Steel Strip World

UK industry fears isolation amid EU treaty fallout

2011-12-12T07:53:00.001Z

Steelmakers anxious that PM's defence of the City of London will lose UK manufacturers their competitive edge and key markets

Steelworks in Port Talbot, Wales, owned by the Tata Group, one of the foreign firms 'investing in the UK as a key player in Europe'. Photograph: Anthony Devlin/PA

Britain's hard-pressed manufacturers have expressed growing unease that the financial sector was defended in Europe by David Cameron at the expense of Britain's industrial interests.

Steelmakers fear the UK could lose its "leadership" position on issues such as deregulation and competitiveness, while other manufacturers fear a growing isolation from a key market.

"In the short term it should make no difference as all the EU structures are in place, but across the longer term … we are going to become less relevant in political decision-making," said Ian Rodgers, director of the trade body UK Steel.

Read the full story by Terry Macallister at the Guardian

Whilst David Cameron and the Government have made a lot of noise recently about taking measures to help Industry and manufacturing their actions show that their traditional loyalty to the city is far stronger. Our largest export market is Europe and any step that weakens our influence within that market is a betrayal of the manufacturing sector.

Technorati Tags: Steel,Manufacturing,UK steel,Industry

Caparo Merchant Bar steel workers to take longer break

2011-12-07T08:57:00.001Z

More than 150 workers at a North Lincolnshire steel firm are taking an extended Christmas break to help their employer stay in business.

Staff at Caparo Merchant Bar (CMB) in Scunthorpe have agreed to take a longer, partly-unpaid, holiday over the Christmas and new year period.

Workers are being supported by the Community Trade Union in an effort to help the company.

The move aims to ease the company's wage bill in the process.

Full story at BBC News

Technorati Tags: Steel,Caparo,Steel bar,UK steel

ArcelorMittal reducing steel capacity in Poland

2011-12-07T08:49:00.001Z

Warsaw Business Journal reported that steel giant ArcelorMittal, which controls 70% of the Polish steel production market, wants to reduce the number of its employees in the Czech Republic by around 10%.
The company plans to launch a voluntary redundancy scheme there in the near future.
Due to a decline in demand for steel, ArcelorMittal has already announced that it will soon idle one of its three blast furnaces in Poland. This will reportedly result in significant job losses. It is even rumored that up to 3,000 employees who work at the Polish steel furnace may be laid off soon.
Trade unions at ArcelorMittal Poland fear that in the face of the crisis the steel maker may soon decide to cut more jobs in Poland.
Nonetheless, Ms Sylwia Winiarek, a spokesperson for ArcelorMittal Poland, said that "No employment reduction decisions have been made at the company."

Technorati Tags: Steel News

Llanwern steel works to axe 115 jobs

2011-12-02T12:29:00.001Z

A hot strip mill at a huge steel plant is to be mothballed because of "continuing poor demand", with the loss of 115 jobs, it has been announced.

Tata Steel said the temporary mothballing of the mill at its Llanwern site in Newport, will take immediate effect.

The move will lead to the loss of 115 agency workers, contractors and others on fixed-term contract jobs.

Tata Steel said the facility is expected to remain mothballed until the UK economy and steel demand justify a restart of operations.

ALL STEEL PRODUCT PRICES FALL AS EUROPEAN ECONOMIC TURMOIL PERSISTS

2011-11-28T07:45:00.001Z

Global economic uncertainty is causing steel consumption to slow in Europe. Moreover, buyers are reluctant to place forward orders on the mills, given the current financial climate. Market players feel that worldwide production cuts will hold the key to price stabilisation. Although the mills are curbing capacity, the results are unlikely to be felt until the start of 2012 at the earliest. Traders are reluctant to place new business with third country suppliers as market sentiment remains weak.
There is very little demand in Germany. In general, steel prices have weakened further. The mills appear to be offering different levels of discount, depending on customer and tonnage. However, end-user activity is still relatively strong in comparison with other European countries. Auto production is at a good level for the luxury brands, which are still enjoying excellent export sales. Other industries are reducing their steel stocks but trying not to lay off personnel. Service centres can obtain supplies from the steelmakers within three to four weeks and, therefore, are only buying when they already have orders for the material.
Prices have decreased in the French market, despite producers’ efforts to stabilise them. Some distributors report that activity has dropped since early October. This is being felt more by smaller players because of the commercial actions of large and mill-tied enterprises who are actively destocking. All buyers concur that they are only purchasing the strict minimum, as they aim to have very low inventories by the end of the year.
There is a great deal of uncertainty in the Italian market at every level. This is not facilitating business activity. Domestic steel demand is poor since end-user consumption has slowed, particularly in the construction, automotive and white goods sectors. Export markets have also weakened. There is no significant import pressure at present but suppliers from Turkey and Russia are looking for orders and may start to offer quite soon.
The current financial issues in mainland Europe have had a disruptive effect on steel business in the UK, where confidence is at a low ebb. Ex-mill basis figures have continued to slip over the last month. End-users and distributors have managed stocks down to a low point. Several service centres claim that their sales volumes are reasonable but that margins need lifting. However, the recent downward drift in resale values may now have halted.
As expected, Spanish consumption has deteriorated further. Service centres refuse to build up inventories and continue to just buy what they need for tomorrow. The mills have offered more price concessions, despite a lack of third country competition. Distributors’ resale values are below replacement costs, and, in some instances, they are losing money just to generate cash.

Report Courtesy of MEPS

Technorati Tags: Steel,Steel Industry,Europeam Steel,Steel Prices

Steel Strip demand and prices weaken

2011-10-25T15:18:00.001+01:00

Unsurprisingly, the economic uncertainty within Europe is impacting upon demand and resulting steel prices.

The most recent MEPS report sums up the situation

EU buyers are reluctant to place orders on the mills as concern over the current financial crisis is undermining business confidence. They believe that prices could go down even further and so are staying out of the market for now. Because demand is so mediocre, the output cuts that European producers have implemented so far have not had any positive effects on basis values. However, more are planned by several steelmakers.
The German strip market is described as “difficult”. Activity has not recovered from the lows experienced during the summer. End-users are postponing orders. Service centres are keeping inventories low because they are unclear about the direction of prices. Many of them purchased third country imports earlier in the year when values were higher. This material is now arriving and they are forced to sell at a discount. Domestic mills have reduced their offers for now. They will curb capacity to try to stabilise the market.
Given the current economic and financial uncertainty, French buyers remain very cautious, even if stocks are run down. This trend is not expected to change, with the end of the year looming. There is some demand from end-users but they are challenging distributors’ resale prices. Ex-mill basis values are also under pressure. The producers appear to be unwilling to drop them any further, preferring to adjust their output instead.
The Italian economy is very weak and turmoil in the financial markets has dampened sentiment significantly. Delivery lead times from the domestic mills are short. Stocks at the ports have gone down substantially. A favourable exchange rate has been shielding the Italian producers from new import competition as well as helping them to export.
End-user demand tends to be sector specific at present in the UK. Distributors’ margins are poor as resale values are continually weakening. Ex-mill figures are fairly steady because producers realise that further discounts are unlikely to generate more business.
The capacity reductions are taking time to have any positive influence on the Spanish market, where the threat of recession has caused business confidence to evaporate. Activity has not picked up, with buyers placing small orders only when they are desperate for material. Traders are finding it virtually impossible to find new third country offers at competitive rates.

ECONOMIC TURMOIL LEADS TO WEAKNESS IN EUROPEAN STEEL MARKET

2011-09-21T10:40:00.001+01:00

ECONOMIC TURMOIL LEADS TO WEAKNESS IN EUROPEAN STEEL MARKET latest MEPS report

Despite earlier market expectations to the contrary, European demand has not picked up following the long holiday break. This is partly due to grave concerns over the financial situation across the region. The mills are experiencing low levels of order entry and, consequently, some production cuts have already been announced. ArcelorMittal has idled several of its blast furnaces in France, Belgium and Germany. This may also have to happen at other European sites. Producers have signalled their intention to push up strip mill prices for the fourth quarter but the success of this initiative is questionable. Third country material, booked earlier in the year, is now starting to arrive at the docks but the import threat, as far as new orders are concerned, has receded.
There are fears of a serious slowdown in the German market. The summer months of July and August have been exceptionally quiet. End-users have work for now but their forward order books are looking thin. Buyers are reluctant to place steel business before they can clearly see the direction of prices in the final trimester. Current domestic spot market values are slightly below those tabled in July.
Activity remains sluggish in the French market in early September. There is little enthusiasm to purchase, especially with today’s economic turmoil. Distributors are working with the steel they have in stock. Nonetheless, producers have been talking about increases. However, buyers do not believe the current market situation can justify any advances.
In Italy, Riva, Marcegaglia and Arvedi have announced price hikes for strip mill products with immediate effect. However, in reality, there has been continuing weakness during the summer. The economic chaos, widespread through the eurozone, is worrying customers, who see no hope of improvement in the steel industry in the near-term, either at home or abroad. Consumption is at a low ebb.
The UK market is described as “weak and depressing”. Producers reacted to a lack of orders by slashing prices, week on week, through August but things may have settled now. Customers who took advantage of these opportunities are now covered for most of period four. Distributors report that business is as tough as ever, which is a reflection of the general economic situation. Their resale values are under considerable pressure.
The Spanish scene is described as “dreadful” with a continuation of July’s total lack of activity. Confidence is very low. Service centres report that they are selling less than in the first two quarters because end-user consumption is dire.

MEPS German Steel Price Report

2011-07-19T13:27:00.001+01:00

Most consuming sectors of hot rolled coil are healthy with the exception of the pipe making industry, which is weaker than the others. The steel companies, seeing that demand was not huge, have revised their figures downwards to a greater extent than was anticipated by several buyers. Stocks at the service centres are relatively low. Distributors will need to purchase after the holidays and some may even start to do so in the remaining weeks of July, while prices are low.

The German mills are not so dependent on the commodity grades as their rolling schedules are full with orders for the more exotic qualities for the next three months and beyond. Wind tower and line-pipe markets are particularly busy. Consequently, producers have held on to prices for commercial material, although customers are pushing for discounts by quoting cheap Chinese offers.
European cold rolled coil demand shows no signs of revival. Customers are wary of placing new business because they anticipate that prices could go even lower.
Although underlying consumption is good in Germany, most buyers have postponed order placement in the hope of cheaper prices in the latter half of the third trimester. As a result, the mills have offered substantial discounts.

More detail in the full report here

Technorati Tags: steel,prices. MEPS

UK manufacturing growth 'stalling'

2011-07-02T08:02:00.001+01:00

UK manufacturing sector growth fell to its lowest rate for 21 months in June as new orders declined, a survey says.

The Markit/Cips manufacturing purchasing managers' index (PMI) for June fell to 51.3, down from May's downwardly revised measure of 52.0. A figure above 50 indicates expansion.

Markit said that growth was "stalling", with weak domestic demand and the recent boost to exports now fading.

However, there were signs that inflationary pressures had eased.

"The manufacturing sector continued to slip closer to stagnation in June," said Rob Dobson, senior economist at Markit.

"The data will call into question the sector's ability to play a major role in delivering a robust and sustainable economic recovery."

More at BBC News

Steel cartel accused of defrauding Deutsche Bahn

2011-07-01T07:04:00.001+01:00

Prosecutors are investigating dozens of people across 10 companies over allegations that they built a cartel to fix the price of railway steel and defraud national carrier Deutsche Bahn for hundreds of millions of euros.

According to prosecutors in Bochum and the Federal Cartel Office, the antitrust case may be among the biggest in decades with 30 individuals under investigation.
Rail steel prices may have been artificially inflated by hundreds of millions of euros over the years, the Westdeutsche Allgemeine Zeitung (WAZ) reported.
The cartel allegedly operated for 10 years before breaking up in 2008. Big companies are linked to the scandal, including GfT Gleistechnik, a subsidiary of steel giant ThyssenKrupp.
"Our interest is to investigate the case quickly and comprehensively," said a company spokesman. He added that company bosses were co-operating with investigators and that the company was dedicated to doing ethical business.
According to WAZ, the members of the cartel called themselves the “rail friends” and met up to six times each year at places like Da Bruno, a Duisburg restaurant best known for a Mafia-related shooting in 2007.
To try to throw off authorities, they used code-names like “Hannibal Lecter” and “Dominatrix.”
The cartel was complex, diverse and international, prosecutors believe. It included participants from German, Swedish and Czech companies. Those involved in the scheme fine-tuned arrangements through encrypted messages and phone calls, according to WAZ.
The secret group fell apart in 2008 when a subsidiary of steel-maker ArcelorMittal undercut the cartel’s prices by 35 percent

http://www.thelocal.de/national/20110630-35983.html

New owner for Steel Business Briefing

2011-06-30T08:10:00.001+01:00

The McGraw-Hill Companies, Inc., today announced that Platts, a division of McGraw-Hill and a leading global provider of energy, petrochemicals and metals information, has signed an agreement to acquire the Steel Business Briefing Group (the SBB Group), a privately held U.K. company and leading provider of news, pricing and analytics to the global steel market. The SBB Group provides subscription-based, electronic products to the steel industry and its participants through two principal businesses, Steel Business Briefing (SBB) and The Steel Index (TSI). Financial terms were not disclosed. The transaction is expected to close on July 1 subject to customary closing conditions.

Read full story at PR Newswire

EU strip prices slip whilst long products remain strong

2011-06-29T13:28:00.001+01:00

MEPS Report :Flat coil products prices continue to decline in northern Europe. Selling values in the Nordic countries have fallen by a greater amount than those in the rest of the continent this month, bringing them closer together. Demand is steady at a relatively low level but, inevitably, sales will slow around the summer holiday period.
Activity in the German and Swedish auto industries is robust and continues to support business in neighbouring countries. Quarterly prices are expected to fall substantially between the second and third periods. However, some producers are only committing to July deliveries as they believe they may later be able to secure higher returns for August and September shipments.
The market for higher specification quarto plates is buoyant, with healthy demand from energy and offshore applications. Increased activity in construction, yellow goods and truck manufacturing has led to increased consumption of commodity plates, resulting in prices being rolled over this month.
Rising scrap costs and growing demand from the building industry have brought about higher prices for reinforcing bar and mesh quality wire rod in all EU countries. Drawing quality wire rod values, though, have continued to slide in the Nordic countries. There has been little change in selling figures for medium sections and beams and merchant bars. Demand is relatively subdued but there are signs that values for these products, too, may be bottoming out.

MEPS

Technorati Tags: EU steel price,MEPS

MEPS EU steel Prices – latest report

2011-03-30T11:26:00.001+01:00

There is something of an impasse in the west European flat products market as customers prefer to sit on the sidelines rather than place business at the inflated prices being demanded by the domestic producers. Consequently, order intake at the mills is slow. Many companies have stocks that are adequate for now. These were purchased in late 2010 and early 2011, ahead of the increases. Buyers think that the steelmakers may eventually be prepared to relax their offers. However, escalating raw material costs in the second quarter are likely to persuade them to push for further hikes.
German customers are battling higher basis values because final users cannot always pass on their growing costs by putting up the price of their finished goods. The market is quiet since many companies have enough steel in stock and are not ready to pay more just yet.
In France, last month's surge in basis values is tailing off. Producers are finding it more difficult to implement further increases as demand remains moderate. Some buyers will not order as they claim to have sufficient material to enable them to wait until the summer holidays. However, mill delivery lead times are extending and a number of distributors' inventories are quite low.
Italian end-users, having decided not to accept further increases, have virtually stopped purchasing. Consequently, the stockholders have problems recouping the most recent mill hikes from their customers and are now living off existing inventories. They bought heavily at the end of 2010 and can afford to wait before reordering. For now, the producers are still claiming the inflated numbers but cannot sell at these levels. Moreover, quantities of third country imports are arriving at the Italian ports, so the domestic mills may well be forced to reduce their price expectations.
The UK market has been quite busy as both service centres and end-users bought ahead of perceived price rises. MEPS has noted a number of upward price movements over the last four weeks. However, some distributors are already well covered for the second quarter. Having bought third country tonnage at the end of last year, they do not need to pay the higher values that local mills are demanding. At present, there are few new attractive foreign offers to dampen the positive tone of the market.
Spanish steel consumption is absolutely flat. The economic situation shows no positive signals. The service centres were relatively busy in January/February as end-users tried to beat the price advances but the market is quieter now. Distributors are struggling to recoup the mill increases. Companies bought third country material quite heavily last November. This is now starting to arrive at the ports, so they are in no hurry to re-order.

