Political Uncertainty Unnerves Business Confidence in Several Emerging Steel Markets

In Brazil, the Instituto Nacional dos Distribuidores de A?o (Inda) reports that, in March 2019, domestic flat rolled finished steel sales totalled 312,900 tonnes – up 19.0 percent, compared with the corresponding figure in the previous year. However, the association is forecasting that both sales and purchases of flat steel will fall by almost 10 percent month-on-month, in April.

The trading environment is gathering momentum, in the Russian Federation. Flat product suppliers are now offering material from their scheduled June production. Bullish distributors are forecasting that sales volumes of finished long products will increase, in May, remarking that construction activity will benefit from improving weather conditions. Consequently, domestic ferrous scrap costs are projected to fall, amid an upturn in collection rates and less transportation disruptions.

The Indian steel industry is forecasting that underlying demand will remain tepid, until after the country’s general election campaign is concluded (April 11 to May 19). Traders and service centres are questioning the sustainability of the current transaction values, specifying that price support is limited. Traditionally, in this period, government infrastructure spending is on hold and end-users defer forward orders. Additionally, the Ministry of Steel is reported to be contemplating expanding the product coverage of “Steel and Steel Products” (Quality Control) Order. Importers are becoming cautious regarding purchasing from overseas, as a result.

The outlook for the Ukrainian market is unchanged. Domestic steelmakers reined in their pricing ambitions, for April business. Underlying consumption has fallen short of industry projections, after a slow start to the construction season. Manufacturing firms are finding it difficult to obtain credit, which is inhibiting their ability to purchase steel products. The local association of metal producers, Metallurgprom, report that finished steel production, in March 2019, totalled 1.694 million tonnes – up 14.8 percent, month-on-month.

The business climate is fragile, in Turkey. Stockists are concerned about carrying too much inventory over the next two months. End-user demand is limited. The situation is being exacerbated by political uncertainty and the imminent festive month of Ramadan (commencing May 5). Exporters are focused on developing new business ties in Asia. 

Business activity is lethargic, in the United Arab Emirates. Distributors are reluctant to place new orders, expecting daily operations to slow down, in late April, ahead of the Ramadan holidays. MEPS’ research indicates that demand for finished long products, will remain tepid, in the June-August period. Export opportunities are limited outside the GCC region.

(more from MEPS Developing Markets Steel Review)

In South Africa, downstream demand for finished steel is growing at a slower pace than expected. No new state-funded infrastructure or construction projects will be confirmed until after the general election on May 8. Meanwhile, ArcelorMittal South Africa is reported to be restarting the electric arc furnace at its Vereeniging steelworks. The facility was made idle four years ago.

Mexican service centres envisage limited movement in activity in the near term. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) is lobbying the government for additional measures to protect the domestic manufacturing and steel industries from foreign competition.

Source: Extract from MEPS Developing Markets Steel Review – April 2019

SMS Group Upgrades Walking Beam Furnace at Sidenor Basauri In Spain

Sidenor Basauri, Spain, trusts in SMS group also for the stage-2 upgrade of its walking beam furnace, which will increase the furnace’s capacity from currently 85 tons per hour to 130 tons per hour. Supplied by SMS group in 2016, the furnace was originally designed with the provision for a future capacity increase. In the design phase, the SMS engineers had already taken into consideration all civil and mechanical modifications required for the future capacity boost in order to guarantee a short plant shut down and a fast restart. The second start-up after the upgrade is scheduled for the second half of 2020.

(more from SMS Group)

The furnace can reheat special steel blooms in sections between 185 and 240 millimeters square. Its state-of-the-art technology will ensure low levels of fuel consumption, scale formation and decarburization also after the modification, helping Sidenor to consolidate its benchmark position in SBQ production. SMS group’s range of supply for the upgrade will include new steel structures with a set of SMS ZeroFlame extra-low NOx burners, which had already been included in stage 1 providing pollutant emissions of less than 100 mg/Nm3 at 1,250 °C, meeting the most stringent of European guidelines.

Since 1997, SMS group has installed 90 reheating furnaces for billets, blooms, slabs and pipes.

Sidenor Aceros Especiales S.L.

Increase of bloom reheating capacity for SBQ production from 85 to 130 tons per hour.

