Zekelman on growth in steel pipe and tube - Energy pipe markets recover Bauxite & alumina - Metal Bulletin
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March 2018 Zekelman on growth in steel pipe and tube Energy pipe Bauxite & alumina Enterprise software markets recover opportunities innovations
AS ONE We are stronger Two powerful companies in the metals industry have forged together. Mitsubishi-Hitachi Metals Machinery and Siemens VAI Metals Technologies have united to become the new global force in metals technologies. Creating the future of metals as one. primetals.com
March
Features
20 20 Spotlights 46
Cover story
Barry Zekelman,
35 End-user spotlight:
Renewable energy
Market spotlight:
executive chairman With movement from
Alumina & bauxite
carbon-fuel generated
ZEKELMAN INDUSTRIES
and CEO of Zekelman As environmental
Industries, on turning energy to clean
restrictions shrink Chinese
around his family’s renewable energy
bauxite and alumina
business and growing accelerating, what
production, high prices
it into a multi-billion- part does the metals
are encouraging other
dollar venture industry play in the new
producers to ramp up
technology?
output
Tube & pipe
New orders
25 39
US energy pipe market
Technology spotlight:
Enterprise software
49
outlook New plant orders
Expert comment on A quarterly list of recently
A summary of the
digital trends and the placed orders
multiple market drivers
future capabilities
and uncertainties
emerging in the ERP and
impacting the US energy
AI sectors
pipe markets and the
global recovery in OCTG 25
markets
Rail
32
ArcelorMittal’s way with
rail
Profiling ArcelorMittal’s
rail production
capabilities and
summarizing the
advantages gained by the
TENARIS
company’s investments
at its Spanish rail mill
32 46
CONSORCIO AL SHOULA
ABB
March 2018 | Metal Market Magazine | 3
March
News and analysis Regulars 8
8 7
Non-ferrous Comment
news review Dynamic markets
PORT OF AMSTERDAM
A summary of recent
key developments
in the international 18
non-ferrous industries Pricing bauxite
and alumina 10
An explanation of
10 how changing market
Steel news review dynamics for bauxite and
A round-up of important alumina have demanded
SHUTTERSTOCK
recent developments evolution in the means
in the global iron and of pricing them
steel sectors
53
53
14 Innovations
Base metals and New developments
steel analysis in steel and metals
BUSINESS WIRE
Metal Bulletin Research technology, processes
analyses the drivers of and products
the base metals, steel
and steel raw materials 54
markets 54
End-user
Advances and market
developments in
applications
GENERAL DYNAMICS LAND SYSTEMS
Disclaimer
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4 | Metal Market Magazine | March 2018
C. Steinweg Group C. Steinweg Group, more than 100 own locations worldwide. Base Metals, Ferro Alloys, Steel, Minor Metals, and Project Cargo. Independent. Logistics. Since 1847. Head Office: Parmentierplein 1 3088 GN Rotterdam The Netherlands Phone: +31(0)10 48.79.555 E-mail: info@nl.steinweg.com Website: www.steinweg.com Warehousing • Chartering • Shipping • Stevedoring • Forwarding • Transport • Releasing • Processing • Customs Documentation • Risk Management
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Comment
Dynamic markets
Magazine
t is a fact that markets tend to be cyclical. It is also Published by Metal Bulletin Group. North America steel editor:
true that the number and relative strength of Metal Bulletin, 8 Bouverie Street, Thorsten Schier
US reporters: Dalton Barker, Michael
factors impacting any given market change more London EC4Y 8AX.
UK registration number: 00142215 Cowden, Millicent Dent, Lisa Gordon,
rapidly at some points in time than others. Right Tel: +44 20 7827 9977
Fax: +44 20 7928 6892 and +44 20
Chris Kavanagh, James Lawrence,
Brad MacAulay, Kirk Maltais, Nat
now we are in a phase in which steel and metal 7827 6495 Rudarakanchana, Mei Ling Toh, Dom
Yanchunas
markets are on the move for a variety of local, E-mail: Editorial@metalbulletin.com
Website: www.metalbulletin.com
national and international reasons. Metal Market Magazine:
Global newsdesk editor: Mark Shaw
US newsdesk leader: Sean Mayer
In our cover profile interview, Barry Zekelman Editor: Richard Barrett Senior sub-editors: Cecil Fung, Sara
Kelly (US), Wei Jun Lau, Renate Foster
points out that increased momentum in US Associate editor: Duncan Moore
Advertising Sales: Mas (US), Tony Pettengell, Jeff Porter
infrastructure investment would supersize demand Publisher: Mary Connors
Tel: 646 274 6250
Sub-editors: Francesca Brindle, Kyle
Docherty
for the steel pipe and tube that Zekelman Industries E-mail: Mconnors@amm.com CEO: Raju Daswani
produce at its plants in North America. Global senior advertising manager,
Europe/Turkey: Arzu Gungor Offices:
More buoyant oil prices have assisted recovery in Tel: +44 20 7827 5268 London: Metal Bulletin, 8 Bouverie
Street, London, EC4Y 8AX, UK. Tel:
E-mail: arzu.gungor@
OCTG demand in the United States and lifted other metalbulletin.com +44 20 7827 9977
New York: Metal Bulletin, 1120
important markets for OCTG in Russia, the Middle Senior sales manager, Midwest, West
Coast, North America: Jessica Kelliher Avenue of the Americas, 6th floor,
East and Asia. Large-diameter line pipe markets have Tel: 312 929 4195 New York, NY 10036, USA. Tel: +1 (212)
213 6202. Toll free: 1 800 METAL 25,
E-mail: Jessica.Kelliher@amm.com
been less swift to respond, but they are often more Regional sales manager, Middle Fax: +1 (212) 213 6617
Pittsburgh: 707 Grant Street, Suite
dependent on long-term government-led projects. East/Africa, Asia, UK: Kelly Huynh
Tel: +44 20 7779 8735 1340, Pittsburgh, PA 15210, USA.
