Author Archives: Christopher Rivituso

Novolipetsk Iron & Steel (NLMK) is undertaking at its main production site in Russia upgrade work on one of the slab reheating furnaces, which will see hot rolling Mill 2000’s capacity rise by 7%, the steelmaking group said.

The planned work will push Mill 2000’s annual rolling capacity up by about to approximately 6.23 million metric tons, NLMK indicated.

NLMK logo

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The mill’s current rolling capacity is now 5.8 million tons, group spokeswoman Marina Simonova told MetalMiner.

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NLMK upgrade work

Upgrade work on the reheating furnace includes installation of equipment that can automatically adjust the temperature, depending on the grade of steel that Mill 2000 rolls. The work will also lower carbon emissions from the furnace by 53,000 metric tons, the group said.

Work on the reheating furnace will also result in a 23% increase in its own annual throughput capacity to 2.25 million metric tons per year, from 1.83 million metric tons, group figures indicated.

NLMK plans to complete work on and restart the furnace in Q2 2023. Estimated cost of the project is ₽5 billion ($67.8 million), the group also said.

The work, however, will not impact Mill 2000’s operations, as there are four additional furnaces that have already undergone overhauls.

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Lower auto sales in Europe have put West European hot rolled coil prices under pressure. However, demand from construction is nonetheless helping to support prices for the flat-rolled product.

“People want to invest their money into something,” one trader source told MetalMiner.

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Hot rolled coil prices slide

hot rolled coil steel

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ArcelorMittal had originally sought €1,080 ($1,210) in November. While that price remains the Luxembourg group’s official one, transactions have taken place at lower levels.

Large-volume transactions have occurred in November at €980-1,000 ($1,095-1,120) per metric ton exw for delivery in January, the trader said.

Transactions for smaller volumes €1,050 ($1,175), the trader added.

Imports from Russia and Turkey have transacted at an average of about €865 ($970) per ton cfr Europe, the trader noted.

Auto registrations slow

New automobile registrations in the European Union totaled 665,000 units for October. That marked a drop of more than 30% year over year from 950,000 units, the European Automobile Manufacturers Association (ACEA) said Nov. 18.

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Metals will play a significant role in helping governments and companies to address climate issues by aiding the transition to cleaner energy and ultimately decreasing carbon emissions, industry watchers said.

“The metals industry is crucial to facilitating this,” one analyst told MetalMiner.

“If you want energy transition, it is not going to happen without metals and mining,” the analyst added.

His and other analysts’ comments come as the 2021 United Nations Climate Change Conference, also known as COP26 (Conference of the Parties), which took place in Glasgow from Oct. 31-Nov. 13.

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Phasing out coal

carbon emissions

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The conference ended with an agreement to work towards limiting an increase in global temperature to 1.5 degrees Celsius. Chief amongst the steps to achieve that is the limiting of coal.

Up to 40 countries had originally planned to “phase out” coal usage in the next 10-20 years. However, the world’s largest users — China, India and the United States — were able to change the wording to “phase down.”

Much depends on China and what it does with coal, however. That includes running power stations and providing feedstock for steelmakers’ coking ovens, the first analyst said.

“I don’t doubt that China will wean itself off of coal,” the first analyst said, “but the reality is that coal will be around in another 30 years.”

Other parts of the climate agreement included 100 countries’ agreement to achieve a 30% cut in methane levels by 2030. Indian Prime Minister Narendra Modi also announced at the conference his country’s plan to achieve net-zero carbon emissions by 2070 as well as to achieve some reduction by 2030.

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Tata Steel Europe is hot starting a new power plant at its Port Talbot plant, in Wales, which will cut CO2 emissions by almost 44,000 metric tons per year, the company said.

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Tata Steel generator carries £37M price tag

Port Talbot steel plant

Port Talbot steel plant. Petert2/Adobe Stock

The 30 MW generator will use gases from Port Talbot’s coking oven complex as well as from its two operating blast furnaces to create steam that will turn turbines within the generator. It also allows the flats producer to avoid flaring off those gases, a process that has a negative environmental impact, the company said last week.

The new generator carries a £37 million ($50.6 million) price tag. It is the fourth of its kind at Port Talbot and will power various parts of the plant, a company spokesman said.