Source MEPS UK

Whilst 2011 and has started quite strongly in the UK, it does seem that buyers are now holding off placing orders. Although some products are short on availability, stocks seem generally high within the market and companies are holding back on re-ordering. It is clear that the steel producers are eager to push prices higher, but a strong resistance amongst end users to accept further increases is squeezing the distributors.

Technorati Tags: europe,Steel strip prices,MEPS

Teeside steel plant to re-open

2011-02-25T07:42:00.001Z

Thai company SSI has signed the deal over Tata Steel's Teesside Cast Products (TCP), securing the future of the plant's 700-strong workforce.

The sale comes a year after the Redcar plant was partially mothballed after a major contract fell through.

The transaction - which should also create hundreds of new jobs at the site - is due to be completed by the end of March, the two companies said.

Head of Tata Steel Europe, Karl-Ulrich Kohler, said: "I am very encouraged that after all our efforts we have been able to reach this agreement, which is good news for the highly skilled and dedicated Teesside workforce.

"I commend SSI, the government and the trade unions for their roles in bringing about this agreement, and in particular the people of Teesside for the spirit and fortitude they have shown throughout the last, difficult two years."

Technorati Tags: Teeside,Corus,Steel

EU Average Hot Rolled Coil transaction price soar

2011-02-17T15:30:00.001Z

The MEPS - EU Average Hot Rolled Coil transaction price soared by almost €100 per tonne in February. Buyers are anticipating further increases in domestic values of flat products in the second quarter as steelmakers make large upward adjustments, in line with higher raw material costs. The EU mills are currently busy because of the restocking exercise that started in December ahead of price rises.
According to the latest research from MEPS, German distributors are experiencing a revival in market demand, amidst well regulated inventories. The mills are pushing for even more increases. These inflated prices could begin to suck in imports later in the year. Although buyers are agreeing higher basis values because they have no real alternative at present, they are only ordering what they need.
Basis figures are continuing to rise in the French market. End-user demand is described as "moderate". There are some third country imports at the docks but quantities have recently dwindled.
All the mills supplying the Italian market are ramping up their basis values. Distributors have been restocking in anticipation of even more expensive steel in the future. However, MEPS notes final consumption is far from robust and, consequently, end-users are reluctant to pay more.
Mill basis numbers are escalating in the UK and resale values are also progressing quite rapidly. The movement is not underpinned by any serious recovery in underlying demand - with the real driver being raw material costs and limited availability from domestic sources.
Having stocked up in the final quarter of 2010, Spanish distributors are now ready to reorder. However, they are only buying just the minimum quantities to keep business ticking over. Current prices do not reflect demand which is stable at a low level.

Technorati Tags: Steel strip,steel prices

Tata announce £95 price increase in UK

2011-02-02T08:15:00.001Z

Tata have announced a £95 price increase on structural steels in the UK. The increase in prices will take effect on all deliveries from March 6th 2011.

The company are quoting the rising costs of raw materials as the main reason for the price hike.

Flat product prices have risen by an average of around £60.00 already throughout Europe and contractual customers in the UK are facing price increases of around £80 from Northern European suppliers from April.

Demand still remains weak, with the construction sector in depression and modest activity in the automotive industry.

Technorati Tags: Steel prices,Tata,UK,steel sector

Steel prices set to soar

2011-01-25T13:01:00.002Z

Steel prices are set to soar by 60 per cent this year according to industry experts.

The expected price rise in 2011, to an average of just under £610 a ton, has been caused by demand in the Middle East and the Australian floods which have shut down coal mines needed in steel production.

If the predictions are correct, then the rise in steel prices during the year will be the second-biggest jump since modern records began in the 1940s.

Technorati Tags: steel. steel prices

World Average Carbon Steel Price is forecast to exceed $US 1000 per tonne

2011-01-17T15:17:00.001Z

Meps Forcast

The MEPS – World Average Carbon Steel Price is forecast to exceed $US 1000 per tonne in the third quarter, according to preliminary analysis by the company. This figure compares with an annual average in 2010 of $US 733 per tonne and an ‘all-time’ high in 2008 of $US 1160.

The sharp rise in steel prices will be driven initially by higher input costs for the mills. The Australian floods are limiting supplies of coking coal – pushing spot prices even higher. Iron ore prices are steadily rising due to restricted availability from India. Scrap costs continue to escalate. These are vital ingredients of steelmaking.

Many steel buyers will be lifting their order volumes in an effort to purchase ahead of the impending price hikes. This should enable the mills to lift their margins on sales. All these factors are likely to push the MEPS World Average Carbon Steel Price through the $US 1000 per tonne barrier once again.

We already seeing prices increasing, and lead times extending. Maybe this year we will not see the easing back of prices that occurred in the second half of 2010.

Technorati Tags: steel prices,MEPS

ASD expanding in Yorkshire

2011-01-14T08:23:00.001Z

ASD Metal Services, a division of German metal group Klöckner & Co, is to double the size of its facility in Leeds.

The steel and aluminium stockholder and distributor has taken a 15 year lease on 215,000 sq ft, creating a combined facility of 400,000 sq ft.

Kaha Avaliani, chief executive of ASD, said “The acquisition of the adjoining premises will enable us to centralise our stock holding activities and increase efficiencies within our distribution chain. The new facility will also allow us to carry a greater range of stock items and through the installation of new machinery offer a new service to our existing and future customer base.”

Technorati Tags: steel,steel stockholding,ASD

Niagara Lasalle takeover

2011-01-12T08:19:00.001Z

Willenhall-based steel firm Niagara Lasalle has been taken over by investor Endless in a £27 million deal.

The investor, which specalises in turnarounds, purchased the 300-strong West Midland firm from its US parent company Niagara Corporation.

Niagara Lasalle, which provides hot rolled and bright steel bars in engineering steel grades, had a turnover of more than £60 million last year.

Read the full story at the Birmingham Post.

Technorati Tags: Niagara Lasalle,steel,steel bar,UK

Tata Steel to invest in steel distribution site for the wind energy market.

2011-01-06T09:14:00.001Z

Tata Group has become the latest major company to tap into the growing UK offshore wind energy market with plans to invest £1.3m in a processing and distribution centre at their Scunthorpe steel works with a manufacturing hub capable of handling 200,000 tons of steel plate per year, supplying fabricators for the construction of the tubular wind tower structures.

The full article can be read at the Maritime Journal.

Technorati Tags: Tata Steel,Scunthorpe

Australian Floods and Steel production

2011-01-06T09:03:00.001Z

The recent floods in Australia are having a major impact on coal mining. As Australia is one one the top five coal exporters in the world this is certain to have an impact on the availability of “coking coal” used in the manufacture of steel.

Whilst the most immediate effect will be felt in the South East Asian markets, the global nature of the industry today, with an inevitable rise in the price of coke and the cost of steel production.

Steel companies have already been speaking bullishly of a steady increase in demand for 2011 and coming price increases. Events in Australia are only likely to add to upward pressure on prices.

Technorati Tags: steel prices,coking coal,Australia

Flat steel prices expected to recover soon- latest MEPS Report

2010-11-18T12:16:00.001Z

Strip mill product prices have continued to deteriorate over the last four weeks but may well be nearing the bottom now. Mill order intake is slow as stockists hold back from buying significant quantities in case basis values weaken further and also to minimise their inventories as the year-end approaches. At present, there is oversupply but some mills are now reducing capacity accordingly. Moreover, stocks in the supply chain will need replenishing soon. Any price developments for the remainder of the final quarter, especially in Southern Europe, will be heavily influenced by movements in the US dollar/euro exchange rate.
In Germany, an uptick in the general economy has not, so far, translated into any sizeable growth in steel purchasing, although order intake is relatively strong compared to other countries in the region. Major steel consuming sectors such as auto and mechanical engineering are performing quite well, while construction continues to falter. For the moment, both distributors and end-users are controlling their stocks at a low level. Nevertheless, the negative pressure on flat product prices continues. A great many customers are hesitating before placing business because they fear basis figures may go lower. Moreover, the fiscal year-end is close, so companies do not want to be carrying a lot of stock. There is no real threat from third country imports as the offers that do exist are not particularly attractive. Southern European coil is available at comparable numbers and delivery lead times are relatively short.
Demand remains weak in France, where prices have continued to slide. Even though producers are endeavouring to contain the decreases, they are willing to offer discounts when large tonnages are involved. There appears to be no hope of any immediate reversal in this trend whilst end-user activity remains so poor.
Italian sales are extremely weak as many buyers are loathe to order because they have enough material in their warehouses to see them through to the year-end. However, traders report that their business picked up a little at the beginning of November as a number of clients needed steel for the New Year because their stocks were so low. Overseas material is becoming cheaper as the US dollar slides, although local market players believe prices are quite close to the bottom. Domestic mills continue to align down to meet these offers.
The UK market is described as "pretty grim", with activity levels even more quiet than in October. Domestic producers are struggling to keep prices level against competition from outside Europe as the currency exchange rate moves in favour of importers. Although the volume of steel in the supply chain is very low, resale values have fallen further due to severe competition between stockists for the few orders available. Many will not buy more material until January because they cannot get forward commitment from end-users.
Producers have marked down Belgian basis figures since our October report but values are starting to stabilise now. Some period one 2011 business has already been booked at fourth quarter prices but a good many customers are postponing buying, fearing further erosion. However, supply should tighten soon as local mills are reducing capacity and imported material is not popular. Generally, demand is rather stable.
The Spanish market is quieter than usual in the pre-Christmas period. The US dollar is very weak, depressing import values. The European mills have reacted by cutting basis numbers again. Exporting is difficult because of the exchange rate. Customers are staying out of the market wherever possible, anticipating further decreases. Real consumption has not changed. Distributors and consumers continue to constrain stocks.

Report courtesy of MEPS.

Technorati Tags: Steel,Steel Strip,Steel Prices

Steel workers strike in Germany

2010-09-23T08:38:00.001+01:00

German steel workers are striking for three days after pay talks broke down between the IG Metall union and employers.

Thousands of them walked out on Wednesday in the Ruhr Valley, Germany’s industrial heartland.

They want a six percent increase in wages which the employers have called unreasonable.

The steel workers are also opposed to government plans to raise the retirement age to 67 and they want temporary workers to be paid the same as full time staff.

The union’s chief negotiator Oliver Burkhard said: “We want to ensure the principle of same money for the same work. It’s crazy that people get different salaries for doing the same work. And we demand fair conditions for workers over pensions, because we believe that a retirement age of 67 doesn’t work in the steel industry because people are doing physically hard jobs.”

The unions said the six percent increase – which is way above inflation at one percent – is to compensate for sacrifices made during the economic crisis.

Salary negotiations in Germany’s steel industry are often used by unions in other sectors as a benchmark for their salary demands.

Technorati Tags: Steel,Germany,steelworkers,strike

Meps latest EU steel prices report

2010-09-23T08:17:00.001+01:00

Demand continues to remain slow, and the steel producers continue to mumble about price increases:

Strip mill market values in several West European countries slipped during the summer and look as if they may continue to drift for some products. Producers are expected to try for some small improvements over the next few weeks as negotiations are concluded for fourth quarter delivery. There are no huge stocks in the supply chain and third country material at the dockside is lacking. However, raw material costs are no longer soaring which may deflect recent mill augments for price increases.
In Germany, market values fell during the July/August period. Much of the negative pressure was caused by Italian suppliers who were keen to book business before the vacation. Both Thyssen and ArcelorMittal are proposing higher figures for period four deliveries. However, customers are questioning whether present demand can support the initiatives, especially in an environment where raw material expenditure and freight rates are declining. Although new offers from third country sources are few, there will be material arriving soon that was purchased comparatively cheaply. This could compel the European mills to offer concessions.
French demand has improved a little since the beginning of September. A number of distributors are placing new business because stocks are low and prices may rise in October. Negotiations are in progress, with the steelmakers looking to implement a €30 per tonne rise. Producers say order books are filling up even if basis figures have not been agreed yet.
Confidence is returning to the Italian market. There are definite expectations that the final trimester will be better than the earlier part of the year. Prices are showing some small improvements compared to late July when basis numbers fell further because local mills aligned down to import levels. Third country suppliers are now jacking up their offers by at least €20/30 per tonne, leading to predictions of similar movements in domestic values.
UK service centres report that there is so little demand from end-users that they have been forced to cut resale values quite dramatically. Activity has been very quiet through the summer. A lack of orders in late July led to significant mill price reductions during August. Market participants are expecting a brief restocking phase this month. However, many companies have learnt to survive with much smaller quantities of material than was the case historically.
The Belgian market is not particularly busy as customers wait to see whether the mills will implement their fourth quarter price proposals. Third country imports were booked before the holidays, relatively cheaply. This material, which is due to arrive in ports during October and November, could threaten price stability. There are few new overseas offers at present.
End-user consumption is slow in Spain, with only a small number of deals being concluded during August. Some cautious restocking is now underway at the distributors, where inventories had become very depleted. The mills conceded discounts over the summer but the price pressure on both imports and domestically produced material is now upwards.

Steel Price News from MEPS

Technorati Tags: Steel,steel prices

Steelmaking and Pricing

2010-09-14T09:56:00.001+01:00

I came across this article by Bridget Freas over at the seekingalpa site.

Whilst the article concerns the future of the steelmaking industry from a financial viewpoint, it raises some interesting points with regard to steel pricing.

Historically demand has been the major factor in steel costs with Steelmakers quick to seize opportunities to increase prices in the good times and equally fast at cutting prices to retain market share during a slump in demand.

The following excerpt is taken from the full article which is an intelligently written and thoughtful report

Prices Are Not the Indicator They Once Were

It used to be that higher steel prices came from stronger demand, as supply was relatively fixed in the short term. This is no longer so. First, in recent years, steelmakers have increased their ability and willingness to adjust production to meet demand, so supply has played a greater role in determining prices than it has in the past. Second, steel buyers and distributors have improved their working capital management, and are able to operate with much smaller inventories than in the past. Therefore, short-term supply changes can have a much greater impact on steel prices by creating the impression of a shortage when the supply chain is lean. Given the degree to which higher-cost inventories weighed on the earnings of steel mills and steel buyers when prices tanked in late 2008 and early 2009, lean inventories have become de rigeur.

Whilst raw material costs (particularly iron ore) were important factors in driving up prices during the first half of 2010, the management of production levels by the Steelmakers has played no small part. As demand grows very slowly it is unlikely that we can study past trends looking for price indicators, but if I were a betting man I would not risk “a punt” on steel prices falling.

Technorati Tags: Steel Prices,Steelmaking

Corus sell Teeside plant to SSI

2010-08-27T12:53:00.001+01:00

Tata Steel’s European arm Corus on Friday entered into a pact with Thailand-based Sahviriya Steel Industries to sell its Teesside Cast Products plant in the UK for about $500 million.

