Learning from leaders along the supply chain - Insights from a year of cover profiles Tube & pipe trends Oilfield mineral developments New plant ...
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March 2020
Learning from leaders along the supply chain
Insights from a year
of cover profiles
Tube & pipe trends
Oilfield mineral
developments
New plant orders
Steel Success Strategies 2020 8 - 10 June 2020 New York Hilton Midtown, New York, USA amm.com/events/sssnyc Leading the conversation on steel for 35 years Book to meet the global steel industry – Early Bird ends 3 April 2020 Key Speakers: David Stickler, Sanjeev Gupta, Leon Topalian, Lourenco Goncalves, CEO, Chairman, CEO, Chairman, President & Big River Steel GFG Alliance Nucor CEO¸ Cleveland-Cliffs
March
Features
18 Industrial minerals Ferro-alloys
March 2020
Cover story
Wide-ranging insights
38 46
Global overview of Indian ferro-chrome
on leadership along the Learning from leaders along the supply chain
oilfield minerals trends
supply chain from a year Market trends for oilfield India’s ferro-chrome
of cover profile interviews Insights from a year
of cover profiles
Tube & pipe trends minerals like frac sand industry faces a range
in Metal Market Magazine
Oilfield mineral
and barite of opportunities and
developments
New plant orders
challenges
Tube and pipe 41
26 Fluorspar’s value chain
could rebalance
Spotlight
Global tube and
pipe trends
Fluorspar’s sluggish 49
global value chain Technology spotlight:
International, regional Data analytics
could be boosted by the
and local factors are Progress in technology
impacts of coronavirus
impacting global tube & turning data collection
in China
pipe markets and analysis into
32 45 profitable action
Chinese logistics
Challenging times for
US energy pipe
challenges 52
Delays to the export of New plant orders
Reviewing the impact A list of recently placed
minerals from China are
of global economic international new plant
inevitable
uncertainties and orders
structural changes in the
industry
38 49
36
New projects aplenty
A selection of recent
new plant projects
contributing to
production in the tube
& pipe sector
GETTY IMAGES
46
BIG RIVER STEEL
GETTY IMAGES
March 2020 | Metal Market Magazine | 3
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March
News and analysis Regulars 8
8 7
Non-ferrous Comment
news review More on leadership
A summary of recent
key developments in
the international 57
SHUTTERSTOCK
non-ferrous industries Innovations
New developments
in steel and metals
10 technology, processes
10
Steel news review and products
A round-up of important
recent developments
in the global iron and 58
GETTY IMAGES
steel sectors End-user
Advances and market
developments in
14 applications
57
Base metals and
steel analysis
Fastmarkets MB research
analysts study the drivers
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of the base metals, steel
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markets
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58
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March 2020 | Metal Market Magazine | 5
WHO KNOWS THE
SECRET OF HOT STRIPS?
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hot.mills@sms-group.com www.sms-group.com
Comment
More on leadership
Magazine
ur cover profile interviewees over the past Published by Fastmarkets. US reporters: Rijuta Dey Bera, Bill
12 months have come from throughout the 8 Bouverie Street,London EC4Y 8AX. Beck, Marina Vertemburg Bozkurt,
UK registration number: 00142215 Michael Cowden, Robert England,
steel and metals supply chain, including Tel: +44 20 7827 9977 Patrick Fitzgerald, Lisa Gordon,
Fax: +44 20 7928 6892 and +44 20 James Lawrence, Michael Roh, Liz
non-ferrous metal mining, steel and 7827 6495 Ramanand, Orla O’Sullivan, Muyao
Shen, Jenny Stewart, Mei Ling Toh,
aluminium production, and metal E-mail: Editorial@fastmarkets.com
Website: www.fastmarkets.com Dom Yanchunas
processing technology, through to scrap Metal Market Magazine: Fastmarkets IM
metal recycling and manufacturing of the latest plant Editor: Richard Barrett
Associate editor: Seema Chaudhary
Industrial Minerals Editor Europe:
Davide Ghilotti
and equipment to achieve that. Leaders from the Advertising Sales: Senior Reporter: William Clarke
Market Reporters: Michael
Publisher: Mary Connors
financial sector have also featured. Tel: 646 274 6250 Greenfield, Sybil Pan, Carrie Shi
E-mail: Mconnors@fastmarkets.com
Within the personal stories that each interviewee Global senior advertising manager,
Global newsdesk editor: Mark Shaw
US newsdesk leader: Sean Mayer
has told, several factors that have contributed to their Europe/Turkey: Arzu Gungor
Tel: +44 20 7827 5268
Senior sub-editors: Cecil Fung, Sara
Kelly (US), Wei Jun Lau, Renate Foster
success have recurred. High academic achievement, E-mail:arzu.gungor@fastmarkets.com
Senior sales manager, Midwest, West
Mas (US), Tony Pettengell, Jeff Porter
Sub-editors: Francesca Brindle,
the strong support of family and a willingness to take Coast, North America: Jessica Kelliher
Tel: 312 929 4195
Kyle Docherty, Hannah Corwin,
Laura Kirk
on new roles and challenges internationally are among E-mail: Jessica.Kelliher@ CEO: Raju Daswani
fastmarkets.com
them. Regional sales manager, Middle
Other factors include a persistent drive to keep “Our annual East/Africa, Asia, UK: Quincy Takyi
Tel: +44 20 7779 8735
Offices:
London: Fastmarkets, 8 Bouverie
profile review
Street, London, EC4Y 8AX, UK. Tel:
finding new opportunities and to learn from the many E-mail: quincy.takyi@fastmarkets.com
Regional sales manager, East Coast,
+44 20 7827 9977
New York: Fastmarkets, 1120 Avenue
challenges faced in the course of a career, a talent for highlights key North America: George Reeves
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of the Americas, 6th floor, New York,
NY 10036, USA. Tel: +1 (212) 213 6202.