Our feature on energy tube & pipe explains current E-mail: Kelly.huynh@ Tel: +1 (412) 765 2580
Singapore: Quadrant at Cecil, 3F, 19
metalbulletin.com
market dynamics. Regional sales manager, East Coast, Cecil Street, Singapore, 049704
Shanghai: Metal Bulletin Research,
Railways are another sector for which projects ‘We are in a North America: George Reeves
Tel: 212 224 3938 Room 305, 3/F, Azia Center, 1233
based on public funding are a key factor. As our feature phase in which E-mail: George.reeves@amm.com Lujiazui Ring Road, Shanghai 200120.
Tel: +86 21 5877 0857. Fax: +86 21
Events and client services
on ArcelorMittal’s way with rail explains, the major steel and metal marketing manager: Adelaida 5877 0856
São Paulo: Rua Prof. Atílio Innocenti
steelmaker has invested in its European rail mills in Montilla
preparation for what it sees as a positive period for
markets are on Tel: 212 224 3937
E-mail: Adelaida.montilla@amm.com
165, 7th floor, Rooms 106-107, São
Paulo, SP, 04538, Sao Paulo, Brazil.
railway authority investments. the move for a Advertising sales administrator:
Eva Cichon
Tel: +55 11 3197 8750
Customer services dept:
Bauxite and alumina markets have their own variety of local, Tel: +44 (0)20 7827 5263
E-mail: ecichon@metalbulletin.com
Tel: +44 (0)20 7779 7390
specific dynamics, but are clearly interconnected national and Production designer: Paul Rackstraw
Subscription enquiries:
Tel: UK: +44 (0)20 7779 8260. USA:
with the fortunes of the aluminium industry international Metal Bulletin:
(877) 638 2856/(412) 765 3581
Email: subs@metalbulletin.com
downstream. The latter, in turn, has become ever reasons’ Group editorial director: Alex Harrison
Global ores, alloys and minor
Metal Bulletin is a part of Euromoney
more dependent on Chinese governmental decision- metals editor: Fleur Ritzema
Global Limited: 8 Bouverie Street,
London EC4Y 8AX.
Global base metals editor:PerrineFaye
making – not least with respect to reducing the Global copper editor: Archie Hunter
Directors: David Pritchard
(chairman), Andrew Rashbass (ceo),
environmental impacts of heavy industries and power Global steel editor: Andrew Wells
EMEA, CIS, Turkey steel editor:
Colin Jones, David Pritchard, Sir
generation. One of our spotlight features weighs up Reginald Ajuonuma
Patrick Sergeant, Andrew Ballingal,
Tristan Hillgarth, Imogen Joss, Tim
Special correspondents: Andrea
the net impact of current market factors on the Hotter, Janie Davies
Collier, Kevin Beatty, Jan Babiak,
Lorna Tilbian
outlook for bauxite and alumina markets. UK and Europe correspondents
and reporters: Lee Allen, Tanya Copyright notice: © 2018 Metal
Our technology spotlight article considers Ashreena, Serife Durmus, Julian Bulletin. All rights reserved. No
Luk, Ewa Manthey, Alice Mason,
enterprise software and artificial intelligence. Both are Vlada Novokreshchenova, Charlotte
part of this publication (text, data
or graphic) may be reproduced,
part of a digital revolution that is transforming the Radford, Viral Shah, Marina Shulga,
Maria Tanatar, Cem Turken, Justin Yang
stored in a data retrieval system, or
transmitted, in any form whatsoever
ways in which plants will be operated and businesses Latin America steel editor: Ana Paula or by any means (electronic,
run. We consider developments of particular Camargo
Latin America reporters: Danielle
mechanical, photocopying,
recording or otherwise) without
relevance to steel and metal industries. Assalve, Felipe Peroni
Asia non-ferrous editor: Shivani Singh
obtaining Metal Bulletin’s prior
written consent. Unauthorised and/
And our end-user spotlight article looks at the Asia deputy non-ferrous editor: or unlicensed copying of any part
contribution that metals and steel are making to Kiki Kang
Asia steel editor: Paul Lim
of this publication is in violation
of copyright law. Violators may be
renewable forms of energy generation, including wind Asia steelmaking raw materials
editor: Deepali Sharma
subject to legal proceedings and
liable for substantial monetary
and solar power. Senior correspondents (Asia): damages for each infringement
Combined with regular market analysis from Metal Fiona Lam, Karen Ng, Vivian Teo,
Ellie Wang
as well as costs and legal fees.
Brief extracts may be used for the
Bulletin Research, reviews of the past month’s news, Analysts (Asia): Gladdy Chu, Anna
Xu, July Zhang, Sophie Zhao, Jessica
purposes of publishing commentary
or review only provided that the
and a list of recently placed new plant orders, our Zong, Susan Zou source is acknowledged.
March issue gives a wide-ranging foretaste of things to Industry researcher (Asia): Echo Ma
Prices manager: Mary Higgins ISSN 0002-9998. Printed in the UK
come throughout 2018. and US. In the UK by Buxton Press Ltd,
American Metal Market Buxton, Derbyshire SK17 6AE. In the
North America non-ferrous editor: US by Sheridan NH, 69 Lyme Road,
Find us online at www.metalbulletin.com and www.amm.com Tom Jennemann Hanover, NH 03755.
March 2018 | Metal Market Magazine | 7
Newsreview:non-ferrous
Huayou Cobalt and
Posco in Li-ion battery
materials jvs
Huayou Cobalt and Posco will
invest in two joint ventures in
China’s Zhejiang province to
produce lithium-ion battery
materials, according to a
statement filed on the Shanghai
Stock Exchange. With a total
investment of 1 billion yuan
($154 million), Zhejiang
Huayou-Posco New Energy Co,
Ltd will be dedicated to the
research and development,
production and sales of
lithium-ion battery precursor
materials.
The second joint venture,
Zhejiang Posco-Huayou New
Energy Co, Ltd, will receive a
total investment of 930 million
yuan to engage in the research
and development, production
FORD
and sales of lithium-ion battery
precursor materials, as well as Demand for its aluminium-intensive SUV models has seen Ford add 400 new robots at its Kentucky plant
battery cathode materials.