“Corus UK Ltd and Sahaviriya Steel Industries Public Company Ltd today signed a Memorandum of Understanding which sets out the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products (TCP) business in a transaction valued at approximately $500 million,” Tata Steel said in a statement here.

Tata Steel said that the deal, if successfully concluded, is expected to create a significant number of new jobs at the plant in addition to TCP’s existing workforce of over 700 and will provide a considerable boost to the local economy.

“The assets covered by the MoU include the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities,” it added.

Corus MD and CEO Kirby Adams said, “We are very pleased to announce this significant progress in our long-held objective to sell the TCP assets to a strategic industry investor.

Technorati Tags: Corus,SSI,Teeside

Corus and carbon credits

2010-07-22T09:15:00.001+01:00

Corus has confirmed that unused carbon credits will form part of any deal struck on the sale of its Teesside Cast Products plant; a recent report says the company had one of the highest surpluses of carbon allowances in Europe. The steel maker was among three EU companies left with the most unused carbon credits in 2009, due to a global downturn in steel production, according to analysts Carbon Market Data.

I wrote about the carbon credits issue back in February.

At the time The closure led to concerns that Corus, owned by Indian billionaire Ratan Tata’s business empire, may seek to trade the carbon credits that were freely allocated to the plant.

Carbon credits can be a “money maker” for multinationals in a way that is totally outside the spirit and purpose of the original agreements and as in this case cost real jobs in an area of the UK that badly needs work.

Shame on Corus.

Technorati Tags: Corus,carbon credits

Corus to take on 154 new workers

2010-07-22T09:03:00.001+01:00

Steel firm Corus is to take on 154 new workers in South Yorkshire, and resume apprentice and graduate recruitment, it has been announced.

The latest plans will bring the number of new workers hired by the firm to more than 300 since March, with the Speciality Steels division recruiting trainees for the first time since the recession started.

The new jobs will be in South Yorkshire and were an investment in the future of the business, said Corus.

It is just over a year since Corus made over 1000 redundancies.

Technorati Tags: Corus,Steel,Jobs

Could rising ore prices halt recovery?

2010-07-05T12:42:00.001+01:00

Came across this interesting article on the BBC website today

By Tim Bowler
Business reporter, BBC World Service

Are the world's iron ore mining companies putting the world recovery in jeopardy, by forcing up prices?

Iron ore is a key component in the manufacture of steel, and is used in construction and heavy industry everywhere.

It may not have the immediate glamour of a precious metal, like gold, but is nevertheless vital for economic growth.

Steel itself is used in a myriad of everyday products - from household items such as fridges and washing machines, to cars, buses, trains and the steel girders used in most office buildings.

Three big mining companies, Rio Tinto, Vale and BHP Billiton, dominate the global market in iron ore.

According to their customers, the steelmakers, they are putting up the price of iron ore unfairly. It's a charge the mining companies deny.

Pricing switch

In the past, the mining firms used to fix the price of iron ore once a year. But this year they have switched to three month contracts, and iron ore prices have risen steeply.

The steelmakers argue that higher raw material costs could push up costs for manufacturers and consumers, and thus threaten the global recovery.

Read the full article here

Whilst market forces dictate that increasing demand will inevitably lead to increasing prices, competition amongst suppliers helps to negate the most extreme moves. However when there are only three major suppliers in the world they are close to being in a monopoly position and able to exert price increases almost at will.

When it is important to get the global economy moving again the fact that a single sector in an important supply chain can wield such power is a worrying issue.

Technorati Tags: Iron ore,Steel,economy

Steel tensile strength conversions

2010-06-18T09:11:00.001+01:00

The tensile strength of steel can be quoted on a number of imperial and metric scales. The factors below are useful for converting.

One newton per square mm is equal to :-
Metric
bar	10
kilopascal	1000
hectopascal	10000
megapascal	1
millibar	10000
pascal	1000000
kilogram per square centimetre	10.19716
kilogram per square metre	101971.6
newton per square metre	1000000
kilonewton per square metre	1000
meganewton per square metre	1
newton per square centimetre	100


British and U.S. (Imperial system)
thousand pounds per square inch	0.1450377
pound per square inch	145.0377
pound per square foot	20885.43
ton per square inch	0.07251887
ton per square foot	10.44272

Whilst conversions between tensile strengths and steel hardness are not exact comparisons a chart showing comparisons can be found here.

Technorati Tags: steel tensile strength,steel hardness

MEPS report steel demand collapse in Europe

2010-06-18T08:09:00.001+01:00

EU STEEL COIL PRODUCERS FACE HIGHER INPUT COSTS AS DEMAND COLLAPSES

Market sentiment has been knocked by the recent economic turmoil and sovereign debt issues in the eurozone. Strip mill product prices are fairly flat this month. Domestic producers are still keen to lift basis values significantly for the third quarter. However, most steel consumers and distributors are comfortable with their current inventory levels and are purchasing prudently. Consequently, the market is very quiet and the number of mill bookings is extremely low. The steelmakers may eventually be forced to go below their target selling figures to generate business, at least for the commodity grades. It may be easier to secure increases for the higher specifications. In recent days, the mills appear to be acknowledging the overall weakness in the market. They are said to be considering output cuts during the third quarter.

Read the full report here

Expect cut backs in production as the European steelmakers try to protect price levels

Technorati Tags: MEPS,Steel,Europe,steel demand,steel prices

Spring Steel Strip in small quantities

2010-06-09T09:12:00.002+01:00

BSS Steelstrip are specialists in supplying small quantities of spring steel strip. We can offer a wide range of sizes to suit small volume manufacturing and for prototype development work.

We are able to offer a wide range of materials for small batch production and development and prototyping, including:-

Hardened and tempered polished polished carbon spring steel in CS80, CS90, 75CR1 and CS100 from 0.05mm to 4.00mm

Hardened and tempered stainless spring steel in type 420 from 0.1mm to 3.00mm

CS70 annealed spring steel strip

Temper rolled type 301 stainless spring steel from 0.005 to 1.20mm

Additionally we can supply stainless and mild steel hard rolled shim stock, medium carbon sheet, music/piano wire, and spring steel blanks.

As a further service to designers and product developers we are able to offer laser cut profiles to your drawings and small batch spring production.

For more information call Steve on 01709 530591

Tata Corus price increase

2010-06-08T08:29:00.001+01:00

TATA Corus has increased transaction prices for reversing mill plate by GBP 60 per tonne on all new orders from June 4.
It said “The increase is driven by further rises in raw material costs and continued improvements in demand for steel plate.”
M Paul Parkins, Corus Commercial Manager, Plates, said “We’ve seen a sustained recovery in demand for reversing mill plate following the economic downturn, particularly in northern Europe and North America. Stocks in Europe are at low levels and we believe the pressure on supplies will continue to increase. Consequently, mill lead times have extended significantly this year. At the same time steelmakers are facing increased production costs relating to continuing upward movement in raw material costs. The weakness of the euro and sterling against the dollar is adding to these cost pressures.”
Corus raised reversing mill plate prices by GBP 60 from February 7, by GBP 60 from March 22 and by GBP 80 from April 23.

Technorati Tags: Tata Corus,reversing mill plate,steel prices

More steel capacity cuts

2010-06-08T08:24:00.001+01:00

Hot on the heels of the recent announcement by ArcelorMittal of possible steel production cutbacks, Bloomberg are reporting discussion of cuts in China:

Chinese steelmakers are likely to cut production in the third quarter because of “weak” demand from auto and appliance makers, according to the nation’s second- biggest mill.

Slower demand may prompt smaller makers to default on iron ore contracts in the third quarter, Baosteel Group Corp. Chairman Xu Lejiang said today at the Bloomberg

“Many steelmakers will cut production or carry out maintenance in the third quarter,” Xu said. “Steel demand from automotive and home appliance industries has become weak. Iron ore costs will be the highest in the third quarter.”

Mills face a “difficult” second half, Xu said last month as concern increases that measures to curb speculation in the property market will trim demand. Baoshan Iron & Steel Co., Baosteel’s publicly traded unit, cut prices on June 4, the first time in eight months.

“Many Chinese steelmakers are either losing money or close to losing money,” Michelle Applebaum, who runs a steel-research firm in Highland Park, Illinois, wrote in an e-mail today. “The timing on iron ore price increases in the coming months is very poor for many of China’s higher cost smaller steelmakers.”

Read the full report at Bloomberg Business Week.

Steel prices have increased rapidly during 2010 and have only weakened very recently in Asia. Steel prices remain high in Europe and North America. Steel Mills appear to be reacting rapidly to a threat of prices collapsing by taking capacity out of the market to align with lower forecast demand. A proportion of the recent price rises was based on increasing iron ore costs. One of the moves by the iron ore produces was to insist on shorter fixed contracts, presumably to give them scope to increase prices more frequently. If demand is falling it may turn out to be a move they will regret.

Technorati Tags: Steel,Baosteel,steel demand

Arcelor to cut steelmaking capacity?

2010-06-07T09:29:00.001+01:00

ArcelorMittal, said on Thursday it was considering halting up to three European blast furnaces (BFs) in the third quarter to meet lower demand. "In Europe the third quarter is characterised by lower demand due to summer vacation shutdowns.

In order to be prepared ArcelorMittal is technically in a position to reduce its production by stopping up to three BFs in Q3," the company said in an emailed statement.
"No decision if and where and when has been taken," it added.

Cutting capacity to protect prices at a time of low demand is a tactic used regularly by steelmakers.

Technorati Tags: ArcelorMittal,steelmaking,Europe

MEPS expects Global steel prices to have peaked in May

2010-06-06T12:30:00.001+01:00

The latest MEPS report suggests that steel prices may have reached a peak. Despite this Northern European Mills continue to pursue price increases for the third quarter:-

Excerpt:

In Western Europe, producers are talking up period three prices but firm negotiations are only just starting. Customers believe that some of the numbers being proposed are far too high relative to current demand conditions, in which case, they would not be sustainable. Many buyers purchased sufficient material during the second quarter, ahead of anticipated further hikes. They can now afford to adopt a "wait and see" approach.

The availability of lower price raw materials from traders and suppliers outside of Europe and continuing weak demand is liable to put pressure on the mills. With iron ore and scrap prices weakening, it will be increasingly difficult for steelmakers to justify the continuing demand for increased steel prices.

Read the full MEPS report here.

Technorati Tags: Steel Prices,European Steel Producers,MEPS

Corus To Build Pilot Plant That Could Reduce Steel CO2 By 50%

2009-11-29T10:24:00.001Z

Corus, the European unit of Tata Steel Ltd. announced Friday plans to build a new pilot plant at its Ijmuiden, Netherlands steelworks to test a new steelmaking process that could potentially reduce carbon dioxide (CO2) emissions by more than 50%, the company said Friday.
The company is working in consortium with the Ultra-Low CO2 Steelmaking research group or ULCOS to build a pilot plant to test a new technology called Hisarna.
The pilot plant will cost EUR20 million to build and will be able to produce 60,000 tons of steel a year. The plant should be operational by the fourth quarter of 2010, a Corus spokesman said.
Hisarna combines two technologies to reduce CO2 emissions. The first technology, developed by Corus, melts iron ore fines in a cyclone. The second technology, developed by Rio Tinto PLC is called Hismelt and places the iron ore in a smelter vessel for final ore reduction and iron production.
The new steelmaking process requires significantly less coal usage and thus reduces the amount of CO2 emissions. Furthermore, it is a flexible process that allows partial substitution of coal by biomass, natural gas or even hydrogen(H2).
The new process could improve energy efficiency by 20%, Corus said.
The Dutch government is contributing EUR5 million while ULCOS and the European Commission will contributed the remaining EUR15 million in funding.

Tata Steel seeks partners for Teesside unit

2009-11-27T08:20:00.001Z

Tata Steel is looking for joint venture partners to run its Teesside plant in England, according to Mr Kirby Adams, CEO of Tata-Steel Europe.

The plant belongs to Anglo-Dutch steelmaker Corus, which Tata Steel acquired two years ago.

The plant had run into trouble early this year after a consortium of buyers, which had committed to buy nearly 80 per cent of the Teesside plant output, terminated the contract. The loss before interest, depreciation, taxes, amortisation (EBIDTA) on account of Teesside plant in the first half was $220 million.

The four buyers that had backed out were Italy-based Marcegaglia SpA, Korean firm Dongkuk Steel Mills Co Ltd, Brazil’s Duferco Participantions Holding Ltd and Alvory SA, a subsidiary of Latin American steelmaker Ternium.

The consortium had signed an Offtake Framework Agreement (OFA) in 2004 to buy 78 per cent of the plant’s production for 10 years. They terminated the agreement before the completion of the term.

Tata Steel has undertaken arbitration and legal proceedings against the companies.

Full story

Technorati Tags: Corus,Tata,teeside,steel

MEPS steel price roundup

2009-11-26T08:43:00.001Z

MEPS reported a generally weak market in November with the exception of China.

“Raw steel output continues to climb steadily in the US. Mill utilisation rates were up to almost 65 percent in the first week of November. However, the recent relighting of blast furnaces has not coincided with a similar upturn in consumption. Oversupply could become a problem in the first quarter 2010. Service centres report that their sales have slowed markedly due to a lack of end-user demand, a situation they expect to continue for the remainder of this year. Consequently, their restocking phase has come to an abrupt end. As we anticipated in October, the steelmakers have started to offer discounts in order to solicit business, despite a lack of any real import competition.

The West European producers are currently facing low order intake as the flurry of activity in early September has tailed off now that distributors have restocked to appropriate levels. In many countries, prices have been lowered a little to encourage purchasing. Negotiations will start soon for first quarter 2010 business but no official announcements have been made yet, regarding the mills' proposals. The threat of excess supply is still causing unease as the steelmakers expand production while demand from the key consuming sectors stays weak. As far as imports are concerned, more expensive Chinese offers are dampening interest from potential customers.”

Read the full Report here

Technorati Tags: MEPS,steel prices

THE MEPS - EU AVERAGE ALL PRODUCTS STEEL PRICE DIPS AGAIN IN NOVEMBER

2009-11-18T08:05:00.001Z

The EU producers are currently facing low order intake as the flurry of activity in early September has tailed off now that distributors have restocked to appropriate levels. In many countries, prices have been lowered a little to encourage purchasing. Negotiations will start soon for first quarter 2010 business but no official announcements have been made yet, regarding the mills proposals. The threat of excess supply is still causing unease as the steelmakers expand production output while demand from the key consuming sectors remains weak. As far as imports are concerned, more expensive Chinese offers are dampening interest from potential customers.
There are very few agreements being concluded in Germany. Buyers appear to have sufficient material to see them through to the end of the year. Although the service centres have low stocks, they are loathe to replenish them because they remain wary about the real state of consumption, despite official views that the economy is reviving. Customers are expecting prices to be lower in period one due to poor demand and increased production. Third country suppliers are offering deals that look competitive at present but are unlikely to be so by the time the material arrives.
Flat product values have eroded in France, despite delayed deliveries. Producers have tried to hold the levels achieved at the beginning of the fourth trimester but spot prices have edged down. First quarter numbers will probably be below those settled in September. Demand is described as "modest". Activity in the automotive industry has improved significantly compared to earlier in the year. Sales to other consuming sectors are also on the rise, although still well below the norm.
Reflecting the state of the Italian market, Riva has dropped basis figures once again in an attempt to generate more sales. Confidence is quite low as demand has deteriorated since the beginning of September. Despite much talk of imports, very little third country material has actually been ordered and port stocks are very depleted. The lack of availability of finance has become a major headache. Traders cannot open letters of credit and final users are also finding it difficult to pay for steel.
In the UK, underlying consumption generally is poor. Restocking and a lack of supply during the summer and early autumn caused the recent spike in prices. The mills are telling customers that availability will still be constrained in the first quarter. There are no surplus inventories now. Service centre margins are healthy because of the tightness in the market.
Activity remains quiet in Belgium. The steelmakers are unable to increase, or even to maintain, basis values. The re-ordering to fill gaps in service centre inventories is now finished and all buyers (at stockists and end-users) are only purchasing what they need. Some have financial problems. The industry is only now seeing the real damage to companies caused by the economic crisis.
In Spain, import offers are slightly more expensive than a month ago. Local suppliers are bringing their prices down to meet this level, thus retaining market share. Stocks have reduced considerably and distributors are keeping them under control due to concern that demand from major steel consumers remains weak. The domestic steelmakers continue to boost their export sales.

