Author Archives: Christopher Rivituso

New Steel Billet Caster in the Works

Longs producer British Steel has begun constructing a billet casting machine at its Scunthorpe works. It will be the second such machine built at the site, which lies in England’s East Midlands region.

On June 15th, the company said that the continuous caster should come on stream in late 2022. Once in operation, it will produce square billet in 140x140mm, 155x155mm, and 180x180mm sizes.

“The new caster will produce billets of an even higher standard, with much better internal and surface qualities,” said Richard Longbottom, Technical Manager of Steelmaking Development. “We’ll also have a broader product range. This enables us to become more competitive and expand our offering to customers.”

British Steel

Steel Billet Casting, 2022, Adobe Stock

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Spokespeople for the company added that Italian firm Danieli will supply the new equipment. However, they declined to say what the new casting machine’s capacity would be or how many strands it would have.

The existing eight-strand billet caster can cast an estimated 900,000 metric tons per year of semi-finished product. That includes 150x150mm and 180x180mm sizes made out of the crude steel produced on site.

The plant could originally produce about 4.5 million metric tons of crude steel per year via four on-site blast furnaces and three 300-metric ton converters. The spokesman noted, however, that the plant is no longer pouring those volumes. Billets act as a feedstock for rolling rebar, merchant bar sections as well as wire rod.

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British Steel Remains a Major Player in the Metals Market

The new caster is part of an £80 million ($98 million) upgrade project for Scunthorpe, in England’s East Midlands. Whilst the majority of that total is intended to finance the new billet caster at £48 million ($59 million), the remainder is to upgrade and reconfigure Scunthorpe’s wire rod mill.

“The product range will also offer customers considerably improved mechanical properties and enhanced options for supply condition,” the company stated. “[Examples include] normalized rolled and low-temperature rolled wire rod.”

The company also indicated that British Steel could produce up to 3 million metric tons per year of rolled long products. Besides wire rod in 5.5-17mm diameters, Scunthorpe rolls construction steels (sections) and rail. Meanwhile, the Teesside mill rolls construction steels and the Skinningrove works, which sites about 100 kilometers north of Scunthorpe, rolls special profiles.

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Other Scunthorpe Steel Capabilities

Scunthorpe can also cast blooms from a six-strand continuous caster as well as slab in 225mm- and 298mm-gauges from a two-strand casting machine. Each caster has a listed capacity of 1.2 million metric tons per year.

Billets from the new caster will also go to the British Steel’s FN Steel plant, in the Netherlands. Reports indicate that the facility can roll at least 350,000 metric tons per year of wire rod in 5.5-30mm diameters.

Applications for British Steel’s rolled wire rod include tire reinforcement, automotive spring and steels, as well as rail clips. Chinese steelmaking and chemicals conglomerate Jingye Group acquired British Steel in 2020. Greybull Capital originally formed British Steel in 2016 when it acquired the Long Products business from Tata Steel.

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NOTE: This story was updated on 6.7.22

The European Commission (EC) has extended its existing safeguard tariffs on steel to June 30, 2024, but with some adjustments. In a letter to the WTO,  the executive body for the 27-member group said the annual rate of liberalization is due to increase from 3% to 4% as of July 1. Liberalization is the degree by which the quota lowers. To that point, the EC also adopted a regulation to allow for temporary trade liberalization on Ukrainian steel.

In its June 3rd issue, the Official Journal of the European Union specifically noted Ukraine’s removal from the safeguards. This meant the changes would go into effect the very next day. It’s an important move in a lot of ways, as Ukraine’s economy is already suffering greatly under the weight of the Russian invasion.

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steelmaking in an EAF

nikitos77/Adobe Stock

Ukrainian Steel Receives Special Consideration

Imports of Ukrainian steel into the bloc have largely ceased since Russia began its military invasion of the country on Feb. 24. Since that time, EC has levied several rounds of sanctions on the latter country. In its letter to the WTO, the EC noted, “This suggests that Ukraine is currently unable to produce and/or export these products in any meaningful volume to the Union market.”