communicating well with colleagues and a willingness experiences E-mail: George.reeves@
fastmarkets.com
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(212) 213 6617
to embrace new technology. and insights Events and client services marketing
manager: Adelaida Montilla
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Those elements contributing to leadership may not on leadership, Tel: 212 224 3937
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Singapore: Quadrant at Cecil, 3F,
surprise, but if any evidence of their importance were management fastmarkets.com 19 Cecil Street, Singapore, 049704
Shanghai: Fastmarkets, Room 305,
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provided plenty of it. Our annual profile review of Tel: +44 (0)20 7827 5263
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cover interviews included in this issue of the magazine Production designer: Tony Herman 5877 0856
São Paulo: Rua Prof. Atílio Innocenti
summarizes the stories from the past year’s issues to Fastmarkets MB: 165, 7th floor, Rooms 106-107, São
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and industrial minerals editor:
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contained. Europe ores, alloys and minor
metals editor: Charlotte Radford
Subscription enquiries:
Tel: UK: +44 (0)20 7779 8260.
Our feature sections this month include overviews Global base metals editor:
Juliet Walsh
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Email: sales@fastmarkets.com
of trends in the global and US tube & pipe markets, Europe base metals editor:
Archie Hunter
Fastmarkets is a part of Euromoney
Global Limited: 8 Bouverie Street,
together with examples of recent new production Global steel editor: Andrew Wells London EC4Y 8AX.
EMEA, CIS, Turkey steel editor: RossYeo Directors: Leslie Van de Walle
projects. Special correspondents: (chairman), Andrew Rashbass (ceo),
Andrea Hotter, Janie Davies
In related markets, the industrial minerals section of UK and Europe correspondents
Wendy Pallot, Colin Day, Tristan
Hillgarth, Imogen Joss, Tim Collier,
this issue looks at the fortunes of oilfield minerals. It and reporters: Cristina Belda, Carrie
Bone, Hassan Butt, Declan Conway,
Kevin Beatty, Jan Babiak, Lorna Tilbian
also considers the impact of the outbreak of novel Serife Durmus, Amy Hinton, Julian
Luk, Ewa Manthey, Alice Mason, Vlada
Copyright notice: © 2020 Euromoney
Global Limited trading as Fastmarkets
coronavirus in China on industrial minerals markets Novokreshchenova, Marina Shulga,
Jon Stibbs, Maria Tanatar, Cem Turken,
All rights reserved. No part of this
publication (text, data or graphic)
and on fluorspar and acidspar in particular. Justin Yang may be reproduced, stored in a data
retrieval system, or transmitted,
Latin America reporters: Felipe
A bonus feature on Indian ferro-alloys looks in Peroni, Renato Rostás in any form whatsoever or by any
Asia ores, alloys and minor metals means (electronic, mechanical,
depth at the interplay between domestic and editor: Susan Zou photocopying, recording or
otherwise) without obtaining
international markets for ferro-chrome ore and alloys Asia steel editor: Paul Lim
Asia steelmaking raw materials Fastmarkets’ prior written consent.
Unauthorised and/ or unlicensed
and the effects that competing interests and editor: Deepali Sharma
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government policy are having. Lee Allen, Ken Kiat Lee, Karen Ng
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market analysis from our experts in Fastmarkets MB Zong,MirandaSong each infringement as well as costs
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Prices manager: Mary Higgins
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examples of the latest innovations in metal products, Fastmarkets AMM
North America non-ferrous editor:
that the source is acknowledged.
ISSN 0002-9998. Printed in the UK
technologies and their end-use markets. Chris Kavanagh
Managing editor, Americas:
and US. In the UK by Buxton Press Ltd,
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Find us at: www.metalbulletin.com; www.amm.com; www.indmin.com Sean Barry
March 2020 | Metal Market Magazine | 7
Newsreview:non-ferrous
Ball Corp announces
higher earnings
Ball Corp announced higher
year-on-year earnings despite
lower overall sales in 2019; the
Bloomfield, Colorado-based
company’s net earnings rose by
24.7% versus 2018.
“We finished 2019 on a
strong note… Over the past
year, our global beverage
volumes increased 5%, our
aerospace contracted backlog
increased 14% and we were able
to sell underperforming assets,”
ENERTOPIA CORPORATION
chairman, president and chief
executive officer John A. Hayes
said in a statement on February
6, noting that demand for
aluminium packaging
continues to outstrip supply. Enertopia at Clayton Valley, Nevada, is working on technology designed to produce battery-grade
The company reported lithium carbonate from brines or create a synthetic brine
full-year net earnings of $566
million in 2019, compared with alliances in the clean energy continuing to import from support production of
$454 million in 2018. But net sector, the company said on overseas. electrolytic tough pitch (ETP)
sales were lower year on year at February 11. copper rod.
$11.47 billion, compared with These talks have included Sigma Lithium’s The company will hire 25
$11.64 billion in the full year ways to monetize future new employees to support the
2018. production from the company’s Xuxa plant to start expansion, with the new
lithium project in Clayton construction in June furnace expected to begin
Valley, Nevada, and, if Sigma Lithium Resources is processing cathodes from
Vale lowers nickel successful, would allow ENRT scheduled to begin September 1, the company
output guidancee a non-dilutive path for the next construction of its “green” confirmed to Fastmarkets.