Source: MEPS - European Steel Review

Technorati Tags: MEPS,European Steel,Steel Strip

UK manufacturing boosts hope that Britain will come out of recession - Times Online

2009-11-05T09:14:00.001Z

Britain’s manufacturing sector expanded unexpectedly last month and at the fastest rate in two years as the weak pound made exports cheaper and imports more expensive, according to new data.

Barely a month after Mervyn King, the Governor of the Bank of England, said that weak sterling “will be helpful” in rebalancing Britain’s economy, the latest Purchasing Managers’ Index showed that the UK’s manufacturing sector grew at the third-fastest rate since the series began in January 1992.

Read the full story at the Times online

The first bit of good news that we have seen in sometime regarding British Manufacturing, and the recession in the UK. We have seen reports in the last few weeks of signs that the US, Asia and some European economies are slowly coming out of recession, but UK projections have remained relatively pessimistic.

One has to be cautious about single reports but any improvements in the economy has to be welcome and particularly when it relates to UK manufacturing, a sector that has been sadly neglected for many years

Technorati Tags: UK economy,UK manufacturing

Salzgitter CEO warns against premature optimism

2009-10-28T08:06:00.001Z

Salzgitter Chief Executive Wolfgang Leese on Tuesday cautioned against premature optimism in the steel sector, warning that markets were fragile and that a recovery in demand is unlikely to be sustained.

If things go well, demand will continue to be flat, Leese said on the sidelines of an event in Garbsen, near Hanover, Germany.

Signs of recovery over the past weeks are unlikely to be sustained, he cautioned.

The slump in demand - particularly from important industries such as automotive and engineering -- has hit Salzgitter and other steel makers.

Read the full story at Reuters

Technorati Tags: Steel,Steel industry,Salzgitter,Reuters,steel demand,steel market

Nucor sees weak steel demand continuing in Q4

2009-10-23T08:55:00.001+01:00

Following our previous posting of the Eurofer report on steel demand outlook, we spotted this story from the US.

U.S. steelmaker Nucor Corp. (NUE.N) said on Thursday, demand from service centers improved somewhat along with output in the third quarter, but it did not see increased end use demand, and operating rates could fall in the fourth quarter as plants shut for the holidays. "Apparent demand did increase in the third quarter due to the end of customer de-stocking. However, there's been no meaningful real improvement in end use demand," said Chairman, President and Chief Executive Dan DiMicco.

Read the full story at Reuters

Technorati Tags: USA,Steel,Steel demand,Nucor

EU steel market stuck in slow motion

2009-10-23T08:48:00.001+01:00

Eurofer, the European Confederation of Iron and Steel Industries have put out a press release on Economic and Steel Market Outlook 2009-2011

EUROFER director general Gordon Moffat comments: “While the economy probably reached a turning point, the EU steel market will remain stuck in slow motion for the time being”.

Prospects for the EU’s steel using sectors – such as automotive and the construction sector – remain subdued. Despite stabilising financial markets, financing is still a bottleneck for many companies. Industrial orders are still weak despite some inventory replenishment. The report shows that while year-on-year output growth should turn positive again in the 2nd quarter of 2010, it could take to 2011 before a more pronounced rebound in output begins.

Weak activity in the steel using industries and sharp destocking in the steel supply chain resulted in steel demand (apparent steel consumption) falling by 45% year-on-year in the first half of 2009 and by almost 32% in the 3rd quarter. The inventory situation is now better aligned with the current weak level of steel demand. Some customers returned cautiously to the market to fill gaps in their stocks; this led to the downward trend in orders at EU mills bottoming out.

The stock cycle will also set the stage in 2010. Some inventory build-up following heavy destocking in 2009 will lead to a ‘technical’ recovery in steel demand. With a forward view to 2011 it is expected that rising end-user activity should provide a broader basis for steel demand growth.

So far this year, imports were at much reduced levels compared with 2007 and 2008. However, Moffat warns: “Global crude steel production increasing in anticipation of a recovery in steel demand which yet has to materialise remains a major risk for the EU supply-demand balance”.

The full report can be viewed in pdf format here

Technorati Tags: Steel Industry,Europe,Steel demand,Eurofer

Steel giant bid to break even despite losses

2009-10-23T08:39:00.001+01:00

Stainless steel giant Outokumpu is continuing to aim to break even by the end of the year, despite pre-tax losses of €81 million (£73 million) for the third quarter of the year.

The Finnish company, which has major operations in Sheffield, where stainless steel was invented 86 years ago, says uncertainty in markets has continued and there has been no major improvement in underlying demand.
Outokumpu has continued to cut back on production and was working at no more than 55 per cent capacity in the third quarter.
This year the company closed its thin strip business at Meadowhall, with the loss of 230 jobs, and then axed 150 jobs in its Shepcote Lane melting shop as part of a plan to cut costs by reducing annual production to 200,000 tonnes from a maximum capacity of 500,000 tonnes.

Read the full article by Bob Rae at the Sheffield Star

Technorati Tags: Outokumpu,Steel,Sheffield

Steel Demand Expectations Collapse To Late 2008 Levels

2009-10-22T16:06:00.001+01:00

Your industry news article on a steel business briefing report:-

Steel Business Briefing warns that demand expectations in the steel industry could drop as low as they did in December 2008, at the height of the global financial meltdown. With the downward trend expected to continue at least into early 2010, this is bad news for producers as end-use consumption is currently insufficient to boost further demand.

The report goes on to contrast the view with the views of the World Steel Association’s more optimistic view

Read the full article here

Technorati Tags: Your Industry news,Steel business briefing,Steel,Steel demand,Steel strip

MSCI News - Steel inventories inch higher in U.S. and Canada

2009-10-19T08:32:00.001+01:00

With steel shipments from metals service centers slowly rising, inventories of the metal, in decline since early last year, rose slightly in the United States and Canada, the Metals Activity Report from the Metals Service Center Institute shows. Shipments of aluminum products also rose slightly, but inventories of the light metal continued to decline in both countries.

Steel Product Activity

September shipments of steel products from U.S. metals service centers totalled about 2.56 million tons, down 31.4% from a year ago but ever-so-slightly higher than August shipments. For the year to date, steel shipments of nearly 22.4 million tons are down 41.2% from the same period last year. Monthly steel inventories, which peaked at 11 million tons in August 2008, rose for the first month since then to 5.79 million tons, or 3% higher than at the end of August, although still 45.7% lower than in September 2008. At current shipping rates, that represents a 2.3-month supply.

Canadian service center steel shipments totaled 455,100 tons in September, 14.8% lower than a year ago but 9.5% higher than in August. Shipments for the first nine months of the year total 3.7 million tons, or 30.4% below the same period in 2008. Canadian steel inventories inched higher to 957,300 tons, or 33.9% below the level of a year ago, but 0.17% higher than in August. At current shipping rates, those end-of-September inventories represent an unusually low 2.1-month supply.

MSCI News Press release.

Technorati Tags: USA,Canada,Steel stocks,steel inventories,MSCI

Message from Corus boss to workers

2009-10-19T08:22:00.001+01:00

WORKERS at Teesside’s threatened steel plant will have to raise their game if they are to avoid the axe.

In an interview with the BBC Balasubramanian Muthuraman, managing director of Tata Steel in India and the overall boss of the Corus steel plant in Redcar, warned staff that costs will have to be further reduced to ensure the ongoing viability of the North Eastern steel plant.

The interview can be seen on tomorrow's Inside Out,on BBC One tomorrow at 7.30pm, presented by Chris Jackson who journeys to Tata headquarters in India and secures a rare interview with the director.

The programme questions why Corus is suffering so badly and Chris discovers that many industry experts believe that Tata paid way over the odds for the Corus takeover and therefore won’t invest in Corus until it has reduced its debt.

Technorati Tags: Corus,Redcar,Steel UK.

ThyssenKrupp CEO sees thousands more job cuts

2009-10-19T08:12:00.001+01:00

Reuters report that ThyssenKrupp will shed as many as 20,000 jobs in it’s current financial year in response to the current economic slump.

Read full story at Reuters

Technorati Tags: Steel Industry,Germany,ThyssenKrupp

European steel prices slipping?

2009-10-16T08:47:00.001+01:00

We have argued for some time that recent price increases implemented by the steel producers were premature and counterproductive.

Shortages due to greatly reduced inventories which in themselves were the result of poor sales lead to end users and distributors placing new orders in June and July. It was naive in the extreme for the steel producers to interpret this as a sign of a real increase in demand. As a result production was increased and there is likely to be a glut of steel in warehouses with real demand still very low. Attempts to move these stocks is likely to put downward pressure on prices. Whilst some grades and sizes are still in short supply and demand price premiums, even this situation will ease very quickly as orders placed in the early summer are fulfilled.

The recent MEPS report supports our view:

The downward trend in steel prices, predicted by MEPS (International) Ltd. last month, has already begun for flat products in some European countries. Material has been in fairly short supply in recent months because producers have continued to restrict their output. Moreover, buyers have undertaken some stock replenishment, after paring back their inventories to minimum levels.
It was anticipated that the mills’ planned production increases would tilt the supply/ demand balance and halt the recent upward movement in prices. In fact, this has been exacerbated by the absence of any sign of a substantial improvement in end-user demand. The higher selling figures available have also attracted imports – particularly from Asia. Most flat steel products have become more readily available and values have started to fall in mainland Europe.
There are some exceptions. Holes in inventories have buoyed the price of galvanised steel in some countries. Furthermore, while plentiful supply has constrained commodity grade plate figures, it has been possible to achieve higher selling numbers for superior specification material.
MEPS’ research has found more optimism in the Nordic countries. Notwithstanding, it is not clear at this stage whether there is a pick-up in real consumption, or if it is an example of the region’s traditional lag behind the markets of Western and Southern Europe.
Demand for long products, too, has diminished after a brief period of restocking, and this will be aggravated by the seasonal downturn in construction activity. Small price increases for many products, at the beginning of October, were supported by earlier hikes in raw material values. However, scrap costs have since fallen and longs selling figures are destined to follow.

MEPS STEEL NEWS

The World Steel Association is forecasting growth in steel demand in Europe of around 12% in 2010 (and interestingly up to 25% in the UK). This is against a background of a fall of some 40% in 2009.

I would be surprised to see growth significantly higher than this and treat the occasional rhetoric by steel producers “talking up demand” with caution.

Technorati Tags: Steel demand,steel prices,MEPS

Steel industry recovering after Chinese stimulus - Times Online

2009-10-13T08:39:00.001+01:00

The Times online commenting on a report from the World Steel Association paints a more optimistic picture for the steel industry for 2010.

The long night is almost over for steelmaking, which will enjoy a strong recovery in 2010, the World Steel Association (WSA) predicted yesterday.

Exceptionally strong consumption in China means that demand for the steel output of the world’s mills will rise by 9.2 per cent next year, a recovery to 2008 levels, the association said.

Even the UK should get a big boost. After a near-collapse in the market this year, with demand falling by more than a third in Britain, steel use is expected to rise by 25 per cent next year.

Daniel Novegil, chairman of the WSA’s economic committee, said that the global recovery was stronger than the organisation had predicted in April.

Read the full report at Timesonline

It would probably take a 40% increase in demand in the West to take us back to 2008 levels and whilst this would be welcome I feel it is unlikely that the recovery will be this rapid.

Technorati Tags: Steel Industry,Economy,Steel demand,World steel association

Continuing uncertainty in Steel Industry

2009-10-09T08:36:00.001+01:00

German iron and steel production rose during September, suggesting demand was improving, but was still down sharply from a year earlier as the market remained weakened by the economic downturn.

German mills produced 3.5 million tons (3.17 million metric tons) of steel for the month, an 8 percent increase on the previous month. Year to date however production remains 40% down on 2008.

In an interview with the Financial Times Wolfgang Leese, the CEO of Saltzgitter criticised rival steel manufacturers such as Arcelor for increasing production during poor market conditions."We only have a small temporary peak that in my view will last until the end of the year roughly," he continued, referring to demand stemming from inventory restocking.

Whilst both orders and steel prices have risen recently, we believe restocking to be the primary cause, an effect that is likely to be short lived.

Despite the recent price increases, there are signs already that increases have stalled, and some slippage is already evident, particularly in China.

Technorati Tags: Steel Industry,Steel demand,steel prices

Will increased supply undermine steel prices?

2009-09-22T09:33:00.001+01:00

The latest MEPS report echoes fears that we currently have regarding Steel Prices :-

Transaction prices for most steel products increased in September in northern Europe. Producers have restricted their output since the onset of the international financial crisis, while stockists and end-users have reduced their inventories to a minimum. Delivery lead-times have increased as the steel makers’ reduced capacities have become full.
Now, as customers return to more regular purchasing to maintain their stock levels, the supply situation for many items has become tight and producers have been able to command higher selling values. This is particularly true in the case of galvanised sheet and coil, where the more complex production process means it will take longer to return volume to the supply chain. Long products prices have also been inflated by increased scrap costs – supported, as is often the case, by demand from Turkish mills.
Many of the major producers in Europe have seen the opportunity, with order tonnages and prices increasing, to reinstate some of their production capacity. Several blast furnaces have been re-lit in recent months and at least half a dozen more are planned to restart before the end of 2009.
Meanwhile, a situation of oversupply has developed in the massive Chinese market. Russian producers rely heavily on this outlet for their material and are likely to seek alternative customers in northern and western Europe.
While the demand on European mills has certainly increased, it is driven by a re-balancing of inventories within the supply chain, rather than by any upturn in end-user consumption. Government measures have not, so far, led to significant improvements in construction activity and the unproductive winter period in that sector in the Nordic countries will be upon us all too soon. Oil prices have not been sustained at a sufficient level to encourage extra investment in that field. The relative recovery in car production is likely to be slowed by the ending of some state car scrappage schemes. The reported increased economic growth recently reported in a few countries will take time to filter through to consumer spending.
Steel production in Europe through most of 2009 has been cut back more than the reduction in real demand. Without doubt, the market can stand an increase in output while inventories are replenished and this would not prevent further price hikes in the short term. However, there is a concern that supply may escalate too quickly and we already have reports of buyers holding back in anticipation of lower values before the end of this year.

Source: MEPS European Steel Review Supplement

We know that many users and service centres have “held off” ordering steel, and that inventories are now very low or depleted. This has lead to an increase in demand as stock has fell to levels insufficient to support even modest production. As stocks are replenished it is unlikely unless we see significant increase in “real” demand that there will be many orders to place toward the end of the year. This will put pressure on the recent price increases.

Additionally Steel Guru are reporting that after an sharp increase in production in China and a fall in demand there, traders attracted to a high value Euro are beginning to offer export material at increased levels.