“Under these circumstances,” the letter continued, “and having analyzed the quota use by other exporting countries subject to the measure, the Commission considered that there would be a risk of a potential shortage of supply for Union users in these categories if it did not take any action.”

The liberalization covers Ukrainian quarto plate as well as angles, shapes, and sections. Ukraine has used 63% of its quarto plate quota of 290,895 metric tons for Q1 2022 as of Feb. 21. It also used about 96% of its 61,159 metric ton quota on angles, shapes, and sections.

Ukraine also produces most of the raw materials used by steelmakers in Poland. Regardless of the new rules, that country is likely to experience production difficulties. That’s why it’s no surprise to see the EU looking elsewhere for product.

The EU Looks to the East

The EC also said that measures on Vietnamese-origin HDG will come into effect on July 1, though the letter did not indicate a tentative quota on that product. According to the European Steel Federation, estimated HDG imports in 2022 are due to total almost 1.35 million metric tons in 2022, up 37.8% from 979,205 metric tonnes.

Anti-COVID lockdown measures in Shanghai and other population centers within China caused a major shift in trade these past few months. In fact, insiders claim the change has prompted flats rollеrs in that part of the world to target European markets.

Meanwhile, China’s official GDP growth forecast for 2022 remains at 5%. However, Swiss-headquartered UBS slashed its own forecast down to 3% from 4.2% in late May. JPMorgan Chase & Co. cut its outlook from 4.3% to 3.7% the same week. It’s a sign that the world’s largest metal exporter might be in for a rough few quarters.

At the same time, producers in South Korea and Taiwan were offering hot rolled coil at €860-870 ($915-925) per metric ton cfr European port. Compare that with the minimum €940-950 ($1,010-1,020) exw in southern Europe. Meanwhile, mills in northern Europe were seeking prices of €1,010-1,050 ($1,085-1,130).

Hot rolled coil serves as feedstock to produce cold rolled coil, and subsequently hot-dipped galvanized sheet. The product has applications in the auto and construction sectors as well as in street furniture.

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Steel prices and gas are the primary topics of conversation today. It seems that steel traders in China are seeking more buyers abroad for their finished steel products. Meanwhile, Russia is mulling cutting gas supplies to the EU. Gas prices have an enormous impact on steel prices.

China: Lockdowns at Home, Low Demand Abroad

The news comes hot on the heels of reports detailing reduced consumption in Europe and ongoing COVID-19 lockdowns throughout China. Indeed, China’s latest anti-Coronavirus measures have resulted in a 2.9% industrial output drop year on year for April. At the same time, reports indicate that retail sales were off 11.1%. Steel price offers from Taiwan and South Korea were €860 ($910) per metric ton cfr Europe, also down from €1,080 ($1,140) cfr Europe from Southern and East Asia.

As one trader told MetalMiner, “Energy costs are hitting people hard. There are more defaults on energy bills.” He added that “The whole world wants to sell to Europe.” However, with inflation hitting record highs and the war in Ukraine charging onward, the market is anything but ripe for the picking.

Another trader pointed out that summer holidays in the Northern Hemisphere (normally in June, July, and August) will also mean lower building activity and lower demand. This is sure to put further downward pressure on steel.

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U.S., China and Russia flags

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Russia: War, Sanctions, and Rubles

Uncertainty about whether or not Russia could cut gas supplies to the EU over European Commission sanctions has created volatility in prices for that hydrocarbon. Steelmakers can rely on natural gas for ironmaking in blast furnaces as well as for steelmaking in electric arc furnaces.

In 2021, the European Union imported 155 billion cubic meters of natural gas from Russia. This accounted for around 45% of total imports and close to 40% of its total gas consumption.