Brazilian multi-metal miner step forward, it noted. open-pit mine and lithium
Vale has revised its 2020 nickel At Clayton Valley, ENRT is concentrator at the Xuxa Aurubis Cu cathode
production guidance to working on technology deposit in Brazil’s southeastern
200,000-210,000 tonnes per designed to produce battery- state of Minas Gerais in June. output fell during
year from 240,000 tpy grade lithium carbonate from The facility, which will have maintenance
previously amid its projected brines or create a synthetic an initial lithium concentrate Aurubis’ copper cathode
“exit” from the Vale New brine. capacity of 220,000 tonnes per output dropped by nearly 15%
Caledonia (VNC) operations, year, will start producing in the fiscal first quarter after
the company announced on Coronavirus outbreak battery-grade, 6%-lithium the European company
February 11.. spodumene concentrate from conducted planned
The lower 2020 production supports Chinese June 2021. maintenance at its main smelter
guidance comes after Vale alumina prices Capacity will then be ramped in Hamburg, Germany.
indicated that operations at China’s alumina price is on an up to 440,000 tpy in 2022, Cathode output totaled
VNC would cease entirely by upward trend after many Sigma Lithium’s chief strategy 234,000 tonnes in the October-
the end of April 2020, while the alumina refineries reduced officer Ana Cabral-Gardner December quarter, down by
company looks to review its production, following told Fastmarkets 14.6% from 274,000 tonnes in
strategy in the region, not transportation difficulties since the same 2018 period. The
precluding the possibility of the Wuhan coronavirus SDI LaFarga breaks shutdown negatively affected
selling the asset. outbreak restricted their coal Aurubis’ revenue by around
and bauxite supply, several ground on new furnace €34 million ($37 million), the
sources told Fastmarkets on SDI LaFarga is moving ahead company said
Enertopia in talks for February 10 with the planned addition of a
JVs or other strategic Despite a bullish sentiment new shaft furnace at its facility
alliances in the market, some alumina in New Haven, Indiana, in a
Antimony gains
Enertopia Corporation (ENRT) analysts think the uptrend may $16-million expansion. support in Europe amid
is continuing to explore not last long because China still The new furnace will more coronavirus uncertainty
strategic business combinations has a lot of alumina inventory at than double the plant’s capacity The impact of the coronavirus
and is in early talks about joint its Lianyungang, Qingdao and – increasing output by 250 outbreak from Wuhan city,
ventures or other strategic Bayuquan ports and is million pounds per year – and China, is positively affecting
8 | Metal Market Magazine | March 2020
antimony prices in Europe, Japanese trading house said on
with low stocks in Rotterdam February 12.
and the market heavily Difficulties facing the South
dependent on supply from African ferro-chrome producer
China. have led Hanwa to review
China accounts for 78% of Samancor’s business plans and
global antimony output, its interests in the company, the
according to the United States trading house said.
Geologic Survey (USGS).
Rio Tinto will review
JW finishes Goose Creek future of unprofitable
Al plant expansion ISAL smelter
JW Aluminum has completed Rio Tinto will conduct a
construction at its plant in strategic review of its ISAL
Goose Creek, South Carolina, smelter in Iceland, due to high
with production set to ramp up energy costs and historically
once equipment installation is low aluminium prices, the
finished. The flat-rolled company said on February 12.
SHUTTERSTOCK
aluminium producer also plans The review, due to complete
to close its St Louis-based plant. in the first half of the year, will
The company expects consider options including A UK ban on the sale of internal combustion engine cars from 2035
production to begin in the third curtailment and closure of the will boost demand for lithium battery materials
quarter of 2020, and will smelter, which has capacity of
gradually ramp up output to its 212,000 tonnes per year. Johnson unveiled the new date domestic mines and smelting
project capacity of 175 million at a launch event for a United plant that may come offline
lbs per year when the expansion GEM to prioritize Nations climate change unless the tender is
enters its second phase, the gathering. The date of the ban satisfactorily completed.
company said. overseas bookings amid has been moved to 2035 from
Hubei lockdown 2040. Alcoa gets ASI chain of
Chinese battery materials The ban will now include
Codelco taps Ventanas producer GEM will prioritize hybrids, which have both a custody certification
manager for VP role delivering cargoes to overseas battery and an internal Alcoa Corp has been certified
Chilean state-owned copper buyers in February amid the combustion engine. A by the Aluminium
producer Codelco has large-scale lockdown in Hubei government spokesperson Stewardship Initiative (ASI) to
appointed José Sanhueza province following the confirmed to Fastmarkets that market products under ASI’s
Reyes, currently general outbreak of the novel the ban will also include plug-in chain of custody standard.
manager of the Ventanas coronavirus, a company source hybrids. It marks another step in the
division, to the newly created told Fastmarkets. drive by the company toward
role of smelter and refinery vice GEM’s Jingmen plant is Greek government sustainable manufacturing
president, the company located in Jingmen city, Hubei practices and is in line with its
announced. province, which has been tables Larco strategic goal of becoming the
The promotion will be heavily affected by the restructuring plan lowest emitter of carbon
effective on March 1, when coronavirus outbreak. The The Greek government tabled a dioxide (CO2) among the
Reyes will become responsible plant is unable to resume plan on February 10 to world’s major aluminium
for all refining operations at the operations, but the company’s restructure and subsequently smelters over the next five
Chuquicamata, Salvador, stocks of nickel-cobalt- sell the majority state-owned years.
Ventanas and El Teniente manganese (NCM) battery multi-metal company Larco, In October last year, Alcoa
divisions, Codelco added. precursor materials can mostly one of Europe’s largest launched a multi-year review
The smelter manager at El cover overseas bookings for ferro-nickel producers. of its aluminium portfolio,
Teniente, Gerardo Sánchez February, according to the Greek authorities plan to placing roughly half of its
Sepúlveda, will take Reyes’ source. place the mineral and global smelting capacity under
place at Ventanas. metallurgical industry into a scrutiny for potential
Shift in UK’s EV policy to clearance management curtailment or closure.
