an electrical resistance welding (ERW) line for up to 24-inch diameter pipes supplied by SMS Meer, Germany. The plant achieves production speeds of up to 35 meters per minute and is capable of producing up to 400,000 tons of pipe per year. SMS Elotherm, Germany ( supplied the necessary induction HF welding and seam annealing technology.

The first welded pipe at CSI.
For the equipment supplied to CSI Tubular Products, SMS Meer has further developed its plant and process technology. Coil pay-off can now be performed from above and below, meaning better strip alignment within the plant’s forming process, depending on the direction of rolling of the inserted strip.

The SMS Meer inline and offline quick-change systems for the URD? stands are more productive than changing systems for conventional stand designs. The quick-change system is supported by the CSS? Quicksetting system, which sustainably improves the product quality by database-assisted plant settings. The stand drives can be separately controlled.

SMS Elotherm’s EloWeld? 1800 pipe welding plant is integrated into the central section of the pipe mill and ensures reliable welding of the longitudinal seams. The downstream EloSeam? 3000 pipe seam annealing plant allows for post-annealing, where necessary, thanks to its ability to be traversed longitudinally. This is required if, for example after a standstill of the plant, a portion of the non-annealed pipe does not meet the quality requirements. The output is therefore higher than with conventional, stationary seam annealing plants.

The new plant is able to produce pipes with outside diameters of between 8 5/8 inches (219.1 millimeters) and 24 inches (609.6 millimeters). Wall thicknesses range from 0.157 inches (four millimeters) to 0.750 inches (19.1 millimeters), with pipe lengths of between 20 ft. (six meters) and 80 ft. (24.4 meters).

Source: SMS Group is not responsible for the content of third party sites.


Russian trading houses have queried whether the latest domestic price levels are supported by market and economic fundamentals. The strength of the US dollar against the Russian rouble has only exacerbated the situation. Moreover, price growth in 2015 is predicted to be difficult, as more production capacity is scheduled to be commissioned.

Indian secondary producers have struggled to adapt to November’s unpredictable business environment. Primary steelmakers have continued to search for new overseas buyers. However, the weak rupee has given assistance to the export drive, whilst also discouraging import activity.

The Chinese steel market has entered a period of low seasonal demand. Local traders expect steel consumption to improve after the Lunar New Year holidays, supported by firmer orders from the construction and manufacturing sectors.

Ukrainian steel producers are growing more pessimistic about the prospects for domestic finished steel consumption in the first quarter of 2015. Turkish steelmakers are faced with a dilemma of whether to ride out the difficult trading conditions, or downgrade planned production targets.

Price volatility has undermined market sentiment in the United Arab Emirates. Local stockists contend that the re-emergence of price volatility in foreign quotations has made it too risky to complete any deals at this stage. Emirates Steel Industries (ESI) and Conares have opted to downgrade their selling figures, under pressure from strong foreign price competition.

South African distributors plan to persevere with conservative procurement strategies next month. Sales volumes are forecast to be muted over the holiday shutdown period. The outlook for the Mexican steel market is unchanged. Underlying demand continues to be driven by shipments to the automotive and construction sectors. Distributors are worried that the Pe?a Nieto government will impose stricter countervailing duties on steel imports.

Source: MEPS – Developing Markets Steel Review?– November Edition

Alcoa Acquires Firth Rixson, Grows Global Aerospace Portfolio

NEW YORK–(BUSINESS WIRE)–Lightweight metals leader Alcoa (NYSE:AA) today announced that it has completed the acquisition of Firth Rixson, a global leader in aerospace jet engine components. The Company closed the transaction, which was announced on June 26, 2014, after receiving all of the required global regulatory approvals and arranging financing for the deal.

Firth Rixson strengthens Alcoa’s robust aerospace portfolio and positions the Company to capture greater profitable growth from its expanding value-add business. The transaction doubles Alcoa’s average revenue content on high-growth engine programs. Accelerating Alcoa’s transformation to a multi-material enterprise, the acquisition increases its offerings made of nickel-based superalloys, titanium, stainless steel and advanced aluminum alloys, produced using the most advanced isothermal forging technology and ring production capabilities.

“By combining the talent and cutting-edge technology of our two innovation-driven companies, we are taking our aerospace business to new heights,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “This transaction is creating a more profitable future for Alcoa by delivering greater sustainable value for our customers, employees and shareholders.”

With this acquisition, Alcoa’s revenues are expected to increase by $1.6 billion with an additional $350 million EBITDA in 2016, and to increase by $2 billion in revenues by 2019. Approximately 70 percent of this growth is secured by long-term agreements.