Another possible factor contributing to the ongoing volatility is the possibility that buyers might refuse to pay for Russian gas in rubles. In late March, Russian President Vladimir Putin issued an order demanding that “hostile countries” pay for their gas supply in their currency by opening accounts at Gazprombank. Indeed, Russia has already cut off gas supplies to Poland and Bulgaria over their refusal to comply with the demand. This immediately sparked concerns over what might happen if other countries followed suit.

The European Commission, the executive body for the European Union, has since softened its stance against buyers of Russian gas opening accounts at Gazprombank. They even stated that buyers could make payments in dollars or euros. However, the organization said nothing about operators opening a second account in ruble-based payments, which several have reportedly done.

The benchmark Dutch TTF price for the hydrocarbon commodity was €95.50 ($100) per megawatt hour on May 17, up 2.84% on the day from €92.86 ($97.93). The price achieved a high of €227.20 ($239.68) back in March.

natural gas tap

PhotocreoBednarek/Adobe Stock

Steel Prices and Gas Still Closely Intertwined

On April 29, the European Statistical Office reported that month’s outlook for inflation was 7.5% year on year in the 19 states that have adopted the euro as their currency. The organization also noted that energy was likely to have the highest annual rate in that outlook at 38%.

Of course, the EU has been trying to lessen its dependence on Russian oil and gas since the country invaded Ukraine in February. So far, their efforts include ramping up renewable energy products, lowering energy consumption, and diversifying sources.

However, many industry watchers have difficulty believing that Europe will be able to achieve that goal. “How is Europe going to back off from Russian gas?” one analyst asked. “I simply can’t see how they’re going to get away from it.”

A second source noted that it would be possible to reduce dependency on Russian gas by sourcing it from North Africa. Of course, this would require the construction of new infrastructure such as pipelines and terminals. He also said that whilst other countries have tried to diversify their gas supply, others like Germany have not. “It was comfortable for the Germans,” he said of the country’s gas transmission infrastructure.

One option for some steel plants would be to use gas produced from coking ovens to help fire blast furnaces. However, results would be inconsistent, as not every steel plant is so equipped.

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The United Kingdom recently imposed a 35% duty on all platinum and palladium imports from Russia and Belarus. This move is part of a new package of sanctions on the two countries totaling £1.7 billion ($1.7 billion).

The Department for International Trade (DIT) and HM Treasury made the announcement on May 9. Since Russia’s late February invasion of Ukraine, the country has seen dozens of major trade penalties and tariffs. A DIT official told MetalMiner that there were no UK import tariffs at all on those metals previously.

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Platinum and palladium prices have surged along with other precious metals.

A Major Source of Platinum and Palladium

Russia is one of the world’s largest producers of platinum and palladium. Much of this supply comes from two companies: Norilsk Nickel and the Russian Platinum Group.

Reports indicate that Russia supplies about 40% of the world’s palladium and 15.52% of global platinum. The UK alone imported £1.2 billion ($1.47 billion) worth of platinum and palladium from Russia in 2021. The DIT official told MetalMiner this amounted to 14.1 metric tons and 17 metric tons of palladium.

Platinum’s primary application is in catalysis, which is used in automobile catalytic converters. It is also utilized in the production of petroleum and fuel cells. Of course, the hyper-rare element is also a major investment commodity.  Palladium is useful in catalysis as well. It also has applications in dentistry, surgical tools, and jewelry.

According to data from Trading Economics, platinum was priced at around $940 per troy ounce on May 13. On May 11, it reached a high of $994.22.

Understanding the Two Metals

The UK’s import tariff on Russian and Belarusian platinum and palladium is the country’s first action on non-ferrous metals. Meanwhile, on May 5, the HM Treasury’s Office of Financial Sanctions Implementation (OFSI) announced an asset freeze against Evraz. A global metal producer headquartered in London, Evraz has several steel making assets in Russia.

