issn 0166-9645 01 the secretary general message from · 2019-01-29 · krakatau steel defends...

The Institute is gearing itself for an interesting and eventful year in 2019 following the admis-sion of Myanmar as a new member country of SEAISI and the adoption of a new business plan by the board of directors end last year.

The first major event of the year for the Institute is the 2019 Travelling Seminar. The theme of the seminar is “Value Creation through Process Improvement, Reliability and Recyclability”. The seminar is scheduled to be held from 11 to 22 March 2019 and, for the first time, Myanmar will be included as one of the stops in the travelling schedule. The seminar will kick-off in Jakarta, Indonesia on 11 March 2019, followed by Shah Alam, Malaysia (13 March), Yangon, Myanmar (15 March), Bang-kok, Thailand (18 March), Hanoi, Vietnam (20 March) and end in Manila, Philippines on 22 March 2019.

Papers to be presented are “Efforts of Japanese Iron & Steel Industries for Global Environmen-tal Challenges” by Nippon Steel & Sumitomo Metal Corporation, Japan; “Achievement and Prospects of EAF Compact Route in Feng Hsin Steel” by Feng Hsin Iron & Steel Co., Ltd, Taiwan; “Experiences and Methods of Continuous Improvement at Newcastle Rod Mill” by Liberty Steel, Australia; “POSCO’s Compact Endless Cast Rolling Mill (CEM) Process” and “POSCO’s Wire Rod Manufacturing Process & Experience on Quality Improvement” by POSCO, South Korea.

2019 SEAISI Conference & Exhibition

Other things to look out for include the publi-cation of the 2019 Steel Statistical Yearbook, which will be published in July/August, as well as new activities/programmes related to the new vision, mission and priority strategic initiatives of the Institute.

In addition to the above, the Institute is also in the process of undertaking a revamp of its official website to enhance the website’s contents and features, including enabling on-line payments of annual membership subscription fees and event registration fees.

We look forward to your continued support and participation in the events and activities of the Institute.

TAN AH YONG

The most anticipated event of the year is of course the 2019 SEAISI Conference and Exhibition, which will be organised in Bang-kok, Thailand. The event will be held on 17 to 20 June 2019 at The Athenee Hotel and the theme of the conference is “Sustainable Development of ASEAN Steel Value Chain”.

One of the highlights of the conference is the Keynote Session which will feature several prominent keynote speakers and a CEO panel discussion involving some of the top execu-tives of steel companies in the region.

Other than the keynote presentations and panel discussion, there will also be several interesting sessions dwelling on the status and issues and challenges of the steel indus-try in the region and beyond, including two special sessions related to Digital Develop-ments in Steel Industry. The Country Report session will have, for the first time, a presenta-tion on the status of the steel industry in Myanmar. We will also have the usual techni-cal sessions on many important topics of interest to the steel fraternity.

For the plant tour, arrangements are being made to organise visits to several leading steel and steel related establishments in Thailand.

In conjunction with the conference, a training course on “Introduction and Applications of Innovative Tools for Steel Industry” will be organised on 16 June 2019. The training will be conducted by POSCO.

The 2019 SEAISI Training Programme will be hosted by the Taiwan National Committee and is expected to take place in the later part of October this year.

The year-end event of the Institute is the 2019 ASEAN Iron and Steel Sustainability Forum which is scheduled to be held towards the end of November in Indonesia.