Expeditions to customers than The mill will have a maximum project will be delivered to the
Ford grows aluminium- originally planned.” annual capacity of 200,000 tonnes, nearby Pirquitas mill and
producing sheet for a variety of concentrator, the Canada-based
intensive SUV output automotive components. The miner said.
Ford Motor Co is investing $25
Avanco Copper to buy plant will include heat-treatment Priority development
million in its assembly plant in Pantera copper project and pre-treatment lines activities have started, including
the US state of Kentucky to Avanco Copper has entered into designed to produce sheet for initiating the earthworks
meet surging customer demand an agreement to buy Vale’s use in body-in-white projects at Chinchillas, releasing
for its aluminium-intensive Pantera high-grade copper-gold components, hoods, doors, lift construction contracts and
sport utility vehicle (SUV) project, located near its existing gates and fenders. It is expected commencing construction
models, a Ford spokeswoman operations in Brazil’s northern to begin construction in early activities at Pirquitas, as well as
confirmed to American Metal region of Carajás. spring 2018 and open in 2020. pioneering works for
Market. It brings Ford’s total The acquisition cost is “Aluminium is a growing pre-stripping at the Chinchillas
funding for the plant to $925 expected to range from $20 material of choice for the deposit, SSR spokeswoman
million. million to $35 million, automotive industry worldwide Stacey Pavlova said.
More than 400 new robots – depending on the strategy as auto manufacturers continue
including collaborative robots undertaken to complete the to demand more and more ITRI becomes
– have been added to the transaction. aluminium to produce lighter,
facility, mainly in the body shop. “Its proximity to established safer and stronger cars, trucks International Tin
The plant also added a robot lab, infrastructure bodes well for low and SUVs,” Novelis president Association
where employees can test out capital investment intensity, in and chief executive officer Steve The International Tin Research
software tweaks or troubleshoot many senses, similar to the Fisher said. Institute (ITRI) has changed its
issues away from the factory company’s producing Antas name to International Tin
floor. copper mine, which was SSR’s Argentine lead Association Ltd to reflect its
“The response from developed on time and within evolution toward more diverse
customers regarding our new budget,” Avanco Copper said. project on track activities including
full-size SUVs has been The construction of SSR sustainability.
exceptional,” said Joe Hinrichs, Novelis plans Kentucky Mining’s project in Argentina, Established in 1932 in
president of Ford Global projected to produce more than London, ITRI for its first 70
Operations. “Using a greenfield auto mill 15,875 tonnes per year of lead years brought together
combination of Ford’s advanced Novelis Inc has earmarked metal, started in January with tin-producing governments and
manufacturing and American $300 million to build a the first ore feed expected in the producers to focus on the
hard work and ingenuity, we’ll greenfield automotive second half of 2018. promotion of tin and the
deliver more high-quality aluminium sheet rolling mill in The first ores from the research and development of
Lincoln Navigators and Ford Guthrie, Kentucky. Chinchillas lead, silver and zinc new tin-based technologies.
8 | Metal Market Magazine | March 2018
Over the last two decades, become one of the world’s
ITRI has tackled a broader largest producers with over half
range of tin industry issues and a million tonnes of sales of
expanded activities in areas manganese alloys,” Ferroglobe
such as market analysis, chairman Javier López Madrid
conferences, sustainability and said.
regulatory affairs. For instance,
it launched a code of conduct to Nornickel, Russian
support responsible tin
sourcing. Platinum sign
$4.4 billion PGM deal
Nornickel has signed a $4.4
Matalco buys billion partnership deal with
aluminium remelt Russian Platinum Plc in a 50:50
competitor Alexin owned enterprise to jointly
Matalco Inc has purchased develop three major platinum
PORT OF AMSTERDAM
aluminium billet remelt group metals (PGM) deposits in
competitor Alexin LLC for an Russia.
undisclosed amount, expanding The joint company aims at
its billet and slab capacity to producing approximately
more than 450,000 tonnes per Port of Amsterdam has been awarded an LME certification by 70-100 tonnes per year of
year and its access to the the London Metal Exchange platinum and palladium, as well
automotive market. as 50,000 tpy of nickel,
“The integration of Alexin ERG’s Pavlodar aluminium 15,000 tonnes of anodes to Nornickel’s president Vladimir
provides Matalco with smelter. Construction is also external smelters. Potanin said.
increased product breadth, underway at mine No. 4 at The deposits in the Norilsk
particularly in the growing Vostochno-Ayatsky and is due LME approves area have proven ore reserves of
automotive flat-rolled product for completion in 2020. 3,100 tonnes of palladium,
market and specialty alloy billet Amsterdam as delivery 1,200 tonnes of platinum, and
markets,” Alexin president Tom Boliden invests in point 6.3 million tonnes of
Horter said. “Our combined The London Metal Exchange nickel and copper.
facilities are well-positioned to copper-nickel ops has approved Amsterdam as a
turbocharge the group’s future Over the next two years, delivery point for primary
product offerings and Swedish metal producer aluminium, aluminium alloy,
Former MRI metals
[production part approval Boliden will invest in expanding lead, nickel, tin and zinc. concentrates head
processes] for speed to market its copper-nickel production Amsterdam will become an sets up Axaya trading
in these growing niche areas sites in Finland. The company active delivery point three venture
while supporting other business will spend €80 million ($98.65 months after the first
possibilities to attain the ... million) to raise output at its participating warehouse Bikram Singh, the former head
medium- and long-term Kevitsa copper-nickel mine and company in the location is of metal concentrates trading at
objectives” of Matalco parent €45 million to expand capacity named, the LME said. MRI Trading AG, has set up a
company Giampaolo Group. of the Harjavalta copper-nickel Current LME delivery points new trading venture named
smelter. in the Netherlands include Axaya AG, according to sources
ERG brings Kazakhstan Metal ore output from the Rotterdam, Vlissingen and and regulatory filings.