MEPS STEEL NEWS

Technorati Tags: Steel prices,european steel prices.,steel demand

Rautaruukki CEO Says Steelmakers Face Slow Recovery From Slump

2009-09-18T08:47:00.001+01:00

Sept. 18 (Bloomberg) -- Steelmakers face a slow recovery from the worst slump in demand since World War II as industry struggles to get funding for capital investment, according to Rautaruukki Oyj Chief Executive Officer Sakari Tamminen.

“The freefall has stopped and demand has leveled off at pretty low levels compared to where we were,” Tamminen, 55, said in an interview on Sept. 16 at the Helsinki headquarters of Finland’s biggest producer of carbon steel. “We need to be prepared for a slow recovery.”

Steel companies including ArcelorMittal, the world’s biggest, are resuming output at mills from the U.S. to Russia and China as economies recover and customers restock depleted inventories. Production in China, the largest maker, jumped 22 percent to a record in August from a year earlier as government spending spurred building and manufacturing demand.

Zhang Xiaogang, chairman of Angang Steel Co., China’s second-largest steelmaker by value, said on Aug. 19 that price gains may lead to oversupply and “cause market turmoil.”

Read the full article at Bloomberg.com

The steel industry would be wise to consider Mr. Tammimen’s words. We have recently seen sharp increases in spot prices for steel and announcements from steelmakers about fourth quarter price increases. The steel producers have begun to bring production back online in the face of a sharp increase in demand. If the steel manufacturers are interpreting this as the start of better times then I would question their judgement.

In reality we have seen a year of destocking at both manufacturers and service centres. Inevitably steel stocks have fell to levels that cannot sustain even a modest manufacturing activity. As a result steel is in short supply and end users and stockholders are placing orders to replenish stocks. In typical fashion the steel manufacturers become bullish, start increasing prices and talking as is the recession is over.

Real demand will not become apparent until stocks are back to a manageable level, probably by the end of this year. I am not the only one who fears that there is a danger of prices falling back at that time. I agree with Mr. Tammimen that real demand will only recover slowly, and that the seesaw approach taken by some steelmakers on pricing does nothing to encourage the recovery.

Technorati Tags: Steel,steel demand,steel prices,Bloomberg

Steel workers to vote on action

2009-09-18T08:18:00.001+01:00

Thousands of workers at Corus are to be balloted on industrial action over the steel group's plans to close its final salary pension scheme to new entrants.

Leaders of the Community, Unite and GMB unions decided at a meeting in London to oppose the proposed changes.

They said in a statement: "Corus should be fully aware that the unions are saying enough is enough.

"Representatives have called for ballots for industrial action right across the company."

The summit in London was called after union representatives walked out of talks with Corus bosses on 3 September.

Corus has said it would be inappropriate to comment while pay and conditions talks were continuing.

The GMB, Community and Unite unions are also discussing a threatened Corus factory on Teesside.

Source and full article BBC News

I am amazed that the unions would consider Industrial action at this time when production plants, particularly in Teeside are under threat of closure. Corus have said they wish to remove the final salary pension scheme from new employees, not existing ones. Whilst very desirable, these schemes are expensive and in a private company impose a considerable financial burden on the employer and eventually on the customer.

When the very existence of the steel industry within the UK is under threat from overseas competition and low demand, the timing on this action is beyond belief. I am very sympathetic with the situation of steelworkers in Teeside and hope that the plant finds a way through, but I fear that threats of industrial action on the pensions issue can only damage their prospects

Technorati Tags: Corus,pensions,Industrial action,Teeside

MEPS steel prices review

2009-09-16T08:48:00.001+01:00

According to MEPS double digit steel price hikes have been recorded for the July to September period in EU flat products sector. Most of them have occurred in recent weeks as customers started to reorder after the August summer break. The increases have not been generated by significantly higher real demand. The main driver has been a shortfall in supply.

It is estimated that over the past twelve months activity in the steel consuming sectors fell by between 30 and 35 percent. Consequently, most steel users and service centres embarked on a strategy of inventory drawdown. Over the same time horizon, the mills cut back production by 40/45 percent.

Market conditions have now changed. Stock reduction is almost complete. Customers are ordering more steel to meet their real demand but output remains low. Shortages are being noted in the flat products’ segment with the consequent hike in selling prices. Local mills have now recognised this situation and many are planning to bring back previously closed capacity. However, in the interim, shortages will continue.

EU producers may have left it a little late. Third country suppliers are already looking to jump in to satisfy the shortfall - particularly now that EU prices have improved. Chinese steelmakers have oversupplied their market and are looking for export sales to reduce their excess. East European prices are also looking competitive once again.

The tight supply situation is creating serious problems for those original equipment manufacturers which carry only small stocks and rely on the mills for regular deliveries. Under current conditions, the OEM’s bargaining power is reduced and increased volumes are difficult to secure. They have little option but to pay the increasing price demands.

Further but more modest upward price movements are anticipated in the short term. However, downward pressure on selling values is likely around the turn of the year as domestic capacity comes on stream and deliveries of third country material arrive in the final quarter.

SOURCE: MEPS INTERNATIONAL Ltd

We would agree with MEPS summary. Many UK OEM’s have been slow to reorder raw material, and low demand has lead to service centres running down their inventories. Some grades and sizes are almost impossible to locate in the UK at the moment and an element of panic is setting in. Spot prices have increased dramatically and we think this situation is likely to continue for some weeks until the supply situation eases.

Technorati Tags: MEPS,Steel supply,steel prices,steel demand

Corus to increase Strip Mill Prices

2009-09-15T07:51:00.001+01:00

We have just heard that Corus are to increase strip mill prices by £30 to £50 dependant upon grade.

Increased demand due to customer destocking is given as the reason.

At a time when some grades are in short supply we have little doubt that they will succeed in implementing the increase. However at a time when signs of recovery remain very fragile and real demand low, it’s unlikely that any level of increase can be maintained beyond the short term.

Technorati Tags: Steel Strip,steel prices,Corus

New orders boost Corus

2009-08-27T08:57:00.001+01:00

We spotted the following report on netbusiness

THOUSANDS of workers at Redcar’s Teesside Cast Products site were boosted today by news that the steelmaker had secured orders to keep the plant operational until the end of October.

Since April, when the international consortium responsible for buying nearly 80% of the plant’s output abandoned a 10-year deal, employees have been living in fear of redundancy.

Earlier this month Corus said it was extending its consultation period with staff as the site’s order book had been bolstered until the end of September.

But today’s announcement will keep the plant busy until the end of October while work continues to secure a long-term future for the site.

Union bosses today described the announcement as "great news".

GMB regional organiser Jimmy Skivington said: "It gives us an better opportunity to talk to people interested in the business.

"And all the time the situation in the steel market as a whole is improving."

Fragile signs of recovery in the steel market were strengthened this week when it emerged that some steelmakers were preparing to bring idled blast furnaces back to life.

ArcelorMittal, the world’s biggest steelmaker, is preparing to relight fires from Ohio to Ukraine, while Corus is reviving strip steelmaking capacity at Llanwern in South Wales.

A rise in demand for construction strength steel in Asia has also boosted Teesside’s Lackenby beam mill with shifts increasing from 15 to 19.5, although the threat of 150 redundancies remains.

Whist we welcome to the cautious optimism regarding activity in the steel sector it’s important to see the situation in context. Service centres have been de-stocking for over a year now, and raw material at distributors and manufacturers is very low. Against this background it is inevitable that at some time those stocks have to be replenished. It is difficult for anyone to assess accurately how much of the demand is due to an economic upturn or simply bringing stocks back to a minimum level.

The steel manufacturers in recent years have demonstrated that they use any upturn in order intake as an opportunity to increase prices, and we are seeing evidence of this again.

Most economists are forecasting a very slow return of consumer confidence and economic activity, and a rapid increase in raw material prices could possibly slow or halt that recovery. We hope that the steelmakers adopt a cautious and responsible attitude, even if recent history does fill us with confidence.

Technorati Tags: Steel,Steel strip,steel industry,Corus,steel demand,Steel prices.

Steel Prices, Meps latest EU forecast

2009-08-24T12:47:00.001+01:00

MEPS have published the following forecast

After peaking in August 2008 at €860 per tonne, the MEPS EU average flat products' price collapsed to €420 per tonne in May this year. This was the lowest figure for more than five years.
The weakening economic climate pushed end-user demand to extremely low levels. Distributors and steel processing companies were forced to reduce inventories. Weak market conditions led to continuous reductions in steel prices into the second quarter of this year.
The steel mills' reaction to the poor demand was to cut output significantly. Steel making capacity utilisation rates fell to approximately 53 percent in the first half of this year. These massive production curbs restricted supply and made a significant contribution to the bottoming out of steel prices over the last two months, limiting the prospects for recovery in the future.
Stock reduction is now almost complete in the flat products segment. Customers ordered larger volumes in recent months from domestic producers as they looked to fill gaps in their inventories. This helped steelmakers to push through modest advances in transaction values for strip mill products.
The price recovery is forecast to continue in the short term for all steel categories. Distributors are expected to resume their restocking efforts after the summer period and scrap costs could move higher. Customers will, almost certainly, increase order volumes in an effort to buy ahead of further perceived advances.
There are still downside risks to steel prices during the remainder of 2009 because end-user consumption is likely to stay low. Industrial production is predicted to decline by approximately 15 percent, year-on-year. European mills have also started to ramp up output on the back of rising sales. Steel making capacity utilisation rates moved up to above 60 percent in June. However, oversupply could develop if the producers increase activity too quickly. These factors may limit price advances in the fourth quarter.
Consumer confidence is expected to improve as economies in the region emerge from recession in the coming months. Underlying demand for steel related goods should grow. Credit restrictions are also likely to ease with banks becoming less risk averse. This will help to increase the amount of finance that is available to companies of all sizes. Consequently, buying power could improve as 2010 progresses.
The strengthening economic situation is likely to encourage further inventory replenishment by service centres and end-users during the first half of next year. This should help local steelmakers to push through price advances early in 2010. Consequently, mills are expected to lift production and return to profitability in this period.
Despite a predicted revival in steel selling figures in the New Year, the market will, almost certainly, be slow to recover. Consequently, we do not envisage a return to previous price levels during our forecast period.

We would largely concur with these forecasts and we have seen many reports recently of steelmakers bringing production “online” to facilitate orders as destocking ends and new orders are placed to replenish.

There does not seem however to be any marked increase in demand. Whilst the restricting of production has no doubt contributed to the halting and even reversing of the downward trend in steel prices, increased production in the third quarter, does carry a risk of placing prices under pressure again toward the end of the year, unless demand accelerates.

Technorati Tags: MEPS,Steel prices

Steel plant restarts production

2009-08-23T11:59:00.001+01:00

Production at the Corus hot strip mill at Llanwern near Newport is to restart next month, the steel giant says.

It has been mothballed since January, but the company says there has been some growth in orders and it wants to satisfy this increasing demand.

However, the restart will not reverse any of the 528 job losses at the plant.

Steel union Community welcomed the move and said it would be seeking a meeting with Corus to discuss the long-term implications.

Tim Rutter, head of communications for Corus Strip Products UK, said the hot strip mill at its Port Talbot steelworks further along the south Wales coast is now working "flat out" and senior managers have taken the decision to restart Llanwern to increase capacity.

However, he was cautious about the upturn in business, saying: "We don't know how sustainable this slight increase in demand will be.

"We will constantly review what capacity is needed, our first choice is always to use Port Talbot because of the energy situation and the cost of transporting steel to Llanwern."

Full Story BBC NEWS | Wales | Steel plant restarts production

Technorati Tags: Steel,Corus,Llanwern

Dramatic fall in Chinese steel prices, where next on Global Prices? | Steel Strip

2009-08-20T13:56:00.001+01:00

We spotted this report today at Reuters, quoting from the metal Bulletin.

After a months-long rally to a 10-month high last week, the

price of benchmark hot-rolled coil in China—which makes half

the world’s steel—plunged 7.6 percent to around 3,987.5 yuan

a tonne this week, data from Metal Bulletin showed.

That in turn has dragged iron ore prices off their peaks as

well, with Indian spot market exporters reporting virtually no

deals this week, adding further complexity to price

negotiations.

 Read full story at Reuters

As recently as three or four years ago, steel prices movements, particularly in the West were an orderly affair with annual or bi-annual negotiations between the large steelmakers and their major customers (usually automotive). The outcome of these negotiations would provide the basis for general market prices.

The opening world market and the increasing demand from China, India and other fast growing economies have changed that forever. European mills in particular used demand from China to force up market prices dramatically, then the availability of Chinese steel exports started to temper the ability of Western producers to force price increases on the market.

Then came the international banking and economic crisis and steel prices fell as demand evaporated.

The steel producers however appear to have “seized” upon a glimmer of recovery (0.30% growth, in one month, in a couple of European economies) to announce price increases. At a time when demand is extremely fragile a decision that seems to us somewhat irresponsible.

Technorati Tags: China,steel prices

Mixed messages on Steel demand

2009-08-18T09:52:00.001+01:00

We have been seeing reports recently on signs of increasing demand for steel, along with speculation on higher steel prices.

Stocks are low at distributors, and some grades and sizes are unavailable. galvanised strip is currently very difficult to find in the UK.

However, whilst there seems to be a real increase in demand in China, it remains lacklustre in the West. Whether or not demand is on the increase globally or just regionally remains to be seen. The steelmakers have a track record of “talking up” the market in an attempt to increase prices.

Whilst we believe we are through the worst, the road to recovery is likely to be pedestrian at best, and it would be a brave speculator who would risk increasing stock levels significantly at this moment.

Technorati Tags: steel,steel demand,steel prices.

ThyssenKrupp posts Q3 net loss

2009-08-14T10:22:00.001+01:00

German steelmaker ThyssenKrupp reported Friday a third quarter net loss of €630 million ($900 million) as the global recession cut into demand for steel.

The Duesseldorf-based company, Germany's largest steel producer, said the loss comes after a profit of €613 million in the third quarter of its 2008 fiscal year.

Sales for the period fell to €789 million from €2.5 billion a year ago, a 68 percent decline.

The company said it expects a pretax loss for the full fiscal year "in the upper three-digit million euro range" because of a significant drop in order intake and sales. It said a drop in prices and volumes will only be partly offset by falling material costs and efficiency measures.

"The overall economic environment deteriorated further in the reporting period," ThyssenKrupp said.

"The global recession is affecting our company in all areas. The worldwide slump in demand — coupled with in part hefty price falls — was particularly dramatic in our carbon and stainless steel and international materials services activities."

Technorati Tags: ThyssenKrupp,Steel Industry,Steel Strip

ArcelorMittal will bring 165 people back to work next week (Cleveland)

2009-08-13T08:16:00.001+01:00

ArcelorMittal will bring 165 people back to work next week, but it will still be more than a month before the Cleveland steel plant's blast furnace fires up and starts melting metal again.

Plant manager Terry Fedor said Wednesday that the company is still negotiating with the United Steelworkers of America Local 979 to figure out how many workers it needs to bring back. In May, the company put 912 workers on layoff as steel orders plunged 45 percent worldwide.

Last week, the company said it would restart production because global markets are showing signs of improvement, but it did not expect production to quickly return to 2008's levels. A small number of maintenance workers had stayed on the job at the idled plant. Fedor did not have a total number of people who would be back to work by next week.

Read the full story at Cleveland.com.

Technorati Tags: Arcelor Mittal,Steel,Steel Plant,Cleveland Ohio

MEPS – World steel prices.