Hanwa expects $59mln situation and immediately The chain of custody
boost battery demand launch a tender for the sale of certification covers three key
loss on Samancor stake The British government has Larco’s factory and mines areas of the supply chain: from
Hanwa expects to incur an brought forward a ban on the within 12 months. the mine to aluminum
annual loss of more than ¥6.5 sale of internal combustion The company has a casthouse, from scrap to
billion ($59 million) on its 20% engine cars in a move which 50-tonne-per-day, or casthouse, and
stake in Samancor amid will boost demand for battery 18,000-20,000-tonnes-per- semi-fabrication and
challenging ferro-chrome materials, including lithium. year, ferro-nickel production manufacturing to final
market conditions, the UK Prime Minister Boris capacity across several product.
March 2020 | Metal Market Magazine | 9
Newsreview:steel
Tosyali Algeria plans to spokesperson told
start HRC production Fastmarkets.
“Nucor has been
Tosyali Algeria plans to start considering a $300-million
production of hot-rolled coil expansion project at our
(HRC) by the end of 2022 and Berkeley County mill, along
is targeting output of 2 million with two other Nucor
tonnes per year, a company locations,” the spokesperson
spokesperson told Fastmarkets said on February 13. “Several
on February 14. factors are still being examined
The steelmaker will mainly before a final decision is made.”
supply the material to
automotive and white goods Russel sees weak Q1
manufacturers, as well as to
pipe makers, and the OCTG, line pipe demand
SHUTTERSTOCK
packaging and construction Weak demand in the energy
industries. sector during the first quarter
Tosyali Algeria will focus on Target markets for Tosyali Algeria’s planned hot-rolled coil is likely to keep prices low for
the domestic market to meet production include white goods manufacturers oil country tubular goods
strong demand for HRC, (OCTG) and X52 line pipe,
market sources said. tpy. The sites produce next five years. according to Russel Metals Inc
products for the automotive, The company expects the chief executive officer
Plymouth buys Nisshin energy, engineering and oil development of the Blue Creek John G. Reid.
and gas sectors. project to produce 4.3 million “The mills are now carrying
Automotive Tubing short tons per annum – 3.9 more inventory than they’ve
Plymouth Tube Co has million tonnes – of premium [ever] carried. So they’re
purchased Nisshin
Hyundai Steel reports high-vol A metallurgical coal competing with distribution
Automotive Tubing LLC decline in operating over the first 10 years of when there’s a downturn that
(NAT), the company said on profits production, the company said compounds it. End users have
February 7. The acquisition of South Korean steelmaker on February 19. been taking longer positions
Versailles, Kentucky-based Hyundai Steel reported an because of the mill programs.
NAT from Nippon Steel almost 70% decline in Ternium takes cautious So we’re competing with end
Nisshin Holding Inc is aimed operating profits in 2019, users [who] are now selling
at increasing capabilities and amid tightening margins approach to making into the market,” Reid said
participation in automotive between its raw materials acquisitions during a question-and-answer
tubing, Plymouth Tube said. buying prices and steel sales Latin American steelmaker session on the company’s
The terms and price of the prices. The company’s Ternium plans to analyze fourth-quarter and full-year
transaction were not disclosed. operating profit of 331.3 possible acquisitions or 2019 earnings results on
billion Won ($277 million) in mergers cautiously, chief February 12.
GFG completes steel 2019, was down by 67.7% year executive officer Máximo
on year. Vedoya said on February 19. WTO paralysis may
plant buys in India Hyundai also experienced “Although the market is
GFG Alliance has completed muted demand for long steel in looking better in 2020, there is create steel price
its acquisition of Adhunik 2019, it said, with low demand currently a lot of uncertainty in disparity
Metaliks and Zion Steel in a for construction in the Korean the markets, so we need to be A block on the World Trade
4.25-billion-rupee ($60 domestic market during the extremely cautious when we Organization’s dispute
million) cash deal, marking its second half of the year analyze mergers and settlement process has
entry into the Indian steel reducing sales volumes and acquisitions,” Vedoya said paralyzed progress in steel
market, the company said on prices for rebar. during a conference call with cases, including those
February 18. analysts to discuss the pertaining to Section 232,
Adhunik is an integrated Warrior Met Coal to company’s 2019 financial which could result in a
steel plant in the Indian state of results. disparity between steel prices
Odisha. It has a blast furnace develop 3.9mln tonne in the United States and those
and electric-arc furnace (EAF) project in US Nucor mulls $300mln in the rest of the world,
with steelmaking capacity of US-based metallurgical coal according to two trade experts.
500,000 tonnes per year, as producer Warrior Met Coal expansion in SC The US has prevented WTO
well as a 34 MW captive power has announced plans to Nucor Corp is proposing a appellate body members from
plant. It produces ferro-alloys, develop a hard coking coal $300-million expansion of its hearing appeals and handling
billet, bar and rounds. project in Alabama with a flat-rolled and steel beam mill disputes by refusing to give its
Adhunik, along with Zion capacity of 3.9 million tonnes near Charleston, South consent to fill empty seats,
Steel, its associated steel- per year, through an Carolina, and additional according to Jack Caporal, an
rolling facility, has a combined investment of around expansions could also be in the associate fellow with the Scholl
rolling capacity of 400,000 $550-600 million over the works, a company Chair in International Business
10 | Metal Market Magazine | March 2020at the Center for Strategic and and partly quarterly and $1.1 billion, was originally by 5 million tonnes from an
International Studies. global. slated to be completed during earlier estimate of 68-73
Products under the review the first half of this year. It will million tonnes.