Kevitsa copper-nickel mine will Moerdijk. Axaya was incorporated as a
bauxite on stream rise 27% to 9.5 million tonnes raw materials trading company
Eurasian Resources Group per year following the last year. Singh became the sole
(ERG) has completed the construction of a new
Ferroglobe buys director in January 2018, Swiss
construction of two bauxite autogenous mill and new mill Glencore manganese company records show.
mines in the Kostanay region of house. The upgrade will be alloy operations The move comes as competition
Kazakhstan, bringing 1.3 achieved in the first quarter of Ferro-alloys producer between merchants in the
million tonnes per year of 2021. Ferroglobe has successfully metals concentrates markets
bauxite on stream, captive to Copper cathode output at the completed the acquisition of a heats up. Singapore-based Kyen
Aluminium of Kazakhstan’s Harjavalta smelter and Pori 100% interest in Glencore’s Resources said it would look to
needs. Production will refinery is projected to reach manganese alloys plants in Mo i start a concentrates trading
commence immediately at both 170,000 tonnes per year in the Rana (Norway) and Dunkirk book as part of its expansion into
sites, located in the Krasno- first quarter of 2020 following (France) from a wholly-owned European markets.
Oktyabrskoye mining unit: the expansion, compared to the subsidiary of Glencore Singh left MRI in March last
mine No. 9 at Ayatsky and mine existing capacity of 135,000 tpy. International. year before Chinese conglomerate
No. 17 at Krasnogorsky. The expansion will enable “The acquisition of the HNA bought the trading house
The new production follows a Boliden to process all of its Glencore plants in France and and its parent company,
$21.5 million investment by internal copper anode output. Norway represents a unique warehouser CWT, for around
ERG and will feed operations at The company currently sells opportunity for Ferroglobe to $1 billion.
March 2018 | Metal Market Magazine | 9
Newsreview:steel
Nucor eyes Florida for “Not only will this help our
second rebar micro-mill customer base in North
America, but the ASA can be a
Nucor could potentially locate launching point in training for
a $227.5 million rebar future generations of
micro-mill in Florida, 75 miles steelworkers with knowledge
from Tampa, according to the in the latest technology in
company. A final decision on a steelmaking and processing,”
site has not yet been made for Doug Dunworth, president
the company’s second and chief executive officer of
micro-mill project, said to be SMS Technical Services, said.
destined for the US Southeast.
South Carolina is also BMB investing $75
currently under consideration,
a Nucor spokeswoman told million in new capacity
SHUTTERSTOCK
American Metal Market. Turkey’s largest steel pipe
“Nucor is continuing to producer, Borusan
evaluate locations in the Van Merksteijn is planning to build a wire-rod mill at the Mannesmann Boru (BMB), is
southeastern US to build a Eemshaven port in the Netherlands going to increase its
second rebar micro-mill, with production capacity with new
Florida and South Carolina final negotiations with the Fuat Tosyali said the mill investments worth $75
currently under production technology will first meet the local demand million.
consideration,” she said. provider and hope to have for rebar, and then target The company will open a
“Similar to our Missouri confirmation in the next one or exports, mainly to African new factory in Gemlik, Bursa,
decision, we are assessing areas two months,” he added. nations. He added that the which will produce special
where the rebar market is company also plans to invest in pipes for the automotive
underserved and where our Malaysia raises long Ethiopian iron ore. Ethiopia industry, while it will increase
transportation and raw has about 70 million tonnes of production capacity at its
material cost advantages make steel products capacity iron ore reserves, according to Halkali mill, located in
the project economically Malaysia has increased its long the Geological Survey of Istanbul.
viable,” she added, referring to steel products capacity via the Ethiopia.
Nucor’s decision to site its first start-up of Alliance Steel’s International Steels
rebar micro-mill in Sedalia, rolling units in the country’s Salzgitter to boost EU
Missouri. “Along with market Pahang state. The integrated to set up service centers
considerations, state and local mill, located at the Malaysia- specialty plate supply in Karachi
incentives – such as the ones China Kuantan Industrial Park, German steel producer Pakistani flat steel products
recently discussed in Florida will be capable of producing Salzgitter will invest more roller and coater International
– are an important factor in wire rod, steel bar and H-beam than €150 million ($185 Steels is to set up service
our site-selection process.” at a rate of 3.5 million tonnes million) in a new heat centers in Karachi and Lahore.
per year at full capacity. treatment line at its The total cost will be 675
Van Merksteijn to build The mill’s wire rod and No.2 platemaking subsidiary million Pakistani rupees
bar mills have started Ilsenburger Grobblech in ($6.08 million), and the service
wire rod mill in the production, according to Ilsenburg, northern Germany, centers will have cut-to-length
Netherlands Chinese equipment maker to upgrade its platemaking and slitting machines and will
Dutch wire products supplier Metallurgical Corporation of facilities to anneal and further be completed within 12
Van Merksteijn is to build a China (MCC). The wire rod process 200,000 tonnes per months after the date of
mesh-quality wire rod mill mill has a maximum rolling year of heavy plates by 2020. approval.
with capacity for 800,000 speed of 105 metres per The company will also invest
tonnes per year at the seaport second while the bar mill is Arkansas college 290 million Pakistani rupees
of Eemshaven in the north of capped at 45 metres per second. ($2.61 million) in an annealing
the Netherlands. The company and SMS group create and skin-pass facility with a
hopes to start production at Tosyali to build steelmaking academy capacity of 100,000 tonnes per
the mill in 2020 and is Arkansas Northeastern year at the Karachi service
expected to use scrap-based steelmaking plant College and Germany’s SMS center.
electric-arc furnace (EAF) in Ethiopia group have signed an
technology. Turkey’s Tosyali Holding is agreement to create Arkansas
“The capacity we’re planning to build a steel plant Steelmaking Academy (ASA).