2009-08-12T10:28:00.001+01:00

As predicted, the MEPS- Global Carbon Steel price moved up by over 1 percent in July. Higher input costs forced local producers to implement advances in domestic selling figures, with varying success across the three regions and products researched. Strip mill categories recorded the largest gains. Inventory adjustment is almost complete, with some shortages developing. Consequently, many distributors increased their purchases with local mills. Delivery lead-times lengthened. Output restrictions were eased by some steelmakers. Sales to the automotive and bridge building sectors recovered slightly. However, end-user demand was lacklustre, particularly from the construction sector in most countries. Many customers are still working at reduced operating levels and taking extended summer holidays. Export opportunities from east to west remained low due to weak global consumption. Banks remained reluctant to lend to businesses, negatively affecting buying power.

Rising input costs are likely to force mills to push through additional increases in transaction values during the remainder of 2009. Distributors may buy ahead of further perceived price hikes as they attempt to refill depleted inventories. However, the summer slowdown in the west could restrict these advances initially. World steel consumption is forecast to remain subdued this year. Most customers in the EU and US will also keep their re-stocking efforts to a minimum in the run up to the financial year end. Consequently, the recovery in steel selling figures is expected to be restrained during the fourth quarter.

Many western consumers are likely to increase their purchasers of steel related products by early 2010. Moreover, credit restrictions should reduce, stimulating demand across the supply chain in all regions. Further advances are, therefore, forecast for the first half of 2010 as the world economy emerges from the recession. However, this upturn is predicted to be much slower than the ones recorded in recent times because many companies will still be feeling the after effects from the recession.

Source: MEPS International Ltd

MEPS - WORLD (GLOBAL) ALL PRODUCTS COMPOSITE CARBON STEEL PRICE FORECAST - Worldsteelprices.com

We have seen steel shortages developing here in the UK, particularly with regard to Galvanized. this is partly being put down to problems at Corus.

Technorati Tags: MEPS,Steel prices

Jaguar Land Rover secures funding

2009-08-12T08:52:00.001+01:00

The Indian owner of Jaguar Land Rover has told the UK government it no longer needs support for the carmaker, after obtaining private funding.

Tata said it had secured some direct bank loans, as well as guarantees that would allow it access to a £340m European Investment Bank loan.

Government funding had been offered but did not materialise, after a failure to agree terms of any cash injection.

Business secretary Peter Mandelson said the development was "welcome".

"The fact that the banks and commercial capital markets are meeting JLR's funding is a clear sign of confidence in the company, its products and the automotive sector," Lord Mandelson said.

He added that the additional funding would allow investment in future models and for the XJ saloon to be launched on schedule.

"This is a good and encouraging outcome for JLR, its workforce and its supply chain," he added, saying the government had offered bridging finance, and would be "willing to help again if necessary".

In a letter to Lord Mandelson, Tata chairman Ratan Tata said he hoped the funding that had been secured would help it "succeed in re-establishing these venerable British brands to their earlier glory".

'Onerous' terms

Tata bought Jaguar Land Rover for £1.7bn in June 2008 from Ford.

It currently employs 14,500 people, having made 450 redundancies at the start of the year.

The firm is based in Gaydon, Warwickshire, and has factories in Castle Bromwich and Solihull, in the West Midlands, and Halewood, on Merseyside.

It has seen a sharp fall in vehicle sales following a worldwide drop in demand.

Mr Tata said that the terms of a £175m bridging loan which had been offered by the government had been "very onerous and hence unacceptable".

However he accepted that it was right that the business department had wanted to be satisfied that the firm was sustainable, and to get an idea of how much was required to meet its needs.

BBC NEWS | Business | Jaguar Land Rover secures funding

Technorati Tags: Jaguar Land Rover,Tata,UK Auto Industry

China charges Rio Tinto workers

2009-08-12T08:47:00.001+01:00

China has formally arrested and charged four employees of mining firm Rio Tinto with stealing trade secrets and taking bribes, Chinese state media reports.

The accused are Australian national Stern Hu and three Chinese employees of the Anglo-Australian company.

The four have been in police custody in Shanghai since early July. Rio Tinto denies any wrongdoing.

Australia has urged China to allow Mr Hu - Rio's head of iron ore operations in China - to have access to a lawyer.

"We encourage China to allow Mr Hu all the protections available under Chinese law, including access to legal representation, now that he has been formally arrested," a statement from the foreign affairs department said.

The four employees have been charged with using "improper means" to obtain "commercial secrets" about China's steel and iron industry, said Chinese official news agency Xinhua.

However, there was no mention of charges of stealing state secrets, which earlier reports in China had said the four would be accused of, and which carry tougher sentences.

Retaliation theory

Last month, the Australian trade minister, Simon Crean, warned that business relations with China could be damaged if the case of the detained Rio Tinto workers was not handled appropriately.

Australian opposition politicians had complained that the arrests might be in retaliation for the collapse in June of Rio's proposed deal with Chinese state-owned firm Chinalco.

Rio scrapped a $19.5bn (£11.8bn) investment by Chinalco in favour of a tie-up with fellow Anglo-Australian miner BHP Billiton. Rio Tinto is now finalising a deal with BHP to merge their iron ore operations in Western Australia.

However, Mr Crean did not believe that the two incidents were related

China is Australia's biggest trade partner, worth $53bn in 2008. Of this, $14bn came from iron ore exports, powered by Rio Tinto and BHP Billiton.

BBC NEWS | Business | China charges Rio Tinto workers

Technorati Tags: Steel,China,Rio Tinto,Australia

New orders keep Corus jobs safe for two months

2009-08-05T11:51:00.001+01:00

As reported at the Northern Echo

THOUSANDS of under-threat steel workers have been told their jobs are safe for another two months.

A 90-day consultation with workers at Corus Teesside Cast Products (TCP) plant, in Redcar, which it was feared would end in heavy job losses and the mothballing of the plant, had been due to finish on Friday.

But the company yesterday confirmed that, having secured new orders, the consultation exercise would be extended.

A spokesman said: “Corus is pleased to confirm that it has secured new orders for its Teesside Cast Products plant until the end of September.

Read the full story at the Northern Echo.

Technorati Tags: Steel,corus,Redcar

New gas and welding wiki

2009-08-05T08:26:00.001+01:00

We have recently been made aware of a new wiki that may be of interest to followers of our steel strip blog. Wikis can be great reference points as hubs for information and resources. As wikis can be edited online and encourage contribution from the readers, who are generally professionals in the related subject matter, they can quickly grow to be an invaluable reference point.

Anyway thanks to Jeffrey Charboneau for informing us of the site.

GAWDAwiki is a comprehensive online information portal featuring the very best in gases and welding industry news and information. The site is located at www.GAWDAwiki.org.

An online lexicon of industry terminology. The “wiki” part of GAWDAwiki is an interactive, user-generated reference of terms and concepts relating to the gases and welding industry. Use it as an information source or share your industry knowledge with the world by expanding on existing entries or creating new ones. Adding content is easy: Just follow the simple steps outlined at the site to create an account, and you’ll soon be on your way!

An industry resource. With GAWDAwiki, product demos, informative spec sheets, valuable white papers, an extensive buyers guide and the latest industry news are now just a mouse-click away!

Gases and Welding wiki: welding, torch, cylinder, acetylene...

Technorati Tags: gases,welding,wiki

More Corus job cuts

2009-07-10T08:23:00.001+01:00

Following on from the announcement of 2000 job losses at UK plants including Teesside, Scunthorpe and Rotherham, last month, Corus announce further job losses.

One hundred and forty nine jobs at two Corus sites in south Wales are under threat following a functional review.

The steel giant said the cutbacks will be split across the sites in Port Talbot and Llanwern near Newport.

The positions affected are business roles that support manufacturing in the strip products division, such as human resources, finance and laboratories.

A consultation period is to begin on Monday, but unions said the cuts will be "devastating".

A Corus spokesman said they will be talking to unions.

He said it may be that the job loss figure is reduced.

The functional review was announced at the start of the year at the same time as 528 redundancies at the Llanwern site, due to the mothballing of the hot mill.

The spokesman added that the reduced manufacturing capacity means that roles connected will have to be scaled down appropriately.

Full story BBC News

Once a major player in European and World steel making, Corus is shrinking to a shadow of it’s former self. Whilst the recession and falling demand in the automotive and construction markets has hit the steel industry hard, it’s significant that almost all of the Indian owned Tata groups cuts have been made in Europe, and particularly the UK.

We had doubts about Tata’s plans for the Corus group when they were acquired. I always felt that they were more interested in access to the European market than developing the manufacturing business in the UK and Netherlands. What has surprised me is how rapid the contraction of their manufacturing has been.

Whilst I can understand the call by steel workers for government financial help to save jobs and manufacturing, I do not believe that any assistance to the Indian owned steelmaker will do anything long term to save jobs, I fear that the “die is cast” for UK steelmaking.

Technorati Tags: Corus,Tata,Steelmaking,UK

Meps say steel prices are rising

2009-06-30T10:38:00.001+01:00

US mills' utilisation rates have crept up steadily over the last month and now stand above 47.5 percent. The recent dire market conditions appear to have bottomed and expectations are for a steady, albeit slow, recovery. Service centres report that business activity continues to be low but inventories are now generally in balance with the reduced level of demand. Imports into the US are not a factor in the market and licence applications from overseas suppliers are still registering month-on-month declines. Most major steelmakers have now announced a series of transaction price advances for strip mill products, following a leading move by AK Steel at the beginning of June. The increases are effective with new orders scheduled for delivery in July.
Canadian transaction values, however, are still falling. The escalation in the strength of the local currency versus the US dollar is making the country more attractive to US mills, although offshore imports remain virtually absent. Domestic producers have reported a couple of weeks of modest improvement in their order position. This is, ostensibly, inventory replenishment which suggests destocking may be near completion. However, the consensus amongst distributors is that market conditions remain very sluggish and the continued automobile closures and shutdowns have damaged any possibility of a summer upturn. A slight pick up is envisaged in the September/October timeframe.
Despite steady growth in imports and domestic output, the price trend for Chinese flat products has turned positive, supported by a strengthening of real demand and traders restocking ahead of further perceived increases.
The recent sharp production cuts in Japan have helped to reduce inventories. Moreover, a small recovery has been noted in demand from car and electronic goods makers, as well as overseas customers. Stocks of strip mill products held by local steelmakers and distributors, as end of April, fell to below the 4 million tonne mark for the first time in two years. Meanwhile, quayside inventories of imported flat products dropped by 13.1 percent in the same time frame. The mills hope to be able to gradually lift output in the Autumn.
Weak consumption continues to dominate the South Korean scene. Following Posco’s extensive price cuts last month, other local suppliers have brought their figures inline with the market leader. Demand is slowly recovering in Taiwan. CSC will lift domestic list prices for July and August by an average of 7 percent compared to June – the first official rise this year. The company has said the increases are due to supply shortfalls as steelmakers have been axing production during the global economic downturn. Chung Hung Steel also announced higher selling values for June contracts with both local and export customers, citing escalating input costs caused by more expensive slab.
Polish strip mill product values are unchanged when denominated in Euros but are slightly higher than a month ago when quoted in the domestic currency because of exchange rate fluctuations. Demand has worsened as the economic crisis cuts deeper and prices are not expected to show any significant growth during 2009. Producers are carrying on with their output curbs.
In the Czech and Slovak markets, although the rate of price decreases has slowed, the outlook remains pessimistic as end-users have very little work on hand. In May, distributors’ stocks plummeted to a level where it seemed they needed to re-order but they have only purchased enough to fill any gaps that might have appeared. Producers have tried very hard to push prices up and, initially, a few buyers agreed to pay a little more. However, the higher figures did not hold. Customers have received offers from Russia, India and China but the quotations are similar to those of more local suppliers.
In Western Europe, end-user consumption remains weak. However, buyers are coming back to the market, albeit only for relatively small quantities to replenish their dwindling stocks. Although EU producers have lifted their latest domestic offers, customers are hesitant to accept the increases. With the US dollar weakening against the euro and sterling, imported material is becoming more competitive. However, many purchasing executives lack the confidence to order significant tonnages on such comparatively long delivery lead times, bearing in mind the woeful state of real consumption.

Article courtesy of MEPS

In the UK we hear that the European producers are increasing prices, but we are at that time of year when the summer closures are upon us and activity levels are low even in normal times.

There is still a great reluctance amongst service centres and end users to commit to any volume, customers are mainly looking to buy, just what they need for now. this is less due to any caution about prices, and more to do with financial necessity to keep minimum inventories.

Technorati Tags: Steel Prices,Steel Industry,MEPS

Corus cutting 2,000 UK steel jobs

2009-06-25T13:13:00.001+01:00

The BBC is reporting further dramatic cuts in the UK Steel Industry

Steelmaker Corus is cutting 2,000 more jobs at UK plants including Teesside, Scunthorpe and Rotherham.

The company has yet to announce the job losses, but Labour MP Elliott Morley confirmed the news. Unions said the cuts were "devastating".

About 500 white-collar jobs will go at Scunthorpe, Mr Morley said, while more than 400 jobs are thought to be at risk on Teesside and 800 in Rotherham.

Corus has seen demand for steel fall as the global recession hits the industry.

Mr Morley said he was "disappointed" at the level of cuts and added he had told the firm that job cuts should be a last resort.

Following on from dramatic cuts announced back in January of 2,500 jobs, the British steel industry is now a shadow of what it was.

Read the full story here

Technorati Tags: Corus,UK steel industry,Rotherham,Scunthorpe

Spring Steel Stocklist

2009-06-25T08:44:00.001+01:00

BSS Steel Strip now have online stock lists for to cover the availability of CS70 annealed, CS80 and CS95 hardened and tempered steel coil and spring steel sheet. View here.

Stainless Spring Steel stock list can be found here.

BSS specialise in the supply of small quantities of spring steel strip and sheet.

Technorati Tags: Spring Steel Strip,Stainless Spring Steel Strip

Jobs blow for Rotherham steel firm

2009-06-11T16:26:00.001+01:00

ROTHERHAM'S giant Corus plant has suffered a further jobs blow after it was revealed plans to transfer work from the West Midlands were being scrapped.

In January bosses at Corus Engineering Steels - part of the Indian-based Tata group - announced more than 700 jobs were to go at the Aldwarke plant as part of a restructuring plan which would see more than 3,500 jobs axed worldwide.

They also announced around 100 jobs would be created when the company's bright bar division was transferred from Wednesbury in the West Midlands to Rotherham.
But now the company says the plans have been ditched due to deteriorating market conditions.
Corus spokesman Rob Simpson said: "The company has decided not to relocate its bright bar operations from Wednesbury, West Midlands, to Rotherham.

Read the full article my Nick Ward, at the Sheffield Star

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Vanmaker LDV faces administration

2009-06-08T08:00:00.001+01:00

Vanmaker LDV is expected to be placed in administration by a court later, threatening up to 850 jobs and thousands more in the supply chain.

Attempts to sell Birmingham-based LDV as a going concern have failed.

Talks with one potential buyer, the Malaysian firm Weststar, broke down at the last minute last weekend, leading LDV to apply for administration.

Administrators could liquidate LDV's assets and it is feared any buyer would take machinery abroad.

Such a move would end decades of production at the Washwood Heath site.

LDV managers and workers were angered last week when they were forced to cancel a planned lobby of Parliament because of Prime Minister Gordon Brown's cabinet reshuffle.

Directors had hoped to persuade the government to agree to a £60m loan to secure the firm, but no ministers were available to meet them.

Full Story BBC NEWS

Technorati Tags: LDV,manufacturing,UK industry.