It also comes on stream at a time when energy costs are sharply rising in Europe.

The day-ahead price for natural gas at the Amsterdam TTF hub was about €62.07 ($71.95) per MWh Nov. 1, data from the European Energy Exchange (EEX) showed. That price is down by almost half from when it hit €114.29 ($132). Yet, it is still almost 50% higher than the €41.86 ($48.52) the EEX indicated on Aug. 24.

The plant can now generate up to 70% of its own energy.

Port Talbot has one coke oven set with 85 separate ovens as well as two blast furnaces with a pig iron capacity of 5.3 million metric tons per year.

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Several factors are likely to see base metals continue to encounter supply constraints into 2022.

Chief among them is demand, said Colin Hamilton, managing director of commodities research at BMO Capital Markets.

“We have never seen this level of demand impulse before,” he said in an Oct. 12 web presentation.

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Producers have also had difficulty keeping up with the demand, which Hamilton attributed partly to people working from home and ordering consumer durables online.

“This is bona fide, demand-driven deficit,” he added.

Hamilton’s statements came during LME Week, which took place Oct. 11-15. The event is an annual gathering for metal specialists, ranging from traders to analysts and CEOs, and includes an invite-only dinner hosted by the London Metal Exchange.

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Energy crisis impacts metals supply

The global energy crisis has also played a role in the supply difficulties.

“We are struggling to get additional calories into the world,” Hamilton said.

Causes behind the energy crisis are not so much due to the energy transition, which is still in beginning stages, but because there are substantially higher levels of heating of space, Hamilton noted.

Buildings could help to remedy space heating, however, as they cover about 30% of global energy. There are some metals-intensive wins there. Smart facades of metals on buildings will allow for better temperature control. Meanwhile, improved ventilation in light of COVID will benefit zinc and copper. Furthermore, LED lighting is wiring-intensive.

The amount of data and Cloud IT spending and 5G have also proven energy-intensive.

“All these factors are playing into structurally higher energy demand growth than we were probably ready for,” Hamilton noted.

Chinese power outages

Power outages in China are also impacting industrial activity. The country has now resumed coal shipments from Australia after an informal ban in 2020.

“Chinese power outages are widespread. We are cutting more supply than demand,” Hamilton added.

Coal imports rose in September rose 76% year on year to 32.9 million metric tons, an Oct. 13 report from the Financial Times stated, itself citing official Chinese customs statistics.

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London Metal Exchange CEO Matthew Chamberlain has expressed doubt over sourcing aluminum from exclusively low-carbon sources in the short term.

“There have been calls for us to exclude high-carbon production, but we don’t think that’s the right thing to do because there simply would not be enough aluminum on the market,” Chamberlain said on Oct. 11 in an interview with Bloomberg Markets and Finance.

Prices on the LME would also be significantly higher than they are now, he warned.

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LME aluminum price on the rise

aluminum price

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The LME’s three-month bid price for the base metal reached $3,019 per metric ton Oct. 11. That is up by one-third from $2,254 on April 12, data from the bourse showed.

Higher demand, plus production cuts in China, have helped to sharply boost benchmark aluminum prices over the past six months. The world has also faced supply chain disruptions as the global economy restarts after the COVID-19 pandemic.

Chamberlain could not say how much of a premium end-users would potentially pay on the base metal with a low-carbon footprint.

The LME’s announcement on the same day of its plans to collaborate with Düsseldorf-based spot trading platform Metalshub would help buyers to acquire the greener aluminum as well as to determine potential premiums, he said.

“What we foresee is a world where you have the LME to deal with high-level hedging … but there is a more digital way where you can then go and source specific parcels of metal with specific sustainability characteristics like low carbon,” Chamberlain stated.

Future of aluminum

Responding to a question over whether or not the exchange would potentially no longer accept “dirty” aluminum, Chamberlain stated that he did not rule it out in five to 10 years, as views on carbon vary.

“People have different views on the carbon footprint of our product, and that’s why we believe that disclosure and user choice is the right way to deal with it,” Chamberlain said.

“I certainly think the world could end up there,” where only lower-carbon is available, Chamberlain noted.