Back in March, the Department for International Trade and HM Treasury imposed a 35% import tariff on iron and steel from Russia and Belarus. This was part of a package stripping both countries of their “Most Favored Nation” status on hundreds of exports. How will these moves affect pricing? There’s no simple answer. However, we can assume that Russian metals companies will feel a significant financial pinch.

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The UK government recently announced an asset freeze on London-headquartered metal and mining group Evraz. Authorities claim that Evraz is receiving benefits or support from the Russian government to conduct business in strategic and economic sectors. True or not, the freeze has broad implications for global steel production.

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NIZHNY TAGIL, RUSSIA – JANUARY 01, 2014: Night view of the main entrance of the plant NTMK company Evraz. NTMK plant is the main enterprise of the city of Nizhny Tagil

Evraz Investigated for “Threatening” Ukrainian Stability

HM Treasury’s Office of Financial Sanctions Implementation (OFSI) went public with the move against Evraz on Thursday, May 5. As in similar situations, the action was filed under the Sanctions and Anti-Money Laundering Act of 2018.

This specific law allows governments to freeze funds and economic resources of problematic persons, entities, or bodies. In this case, it refers to those involved in destabilizing Ukraine or undermining/threatening the country’s territorial integrity, sovereignty, or independence.

Evraz has steel making assets in Russia that include the Nizhniy Tagil (NTMK) and Western Siberia (Zapsib) plants. The OFSI also noted that the company controls coking coal mines in Raspadskaya and Yuzhkuzbassugol and an iron ore mind at Kachkanarsky.

However, the information made no mention of Evraz’s Mezhegeiugol coking coal mine in eastern Siberia or its vanadium production operations.

Evraz Denies Any Wrongdoing Despite Abramovich Relationship

Freezing the assets of companies like Evraz has played a large role in how Western countries and the EU are punishing Russia for its Feb. 24 invasion of Ukraine. Indeed, back on Mar. 10, the UK’s Financial Conduct Authority officially suspended the group’s shares on the London Stock Exchange.

The earlier move was in response to the national government placing Roman Abramovich on its list of sanctioned individuals. Well known as the owner of Chelsea Football Club, Abramovich holds the single largest stake in Evraz (28.64%).

At that time, Evraz denied any involvement in actions against Ukraine. They have since reiterated claims that they mainly produce materials for construction and infrastructure.

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North American Subsidiaries Still in the Green

Evraz NTMK poured 4.1 million metric tons of crude steel in 2018, from which it rolled about 4.6 million metric tons of finished product. The manufactured items included rails, long products, rings for mechanical engineering, and grinding balls. According to the group’s website, the plant also produced semis for tubular production.

Meanwhile, Zapsib’s product assortment includes long section steel and continuously cast and hot rolled slabs. The plant also produced continuously cast and hot rolled section billets, rails, and downstream products. In 2016, Zapsib produced 6.9 million tons of crude steel and 6.3 million metric tons of steel products.

The OFSI did note that Evraz could continue to operate with its North American subsidiaries. Allotments include “payments to or from those subsidiaries under any obligations or contracts” and “payments to or from any third party under any obligations or contracts.” It also includes the “receipt of payments made by the North American Subsidiaries for audit services.” The OFSI also added that “Evraz North America is permitted to pay for the audit services referred to in the previous sentence.”

One source noted that many Russian companies are trying to put distance between their overseas assets and their owners in Moscow. “Everyone is separating or thinking about spinning off assets abroad into separate divisions,” that analyst added. Only time will tell if their efforts will pay off.

A Major North American Producer

Evraz North America’s headquarters are in Chicago, but the subsidiary has a welded pipe mill in Oregon (Evraz Portland) and a hot end and rail mill in Colorado (Evraz Pueblo).

In total, Evraz North America has six plants spread throughout the United States and Canada. The wholly-owned subsidiary can produce up to 2.3 million metric tons per year of crude steel via electric arc furnaces at Pueblo and Regina alone. The former is located in Colorado, while the latter is situated in Saskatchewan.