Conares Steel to
planning to build would help to in Ethiopia, Africa, the The school – located in build PPGI line
cover the current mesh-quality company has announced. The Blytheville, Arkansas – is United Arab Emirates steel
wire rod shortage in the mill will produce billet and scheduled to open in 2019. producer Conares Steel has
European market,” group rebar, and will reduce the Previously, SMS TECademy started the construction of a
commercial director Kris van country’s reliance on imports, training had been available new line to produce color-
Ginderdeuren said. “We are in chairman Fuat Tosyali said. only in Germany. coated coil, or pre-painted
10 | Metal Market Magazine | March 2018galvanized iron (PPGI) chief S+B has bid a total of €195
executive officer Bharat Bhatia million ($238.61 million) for
told Metal Bulletin. Ascometal, including an €82
The new PPGI line is being million investment in the
built in the Jebel Ali Free Zone, production facilities over the
with equipment supplied by next four years, it said. This is
CMI Belgium. It will have up from its initial bid of €135
capacity for 75,000 tonnes per million, which included a €64
year and will produce PPGI in million investment in the
gauges of 0.18-1.2 mm and in production facilities.
widths up to 1,500 mm. The
total investment in the line will Unicoil extends capacity
be $30 million.
to thicker PPGI
Saudi Arabian flat steel
B Group’s new re-roller and coater Unicoil is
Finnish plant now able to produce
Lithuanian long steel company pre-painted galvanized steel
B Group has opened a new (PPGI), or color-coated coils,
rebar service center in Finland PPGI in thicknesses from 0.22
NLMK
as part of its plan to buy in and mm to 1.50 mm and in widths
process larger volumes of bar NLMK is increasing iron ore pellet production at its Stoilensky plant of 500-1,250 mm.
products, company chief
executive officer Donatas delivery of quality steel Tsingshan has formed a
Gelazauskas told Metal Bulletin. products into the joint-venture company –
Mughal Steel to increase
The unit in Loviisa, south marketplace,” Union Partners’ Cromo Steels Private Ltd Co rebar, billet capacity
Finland, has the capability to founders Chris Hutter and – with unknown parties to Pakistan’s Mughal Steel is
process 20,000 tonnes per Paul Douglass said in a construct a 150 billion rupee planning to increase its rebar
year of rebar in coils and statement. ($2.3 billion) integrated plant, production capacity to
straight bar, Gelazauskas said. which will consist of 420,000 tonnes per year from
NLMK increases iron ore hot-rolling and cold-rolling the existing 150,000 tpy. The
Union Partners to build lines as well as smelting project, planned to be
pellet output facilities, in Gujarat state. completed in the second
steel processing facility Russia’s largest steelmaker, quarter of 2018, will increase
Union Partners will build a Novolipetsk Steel (NLMK), the company’s overall
new steel processing facility on will increase iron ore pellet
Aceros Arequipa’s re-rolling capacity to 958,000
the Osceola, Arkansas, campus output at its Stoilensky plant new furnace to reduce tpy from the existing 688,000
of Big River Steel. in the west of Russia to 6.4 imports tpy. Its other products include
Construction of the new million tonnes per year in Peruvian steel producer I-beams, L-sections,
facility, which will be next to 2018, a company Aceros Arequipa will invest C-sections, H-beam and T-bar.
Big River’s Flex Mill, will spokeswoman told Metal $180 million to construct a
begin in the first quarter of this Bulletin. The 2018 target new electric-arc furnace (EAF) Severstal to boost pig
year and will include both would increase NLMK’s at its Pisco works to reduce its
slitting and multi-blanking 64.8% Fe pellet output by dependence on imports of iron output with new
lines in a built-to-suit facility 11.89% year-on-year, up from billet. blast furnace
that is expandable to 258,000 5.72 million tonnes in 2017. The new facility will have an Russian steelmaker Severstal
square feet. “We don’t have any plans to annual production capacity of is planning to build a new blast
The facility will house the sell to third parties – all pellet 1.25 million tonnes per year, furnace (BF). The new BF3,
“latest innovations in output will be fed into with its start-up expected in with capacity for 2.9 million
technology and processes” to NLMK’s Lipetsk steel mill mid-2020, the firm said in a tonnes per year, is scheduled
allow for real-time [also located in the west of note to the country’s securities to start operations in 2022,
collaboration with Big River Russia],” the spokeswoman regulator, SMV. allowing Severstal to increase
Steel, according to the said. pig iron output to 14.6 million
Chicago-based steel processor. S+B raises offer for tpy from 11.7 million tpy.
“This collaboration will Tsingshan’s new Indian “The construction and
allow Union Partners to supply Ascometal launch of BF3 will enable
additional steel needs across stainless steel project Swiss special and stainless steel the company to reduce capex
the country, while maintaining China’s Tsingshan Holding producer Schmolz + and avoid a shortage in pig
our strong commitment to Group has started Bickenbach (S+B) has iron, thereby securing
innovation. Our leading construction of a cold-rolling increased the value of its bid to Severstal’s supply of the raw
equipment and testing line at what will be one of the acquire a substantial part of material for years to come,”
capabilities will only serve to largest stainless steel projects French specialty steelmaker chief financial officer Alexey
further enhance the timely in India when completed. Asco Industries (Ascometal). Kulichenko said.
March 2018 | Metal Market Magazine | 11Newsreview:steel
AZZ purchases Dana Steel to add
galvanizer Rogers 400,000 tpy to UAE’s
Brothers coated steel output
AZZ Inc continues to expand Dana Steel is adding 400,000
its metal coatings platform tonnes per year to the United
with the purchase of Arab Emirates’ coated steel
hot-dipped galvanizing output with the installation of
company Rogers Brothers Co an HDG line and PPGI line in
for an undisclosed amount. Dubai, a company executive
Fort Worth, Texas-based told Metal Bulletin.