The bourse already does not accept metal that has exploited child labor or that has supported conflict financing as the world has decided that those are negative things, he added.

Chamberlain made the statements at the start of the LME Week, which is taking place in 2021 from Oct. 11-15. The event is an annual get-together for metal industry participants along the entire supply chain. The week includes seminars on trends and outlooks, along with networking sessions and the LME Dinner.

Events for the week in 2021 are more curtailed due to ongoing concerns over the COVID-19 global pandemic.

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ArcelorMittal plans to introduce a €50 ($58) surcharge on all of its long products in Europe in order to account for sharply rising energy prices, an official with the Luxembourg-headquartered group said.

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ArcelorMittal introduces new surcharge

ArcelorMittal logo

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“The price rise is temporary and primarily in response to the record rise we have seen in energy prices,” a spokesperson for the group said in a statement to MetalMiner.

The source did not say when exactly the surcharge would come into effect, except that it would “pretty soon.”

He also did not indicate how long the surcharge would last, saying that it would depend on energy prices.

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Thyssenkrupp Steel (TKS) has restarted at the Duisburg plant its blast furnace No. 1. The restart comes after a three-month stoppage for a partial reline, the German steelmaker and flats producer announced.

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Thyssenkrupp Steel furnace at Duisburg back at full capacity


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The furnace can now operate at full capacity. The furnace can produce 10,000 metric tons per day of pig iron, or 3.65 million metric tons per year, TKS stated Oct. 4.

TKS took BF 1 off stream in early July to conduct the partial reline. In this case, it left the furnace’s outer body intact. The previous campaign lasted over 13 years, TKS stated.

Relining a blast furnace carries a high cost, due to the premium charged for heat-resistant bricks that can contain graphite, carbon, alumina and silicon carbide.

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Russia’s 15% export duty on steel has not impacted market prices for flat-rolled products, either coming into the European Union or rolled within the 27-member bloc, market participants told MetalMiner.

“The Russian [steelmakers] are absorbing it completely,” one trading source said of the export duty.

A second trader noted a similar situation.

“The export tax has nothing to do with the customer here. That is the producers’ issue,” that source noted.

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Russia export duty after two months

Russia exports

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Their comments followed Russian Federal Government’s Decree No. 988 of June 25. The decree imposed a 15% export duty from Aug. 1 to Dec. 31 on all steel exports – finished and semi-finished – from the country and also the wider Eurasian Economic Union. That includes not only Russia, but also Armenia, Belarus, Kazakhstan and Kyrgyzstan. It also includes observer states Moldova, Cuba and Central Asian state Uzbekistan.

The duty also applies to certain base metals, including copper, nickel and low-grade aluminum products.

Federal government officials claimed then that sharply rising steel prices in Europe, Russia’s second-largest export market, were translating to higher steel prices at home.

The European Union is also Russia’s second-largest destination market for steel exports, including finished, semi-finished and tubular products. Those exports exceeded 4.02 million metric tons in 2019, the analyst said.

That number was down 20% on the year from 5.17 million metric tons, yet the bloc retained its place as Russia’s second-largest export market.

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Germany’s federal environment minister has pledged €55 million ($65 million) towards ArcelorMittal Hamburg’s planned construction of a demonstrator directed reduced iron (DRI) plant, which will eventually use green hydrogen, the Luxembourg-headquartered group stated.

Svenja Schulze pledged the government’s support Sept. 7 while visiting the Hamburg plant, ArcelorMittal noted.

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Germany to offer half of funding for new ArcelorMittal plant

ArcelorMittal sign in Ontario

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That amount represents half of the projected €110 million ($130 million) cost for the plant, ArcelorMittal said. However, funding is contingent on European Commission approval.

A spokesman for the group declined to say when the European Commission would give its approval. The spokesman expressed hope that approval would come “soon.”

The demonstrator plant will have a DRI capacity of 100,000 metric tons per year and is due to come on stream by 2025. The spokesman noted that it would at first use grey hydrogen to produce DRI, rather than green.

“Once available in sufficient volumes and at an affordable price, green hydrogen – made from the electrolysis of water using renewable energy – will be used,” ArcelorMittal stated in its Sept. 7 announcement.

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