Besides having hot ends, the Pueblo plant can roll long products that include rail as well as wire rod and rebar in both coils and seamless pipes. Meanwhile, the Regina plant produces line pipe from its own rolled plate products.

Other Canadian sites, such as Camrose, Calgary, and Red Deer,  produce casings and tubings for Oil Country Tubular Goods (OCTG) as well as straight- and spiral-weld line pipes. Evraz North America’s Portland plant also produces line pipe from the plate and hot coil it rolls on site

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Steel prices for hot rolled coil in Europe have started to decline as end users push back from earlier offers. Meanwhile, benchmark iron ore prices in China dropped, due to the country’s zero-Covid policy. One analyst noted that steelmakers in Europe are cutting back their production.

“Steel would get a bit of support from production cuts … crude was down 6.8% in Q1 year on year,” one analyst told MetalMiner, referring to the World Steel Association’s (Worldsteel) global numbers. Global crude production for the first three months of 2022 was almost 457 million metric tons, compared with 490 million metric tons over the same time in 2021, Worldsteel’s numbers show.

Europe’s crude steel production for 2022 was down 3.8% to about 36.2 million metric tons from 38.3 million metric tons, Worldsteel data also indicated.

Comparative steel prices by region:

Comparison steel prices

Source: MetalMiner Insights

Although US steel prices continue to rise, Chinese HRC prices have clearly flattened.

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China’s Zero-Covid policy is driving demand down
China’s Zero-Covid policy and the lockdown in Shanghai has pushed iron ore’s benchmark price for 62% Fe fines to $136 per metric ton cfr China. This is down almost 10% from $151 on April 22, one analyst said.

“The next question is how far will they fall? Iron ore, I reckon, if Beijing goes into major lockdown will be below $100 soon,” that source added.

The first trader believed that prices would continue to decline in the short-term. He did not rule out that they could bounce back. However, one reason for which is that China is now eyeing an increase in export tariffs.

Reports about plans by Russia to take over eastern and southern Ukraine, could also push up steel prices as plants in the occupation zone could become subject to sanctions that the European Union placed against Russian steel products on March 15. This could severely impact end users in Central and Eastern Europe.

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Back in Ukraine

Ukrainian flats producer Zaporizhstal has also started to put out feelers for prices on its flat rolled products. after Metinvest said it would bring the plant back on stream. The trader believed that there would not be much interest from that steelmaker.

“Who is going to risk buying from Zaporizhstal?” due to the risk of rail infrastructure damage, the trader asked.

Zaporizhstal can produce up to 3.8 million metric tons of pig iron. Its seven open-hearth furnaces and one bath furnace can pour 4 million metric tons of crude steel.

The plant can also roll up to 3.6 million metric tons per year of hot rolled sheet and coil. Further downstream, the plant has an annual capacity of 1 million metric tons to produce cold rolled coil.

At least two Ukraine steel manufacturers are ready to restart production amid the ongoing conflict with Russia. Sources indicate this is because the areas where the mills are located have seen less impact from the invasion. Global investors greeted the announcement with much fanfare. After all, the renewed export of Ukrainian steel will undoubtedly have a significant impact on European markets.

A Major Steel Producer Comes Back Online

Luxembourg-based ArcelorMittal Kryviy Rih, a longs producer in the country’s second-largest city, is set to bring Blast Furnace No. 8 back online on May 2. This is according to CEO Mauro Longobardo, who made the announcement in the April 8 issue of the plant newspaper, Metallurg. Longobardo went on to say that Blast Furnace No. 6 will resume operations “in the coming days.”

ArcelorMittal Kryviy Rih also expressed plans to return rolling production to the “highest possible level” by May 10. At the same time, the company plans to resume exports of iron ore concentrates. However, Longobardo made it clear that these actions are contingent on both logistics and the military situation. Currently, the plan is to dispatch finished products to Poland via train.