A majority of these new revenue streams come from aerospace sales, enabling Alcoa to further capitalize on strong growth in the commercial aerospace sector. Alcoa projects a compounded annual commercial jet growth rate of 7 percent through 2019 and sees a current 9-year production order book at 2013 delivery rates.

Alcoa is implementing a robust integration plan to realize significant synergy cost savings, primarily driven by purchasing and productivity improvements, optimizing internal metal supply and leveraging Alcoa’s global shared services. These cost savings are expected to reach approximately $100 million annually by year five. The transaction is expected to be neutral to earnings the first year and accretive thereafter and will generate a return in excess of cost of capital. Firth Rixson’s businesses will be integrated into Alcoa’s Engineered Products and Solutions (EPS) segment.

Alcoa’s aerospace business holds the number one global position in aluminum forgings and extrusions, jet engine airfoils and fastening systems and is a leading supplier of structural castings made of titanium, aluminum and nickel-based superalloys and aluminum sheet and plate. Through this acquisition, it now also holds the number one global position in seamless rolled jet engine rings, engineered from nickel-based superalloys and titanium, and is one of the world’s leading suppliers of vacuum melted superalloys used to make aerospace, industrial gas turbine, oil and gas products and structural components for landing gear applications. It also has entered into a highly specialized segment of jet engine forgings that require isothermal forging technology.

Source: Alcoa is not responsible for the content of third party sites.



According to the latest report by MEPS, there has been no movement in German hot rolled coil basis prices. In general, steelmakers still have capacity available for the fourth quarter. Pipemakers report that their business is not improving. Order quantities are reasonable but profit margins are lacking due to world-wide competition. Distributors are trying to reduce hot rolled coil stocks for the year-end. We hear that some service centres have already finalised their January business at a rollover price from the fourth quarter.

Recent statistics show that inventories of hot rolled plate at stockists are growing and sales volumes have fallen. The general economic outlook is less optimistic than of late, partly due to the Ukrainian problem, causing investors to hold back. Commodity plate values are unchanged from those reported in October.

Cold rolled coil domestic suppliers have cut their final quarter offers. There has been no revival in demand since the summer vacation and mill order books are lean. Local auto manufacturers have experienced a sharp drop in sales to Russia but premium car exports to other countries are holding up. Construction-related sales of hot dipped galvanised coil are static. Basis numbers in the general market have not recovered due to oversupply.

Domestic mills have maintained low carbon wire rod prices this month, after conceding a small discount in October. There is little activity in the recoil market, where values are, again, unchanged, despite negative pressure from declining scrap costs.

Sales volumes of structural sections are poor, where there is strong competition for the little business that is available. Nevertheless, suppliers have held on to prices during recent negotiations, after trimming them last month.

Rebar buyers have successfully pushed for lower prices as scrap costs drop further. The market is subdued. Merchant bar steelmakers have failed to resist customers’ calls for basis price cuts, for the second consecutive month. Purchasing activity remains cautious as buyers fear further downward developments. There has been no recovery in business levels.

Source: MEPS – European Steel Review – November Issue


Purchasing activity in northern Europe is starting to slow ahead of the winter break, according to MEPS. Mill order intake of hot rolled coil is unlikely to pick up during the final quarter. Customers want to minimise their inventories for the year-end. Prices are weakening.

Cold rolled coil producers are not, as yet, pushing for higher prices in the new year. Raw material costs have fallen, putting downward pressure on steelmakers in upcoming negotiations. Prices in Norway have risen, in kroner, reflecting the weakening local currency. Distributors find it difficult to pass such increases on to their customers.

Demand for commodity plate is subdued. There is plenty of material available. Distributors are rationalising their structures, to adapt to the prevailing business situation. Selling figures are holding up, in Norway. Imported Russian plates, whose values are complicated by both the rouble and US dollar exchange rates, are now more expensive, in Norwegian kroner, than they were in the summer.

Order volumes for drawing quality wire rod are quite healthy. Industrial activity continues at a satisfactory level – stronger than in most of Western Europe. Selling values are unchanged in November, in euro terms, in all the countries reviewed. Structural section sales volumes are fair. Building activity continues at a good pace because the weather has remained mild, so far. Lower raw material costs are starting to exert negative pressure on transaction values.

Low scrap costs are likely to have a negative effect on rebar prices in the near term. Activity levels remain good, aided by the continuing fine weather. Merchant bar prices have fallen in November reflecting poor demand. There are no indications that consumption will pick up in the near future. Demand from the manufacturing sector is slowing.

Source: European Steel Review Supplement ?– November Edition