AZZ has been actively seeking A source at one of the
growth in its metal coatings biggest producers in the UAE
services. The company said that although the
previously acquired powder introduction of new capacity
coating, plating and anodizing in the region will undoubtedly
provider Enhanced Powder increase competition, the
Coating Ltd in early July 2017. impact on prices will be
limited because the value of
ARCELORMITTAL
Tata Steel UK raises HRC HDG will keep increasing in
the UAE and in global markets
capacity by 150,000 tpy because of high hot-rolled coil
Tata Steel UK has increased its As part of a $1 billion investment in its Mexican plant, (HRC) and zinc prices.
production capacity for ArcelorMittal will install a hot strip mill and hot skin pass mill Dana Steel’s HDG line will
hot-rolled coil by 150,000 have an annual production
tonnes per year by installing a the Bhilai site will have an The new welding line in capacity of 250,000 tonnes per
new transfer bar cooling overall liquid steel production Finland and facility in Poland year and will be able to
system at its strip mill in Port capacity of 7.5 million tpy, are both expected to start produce HDG in
Talbot, South Wales. The new Sail said. production in the first half 0.30-2.50mm thicknesses, the
cooling system is part of a £14 Sail is planning to increase of 2019. company executive told Metal
million ($20 million) production capacity and sales Bulletin. The company is also
investment at the site, which volumes over the coming ArcelorMittal Mexico to adding a PPGI line in Dubai,
will allow Tata to manufacture years, in line with the Indian with both facilities expected to
increased volumes of higher- government’s ambition to build 2.5 million tpy hot be up and running by
value steels. achieve a nation-wide steel strip mill November 2018. The PPGI
“We took the opportunity of output of 300 million tpy by ArcelorMittal Mexico is to line will have an annual
a planned maintenance 2030-2031. build a 2.5 million tonne per capacity of 150,000 tpy and
shutdown to upgrade several year capacity hot strip mill and will be able to produce PPGI of
plant areas to further improve Stalatube invests in a 650,000 tpy hot skin pass 0.2-1.50mm thickness.
production of high-value steels mill at its Lázaro Cárdenas site
and their delivery to Finland and Poland in Michoacán, Southern
customers,” Jon Ferriman, Finnish stainless tube maker Mexico. Both mills are
Gerdau sells Beaumont
director of Tata Steel’s UK Stalatube will invest €20 planned to start up in 2020. mill to Optimus Steel
strip products division, said. million ($24.86 million) in The new hot strip mill forms Gerdau SA has entered into a
Other upgrades at Port expanding its capacity in a part of ArcelorMittal’s plans definitive agreement with
Talbot include replacing a Finland and opening a new to invest $1 billion in its Optimus Steel to sell its
basic oxygen furnace service center in Poland. Mexican operations over Beaumont wire rod mill and
steelmaking vessel, buying “We will install a new tube 2017-2020, which it two downstream facilities in
new cranes and installing welding line at our Finnish mill announced in September 2017. Texas for $92.5 million.
dust-extraction hoods to [in Lahti, southern Finland] “The investments will help The Beaumont steel mill has
minimize emissions. for special sizes,” chief us to meet the demand melt capacity of around
executive officer Jukki Nummi requirements for higher- 700,000 tons per year and
Sail to raise liquid steel told Metal Bulletin. “It will added value products we rolling capacity of 800,000 tpy.
have the capacity of a few expect to see from domestic The mill produces wire rod and
capacity by 2.8 million thousand tpy and we will also customers, which today are coiled rebar. The downstream
tpy update other lines,” Nummi heavily dependent on imports facilities are Beaumont Wire
Steel Authority of India (Sail) added. while continuing to support Products and Carrollton Wire
will increase its steel Stalatube’s new service ArcelorMittal’s Nafta Products. The former includes
production capacity by center in Lódz, central Poland, operations by providing a wire mesh mill, while the
2.8 million tonnes per year after will provide value-added high-quality semi-finished latter supplies industrial wire
the commissioning of blast services, such as laser-cutting steel slabs,” ArcelorMittal into the greater US southern
furnace No.8 in Bhilai, central and bending, as well as shorter Mexico chief executive officer region, according to a
India. Once it starts producing, delivery times. Victor Cairo said at the time. statement from Optimus Steel.
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Aluminium Lead
Bulls disappointed Upward trend continues
As the aluminium market has LME cash price, $/t Lead prices remain on a steady, LME cash price, $/t
been waiting for the publication 2,500 well-established upward trend, 3,000
of the US Department of reflecting tighter fundamentals.
Commerce’s recommendations 2,000 The high, so far, this year was 2,500
from the Section 232 probe, the $2,685 per tonne on February 2.
focus of attention has remained 1,500 After that things wobbled, 2,000
on rising visible inventories, LME/MBR
reversing to $2,480 per tonne, LME/MBR
particularly in China. SHFE 1,000 but quickly rebounded back into 1,500
Oct 15
Dec 15
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 15
Dec 15
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 17
Oct 17
stock reports have become a the $2,600s. The speed and
weekly reminder that Chinese extent of the rebound suggest
production cuts have fallen gradually deteriorating as it there is strong underlying was in August 2009. SHFE
short of expectations and that adjusts to the disappointing buying appetite, which bodes stocks are also trending lower
there remains far greater reality. This is clear from falling well for the continuation of the again. Given our expectations
availability than aluminium fund length and prices so far this uptrend. This is especially so for another annual supply deficit
bulls had expected. Chinese year. We wait to see now now that LME stocks are falling this year, and again next year,
production grew no less than whether the Section 232 news at a faster pace. Outflows have the fundamentals will further
11% last year. Indeed, we have restores a bullish tone. We fear it averaged over 1,400 tonnes per tighten and so the overall
recently revised our supply- will not. Chinese winter day in February to the time of uptrend in prices should
demand balance, replacing last production cuts expire in writing, compared with 575 continue. We are looking for
years expected deficit with a March, raising the prospect of tonnes per day in January. The lead to trade into the $2,700-
surplus. Not surprisingly, even higher SHFE stock levels last time stocks were at current 2,900 per tonne range before
overall sentiment has been and greater pressure on prices. levels, around 115,000 tonnes, long.