SMS group is a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry. It has some 14,000 employees who generate worldwide sales of about EUR 3 billion. The sole owner of the holding company SMS GmbH is the Familie Weiss Foundation.

Source: SMS Group

Section 232 Creates Boom and Bust in US Steel Prices

While US steel selling values continue to be amongst the highest in the world, domestic steelmakers have lost a large part of the pricing gains they secured in late 2017/early 2018.

It is widely accepted that US steel producers capitalised initially, on the speculation, and then the implementation of strong import protection measures, in March, last year. This enabled domestic mills to pass through a succession of list price hikes with little resistance from buyers. Amid a healthy trading environment, US steel values advanced rapidly.

MEPS contends that the Section 232 measures were the catalyst for the rapid escalation of US steel prices – while playing a leading role in their fall, in the subsequent period.

Domestic scrap-based producers, who were enticed by the rising financial returns, took steps to build new facilities or restart idled capacity. Year-to-date capacity utilisation, in the US, is 81.9 percent, up from 75.6 percent in the equivalent period in 2018. However, in the same timeframe, demand from the automotive industry, notably for passenger cars, and the construction sector, has slowed. This has put negative pressure on local steel selling figures.

Despite existing trade legislation, offshore volumes continue to influence the US steel sector. Significant quantities of foreign material are still entering the country, most notably on the west coast and in the southern states. 

The Section 232 measures have, arguably, created a level playing field for foreign, and specifically, new suppliers to target sales in the United States.

A number of political and economic uncertainties exist in the US. The ongoing trade disputes with China and the European Union are doing little to boost market sentiment, amid the expectation of a slowing economy. Cross-border trade with near neighbours, Canada and Mexico, is being adversely affected by the tariffs, despite the recent USMCA deal. Both countries have introduced reciprocal measures against US steel exports. This protectionist climate is likely to continue under the current US administration.

Compared with their global counterparts, US steel prices will remain at elevated levels. This is likely to reduce the competitiveness of US manufacturers, both in local and export markets.

Source: MEPS International Steel Review – April 2019

Continuous caster and secondary metallurgy facilities by Primetals Technologies receive FACs from MMKI

  • Annual production capacity increases to four million metric tons of slabs
  • Project included two-strand slab caster, twin ladle furnace, alloying station and dedusting system
  • Expands product portfolio of MMKI
  • Cross-section heat-pacing solution to coordinate steel production with casting operation
  • Reduction of dust content in cleaned gas

In late March, Ukrainian steel producer PJSC “Ilyich Iron and Steel Works of Mariupol” (MMKI) issued the Final Acceptance Certificates (FACs) for a two-strand continuous slab caster, a twin ladle furnace with an alloying station, and the associated dedusting system, all supplied by Primetals Technologies. The two-strand caster CC4 is designed to produce 2.5 million metric tons of slabs per annum. This increases MMKI’s annual production capacity to around four million metric tons, as well as enhancing and expanding its product portfolio to include, for example, HC, UHC and ULC steels. A level 3 heat-pacing solution coordinates the steel production with the casting operation.

MMKI produces steel with three LD (BOF) converters. A new 150 metric ton twin ladle furnace from Primetals Technologies and the associated alloying station help to set the desired steel grades and the correct casting temperature. Due to an Industry 4.0-ready automation on Level 1 and Level 2, this can be done via pre-selectable process models. A transformer with a rated power of 28 MVA provides the electrical energy for the ladle furnace, enabling a heating rate of 4.5 °C per minute. This heating rate and the guaranteed energy consumption value have been over-fulfilled during start-up.

Primetals Technologies designed a dedusting system to clean the off gases from the ladle metallurgy facility. This improves the environmental situation in the city of Mariupol, where MMKI is located. The dedusting system reduces the dust content in the off gases to a level of 12 mg/m3 (maximum), whereas the Ukrainian standards require up to 50 mg/m3 and the European standards up to 30 mg/m3.