“It used to go by sea, but now we will transport it by rail first to Poland and from there to our customers,” Longobardo added.

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Ukraine steel production represents some 15% of the total economy.

Ukraine Steel is Crucial to the Country’s Economy

When Russia invaded back on February 24, Arcelor Mittal announced it would slow down production at Kryviy Rih to a technical minimum. However, AMKR is located in Ukraine’s Dnipropetrovsk region, which has so far not experienced much fighting. Though the war appears far from over, many Ukranian businesses are eager to get the economy rolling again.

The Ukrainian steel industry typically comprises around 15% of the country’s economy. This is meaningful, as the World Bank estimated that the war will shrink Ukrainian GDP by as much as 45%. Altogether, mills in Ukraine can produce about 20 million metric tons of finished and semi-finished steel products. Before the war began, some 70% of this amount was exported. Were exports to continue, it might help alleviate wartime financial problems.

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Indeed, Arcelor Mittal alone can produce around 6 million metric tons per year of crude steel via the BF/BOF Route. Its steel is mainly cast into billets. These are then rolled into long products, such as wire rods, rebar, and merchant bar.

Metinvest Joining the Fight to Boost Steel Production

On April 12, Metinvest, an international mining and steel enterprises company, announced that it had restored operations at its sinter plant. The company also said that it was in the process of blowing in two of the four blast furnaces at its Zaporizhstal joint venture.

Zaporizhstal, located in the southeast, is Ukraine’s fourth largest steelmaker. “Gradually, with the production of hot metal by the blast furnaces, subsequent links in the production chain will be put into operation as well,” the group stated. They later added that Zaporizhia Coke and Refractory have also resumed operations.

Metinvest reports a 49.9% stake in Zaporizhstal. However, one source told MetalMiner that this is closer to 100%. This is because the remaining stake originally belonged to “a group of Russian investors.” Of course, since the war began, the Ukrainian government has started confiscating all Russian-owned assets.

stack of steel pipes

kasarp/Adobe Stock

Zaporizhstal Represents Significant Metal Output

Zaporizhstal lies some 550 kilometers southeast of Kyiv. According to Metinvest representatives, the site’s four blast furnaces can produce up to 3.8 million metric tons (mmt) of pig iron annually. Meanwhile, its seven open-hearth furnaces and single bath furnace can pour around 4 mmt of crude steel.

Zaporizhstal’s Mill 1680 can also make up to 3.6 mmt per year of hot-rolled sheet and coil in multiple gauges and widths. Further downstream, the plant has an annual capacity of 1 mmt for cold-rolled coil. In this case, Rolling Shops #1 and #3 produce gauges of 0.2-5 mm gauges and 850-2,300 mm.

Ukraine Steel Production Rolls on in Some Areas

Another Metinvest operation is Kamet Steel. The company acquired it back in June 2021, when it was known as Dneprovsky Iron & Steel Integrated Works. Situated near Dnipro, this longs producer has managed to operate as normal virtually the entire war.

Kamet Steel site can pour up to 3.5 million metric tons of crude steel per year. The company casts nearly all of this into square and round billet. It then makes these billets available for commercial sale. They can also roll the billet into roughly 1.8 million metric tons of long products or ship them to Metinvest’s Promet subsidiary in Bulgaria.

The fact that Metinvest and ArcelorMittal Kryviy Rih are restarting production is undoubtedly good news. What effects will renewed steel export have on Ukraine’s overall economic situation? It’s hard to tell . However, European investors are undoubtedly eager to see anything returning to “normal.”

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On April 8th, the European Union announced plans to ban imports of Russian coal. This, of course, comes in the wake of that country’s February invasion of Ukraine. The decision is part of the fifth round of sanctions against the Kremlin. And with the Russian economy already poised for a massive contraction, prices – including metal prices – around the world are sure to be affected.