Eurofer sees slim are 28 steel products combine an integrated The miner suffered
categories, including specialty steelmaker and the production losses amounting
consumption recovery hot-rolled (HR), cold-rolled United States’ sole iron ore to 1 million tonnes due to
in 2020 (CR) and hot-dipped miner, and could mean heavy rainfall at its mining
European steel association galvanized (HDG) coil, heavy potential changes in the operations in Brazil’s
Eurofer forecasts a modest plate, rebar and wire rod. market. southeastern region in January
recovery in apparent steel and February, according to its
consumption in 2020, with ArcelorMittal Poland Sail reports loss despite production report.
risks relating to import
volumes, Eurofer said on plans restart in Krakow higher sales and
January 30. ArcelorMittal Poland plans to production NLMK USA sees sales
No significant rebound is restart primary operations at A summary of state-owned and revenue decline
expected before the second its flat steel plant in Krakow in Steel Authority of India’s in Q4
quarter of 2020, Eurofer said. late March 2020, the company (Sail) financial results for its NLMK Group’s earnings
EU apparent steel said. The steelmaker idled the third quarter covering the declined in the fourth quarter
consumption fell by 3.1% year blast furnace and halted period of October to of 2019, the Russian
on year to 37.2 million in the steelmaking operations at the December, and the first nine steelmaker announced on
third quarter of 2019. The end of November 2019 due to months of its financial year February 12, citing weak
stock cycle continued to be “deteriorating market 2019-20, reported higher demand and softening steel
negative that quarter, which conditions”. sales and saleable steel prices affecting its operations
further affected the negative “The decision to restart is production in the third in the United States.
trend in final steel use. [being] driven by the need for quarter, but lower prices hurt For the full year 2019, US
supplies of slab to [our] plant at earnings. sales decreased by 3.5% to
EC starts second review Gent [in Belgium] where a Earnings before interest, 2.21 million tonnes from 2.29
blast furnace reline is planned, taxes, depreciation and million tonnes in 2018.
of steel safeguard and to mitigate production amortization (Ebitda) to Q3 NLMK attributed a 19.6%
measures losses at other ArcelorMittal FY20 was at 11.84 billion year-on-year decrease in the
The European Commission Europe plants,” ArcelorMittal rupees ($165.19 million), down segment’s full-year 2019
(EC) has initiated a review of Poland’s chief executive officer from 26.53 billion rupees year revenue to a steel price
existing safeguard measures Marc De Pauw said on on year, and 13.22 billion adjustment in the US market.
into a number of imported February 3. rupees quarter on quarter. NLMK USA also reported
steel products, it said on “Despite lower steel prices an earnings before interest,
February 15. The EC had AK, Cliffs expect to seal amidst stiff competition taxes, depreciation and
already initiated a first review during the third quarter, we amortization (Ebitda) loss of
of the measures in May 2019 merger in March could achieve significant $37 million for 2019,
and imposed reviewed Cleveland Cliffs and AK Steel growth in sales and saleable compared with Ebitda of
measures in late September expect to finalize their merger steel production. The recent $253 million in 2018.
26. The EC imposed the agreement earlier than improvement in market
definitive safeguard measures expected, the companies said. conditions combined with the Steel Dynamics Inc
on January 31, 2019. Cleveland Cliffs and AK efforts towards cost reduction,
The definitive safeguard Steel expect the merger, we are hopeful of doing better targeting market share
measures applied to a list of announced in December, to in the fourth quarter,” Shri Steel Dynamics Inc targeting
imported steel products, in the close on March 13, they said in Anil Kumar Chaudhary, market share Steel Dynamics
form of 25% tariff rates and a a joint release issued on Chairman at Sail, said. intends to expand market share
range of quotas that are partly February 11. for flat-rolled steel in the
annual and country-specific, The deal, valued at about Vale lowers Q1 2020 United States in addition to
growing its exports to Mexico
iron ore fines output next year when its new
guidance $1.9-billion electric arc furnace
Brazil-based miner Vale has facility in Sinton, Texas, is
lowered its iron ore fines completed.
production guidance for the
first quarter of 2020 after its Worthington to
operations were adversely
affected by heavy rain, the shutter Wooster, Ohio,
company said on February 11. facility
GETTY IMAGES
Vale said it was expecting to Worthington Industries will
produce 63-68 million tonnes consolidate its oil and gas
EC products under a review of existing safeguard measures of iron ore fines in the equipment manufacturing
include HR, CR and HDG coil, heavy plate, rebar and wire rod January-March period, down operations in Wooster,
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12 | Metal Market Magazine | March 2020Newsreview:steel
Ohio, with its facility in in a major shortage of truck run-rate in the construction
Bremen, Ohio, the company drivers.
BlueScope to install and manufacturing sectors for
announced on February 12. new EAF in Ohio the remainder of the year can
The decision will help Usiminas FY adjusted North Star BlueScope plans to make up for the loss of activity
utilize available capacity at install a new meltshop at its at the outset of the year,” BHP
the Bremen facility, which earnings fall 27% facility in Delta, Ohio, and to said in its outlook report.
manufactures similar In a summary of Brazilian flat commission it by the end of
products, the Columbus, steel producer Usiminas’ 2021, Fastmarkets Stelco shifts BF reline,
Ohio-based company said in a earnings in 2019, the understands.
statement. Over half of the company’s adjusted Ebitda at The new facility will feature pig iron plant to H2
Wooster facility’s 122 Usiminas dropped by 27% a single-bucket charge, Stelco will move a planned
workers will have the year-on-year to 1.97 billion 195-ton electric-arc furnace reline of its Lake Erie blast
opportunity to transfer to Reais, which reflected a fall in (EAF), to be built by Danieli furnace, along with the
Bremen. steel sales over last year, Group, the Italian mill and completion of its 1-million-
The close of Wooster’s mainly due to a reduction in equipment supplier ton-per-year pig iron plant, to
operations should be steel exports. announced on February 14. the second half of this year, the
completed by May 31, 2020. The company also faced an “Because this is a single- company’s top executive said.
increase of 9.9% in its average charging furnace, it will save “Previously we noted our
Cisa asks for cash cost per tonne in its steel energy and promote melting intent to proceed with the
business because of higher efficiency,” a Danieli reline of our blast furnace at
government help with raw material costs. These representative told Lake Erie Works [in
logistical problems effects were partially Fastmarkets. Nanticoke, Ontario] in the
The China Iron & Steel compensated by higher second quarter of 2020.