The equipment order for the continuous slab caster covered all the installations from the ladle turret and the tundish car through to the exit zone with its weighing, torch cutting, marking and deburring machines. The caster from Primetals Technologies has a machine radius of nine meters and a metallurgical length of 29.8 meters. It casts slabs with thicknesses of 170 and 250 millimeters in widths ranging from 900 to 1,550 millimeters. The maximum casting speed is 2.2 meters per minute. It processes peritectic and peritectic alloyed steels, low, medium, high and ultra-high carbon grades, as well as medium-carbon alloyed steel. The caster is equipped with automatic LevCon mold level control, a straight, cassette-type Smart Mold with the DynaWidth technology package to automatically adjust the width of the slab online, and the DynaFlex mold oscillator. The strand guide is equipped with Smart Segments and I-Star rollers. DynaGap Soft Reduction, the Dynacs 3D secondary cooling model, and DynaJet nozzles was also installed, making it possible for MMKI to produce a wide variety of high-quality grades with improved interior quality of the slabs.

MMKI is one of the largest iron and steel works in Ukraine. The company produces a wide range of flat products made of carbon, low-alloyed and alloyed steel grades for various applications. These include heavy plates for pipelines, shipbuilding, pressure vessels and the construction industry, as well as hot and cold rolled plates and coils.

Slab caster CC4 from Primetals Technologies at PJSC “Ilyich Iron and Steel Works of Mariupol” (MMKI), Ukraine.

Source: Primetals Technologies

Primetals Technologies optimizes pickling line-tandem cold mill for Hyundai Steel in just a few weeks

  • After a short refurbishment, all performance tests were successfully completed in just four weeks
  • The capacity of the pickling line-tandem cold mill has been increased to supply an additional strip galvanizing line
  • Prior analysis enabled targeted modernization with reduced investment sums

Primetals Technologies optimized the drive and automation equipment of the pickling line-tandem cold mill (PLTCM) no. 1 at the Dangjin plant of Hyundai Steel, a Korean steel producer, within a short period of time. After a refurbishment phase at the end of 2018, all the agreed proofs of performance for the production of more than 20 different product groups were completed by January in a period of just four weeks. The production capacity of the PLTCM was substantially increased at the same time, which now enables it to supply cold-rolled strip to an additional strip galvanizing line at the Suncheon plant. The refurbishment was preceded by a detailed analysis of the weak points of the entire plant and the development of a targeted refurbishment concept. This increased the production potential of the existing lines and minimized the investments needed for new equipment.

The analysis preceding the refurbishment showed that, instead of replacing the entire drive train, only the drive trains on stands two and three had to be replaced to eliminate the weak points. The available installed reserves of stands one, four and five were utilized and the load optimally redistributed to achieve the required increase in throughput for the complete plant. New transformers and cycloconverters were installed on stands two and three, and new motor and gear units were mounted on the existing foundations. The “Motor Utilization Model – MUM” newly developed by Primetals Technologies was used for the first time to make the maximum possible use of the installed performance reserves of the new and existing stand motors. The load was distributed optimally to adapt it specifically to the product mix and to obtain the best possible dynamic use of the forming forces of the individual stands. The objective was to achieve the maximum degree of forming along the complete line, and to come as near as possible to the load limits of the individual stands.

The continuous power of the new machines is around 36 percent higher and they allow the rolling work to be optimally redistributed in the tandem mill. Some of the low-voltage drives were also replaced. For example, the rollers on the infeed side are now equipped with motors and drives that are up to 50 percent larger in order to deliver the required pulling force at higher speeds. In addition to the renewal of the drive equipment, the technological controls in the basic automation and the Level 2 rolling regulations were modernized. The refurbishment of all parts of the plant was planned in great detail and completed right on schedule within the timeframe of 15 days. It was even possible to hold the first tests of the rolling operation one day earlier than scheduled. The first strip was successfully rolled as planned on December 14, and the plant was brought up to its previous throughput within three days.

All the verifications for more than 20 individual product groups – mainly interstitial free grades and other products for the automotive sector – were completed by the end of the first month. The plant also significantly surpassed the contractually agreed parameters within the first few weeks.

PLTCM no.1 at Hyundai Steel’s Dangjin site now has a capacity of around 1.8 million metric tons per annum. It processes cold steel strip in widths ranging from 600 to 1,800 millimeters. The entry thicknesses can vary between 1.2 and 6 millimeter, and from 0.25 to 3 millimeters on the exit side. The maximum strip speed is 1,400 meters per minute. The line consists of four four-high stands and one six-high rolling stand. Primetals Technologies had equipped the line with process automation back in 2006.