Aside from banning thermal coal from Russia, the six-pillared sanction package also stipulates a ban on coking and PCI-grade coal. Russia is currently a major supplier of these high-demand raw materials. Therefore, this announcement will undoubtedly create a number of challenges for steelmakers in the 27-member bloc. In fact, according to German state broadcaster Deutsche Welle, Russian metallurgical coal comprises about 25% of total imports.

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Russia's invasion of Ukraine has drawn international condemnation.

No Overstating the Importance of Russian Coal

Any way you slice it, Russian coal is crucial to many European industries. As the name implies, coking coal is the primary feedstock for coke production. PCI-grade coal, on the other hand, is crucial to the production of pig iron within blast furnaces. In 2020, hard coal deliveries to EU coke ovens totaled 38 million metric tons.

According to figures provided by the European Statistical Office (Eurostat) this was a decrease of approximately 15.6% from 2019. In that year, more than 45 million metric tons were shipped. Eurostat also noted that coke production in the bloc totaled 30 million metric tons in 2020. This, too, was down 6.3% from the previous year.

Steelmakers Buying Before Rules Go into Effect

As of the announcement, Russian-flagged sea vessels will also no longer be able to enter EU ports in most cases. The European Commission added that “exemptions apply for medical, food, energy, and humanitarian purposes. That said, the proposed coal ban is not due to actually go into effect until August.

As one analyst pointed out, this would allow end-users to acquire large volumes of product until that time. Of course, if the ban goes forward as planned, steelmakers will still need to find new sources of coal. “This will result in further cost increases,” the analyst told MetalMiner. “And while I think Europe can get around it, it will be another constraint.”

Alternatives for Russian Coal

The Search for New Coal Sources

The analyst went on to say that some possible sources the EU might consider to replace Russia’s coal supply include both Colombia and Canada. However, transatlantic shipping logistics and the high quality of Canadian-origin coking coal will make both of these rather expensive options. Due to its proximity, Polish coking coal would be much more convenient. Unfortunately, many of that country’s mines need to dig deeper before hitting coalface, which can drive up costs.

Southeast Asian and Oceania are also in play. As of April 8th, the Singapore Exchange’s Australian Coking Coal contract was $411.33 per metric ton. While the latest price is down from the March 8th high of $585, it is up more than 177% from 2021, when the contract was $148.50.

“There is always the option of sourcing the coal from the United States, which has some of the world’s highest-quality coking coal,” our analyst indicated. However, he remained dubious as to whether the Biden administration would be willing to restart coal mining activities solely for that purpose.

Overstating the Importance of Russian Coal

The day the invasion began, Russian President Vladimir Putin took state television to announce that the “operation in Ukraine” was an attempt to stop the genocide of ethnic Russians and to “de-nazify” and demilitarize the country. The announcement was met with both outrage and accusations of deliberate misinformation from all corners of the world.

Leading up to the mobilization, one of Russia’s main points of contention was the prospective expansion of the North Atlantic Treaty Organization (NATO) military alliance eastward into Ukraine. Russia was – and likely still is – seeking some sort of guarantee that Ukraine would never join that organization, a demand that US officials have declared a “non-starter.”

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Hot rolled coil prices in Western Europe have continued to rise. Insecurity of supply for the flat rolled material and the European Union’s blockage of certain steel imports from Russia are pushing prices upward, market sources told MetalMiner.

In addition to other forms of steel, the MetalMiner Insights platform includes hot rolled coil prices from Europe. 

Hot rolled coil prices pick up

Mills on the continent are seeking about €1,400 ($1,540) per metric ton exw for rolling in May, one trader said. However, he warned there was no guarantee that end users would receive it at that time.

hot rolled coil steel

taitai6769/Adobe Stock

“It’s a tricky market,” the trader stated.

That quote is up almost 8% from the week starting March 15, when the same material was on offer for €1,300 ($1,430).