Association (Cisa) is seeking average steel sales prices in Rio Tinto lowers iron However, in response to
the Chinese transport 2019, according to the current strong market
ministry’s help to solve company. ore shipment guidance demand, along with materially
logistical problems Iron ore sales at Usiminas’ for Pilbara improved prices in the near
experienced by steelmakers in 74%-owned mining subsidiary Anglo-Australian iron ore term, we are electing to
recent weeks – especially rose mainly due to higher miner Rio Tinto has lowered commence the reline and
those affecting the delivery of exports of the steelmaking its iron ore shipment guidance commission our new pig iron
raw materials, market sources raw material. Usiminas’ following infrastructure caster in the second half of this
told Fastmarkets. mining unit exported 4.63 damage across its Pilbara year,” chief executive officer
Various transportation million tonnes of iron ore last operations in Western David Cheney said on
restrictions have been put in year, up by 41% from the Australia. February 18 in commentary
place throughout China since previous year. The miner now expects accompanying the company’s
late January as a result of the The company is optimistic shipments of 324-334 million fourth-quarter earnings
outbreak of the novel about the performance of the tonnes in 2020, down from a results.
coronavirus (2019-nCoV) in steel sector in 2020, expecting previous guidance of 330-343
the country. demand for its products to million tonnes, it said on MRC Global expects
These, coupled with increase in line with the latest February 17.
government instructions for forecast from the country’s “Rio Tinto’s iron ore lower activity in 2020
companies to delay the restart steel association, Aço Brasil, operations in Pilbara, Spending levels from
of business after the Chinese which sees growth in Brazilian Western Australia, are customers led to a decline in
New Year break in the final steel consumption of 5.2% progressively resuming earnings in the fourth-quarter
week of last month, resulted this year. following the passing of 2019, according to MRC
tropical cyclone Damien,” the Global’s top executives.
company said. “Customer spending levels in
the fourth quarter were
BHP predicts iron ore significantly lower than
expected as budget
price volatility exhaustion and capital
The outbreak of the novel discipline drove customer
coronavirus (2019-nCoV), behavior,” company president
intra-year demand volatility and chief executive officer
and seaborne supply Andrew R. Lane said in a
uncertainty are likely to statement on February 13.
contribute to iron ore price The company’s sales totaled
volatility in the coming year, $766 million for the fourth
Australia miner BHP said. quarter of 2019, down by 19%
SHUTTERSTOCK
“If Covid-19 is effectively compared with the third
and demonstrably contained quarter of 2019 and 24.1%
Transportation restrictions in Wuhan, Hubei province, are within the March quarter, we lower than the fourth quarter
impacting markets following the novel coronavirus outbreak expect that an accelerated of 2018.
March 2020 | Metal Market Magazine | 13Market analysis
Aluminium Lead
Weaker demand outlook Chinese supply, demand downgrades
Fastmarkets MB research has One of the industries hardest
revised down its forecast of
LME cash price, $/t hit by the coronavirus outbreak
LME cash price, $/t
2,300 2,600
global aluminium demand in China is the auto industry –
growth in 2020 to 2.0% from a 2,100 the largest user of refined lead 2,325
previous forecast of 2.6%. We 1,900
in lead-acid batteries. We 2,050
believe the long-term outlook is expect exceptionally weak
strong, especially from the 1,700
LME/Fastmarkets
Chinese vehicle sales and 1,775
LME/Fastmarkets
automotive industry as it adopts 1,500
production in Q1 2020, and a
1,500
Jan 18
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
Jan 18
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
higher emissions standards, growing knock-on effect to
electrification and fuel efficiency. overseas auto production lines
But short-term downside risks material change in a 66 million that rely heavily on parts made collection, the build-up of
for aluminium demand have tonne-per-year market, which in China. Lead demand is likely by-product acid at smelters and
increased given the disruptions will be balanced this year. to be hard hit by the fallout and logistics restrictions have
in China and to global Beyond the short-term volatility we have lowered our forecasts meant severe disruptions on
manufacturing supply chains – which may yet bring new cycle focusing on China and Q1. We the supply side. The revisions
caused by the coronavirus, which lows in the coming month – a cannot rule out further to our supply-demand forecasts
come on top of existing macro/ fundamentally balanced market downgrades as the virus’s toll have seen the global refined
geopolitical uncertainties. We should allow prices to work back on demand becomes clearer. lead surplus we forecast for
now see a global surplus of towards $1,800 per tonne levels But the slow return to work, 2020 expand by about 50% to
204,000 tonnes for 2020, from once the virus crisis has passed demand uncertainty, extended 155,000 tonnes. Lead prices
the deficit of 111,000 tonnes we and pent-up demand emerges winter breaks at local mines, are reflecting this softer
previously forecast. This is not a fueled by monetary policies. the suspension of scrap fundamental backdrop.