Copper Nickel
Not convincing yet Better, even before the batteries bandwagon
Copper went into 2018 LME cash price, $/t Nickel prices ran up to a LME cash price, $/t
carrying high expectations for 8,000 three-year high of $14,420 per 16,000
a bullish year. That still might 7,000 tonne on February 15. There are 14,000
materialize, but copper’s story 6,000
still plenty of excitable headlines 12,000
so far has been one of rising about the electric vehicle
5,000 10,000
stocks on all three major revolution, their batteries and
exchanges, weak premiums, a 4,000
LME/MBR the importance of nickel in 8,000
LME/MBR
comfortable contango and a 3,000 them. This is surely buoying 6,000
Oct 15
Dec 15
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 17
Dec 15
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 17
Oct 15
relative lack of supply nickel prices to some extent. We
disruptions. should not overlook the supply
There is very little sign of higher in March, especially if deficits in 2016 and 2017 (and tonnes lower. We should be
physical tightness, which is the dollar remains weak and again in 2018, we believe) that wary; stocks are still high by
undermining the copper bulls’ perhaps with the support of a occurred without batteries yet historical standards and large,
narrative. As a result, seasonal pick-up in demand, having started to meaningfully sudden inflows of copper and
speculative length has been our average LME base case impact fundamentals. Indeed, aluminium recently warn that
reduced and prices are really cash price forecast of $7,185 LME stocks have really started seemingly meaningful stock
only attempting to rally on the per tonne for Q1 seems to have to accelerate lower recently, downtrends can be undone
back of dollar weakness. slipped out of reach. We have helping to underscore the fact overnight, especially in a market
We would not be surprised revised it down to $7,090 per that this market has turned a like nickel where large
to see prices still trying to work tonne now. corner. They only declined a net stockpiles are being financed
4,290 tonnes in 2017, but off-market thanks to the wide
already this year they are 30,000 contango.
In this regular section, Metal Bulletin Research’s base metals
team summarise their in-depth reports to highlight key factors
driving the markets and their short-term price forecasts. The weekly
14 | Metal Market Magazine | March 2018World leading market analysis
www.metalbulletinresearch.com
Tin Steel
Supply tightness to ease somewhat Strong prices in the US and Europe attract imports
Tin has had a strong start to LME cash price, $/t The Chinese steel market 110
the year. Having run up from 25,000 started to wind down for 100
its December low of $18,600 Lunar New Year festivities 90
per tonne to $22,000 per from early February, with 80
20,000
70
tonne in late January, a phase slowing activity in the
60
of correction and 15,000 domestic and export markets.
50
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17
Jul 17
Jan 18
consolidation set in. The rally Flat steel export prices
LME/MBR
was partly investors 10,000
Oct 15
Dec 15
rose thanks to buyers who Global flat products index
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 17
normalizing an overly bearish wanted to secure material Global long products index Jan 2012 = 100
position, partly the weak before the market came to a Steel price index MBR
dollar that has helped boost we maintain our Q1 average halt. Meanwhile, in the Differentials of South European
many commodity markets, base case cash price forecast domestic market hot-rolled domestic HRC to fob prices ($/tonne)
and partly a reflection of of $20,500 per tonne, below coil stock levels (combined 140
120
supply concerns due to very the quarter-to-date average of volumes held at mills and 100
80
low LME stocks and a $21,022 per tonne. But stocks warehouses) increased, as the 60
40
temporary drop in Indonesian are still low and the market supply chain started to 20
0
exports. Although there is will be in deficit overall this prepare for a pickup in -20
-40
certainly a risk of prices racing year, so prices should return activity in March. However, -60
Jan 16
Apr 16
Jul 16
Oct 16
Jan 17
Apr 17
Jul 17
Oct 17
Jan 18
beyond $22,000 per tonne in to their long-term upward as prices ticked up together
March, it seems more likely trend once they have with stocks, it seems that Turkey India CIS
Source: MB, MBR
that they will fade further as corrected their December- expectations of stronger
tightness eases. So, for now, January spike. demand have already been recommendations were made
factored into the latest price after the Section 232
rises, which might limit any investigation was complete,
Zinc future upside after the holiday
period.
with three alternative options,
containing either tariffs or
Bulls still in charge United States steel prices quotas. The main aim of
continued to accelerate, proposed measures is to
Zinc prices extended their run LME cash price, $/t with gains seen in flat and increase the crude steel
of 10-year highs into February, 4,000 long product categories. The capacity utilization rate in the
with the peak at the time of 3,500 key reason behind the steel US from 73% in 2017 to an
writing up to $3,595 per tonne. 3,000 price rally is an ongoing 80% operating rate. However,
We had not expected such 2,500 supply-side tightness. if the proposed 63% quota is
bullishness given how much 2,000 Although most of the implemented, MBR estimates
supply is coming on stream. 1,500 LME/MBR scheduled US mill outages that US producers need to
But, for now at least, the bulls 1,000 were finished in Q4 of last ship 90.4 million tonnes of
Oct 15
Dec 15
Feb 16
Apr 16
Jun 16
Aug 16
Oct 16
Dec 16
Feb 17
Apr 17
Jun 17
Aug 17
Dec 17
Feb 17
Mar 17f
Oct 17
remain in charge, their resolve year, some producers were finished steel to match 2017’s
strengthened by still-falling faced with unplanned demand; an increase of more
LME stocks, a weak dollar, the if $3,600 per tonne is not interruptions in January. than 12%.
robust macroeconomic cleared. However, while the Elevated prices in the US Looking at the proposed
backdrop and good current fundamental situation were not unnoticed by other 24% tariff scenario in the HRC
risk-appetite for commodities. still looks bullish at the producers, drawing imports. market, in the 2010-2017
Our price forecasts may need moment, we maintain our view According to the January period, it would have meant
another upgrade shortly as our that rising mine supply this license data from the US an average annual increase of
base case cash forecast for the year should start to rebalance Department of Commerce spot import prices of $153 per
Q1 average stands at $3,350 the refined market by the (DoC), for the first time since tonne, exceeding US domestic
per tonne and our high-case second half. By then, we July total steel imports prices during this period.