Cold rolled coil normally carries a premium of €80-120 ($90-130) over hot rolled coil.

Hot rolled coil’s applications include construction as well as feedstock to produce various welded pipe products. The flat rolled product also serves as feedstock for rolling of cold rolled coil.

The MetalMiner Monthly Metal Index (MMI) report includes additional analysis of steel markets, including HRC. 

Steel sanctions

The European Commission, the executive body for the European Union, implemented on March 15 an import ban on Russian steel products that were subject to safeguard measures.

Read more

Shelling on Metinvest’s longs and flats producer Azovstal has destroyed its ability to operate, local reports and a plant official stated.

The plant is in the besieged Ukrainian city of Mariupol. Damage to the site remains unclear at present, sources told MetalMiner.

Metinvest officials outside of Ukraine also did not indicate the degree of damage.

Azovstal’s most popular product is slab. The majority of that product was going to its Trametal asset in Italy, as well as to Marcegaglia. Trametal rolls plate in 4-180 mm gauges and in widths up to 3,200 mm.
Marcegaglia’s carbon steel product assortment includes CRC, plus some coated, downstream products. That company’s website does not indicate if it produces hot rolled coil for sale, though its other products include welded pipes as well as cold-drawn welded tubes.
Turkish plants Tosçelik and Habaş were also buyers of Azovstal’s slab, according to a source.
These companies, depending on where they are, will now likely source their slab from India, Brazil or Iran, the source added.

The MetalMiner team will continue to analyze the impacts of the Russia-Ukraine war on metals markets in the Monthly Metal Outlook (MMO) report, available to subscribers on the first weekday of every month. 

Azovstal Iron and Steel Works

Azovstal Iron and Steel Works in Ukraine. bartoshd/AdobeStock

Russian shelling hits Azovstal coking plant

A video from Turkish news outlet Anadolu Agency on March 17 shows shelling on the plant. The attack knocked out Azovstal’s coking plant. The plant is also a target in efforts to take Mariupol, Ukrainian media stated.

Information on Azovstal’s website indicates there are three coking batteries on site. Those can produce 1.82 million metric tons per year of coke and coal products.

The attack on the coking batteries do not pose a danger as they were wound down in the days after Russia began its invasion of Ukraine, Azovstal’s general director Enver Tskitishvili said in a video that MetalMiner received March 19.

The five blast furnaces at the site were off stream. They had cooled by the time of the attack, Tskitishvili noted.

Metinvest announced on Feb. 24 that it would put that plant and the nearby Ilyich Iron and Steel into conservation mode.

As the war continues and impacts the metals sectors in Russia and Ukraine (and end users elsewhere), the MetalMiner team will break it all down in the MetalMiner weekly newsletter

Azovstal production impact

Azovstal has five blast furnaces that can produce 5.55 million metric tons of pig iron. The plant’s convertor shop has two 350-metric ton basic oxygen furnaces that can pour 5.3 million metric tons of crude steel.

Further downstream, Azovstal has four continuous caster machines for slab production, plus an ingot casting machine.

Azovstal’s Mill 3600 can produce 1.95 million metric tons per year of plate. The mill produces 6-200 mm gauges and widths of 1,500-3,300 mm.

Mill 1200 produces blooms for further rolling of long products. Meanwhile, Mill 1000/800 can roll up to 1.42 million metric tons of rail and bar products.

Azovstal’s information also stated that Mill 800/650 can produce up to 950,000 metric tons of heavy sections.

Mariupol has the largest port facilities on the Sea of Azov, which leads to the Black Sea via the Russian-controlled Kerch Strait.

The city has come under intense bombardment as Russian forces try to clear a land corridor between the Crimean Peninsula, which it annexed from Ukraine in 2014, and the Ukrainian breakaway regions of Donetsk and Luhansk.

Russian President Vladimir Putin also recognized those regions as independent republics on Feb. 21.

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