Copper Nickel
Bullish fundamental narrative postponed Worse before it gets better
Early this year, we were looking LME cash price, $/t Nickel has been burdened in LME cash price, $/t
forward to the prospect of a 7,000 the past month by the fallout 18,000
pick-up in Chinese demand from the virus outbreak, a
6,500 16,000
after the Lunar New Year surge in LME stocks,
holidays, building on the 6,000 abysmal Chinese electric 14,000
improvement in sentiment vehicle sales data and
12,000
after the de-escalation of the 5,500
LME/Fastmarkets
weakness in the Asian LME/Fastmarkets
US-China trade dispute. 5,000 stainless steel market – in 10,000
Jan 18
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
Jan 18
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
Coupled with tight supply-side each case the opposite of the
fundamentals, this could have bull themes that had
paved the way for an average short-term demand propelled nickel prices sales slumped 54% year-on-
price in Q1 2020, somewhere expectations. However, higher in 2018 and H1 2019. year in January, February is
near $6,400 per tonne. pent-up demand, a supportive LME nickel stocks have now certain to be worse given the
However, the coronavirus monetary and fiscal policy risen by 47% since the end of virus lockdowns. As for
outbreak has changed that stance by authorities in China 2019 and although SHFE stainless steel, oversupply is
narrative, and the Q1 average is and elsewhere, together with stocks have not increased this exacerbated on virus-related
now destined to fall below supply disruptions, should see a year, combined exchange disruptions, resulting in
$6,000. Moreover, having more bullish landscape in the stocks are up 37% so far in stock builds and pressure to
previously modeled a balanced second half, assuming the virus 2020, suggesting there is reduce production, and
global refined market across the is contained. Although prices plenty of class 1 availability nickel usage. Nickel prices
first half of the year, we now see may go lower, the coronavirus and undermining fears to the may fall in the short term
a 174,000-tonne surplus in Q1 sell-off is a buying opportunity contrary. And while Chinese before they recover in the
alone after revising down our in our view. new energy vehicle (NEV) medium term.
In this regular section, Fastmarkets MB’s research team summarize their in-depth
reports to highlight key factors driving the markets and their short-term price
forecasts. The weekly service, Base Metals Market Tracker, provides independent
analysis and forecasts for base metal markets and prices.
14 | Metal Market Magazine | March 2020World leading market analysis
www.fastmarkets.com
Tin Steel
Price rebound on hold The outbreak of novel coronavirus unsettles
The tin market has not been
LME cash price, $/t
steel markets
immune to the elevated macro 22,000
uncertainty surrounding the The Chinese steel market has Fastmarkets steel indices
coronavirus and its 20,250 been deeply impacted by the 120 Jan 2012 = 100
implications, which has led to 18,500
coronavirus epidemic. While
weak market action in the long-term implications remain 110
broader base metals complex. 16,750 uncertain and depend on how 100
We expect more short- 15,000
Jan 18 LME/Fastmarkets
long it will take to contain the
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
covering potential in tin as, spread of the virus, February 90
fundamentally, this was a has been characterized by a fall 80
market in deficit last year and now, the global refined tin in end-user demand in the
will be again this year market is in temporary country, a build-up of steel 70
considering supply shortages oversupply due to the lack of inventories in the supply chain
60
and the dovish response of demand caused by the and a sharp drop in steel prices.
major central banks, coronavirus outbreak, To contain the spread of the 50
Jan 12
July 12
Jan 13
July 13
Jan 14
July 14
Jan 15
July 15
Jan 16
July 16
Jan 17
July 17
Jan 18
July 18
Jan 19
July 19
Jan 20
especially the Peoples Bank of reflected in the increase in virus, the Lunar New Year
China, to the coronavirus exchange stocks (+1,700 holiday in China was extended Global flat products index
Global long products index
outbreak that should boost tonnes or 13% so far this year), until February 3 or February Steel price index Fastmarkets MB
demand. Tin may be one of heavily focused on China. This 10, depending on the region.
the base metals to recover leaves tin, like other base But not all manufacturing firms Steel stocks in China traditionally peak
in February, while demand drops
most strongly when macro metals, at risk of price falls in and construction sites were 35%
fears dissipate. However, for the short term. able to resume their operations
m-o-m change, 2016-2019 average
30%
straight after. One of the 25%
20%
problems has been that
Zinc
15%
migrant workers were not able 10%
to return to their jobs because
5%
0%
Weak fundamental outlook now appears weaker of travel restrictions and -5%
lockdowns that remained in -10%
Jan
Feb
Mar
Apr
May
June
Jul
Aug
Sep
Oct
Nov
Dec
Zinc prices have been LME cash price, $/t place, exacerbated by Apparent consumption NBS, Cisa, Steelhome,
eroding over the past month 4,000 mandatory 14-day quarantines Mills and warehouses stocks Fastmarkets MB research
and by February 24 had for returned workers.
slipped to a fresh three-and- 3,500 According to local press producers. By February 21, flat
a-half year low of $2,055 per 3,000 reports, two thirds of workers steel stocks held at mills rose by
tonne, which puts the $2,000 should return to work by the 59% year on year, while rebar
landmark in sight. Prices 2,500 end of February, and the stocks jumped by 126%.
LME/Fastmarkets
have been as high as $2,448 2,000 workforce will be complete Inventories held at warehouses
Jan 18
Mar 18
May 18
Jul 18
Sep 18
Nov 18
Jan 19
Mar 19
May 19
Jul 19
Sep 19
Nov 19
Jan 20
Mar 20f
per tonne as recently as only in March if the spread of also rose, but at a smaller scale.
January. The coronavirus is the virus is under control by February opened with steep
taking a heavy toll, but zinc and lower smelter utilization then. price falls of domestic and
sentiment was bearish before rates as stocks of by-product Traditionally, steel mills export prices and declines
the outbreak, as the acid build up. We have continue to operate during the continued through most of the
fundamentals were lowered our forecasts for Lunar New Year break, which month. Hot-rolled coil (HRC)
perceived to be moving into Chinese zinc supply and leads to a build-up of stocks and rebar prices in Eastern
oversupply. The virus fallout demand for Q1 2020; we through the supply chain. As China fell from 3,870 ($558)
has made a weak outlook have also raised our soon as end users return to the yuan per tonne and 3,655
weaker, as the impact now expectations for both in the market, stocks start to fall ($527) yuan per tonne at the
seems to be on the demand second half. However, the rapidly, and stronger demand end of January to 3,470 ($497)
side, even though supply is global supply-demand pushes prices higher. Delays in yuan per tonne and 3,385
also being affected by outlook remains in flux and the restart of normal business ($485) yuan per tonne by
extended winter shutdowns revisions to our forecasts activity this year has meant February 17, respectively.