UK steel plant to be ‘mothballed’

2009-06-05T08:13:00.001+01:00

One of the biggest steel plants in the UK is to be ‘mothballed’, threatening the future of up to 2,000 workers. Workers at the Teesside Cast Products plant in Redcar were told the news ahead of a 90-day consultation period on the future of the plant. Owner Corus said the development had become unavoidable because of the termination of a contract by four international buyers of steel slab.
A spokesman said: “The company has begun discussions with employees and their representatives about what can be done to mitigate the impact of ‘mothballing’ the plant.”
Corus had agreed to sell a majority stake in the plant to a consortium led by Italian firm Marcegaglia, but the steel giant said that the consortium had unilaterally and unreasonably initiated moves to terminate the contract, making Redcar unviable. Corus, which has been owned by Indian conglomerate Tata since 2007, said it was using all legal means to ensure that the terms of the 10-year contract were enforced and that the four members of the consortium lived up to their contractual obligations.

Technorati Tags: Corus,Redcar,Steel,steel plant

ArcelorMittal Gets Approval for Deep Layoffs in Spain

2009-06-04T08:24:00.001+01:00

ArcelorMittal, the world’s largest steel maker, said Wednesday that the Spanish government had granted it permission to lay off a major part of its work force in Spain, another sign of retrenchment in a country that already has the highest jobless rate in Europe.

The layoffs would run until the end of the year and could be extended until June 1, 2010, if economic conditions warrant. All laid-off workers will receive at least 90 percent of their gross salaries, with part of that amount paid by the government.

The company did not say how many employees it intended to idle, but it said it could cut the total hours worked, at maximum, by 40 percent at its Spanish plants.

Technorati Tags: Steel Industry,Arcelor Mittal,Spain

MEPs latest EU steel market Report

2009-05-20T09:56:00.001+01:00

Market sentiment has visibly changed in the flat products sector. We can detect an air of mild optimism, albeit tempered with extreme caution. The downward pressure on steel prices appears to be abating, helped by the recent severe production cuts, which have limited availability. Nevertheless, underlying demand remains weak. Customers are still not placing orders far in advance but diminishing inventory levels have caused mill sales to pick up slightly.
The German market is very quiet as buyers hesitate to finalise business and are only purchasing small quantities on as short as possible delivery schedules. Companies are not ordering anything that is surplus to their immediate requirements. Service centres are reportedly operating on average at 50 percent of their usual activity. Consequently, stock reduction is proceeding quite slowly.
The French market continues to be characterised by weak demand and ongoing destocking. However, producers have stabilised strip mill product prices and some are applying a small increase, although this is not linked to any improvements in consumption. The success of the initiative seems to be due to the effects of ongoing output curbs together with a strong desire on the part of the mills to recoup recent losses. Already, distributors are meeting with strong resistance from their customers when they try to lift resale values in line with their new purchasing prices.
In Italy, market players are less pessimistic than four weeks ago. At last, they can see signs of movement in activity, although they are quick to point out this situation may be only temporary. For the first time in many months, service centres are starting to issue enquiries. Their stocks have been depleted and replenishment is necessary. Local mills are attempting to lift prices marginally to try to recover the increased costs incurred due to production cutbacks. Even importers seem less desperate to offload tonnage and are trying to secure higher prices with quotations up by $US10/15 per tonne. It remains to be seen whether customers will accept this.
There is very little demand from UK end-users. Manufacturing industry continues to struggle but a few positive signs are developing. In the auto sector, Nissan in particular has picked up some business for smaller vehicles as a result of the various car scrapping schemes in place in a number of EU countries. In the construction industry, government backed projects for hospitals and prisons are generating more demand. Service centres, in the main, are only ordering for business already on their books or to fill gaps in inventories. In general, stock depletion is progressing well but resale prices from some distributors still do not reflect replacement costs. The sudden, positive movement in the Sterling exchange rate is making foreign deals look more attractive but buyers seem unwilling to run the risk at present, when material can be obtained relatively quickly from nearer home.
In Belgium, price movements are lagging behind those in the long products sector because there are still surplus quantities of steel at the mills and service centres. Market confidence has strengthened slightly even though it remains uncertain. Spanish stocks are at an undesirable level which gives distributors cause for concern since real consumption is extremely low. Resale values have not picked up. Nevertheless, players feel that the recent relentless deterioration in market conditions has been arrested for now. In fact, some buyers are confident enough to start to consider importing again. However, the current price differential is not quite large enough to be attractive.

Steel Price News, Steel news, EU steel prices, Steel Industry news, Free steel news, Steel news, Steel news alerts

Technorati Tags: EU Steel market,European steel prices.

British MP goes to Italy for Corus talks

2009-05-19T14:10:00.001+01:00

The MP for Redcar is to fly to Italy to hold talks about the future of under-threat steelworks Corus. Earlier this month a consortium of firms, led by Italian steel specialists Marcegaglia, pulled out of a 10-year deal, threatening nearly 2,000 jobs. But Vera Baird said she was hopeful of saving the plant, after being invited by Marcegaglia for a summit. She also said the talks in Mantua offered a "chink of light" for the Corus site, Teesside Cast Products. The agreement which has fallen through was signed in 2004 and committed the consortium of Marcegaglia SpA, Dongkuk Steel Mills Co Ltd, Duferco Participations Holding Ltd and Alvory SA, to buying just under 78% of the plant's production for 10 years.

More here

In a separate development anger among Teesside’s steel families has turned to action yet again, with more than 5,000 now signed up to the Save Our Steel campaign on Facebook.

Following a national protest in Birmingham led by Teesside Corus workers, the region is also highlighting the plight of Britain’s battered manufacturing sector through the internet campaign.

Technorati Tags: Corus,Teeside,Redcar

MEPS steel price and demand forecast

2009-05-18T08:40:00.001+01:00

ALL PRODUCTS CARBON STEEL PRICE FORECAST – APRIL 2009

WORLD (GLOBAL) - ALL PRODUCTS COMPOSITE CARBON STEEL PRICE FORECAST
The MEPS – Global World All Products Composite transaction price was, as anticipated, slightly lower in April. Global demand is weak for both long and flat products. Despite continued production curbs in all parts of the world, oversupply remains a problem. This is due to a substantial reduction in inventories in the supply chain over the past six months. However, it is now becoming clear that the rate of steel price decline is slowing. This is partly because the inventory drawdown is coming to an end. Further price reductions are anticipated over the next few months. The prospect of a significant cut in iron ore contract prices is leading to fears that prices will drop further.
An early revival in steel prices is unlikely. However, we do believe that a recovery is probable in the final quarter of the year and into 2010. The inventory depletion phase will be almost complete. Customers will need to start reordering on the mills. Delivery lead times are expected to extend. The mills will, almost certainly, maintain some production curbs. Moreover, the benefits of the various governments’ incentive packages should be filtering through to the steel sector as auto sales improve and infrastructure/construction projects start up.

EU – ALL PRODUCTS COMPOSITE CARBON STEEL PRICE FORECAST
The MEPS - EU All Products Composite transaction price decreased by approximately €30 per tonne in April. This was slightly below the figure anticipated last month. Competition from cheap dockside material forced local producers to reduce offer prices for flat products as they competed for the few orders available. Inventory depletion slowed with high stock levels for strip products remaining at many distributors. Decreases in scrap costs during March pushed down transaction values for all long categories. Consumption from end users was low. Mills continued to cut production in an attempt to re-balance supply and demand. With very few sales being concluded, however, this has yet to have any real effect on steel prices. Export opportunities declined further. Both the commercial and residential building sectors continued to weaken. Even projects that were ongoing have now been put on hold because of a lack of finance.
Selling figures should begin to stabilise in the second half of the year as domestic markets started showing small signs of recovery during the latter part of April. Recent rises in scrap costs could push long products prices higher after the summer break. However, there could still be downward pressure on transaction values as end user consumption will, almost certainly, remain weak in the short term. The conclusion of the new iron ore contract may also weaken transaction values for flat categories lower. Prices are then forecast to recover during the second half of 2009 as mills re-balance supply and demand by continuing to cut output and extending summer shut downs. The availability of credit should also improve later in the year. This is likely to lead to increased buying activity and accelerate the inventory depletion process. However, rises in selling figures may be limited by a resurgence in import volumes. Larger advances are forecast for early in 2010.

NORTH AMERICA – ALL PRODUCTS COMPOSITE CARBON STEEL PRICE FORECAST

The MEPS – North American All Products Composite transaction price moved down by over 5 percent in April. This was in line with our March forecast. End user demand remained poor. Scrap costs pushed long categories lower this month. Customers are still buying on an “as needed” basis. Consequently, the producers order volumes were low. Distributors are fighting for sales in a bid to offload surplus stock and raise cash. Reduced operating rates are also putting pressure on mill production costs. Inventory depletion continued throughout the supply chain. However, the pace of de-stocking slowed at US service centres, with gaps beginning to appear for certain grades/sizes. These are, however, not being replaced. Import purchases are too risky due to the extended delivery lead times. The housing market is still facing difficult times ahead, despite a 22 percent rise in new start-ups in February.
The All Products Composite price is forecast to continue decreasing over the next few months, even though the steelmakers are operating close to, or under, the cost of production. Falling raw material values are likely to put additional downward pressure on selling figures as demand from end users remains low. However, we do believe that we are nearing the bottom of the current price cycle. Import volumes are dropping and local mills are expected to maintain production cuts and extend summer shut downs. We predict that transaction values will stabilise around the middle of the year.
Government stimulus packages should begin to lift steel demand during the second half of 2009. Credit restrictions are also likely to ease. This should provide customers with the ability to increase their purchases. Low inventory levels in the market could then create supply shortages as order volumes grow. This will, almost certainly, lead to extended delivery lead times and rising prices from the fourth quarter onwards. Seasonal factors may temper these advances initially. Larger gains are then predicted for early 2010.

ASIA – ALL PRODUCTS COMPOSITE CARBON STEEL PRICE FORECAST

The MEPS – Asian All Products Composite transaction price moved up marginally in April. However, domestic price decreases were noted in all countries except Japan. Exchange rate movements, particularly in the South Korean Won, pushed the figures upwards when converted into US dollars. Output in the auto, appliance and construction industry negatively affected the cold rolled and coated sectors this month. Decreases in raw material costs put negative pressure on long products transaction values. End user demand was weak. Sales to distributors were low due to ongoing inventory depletion. Consequently, the mills tried to increase exports to help boost their order books. Nevertheless, poor global demand made this a difficult task, even for Chinese traders who have had export tax rebates reinstated. Local steelmakers continued to cut production in a bid to stem oversupply across the region. Building developments are being cancelled or postponed due to weakening economic conditions.
Transaction values for all products are forecast to decrease over the next few months as few signs of a pick-up in end user demand are evident. Distributors are expected to continue de-stocking with no rebound in sales anticipated until the excess inventories have been digested. Negative price pressure is also likely once the new iron ore contracts have been concluded, with Posco having already promised to adjust steel selling figures after the negotiations are completed. Weakening scrap costs are predicted to push prices for long categories lower in the short term. However, the oversupply situation may begin to ease shortly. Many local mills are scaling back production and several steelmakers are choosing to carry out maintenance in the hope that this will help to re-balance the market. Some sales recovery for long products in China is predicted in May/June, when several large projects start up. The Shanghai-Hangzhou railway in particular should generate demand in the longer term. Price stability is predicted for the third quarter.
A steady increase in steel consumption is predicted for the second half of 2009 as government schemes get underway. Prices are, therefore, forecast to advance in the final few months of the year. However, oversupply in some categories could temper these rises as new capacity comes on stream in China. Larger price improvements are forecast for early 2010 as a recovery in the world economy commences.

SOURCE: MEPS INTERNATIONAL LTD.

Steel Price news, Steel Price Index, Stainless Steel Prices, Steel Price News, World Steel Prices, Global Steel Prices

Corus asks banks to relax debt covenants

2009-05-13T10:34:00.001+01:00

Corus is meeting with it’s bankers today to discuss the effects of the recession on key debt to earnings ratios.

Whilst Corus have made cutbacks in production and costs, the depth of the recession continues to take a heavy financial toll on the steelmaker.

We understand that whilst Corus is an indirect subsidiary of Tata, it does not have access to the parents funds.

You can read more on this story at The Independent

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UK steel production falls

2009-05-12T10:45:00.001+01:00

STEEL production in the UK has dropped by almost 43 per cent in a 12-month period.

But the figures for the European Union as a whole show an even bigger fall.

In March this year, UK steel output totalled 749,000 tonnes, down from 1.3-million tonnes in March last year.

But the total was up on the 650,000 tonnes produced in February this year.

World crude steel production for the 66 countries reporting to the World Steel Association was 92-million tonnes in March, 23.5 per cent lower than March last year.

World production in the first quarter of 2009 was 264-million tonnes, a decrease of 22.8 per cent compared with the first quarter of 2008.

European Union production was down by 43.8 per cent compared with the same quarter of last year, while North America showed a 52.1 per cent decline.

China showed a slight increase, while all the other major steel-producing countries showed a decrease in the first quarter of 2009.

Severstal International idles Ohio, W.Va. mills indefinitely, laying off 3,100

2009-05-08T11:13:00.001+01:00

Severstal International Inc. said Thursday its steel mills in West Virginia and Ohio will be idled indefinitely because of the drop in orders, resulting in the layoffs or future layoffs of 3,100 steelworkers.

Severstal will idle its cold rolling and coating operations at its Severstal Wheeling Inc. plants in the next few weeks, after earlier stopping steelmaking operations. Production and steel finishing operations at a Warren, Ohio, plant will be idled indefinitely.

United Steelworkers spokesman Tony Montana said the layoffs were not surprising, given the global economic crisis impacting demand for steel.

Technorati Tags: Severstal,Warren,Severtal Wheeling,Steel plant,Steel Jobs

Steel plant could lose 2,000 jobs

2009-05-08T11:02:00.001+01:00

From BBC News

Steelmaker Corus is to mothball its Teesside plant threatening the jobs of nearly 2,000 workers.

Workers at the Teesside Cast Products plant in Redcar were told the news ahead of a 90-day consultation.

Owner Corus said the development had become "unavoidable" because of the end of a contract with four international steel slab buyers.

Steel union Community expressed "outrage" and said it would work to secure future steelmaking on Teesside.

Corus said the development was due to the termination of a contract by four international slab buyers.

Community general secretary Michael J Leahy said: "This is appalling news. We cannot believe that the consortium is taking such irresponsible action that will have a devastating effect on our members and the whole community in Teesside."

In January, the steelmaker announced it was cutting 3,500 jobs worldwide, including about 2,500 in the UK.

Technorati Tags: Steel Plant,Teeside,Corus

Possible good News on LDV

2009-05-06T07:52:00.001+01:00

Malaysian firm Weststar is said to be on the verge of taking over LDV after the troubled van maker was offered a £5m four-week loan from the government.

Negotiations between the company, LDV and UK government officials continued into the night to finalise the deal and avoid administration.

The company had been set to go into administration on Tuesday, raising redundancy fears for 850 workers.

Thousands working at other companies would also have lost their jobs.

Business minister Ian Pearson said a sale to Weststar offered a chance of keeping the factory in the UK.

A deal would bring some rare good news for the beleaguered motor industry, which has been battered by the recession.

Full Story at BBC

Technorati Tags: LDV,Westar,Auto Industry

LDV apply for administration

2009-04-29T13:50:00.001+01:00

The Birmingham based van maker LDV has applied to enter in to administration.

The Russian owned company has been in difficulty for some time as sales of commercial vehicles have collapsed. An earlier bid for Government help did not fail entirely, but help was offered only on the basis that their current financial situation was stabilised by it’s Russian owners.