Steel Coil produced by Hyundai Steel

First coils produced at Korean steel producer Hyundai Steel’s Dangjin plant after the pickling line-tandem cold mill (PLTCM) no. 1 had been restarted. Primetals Technologies optimized the drive and automation equipment of the PLTCM within a short period of time.

Source: Primetals Technologies, Limited headquartered in London, United Kingdom is a worldwide leading engineering, plant-building and lifecycle services partner for the metals industry. The company offers a complete technology, product and service portfolio that includes integrated electrics, automation and environmental solutions. This covers every step of the iron and steel production chain, extending from the raw materials to the finished product – in addition to the latest rolling solutions for the nonferrous metals sector. Primetals Technologies is a joint venture of Mitsubishi Heavy Industries (MHI) and Siemens. Mitsubishi-Hitachi Metals Machinery (MHMM) – an MHI consolidated group company with equity participation by Hitachi, Ltd. and the IHI Corporation – holds a 51% stake and Siemens a 49% stake in the joint venture. The company employs around 7,000 employees worldwide. Further information is available on the Internet at www.primetals.com.

Nordic Flat Product Prices Pulled in Opposite Directions in April

Regional mills’ input costs are rising but they are struggling to fill their production capacity. Competitively priced import offers are scarce, while local purchasing activity is, mostly, quite weak. Consequently, the majority of selling values reported are slightly down. The remainder are unchanged, with the expectation of imminent reductions.

Demand for hot rolled coil, in Denmark, is subdued. End-users, in Sweden, are reluctant to pay more and distributors attempted to minimise price rises in their quarterly agreements with producers. Sales volumes remain satisfactory, in Norway, but buyers are becoming hesitant. 

Plate-consuming sectors, other than agricultural equipment, in Denmark, are performing well. The prospect of falling inventory values is making buyers cautious. Swedish construction activity is slowing. Plate consumption was down, in Finland, in the first three months of 2019, compared with the year earlier figure. No pickup in demand is detected. Sales tonnages, in Norway, are satisfactory. 

Ex-mill delivery lead times, for cold rolled coil, are declining, in Denmark. Asian import offer prices are not much cheaper than locally produced material and, therefore, not very attractive. Sales tonnages are down, slightly, in Sweden. The weak Swedish krona makes mill purchase costs expensive. Coils are readily available, in Norway.

Demand for coated sheet and coil, from the German and Swedish automotive supply chains, remains subdued. Orders from the local building sector, in Denmark, however, are at a reasonable level. Sales of galvanised sheet and coil are fair, in Sweden. Activity, in the Finnish automotive and construction segments, is poor. Demand remains muted, in Norway. 

In Sweden, demand, for drawing quality wire rod, is mixed. Customers in several sectors report a slowdown, while others remain busy. The market for mesh quality material is softening. Supply is plentiful. Raw material costs have risen, in Finland, but ex-mill selling values are down. Order volumes, from the automotive industry, are weak.

European producers of medium sections and beams sought price increases, in Denmark, in April, but, eventually, struggled to maintain rollover figures. Demand is on the downward part of the current cycle, in Sweden. Exchange rate fluctuations are affecting local prices. Sales volumes are relatively stable, in Finland, but forecasts suggest a negative trend.

Reinforcing bar demand is quite good, in Denmark. Many new residential building and infrastructure schemes are in progress. Sales tonnages, in Sweden, are similar to those during the same period, twelve months ago. Rapid utilisation of the EC safeguarding quotas could lead to price increases, in Europe. A seasonal pickup in activity is reported, in Finland. Many stockists bought large volumes, from Russia, before the quota tonnage was utilised.

Prior to recent developments in the Brexit negotiations, buyers of merchant bars in Denmark, and elsewhere, reported a reluctance to place orders with UK producers, fearing the application of tariffs, in the event of a “no-deal” outcome. Swedish demand reduced, year-on-year, but is steady, at an acceptable level. Finnish sales tonnages are stable. The local market is heavily influenced by Russian suppliers. Norwegian purchasers report consistent offer prices from Chinese and Russian suppliers, while those from Turkey are rising.

Source: MEPS European Steel Review Supplement