at mines in northern China may become necessary. that stocks have continued to With a challenging situation at
accumulate in February, with home, Chinese producers
Analysis by Andy Cole, Fastmarkets MB particularly sharp rises at turned their attention to the
Request your free sample at www.fastmarkets.com
March 2020 | Metal Market Magazine | 15Market analysis
export market. Eager to secure
orders amid mounting Steel raw materials
inventories, Chinese mills
dropped their offers, pricing
Coronavirus outbreak and supply disruptions shape the iron ore market
out rival suppliers of flat and Prices for iron ore declined for Fastmarkets MB steelmaking raw numbers. Both crude steel
long steel products in three consecutive weeks as the materials indices production and pig iron
Southeast Asian market. In the coronavirus outbreak reduced 140 Jan 2012 = 100 production fell in early
middle of February, we also business activity and restricted February, recording the
heard about a reappearance of logistics in China and beyond, 100
biggest drop since 2015, down
Chinese billet in the export before rebounding in the week 60 12% and 10% respectively, as
market, not seen in the past ended February 14 amid supply the chart shows.
three years. disruptions in both Australia 20 However, just as iron ore
Jan 12
July 12
Jan 13
July 13
Jan 14
July 14
Jan 15
July 15
Jan 16
July 16
Jan 17
July 17
Jan 18
July 18
Jan 19
July 19
Jan 20
The impact that the and Brazil. Fastmarkets indices prices declined amid the virus
epidemic will have on the steel for 62% Fe and 65% Fe fines Asian import HMS No1 cfr outbreak, they rolled back up
Fines 63.5% cfr main China ports ($/tonne)
market depends on how long averaged $86.94 and $102.16 Australian hard coking spot fob price (metric) after most recent supply
disruptions to normal per tonne cfr, respectively, after Fastmarkets disruptions in both major
economic activity will last. peaking at $96.67 for lower- export markets, Brazil and
Extended holiday in China leads to
According to a forecast from grade and $110.08 for higher- falling daily average production Australia. Brazil has been
Oxford Economics, if the grade ores in the second half of rates of crude steel and pig iron suffering from heavy rain for
spread of the virus is contained January. 2.5 several weeks, and it is now
in February, it will mean a 2% Just as China and the US evident that volumes have
drop in China’s GDP in the started to reach a deal and the been disrupted as Vale has
Million tonnes
first quarter, with a rebound trade tensions eased, the 2.0 lowered its production
later in the year; on an annual coronavirus has again increased guidance for the first quarter
basis Chinese GDP growth will the uncertainty in the markets. by 5 million tonnes to 63-68
be 0.6% lower (5.4% versus Although there may be little or 1.5
million tonnes. A few days
6.0% previously). We believe no impact on China’s GDP in later, on February 17, Rio
that once quarantine measures the long run, there are short- Jan Feb Mar Tinto also announced it would
are lifted and logistical and term implications as 2020 crude steel 2020 pig iron reduce its production guidance
operational issues are resolved, steelmaking raw material 2019 crude steel 2019 pig iron
for the year by more than 2% as
steel prices in China should prices are responsive to Fastmarkets, CISA a result of cyclone Damien,
recover, but a downtrend in sentiment. The extended Lunar discharging rate for goods. which damaged the
February has led to a New Year holiday period added The similarity of the current infrastructure at Pilbara Port
downgrade of our forecasts on to the bearish sentiment in coronavirus outbreak to the and the connecting rail
an annual basis. early February. SARS event in 2003 allows us network in Western Australia.
Interlinked global supply The Chinese government to evaluate the possible impact The supply concerns are
chains mean that disruptions in also imposed restrictions on on the Chinese. While there likely to add upward pressure
China are affecting the movement of people and was clearly an impact from the on iron ore prices in the short
manufacturing companies goods and extended the SARS outbreak, the effect was term. The downward risks
around the world. Wuhan, the holiday until February 10. The contained to a limited period come from the demand side
center of the outbreak, is an Hubei region is not a major and was soon blurred into the as the emphasis among steel
automotive hub, with a industrial hub, but Wuhan is general economic trend of the mills in China has been to
number of car manufacturers still an important steel- time. For example, growth in manage the impact from the
and suppliers of parts located producing region and a industrial production slowed 2019-nCov outbreak, which
there. A shortage of connection point where raw due to SARS, but when the has slackened iron ore
components from China lead materials pass through the epidemic was contained, it soon demand. There is still
to a closure of car factories in Yangtze and Hanshui rivers to returned. However, the rate of uncertainty about when the
South Korea in early February, supply iron ore to the Wuhan industrial production growth outbreak will be controlled to
while some European Iron and Steel Corporation was just 6.2% for November the point where industrial
carmakers warned that they (WISCO), among others. 2019 and 6.9% for December activity can return to normal.
could also be forced to stop These river transport routes 2019, which is significantly We are unlikely to see a real
production in the coming were placed under lockdown. lower than the level seen prior boost in iron ore demand
weeks, expanding downside At Chinese ports, there have to the SARS epidemic, so any until then.
risk for steel prices. been strict prevention and disruptions now could have a
control measures to contain different impact.
Analysis by Marina Maliushkina, the virus spread, which has The dampened demand has Analysis by Alona Yunda,
Fastmarkets MB slowed the loading and already become apparent in the Fastmarkets MB
In this section, Fastmarkets MB’s research team summarize their in-depth reports to highlight key factors driving the
markets and their short-term price forecasts. We 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 – www.fastmarkets.com
16 | Metal Market Magazine | March 2020You can also read