About 800 people are employed at its Birmingham factory - though most have not been working, with production halted since December last year. Employees have been paid up to the end of last week, it said, but the firm could not confirm any further payments.

A large number of West Midlands based companies, including steel ressworkers would be involved in the LDV supply chain, so the repercussions of closure could be widely felt.

Technorati Tags: LDV,UK industry.

ArcelorMittal sales almost halve

2009-04-29T13:40:00.001+01:00

ArcelorMittal has seen its quarterly sales almost halve with the global recession hitting demand for steel.

Revenues at the world's largest steelmaker fell to 15bn euros ($19.8bn; £13.5bn) in the three months to 31 March, from 29.8bn euros a year ago.

As a result, the firm posted a quarterly loss of 1.06bn euros, its second in succession. A year earlier it had reported a 2.37bn-euro profit.

ArcelorMittal is based in Luxembourg but led by India's Lakshmi Mittal.

The firm said it would continue to freeze production while demand remains low from the global construction industry, carmakers and other main steel users.

Full story at BBC News

I have seen various statistics quoted in terms of the fall in steel sales, commonly that demand is down by 25%. I have felt for a while that a 25% figure is an optimistic one, and that the Arcelor figures reflect more accurately the situation, particularly in western Europe.

Technorati Tags: Steel production,Steel Sales,Arcelor Mittal

Staff told car plant under threat

2009-04-28T22:47:00.001+01:00

The owners of a car components plant in Llanelli that once employed over 1,000 workers say it could finally close with the loss of 100 jobs.

ThyssenKrupp Tallent, formerly Camford Pressings, has told staff it is looking at moving work to its other UK sites.

It said a final decision had yet to be made and it was unlikely any permanent employees would be made redundant before the summer.

The company blamed a significant fall in orders due to the current recession.

It is not the first time the future of the plant in Felinfoel has been under threat.

Three years ago the company held a 90-day consultation about closing it.

In a statement group HR manager Sue Boulton said: "It with great regret that the workforce of ThyssenKrupp Tallent's Llanelli plant were briefed on the possible closure of the site due to the significant fall in volume caused by the current recession.

"ThyssenKrupp Tallent has six plants in the UK all operating well below capacity with orders from customers down between 35% and 60%.

Full Story BBC News

Technorati Tags: ThyssenKrupp Tallent,Auto Industry,UK

Steel Blanks and profiles

2009-04-27T23:02:00.001+01:00

BSS Steel Strip are now able to offer steel blanks and profiles from as from 0.05mm to 10mm in a range of grades including cold rolled mild steels, high carbon and spring steels, and stainless grades 301 and 420.

Grades we supply:

EN10132 DC01 through to 4 including restricted tempers (these grades comply to BS1449 CS1 to CS4)
CS70, CS80 and CS95 Spring steels in the annealed and hardened and tempered condition. Equivalents to SAE 1075, SAE 1095, C67, C100 etc.
Type 301 full hard temper and type 420 hardened and tempered stainless spring steels.
Hot Rolled structural, high strength low alloy and Tenform

Dependent upon the grade we can offer guillotined or laser cut blanks and profiles according to your drawing, in quantities from a few blanks up to a few tons.

We currently supply around the world to Universities, Research and development organisations, and component manufacturers in to diverse industries and sectors including:

gas and oil
automotive
hand tools
locks and security products
musical instruments
Building industry
Fashion accessories

We are happy to ship small quantities around the world. Contact Steve at BSS for more information or call 01709 324379

BSS Steel Strip

Technorati Tags: Steel blanks,Steel profiles,Small quantities

Mittal expected to cut steel output by up to 10%

2009-04-27T13:06:00.001+01:00

Extract from article By Peter Marsh, Manufacturing Editor at FT.COM

ArcelorMittal is likely to have to make permanent cuts of up to 10 per cent in its steelmaking capacity as the industry reels from the impact of the worst global recession in decades, industry observers have warned.

It has slashed output in recent months by nearly 50 per cent through the temporary closures of steel plants and by putting tens of thousands of its 300,000 workers on short-time working.

ArcelorMittal says it is not contemplating permanent shut-downs or divestments. But others in the steel industry think it may be pushed into taking such action.

Read the full story at FT.COM

ArcelorMittal, have already made cut backs in production around the world, along with other major steel manufacturers. There is still however major over capacity throughout the industry with demand at an all time low.

Technorati Tags: ArcelorMittal,Steelmaking,Steel demand

More Steel jobs lost in Sheffield

2009-04-27T12:58:00.001+01:00

Around 50 jobs are to go at Sheffield forging plant Firth Rixson – just days after stainless steel giant Outokumpu announced the loss of 110 jobs.

Staff at Firth Rixson Forgings have been told "up to 60 jobs" will be cut from the 156-strong workforce at the Meadowhall site.
Workers have received letters saying 42 staff from the shopfloor must go, and that another five workers from the offices will lose their jobs.
One employee facing the axe said every member of staff has been told they must reapply for their own jobs and, once the process is complete, 47 workers will go.

Read the full story by Ben Spencer at the Sheffield Star

Technorati Tags: Firth Rixson,Steel Jobs,Sheffield

ArcelorMittal to lay off 400 in East Chicago

2009-04-14T09:11:00.001+01:00

Steelmaker ArcelorMittal SA will be indefinitely idling steel bar operations in East Chicago, IN, resulting in the layoffs of about 400 union and nonunion employees, or 8 percent of the Indiana Harbor plant's workforce, said Jim Robinson, a district manager for the United Steel Workers.
The USW received notice of the layoffs Monday from ArcelorMittal, a Luxembourg company that produces 10 percent of the world's steel.
ArcelorMittal said that a worldwide drop in demand for steel led to the layoffs at its Indiana Harbor Long Carbon facility in East Chicago. "This indefinite closure and corresponding layoffs reflect measures the company is being forced to take around the world to adapt to the market's situation," ArcelorMittal said in a statement.

Read the full story at the Chicago Tribune

Technorati Tags: ArcelorMittal,Chicago,Steeplant,layoffs,steel jobs

EU warns China over increasing steel exports

2009-04-08T23:44:00.001+01:00

A simmering trade conflict between Europe and China is nearing the boil as state-supported Chinese steel companies ramp up capacity despite drastic cuts by the rest of the world.

A 166-page report by the European Parliament has accused China of systematic distortion of its steel market, resulting in "irrational capacity extension". This is promoted, it said, by "artificially depressed cost levels" and export rebates.

The European Commission, the EU's trade enforcement arm, said some Chinese measures to support the steel industry are permissible under World Trade Organisation rules but there has been an escalation into "borderline" subsidies.

"The EU is taking this very seriously and we're in discussions with the Chinese," Lutz Gullner, the commission's trade spokesman, said.

"While steel production is declining all over the world to reduce over-capacity, it is still going up in China. This puts pressure on world markets," he said. The EU steel industry employs 440,000 workers. China's steel exports to the EU were 1.6m tonnes in 2005, 5.6m in 2006, 11.5m in 2007 and almost certainly higher in 2008.

At a time when the steel industry in Europe and the US is in crisis, there was always an inevitability that Chinese steel production would become an issue at some point. Whilst protectionism holds dangers for the global economy, "unfair competition" will be a major area of contention.

read the full story at the Telegraph.

Technorati Tags: Steel,steel internationa,China steel

ArcelorMittal hardens steel output cuts in Europe

2009-04-08T14:43:00.001+01:00

ArcelorMittal steel announced on Wednesday that it would continue to suspend production in Europe, and a union official said this meant the group would slash the output by more than half.

ArcelorMittal, by far the world's biggest steel maker, said after a meeting here with European union officials that "it is necessary to continue to suspend and optimise production" in the face of the global economic crisis.

CGT union official Jacques Laplanche told AFP that staff had been told at the meeting that European production would be cut by more than half from the end of April.

"Because of the crisis, ArcelorMittal wants to reduce costs and is going to concentrate production on certain sites," Laplanche said.

Furnaces at Liege in Belgium and at Florange in eastern France would be totally halted, he said.

Full story at AFP

Technorati Tags: ArcelorMittal,Steel Production,Steel cuts

German steel output down by half in record fall

2009-04-08T00:15:00.001+01:00

Reuters reported today that German steel production in March halved, continuing a downward trend, and the steepest fall in 19 years.

The Federal Statistics Office on Tuesday said 2.10 million tonnes of raw steel were produced in March, down 49.8 percent year on year.

Europe's biggest economy has been hit hard by the global downturn, with manufacturing orders falling sharply since the end of 2007. Industrial output posted a record drop in January.

Brokerage Merck Finck said the negative sector trend has considerably strengthened, but this was expected as local plants were only producing 50 percent to 65 percent of capacity.

Read the full story at Reuters

Technorati Tags: Steel Production,German Steel Industry

Steel and the credit crunch

2009-04-07T23:40:00.001+01:00

The situation in the steel industry shows little prospect of improvement in the near future, and whilst trading conditions remain as they are cash flow will become an increasing problem, that unfortunately will lead to the demise of some players.

It is not only the low production levels, (total production in the first 13 weeks of 2009 was 13.66 million tons in the US a decline of 52.9% from 28.99 million tons produced during the same period a year ago), but the lack of available credit, that might strike the killing blow for some.

As banks and insurance companies have pulled back from their traditional role of financing company cash flows and providing credit insurance against bas debt, this role is falling to the steel producers and distributors themselves.

Whilst business has declined rapidly, particularly in the automotive and construction industries, steel companies are fighting over a much smaller pool of orders. Not only are there fewer orders available, but it is increasingly difficult, if not impossible to obtain any meaningful guarantees of the creditworthiness of customers. In a bid to maintain some level of production, steel suppliers are taking that risk, and sometimes the risk is not going to "pay off". Ironically any supplier to a steel company, will find they cannot get any insurance cover on the steelmakers themselves. The very same banks that brought about the crisis by reckless lending are perpetuating the desperate economic climate by withdrawing their support even from profitable enterprises that need short to medium term assistance.

Until the banks start to lend again (isn't that what they are in business for?), things are going to continue to get worse, and the longer we remain in this situation the more companies, including those in the steel sector are going to run out of cash.

It's only just over a year since rising steel prices and demand were pushing up steel company share values faster than MP's expense claims at Westminster. Who would be an economc forecaster?

There is an interesting article here at Mineweb about a recent Steel Industry conferance in Athens

Technorati Tags: Steel Industry,Credit Insurance,Credit

MEPS report Steel Prices continue to slide

2009-03-30T09:22:00.001+01:00

Mill outages continue in the US, with operating levels now under 50 percent. There is still negative pressure on transaction prices as sales fail to recover. All the major steel consuming sectors are affected by the financial and economic crisis - from construction through to manufacturing and particularly the auto industry. Moreover, distributors are buying very little as they wait to see some pick up in consumption. Although holes are appearing in inventories, they are not being filled.
In Canada, orders are sparse, causing many producers to close facilities for indefinite periods of time. They continue to axe transaction prices and further erosion is likely as they scramble to fill empty mill rollings. All consuming sectors are experiencing depression, including vehicles, tubing, construction and manufacturing. Customer inventories are at historic low tonnages but are still seen as too high for the dismal level of demand. However, there is some optimism that if the Canadian dollar remains weak, local firms may start to generate more export business. Likewise, the current exchange rate is reducing steel import competition.
Chinese values have been on a downward trend for the majority of the last month. However, having lifted production at the start of the year, local mills have begun to cut output again in response to the re- emergence of excess supply. Additionally, the government's policies aimed at boosting consumption should start to revive demand in the near future. Steel exports continue to contract and overseas sales of manufactured goods are declining because the main destinations, Europe, US and South Korea, have been severely hit by the global downturn. Cheap steel imports, especially from Russia and Ukraine, are putting a strain on the domestic market.
Selling values are softening in Japan. Tokyo Steel decided to cut domestic list prices for all its products by between ¥3000 and ¥5000 per tonne for April contracts, in a weak market climate. Inventories of strip mill products held by local steelmakers and distributors, as end January, moved up slightly compared to December - reaching 4.72 million tonnes. Meanwhile, quayside stocks of imported flat products fell by just 0.8 percent in the same time frame.
In South Korea, Posco has hinted that its production cuts may be extended into this month in line with declining steel demand worldwide and dismal domestic consumption. Taiwanese sales are described as 'satisfactory', although domestic producers Chung Hung and CSC continue to trim prices to help lower the costs of downstream customers. The latter company is bringing forward maintenance at its No 3 blast furnace to mid-April. The work will continue until September, curtailing output by 40 to 45 percent during the period.
Polish demand is still deteriorating. Inventories remain at an undesirable level. Prices have reduced in euro terms but currency fluctuations have pushed zloty values slightly higher this month. We can see no positive progress in the Czech/Slovak markets. In fact, both consumption and prices continue to drop. Because their sales are so slow, distributors have adopted a purchasing policy whereby they buy the very minimum they need. There is no necessity for them to build up stocks because material can be obtained from the mills in small quantities, within two to four weeks.
In Western Europe, the mills are curbing capacity but market players question whether the cuts are sufficient. Distributors are still destocking because sales to end-users are so poor that the whole process is taking much longer than anticipated. Credit issues are exacerbating an already dismal demand situation. The producers have held back from making official announcements for the second quarter. They lowered prices for March output, amidst weak demand, financial uncertainty and severe competition for the small amounts of business that were available.

Source: MEPS - International Steel Review - click here for a free sample copy.

STEEL INDUSTRY NEWS FROM MEPS INTERNATIONAL LTD, Steel Price News and Steel News Alerts, World Steel Price News, Steel Prices, Steel News, Steel Price, Steel Industry News

Ratan Tata warns of jobs cuts at Jaguar

2009-03-26T08:12:00.001Z

Tata Group Chairman Ratan Tata has said job cuts will take place at Jaguar unless the British government guarantees loans worth millions of pounds to the car maker.
In an interview to Sky News, Ratan Tata said, "Job cuts will be made unless the government can guarantee 500 million pounds in loans to the company".
Quoting Tata, the report published online said Jaguar was in need of urgent help or the company would face "devastating" results.
He said the firm needed a multi-million pound loan guarantee otherwise "its 15,000 UK workforce would be culled".
"If funds are not available a company will not be able to run... So layoffs will take place, redundancies will take place..., as has already happened in the UK," Ratan Tata told Sky News.
According to Sky News report published online, the firm is engaged in a stand-off with the UK government over funding.

Technorati Tags: Tata,Jaguar Landrover,Government loans,UK car Industry

Steel wage subsidy plea rebuffed

2009-03-25T07:30:00.001Z

The government has dismissed calls for a wage subsidy to keep the steel industry going through the recession.

Ian Cawsey, the Labour MP for Brigg & Goole, called a special Parliamentary debate on Tuesday to ask ministers to help steel giant Corus.

He said the company needed help to retain staff at its plants in Scunthorpe and elsewhere in the UK.

Other European countries are boosting the pay of workers who have been put on short working weeks as demand slumps.

Mr Cawsey admitted wage subsidy was an expensive option, but argued it was wiser in the long term.

"If we can spend £1.2bn on protecting jobs that would be a price very well worth paying.

"It strikes me that whilst across the world we all face the same problem, how we respond is going to be crucial to how soon and how extensive our recovery will be."

Business Minister Ian Pearson pointed out that the government was offering financial help to struggling companies.

But he insisted wage subsidies were not the answer.

"Wage subsidy schemes are extremely costly," he said.

He said many of the firms eligible for such relief would have retained workers without the subsidy anyway.

Mr Pearson added that wage subsidy schemes would "create distortion and perverse incentives" in the market.

Technorati Tags: Corus,Stee workers,subsidies,steel industry