scenario at $3,500 per tonne. should be able to start thinking increased on a month-on- With no competition from
The current chart picture about calling a stop to this month basis, with large gains imports, it would have
points towards downside risks bull market. in HRC and rebar shipments. definitely led to a rise in
On Friday February 16, domestic prices of a similar
US Commerce Secretary extent, with a knock-on effect
Analysis by Andy Cole, Metal Bulletin Research Wilbur Ross revealed what down the supply chain. The
service, Base Metals Market Tracker, provides independent analysis and Request your free sample of this service –
forecasts for base metals markets and prices. email info@metalbulletinresearch.com
www.metalbulletinresearch.com
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White House has until April
11 to make a decision about Steel raw materials
Section 232 sanctions. It is
not certain that it will follow
Iron ore market fundamentals tighten in contrast with coking coal
DoC’s recommendations in Metal Bulletin’s daily Fe 62% 140 Jan 2012 = 100
MBR
As such, we maintain our
full and we doubt the quota iron ore index has seen a bullish forecast of only a small decline
will work in today’s market. start to the year peaking on 100 in benchmark iron ore prices
European flat steel prices January 11 at $79.08 per tonne during the next few months.
60
have also been on a rise and cfr Qingdao. This was followed In the coking coal market,
in southern Europe reached by a short-term retreat to tight supply from Australian
20
Jan 18
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17
Jul 17
€565 ($697) per tonne $72.88 by February 1, before a ports is easing and queuing
by February 14, the highest recovery to $78.43 by February Asian import HMS No1 cfr times are getting shorter. The
level since Metal Bulletin 15. Prior to the prices fall, Fines 63.5% cfr main China ports ($/tonne) increased spot availability of
started assessing regional Chinese port stocks of iron ore Australian hard coking spot fob price (metric) vessels at the Dalrymple Bay
prices in May 2012. Italian had ballooned to an Coal Terminal pushed down
producer Ilva has been unprecedented level. Stocks Chinese iron ore port stock changes prices in the second half of
experiencing difficulties amounted to 1.6 months’ worth 40 40%
January. Metal Bulletin’s index
30
with deliveries of material of blast furnace iron 30%
for premium coking coal, fob
20
and this led to shortages in production, which though 20%
Australia, dropped from a peak
10 10%
the spot market. This is seasonally depressed and of $258.79 per tonne on
Mt
0 0%
having a knock-on effect constrained by winter January 12 to find its floor at
-10 -10%
across the region, as countries production cuts, contrasts with $209.64 on January 30, before
-20 -20%
such as France and Germany an average of just one month’s rebounding again to $229.57
2010
2011
2012
2013
2014
2015
2016
2017
are important participants worth of stocks historically. The Percentage [RHS] Tonnage [LHS] on February 15. Just like last
in the Italian market, high stock level finally fell in the Source: MBR, Steelhome year, this particular benchmark
supplying almost 700,000 week ended January 26, remains the most volatile of all
tonnes of HRC between indicating that demand environmental protection steelmaking raw materials.
January and October last year, exceeded supply. It was stocks policies will have an impact on With supply disruptions easing,
or 31% of all Italian HRC owned by mills that fell with actual crude steel output. most analysts are bearish for the
imports. traders’ stocks actually rising. Combined crude steel output in next quarter, but there is a
However, a price rally in However, the volumes held November and December short-term upside risk to
Europe made it an attractive were so excessive that they are 2017, in fact, rose by 3.9% coking coal prices with the
export destination, even for still likely to negatively impact year-on-year to 133 million expected pick-up in demand
those companies that are new orders and prices in the tonnes. The provinces facing after the Lunar New Year.
targeted by anti-dumping spring. winter cuts were mainly in the January also started on a
duties. Recently Iranian Overall, a further boost in north and included Hebei, bullish note for the ferrous
Mobarakeh Steel (under the inventories this year would be Tianjin and Shanxi. Shandong scrap market, in particular in
fixed rate duty of €57.5 per countercyclical. Based on in the East, the second largest the United States and Europe.
tonne) and Severstal (€17.6 developments over the past steel producer after Hebei, was It was not until the second half
per tonne duty) were heard decade, 2018 should be a year also affected. Although of the month that the situation
making HRC sales to Italy, in which the industry takes production in the provinces changed when the Metal
Spain and Portugal, absorbing stock and reduces their facing cuts fell by 6.4%, the Bulletin index for northern
levies. And competition from holdings, rather as in 2015 or drop was offset by other regions European HMS 1&2 (80:20)
abroad will only intensify. An 2012, as the chart above shows. where crude steel output was dropped from $366.99 per
arbitrage between south Although there is clearly a raised by 11.4%. tonne cfr Turkey on January 17
European domestic and seasonal demand revival on Increased scrap consumption to $334.93 on February 7. It
export prices out of India, course, whether it matches of Chinese material, both at then climbed to $344.42 on
Turkey and the CIS has been expectations is another issue. home and abroad, has pulled February 15, in tandem with
steadily growing, and for the The winter iron output cap scrap prices higher and to levels other steelmaking raw
CIS reached a record high of which took effect back above hot metal, making materials markets. Scrap
$121 (€98) per tonne, making mid-November, is expected to them increasingly demand fundamentals remain
a push by European mills for last until Mid-March, but many uncompetitive at the country’s strong amid rising steel output
higher prices more difficult market participants believe integrated mills. Without a in Turkey, the EU countries and
to achieve. some form of restrictions may dramatic drop in scrap prices, the US.
still remain in place after the which we do not expect, it is
Analysis by Marina Maliushkina, proposed end time. However, it unlikely that iron ore prices will Analysis by Alona Yunda,
Metal Bulletin Research is not evident that these come under too much pressure. Metal Bulletin Research
In this section, Metal Bulletin Research’s steel and steel raw materials team summarise their in-depth reports to highlight
key factors driving the markets and their short-term price forecasts. Metal Bulletin Research provide several regular services
dedicated to the ferrous markets, providing independent analysis, price forecasts and supply and demand forecasts.
Request your free sample of these services – email info@metalbulletinresearch.com
March 2018 | Metal Market Magazine | 17You can also read
