Articles in Category: Ferrous Metals

HRC hot-rolled coil steel

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HRC mills in Western Europe continue to seek higher prices for hot rolled coil on high local demand and low availability, traders told MetalMiner.

End users are also trying to hedge their positions because November and December are the two months when they build up stocks before year’s end, traders said.

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Mills are now offering HRC at €600 ($715) per ton EXW for February/March delivery, up from previous deals of €520-530 ($620-630), sources said.

It’s not clear if any buyers have accepted the latest offers because they are still “swallowing this information,” one of the traders noted.

HRC from Russia, Turkey

The lack of available material on the local market is adding support to the offer prices, one trader added.

“The mills can wait,” the trader said about market acceptance, noting that even availability of imported HRC is becoming scarcer.

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China story steel production

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If we were worried about China’s dominance of global steel output over the last decade, the next decade is looking like it may be even worse.

Having bounced back robustly this year from severe coronavirus lockdowns in Q1, China is on track to top 1 billion tons of steel production by the end of 2020, beating 2019’s 996.3 million tons despite steel-consuming industries suffering a lockdown.

Indeed China is the only major producing country to have increased output this year, up 5.6% at the end of October. Europe, North America, Japan, South Korea, and India are all down over the year cumulatively, leading to a global 1.9% reduction.

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Despite a small decrease from record levels in August and September, China’s October output was still up on last year.

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China steel plant

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Not surprisingly, China paced a significant jump in October 2020 crude steel production.

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October 2020 crude steel production up 7%

October 2020 global crude steel production has bounced back after a down spring and summer.

In March, global crude steel production fell 5.7% before taking a 13.1% dive in April.

From there, output recovered, even as the world continued to struggle with the COVID-19 pandemic.

Output remained down on a year-over-year basis in May, June and July before finally posting a 1.9% jump in August.

September output jumped 3.9% before growing 7% in October.

China leads the way in October production

Meanwhile, top steel producer China posted a 12.7% year-over-year increase in crude steel output in October.

The rise followed a 10.9% jump in September and an 8.4% increase in August.

China’s output totaled 92.2 million tons in October.

As MetalMiner’s Stuart Burns noted recently, China’s economic recovery has powered the rise of prices for a number of commodities.

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steel imports

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U.S. steel imports totaled 1.4 million metric tons in October, up from 1.1 million metric tons the previous month, the Census Bureau reported.

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U.S. steel imports pick up

Although U.S. steel imports are down for the year, October imports picked up.

U.S. steel imports jumped approximately 27% from the preliminary September total to the preliminary October figure.

For the year through September, the U.S. imported 16.1 million metric tons. Meanwhile, for the same period in 2019, the U.S. imported 20.5 million metric tons.

Rebar, cold-rolled sheets and blooms, billets and slabs pace increase

Per the Census Bureau data, the U.S. saw significant jumps in imports in three categories: rebar; cold-rolled sheets; and blooms, billets and slabs.

From September to October, imports of blooms, billets and slabs jumped from 80,154 metric tons to 233,798 metric tons, an approximately 192% increase.

Rebar imports nearly doubled, jumping from 39,080 metric tons to 76,347 metric tons.

Cold-rolled sheet imports jumped from 67,173 metric tons to 94,863 metric tons, a 41% increase.

On the other hand, imports of sheets and strips, tin plates, and hot-rolled sheets declined from September to October.

OCG down

In U.S. steel imports news relevant to the oil sector, imports of oil country goods (OCG) for the year to date declined.

Imports during the nine-month period totaled 831,459 metric tons. That total marked a 54% year-over-year decline.

However, the oil price has picked up of late. The WTI crude oil price closed Nov. 24 at $44.91 per barrel, up $3.48 per barrel from the previous week, per the Energy Information Administration.

Furthermore, from September to October, imports of OCG rose 126% to 47,526 metric tons.

Oil demand remains depressed amid the pandemic, with many foregoing car trips (or vacations altogether) and a significant percentage of the U.S. workforce transitioning to remote work setups. However, recent announcements regarding the efficacy of potential COVID-19 vaccines could serve as a shot of support to demand for various steel products, including OCG, as Americans become more comfortable with returning to the previously normal rhythms of life.

Of course, when mass rollout for such vaccines will occur is still up in the air.

U.S. steel imports surge from Mexico, Turkey

Viewed through the lens of imports by country, the U.S. saw an increase from Mexico. The U.S. imported 252,348 metric tons of steel from Mexico in October, up 34% from the previous month. While perhaps a niche consideration for the steel market at large, the United States Trade Representative recently announced a preemptive exemption for Mexico from a potential future Section 232 tariff on grain-oriented electrical steel.

Meanwhile, imports from Canada were about flat from September to October.

On the other hand, imports from Taiwan, South Africa and the U.K. declined, per the Census Bureau.

In year to date, increases came from Turkey, Brazil and Singapore. Imports from Turkey jumped from just 5,941 metric tons in September to 61,948 metric tons the following month. For the year to date, U.S. steel imports from Turkey jumped 65% to 387,608 metric tons in the January-September 2020 period.

Meanwhile, U.S. steel imports from Russia declined.

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This morning in metals news: the U.S. steel capacity utilization rate reached 71.5% last week; the Energy Information released its monthly energy review; and the nickel price continues to move upward.

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Steel capacity utilization rate hits 71.5%

The U.S. steel capacity utilization rate hit 71.5% for the week ended Nov. 21, the American Iron and Steel Institute (AISI) reported.

U.S. steel output for the week totaled 1.58 million net tons, up 0.1% from the previous week but down 13.2% year over year.

For the year through Nov. 21, U.S. output totaled 70.5 million net tons, down 18.6% year over year.

EIA releases monthly energy review

Aside from steel capacity utilization, the EIA released its Monthly Energy Review today, reporting total energy production of 64.46 quadrillion btu through the first eight months of the year.

Fossil fuel production totaled 50.93 quadrillion btu during the period. Meanwhile, nuclear energy production reached 5.57 quadrillion btu and renewable energy production totaled 7.96 quadrillion btu.

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merger and acquisition

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner, including Tata Steel and its attempt to spin off its European assets, the U.S.’s rising steel capacity utilization rate, China’s economic recovery and its impact on metals prices, and much more:

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Week of Nov. 16-20 (Tata Steel looks for buyers, capacity utilization rises and more)

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Central Europe and Eastern Europe

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Interest in the Central European steel sector came not only from the West, but also from further East.

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Interest in Central European steel assets

Ukrainian group Industrial Union of Donbass (ISD) acquired Hungarian integrated flats producer Dunaferr in 2004. The group also acquired Polish integrated plate producer Huta Czestochowa in 2005.

The Polish plant entered bankruptcy in 2019, however, amid what it called increasing difficulties in the European steel market.

Liberty Steel subsidiary Sunningwell leased in 2019 the plant from Czestochowa’s bankruptcy trustee. In 2020, it won a tender to purchase the plant. Polish media noted in October, however, that the plant would remain leased until mid-2021.

Czestochowa is now operating, an administrator for the plant confirmed to MetalMiner. However, she declined to indicate what shops were operating or at what percentage of capacity.

Steel situation in Ukraine

One difficulty Czestochowa faced was reportedly due to the armed conflict in 2014 between Ukrainian forces and Russian-backed rebels in eastern Ukraine, resulting in creation of the breakaway Luhansk People’s Republic and the Donetsk People’s Republic, a November 2014 report in Polish media stated.

ISD subsequently lost control of its slab producer at its Alchevsk plant, which is in Luhansk People’s Republic, and from which it sourced slabs for rolling at Czestochowa.

Donetsk region, once Ukraine’s industrial heart and the location for the majority of steelmaking and rolling assets, is now the within the breakaway and unrecognized Donetsk People’s Republic. The republic contains Donetsk Steel, integrated metal and mining group Metinvest’s Yenakievo and Makeyevo plants and the Khartzysk pipe plant.

Reports of low operating percentages against capacities, industrial action by workers over unpaid back salaries and out-of-date equipment are also coming out of steelmakers in the Donetsk People’s Republic, sources told MetalMiner.

“Nobody knows what’s going on there,” a second analyst said.

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European Union flag

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(Editor’s Note: This is the first of a two-part review of the European steel sector.)

While steelmakers east of Berlin are working to meet rising demand, others are facing myriad technical and regulatory challenges.

Those challenges include a global pandemic that has severely impacted economies, industry watchers and market participants told MetalMiner.

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European steel faces higher costs, environmental restrictions

Steel plants in Central and Eastern European states that are members of the European Union face not only higher costs, but also environmental restrictions that could eventually mean an additional $30-40 per tonne to make steel.

China’s recovery from the coronavirus pandemic has led to increases there in steel production and cheaper imports.

As a result, China’s rebound has further impacted European steelmakers in Central and Eastern Europe.

‘Shifting east’

Foreign metals and mining groups started to acquire plants in Central and Eastern Europe in the late 1990s to early 2000s. Governments in those regions sought to privatize what in many cases were previously state-owned assets.

“The view was that the market was shifting east in terms of manufacturing bases,” as Western European automakers and white goods producers were setting up shop in those countries, one analyst said.

Some of the acquired assets also have either captive raw materials sources or easier access to them. This solved potential supply chain questions and allowed the acquiring groups to redistribute material elsewhere within their own network.

Many of the newer member states that joined from 2004 were also receiving subsidies from Brussels for infrastructure improvements. Those improvements would, in many cases, require steel, the analyst added.

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hot rolled steel

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This morning in metals news: the U.S.’s steel capacity utilization rate reached 71.4% for the week ended Nov. 14; a survey by INVERTO took a look at procurement trends during the COVID-19 pandemic; and steel prices continue to rise.

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Capacity utilization rises to 71.4%

The U.S. steel sector’s capacity utilization rate for the week ended Nov. 14 reached 71.4%, the American Iron and Steel Institute (AISI) reported.

The rate marked an increase from 71.1% the previous week. However, the rate fell from 78.8% during the same time frame in 2019.

Steel production during the week ended Nov. 14, 2020, totaled 1.58 million net tons. The production total marked a 0.4% increase from the previous week but a 13.3% year-over-year decline.

INVERTO releases Raw Materials Study 2020

A survey conducted as part of INVERTO’s Raw Materials Study 2020 delved into the impact of the COVID-19 pandemic on procurement and ways buyers have tried to adapt to the challenges of 2020.

Among its key findings, INVERTO noted of the survey respondents that “supply security is underestimated,” with few expressing concern about raw materials supply in the future.

Furthermore, INVERTO concluded few companies had taken “structured, profound and long-term countermeasures” in response to the pandemic.

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gold, silver, copper, oil prices

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner, including the copper price, oil price gains and steel imports:

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Week of Nov. 9-13 (copper price, oil price gains and more)

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