Publisher: SEAISI Editor: Pichsini Tepa-Apirak Contributing Editor: Josephine Fong Printer: PLANAX Marketing (M) Sdn. Bhd.Email: [email protected] Tel: 603 55191102 Fax: 603 55191159 Website: www.seaisi.org

Theme: Sustainable Development of ASEAN Steel Value ChainDate: 17-20 June 2019Venue: The Athenee Hotel, a Luxury Collection Hotel, Bangkok, Thailand

SOUTH EAST ASIA IRON AND STEEL INSTITUTE

NEWSLETTERISSN 0166-9645

2019JAN

MESSAGE FROM THE SECRETARY GENERAL 01

UPCOMING EVENT 02

2 SEAISI Newsletter, January 2019

ContentsMessage from Secretary General ....................................................... 1

Australia’s Grange iron ore sales fall .......................................... 2

Krakatau Steel defends market share amid rising competition

in Indonesia ........................................................................................ 2

Krakatau targets 20-30% output hike ................................................ 4

Japan’s 2018 steel output falls 0.3% on year to 104.33 million mt .. 4

Lion Industries sells non-core asset to fund flat steel venture ........ 4

Govt imposes safeguard duty on imported cement .......................... 5

Rebar import prices in Singapore fall further on limited demand .... 5

Container scrap rebounds in Taiwan ................................................. 6

Thailand extends galvalume AD, Vietnam exempts colour-coated

safeguards ........................................................................................... 6

Thailand targets steel sector strategy .............................................. 6

Vietnamese steel exports surge ........................................................ 7

Over 32,000 tonnes of colour-coated iron exempted from

safeguard measures ........................................................................... 7

Vietnam’s 2018 steel output hits 24.19 million mt, up 15%

on year ................................................................................................ 7

Russian steel exports grow over January-November ........................ 7

Japanese, South Korean firms evince interest in Indian steel

sector: Steel Minister Chaudhary Birender Singh ............................. 8

India: Steel production rises 4.5%, consumption up 8.4% during

April-Dec in FY19 ................................................................................. 8

Indian steel producers push for higher import duties ...................... 9

India may face iron ore shortage in 2020 .......................................... 9

How China is dodging duty wall to continue dumping stainless

steel in India ..................................................................................... 10

Chinese steel consumption is expected to rise in 2019 ................. 10

China’s steel exports fall 8.1% on year to 69.34 mil mt in 2018 ..... 10

China to focus on improving steel capacity structure – assn chief . 10

China’s inspections to speed up rebar standards rollout ............... 11

China’s crude steel output exceeds 900 mln tonnes in 2018 ......... 11

Six companies to watch on the steel M&A front in 2019 ................ 12

EU agrees to extend steel import curbs until 2021 ......................... 13

Definitive safeguard measures might not be enough to protect

EU market, Eurofer says .................................................................... 13

Iron ore and steel: points to watch in 2019 ..................................... 14

China’s steel export to ASEAN-6, January to November 2018 ......... 14

2018 SEAISI Conference & Exhibition: Call for Papers ..................... 16

A U S T R A L I A

I N D O N E S I A

Australia’s Grange iron ore sales fall

Australian iron ore producer Grange Resources’ sales fell by28.3pc to 496,936t in October-December from 692,685t a yearearlier because of a decline in sales of pellet, its main product.

Total sales were also down from 513,675t in July-September.Sales of pellet, which accounted for around 94pc of the total, fellto 465,834t in latest quarter from 652,577t a year earlier and498,714t in July-September.

Pellet sales in 2018 as a whole rose to 2.26mn t from 1.8mn t in2017, while total iron ore product sales increased to 2.37mn tfrom 1.89mn t.

There were no iron ore concentrate sales during the latest quarter,with the balance of product sales by iron ore chip.

The decline in sales was partially offset by a rise in the averagerealised price to $112.61/t in October-December from $105.51/t a year earlier, although this was down from $132.41/t in July-September. The price averaged $111.92/t in 2018, up from $97.84/t a year earlier.

Iron pre pellet production fell to 516,722t in October-Decemberfrom 674,447t a year earlier but was up from 437,336t in July-September. Production in 2018 rose to 2.19mn t from 1.9mn t ayear earlier, it said. The miner’s pellet stockpile dropped to189,351t from 262,212t over the same period.

“The iron ore price continues to be strong despite decreasedpremium for high grade pellets from record levels,” Grange said.It agreed term offtake sales during the quarter for 2019-21 usingbenchmark 65pc Fe fines index as a basis. “We believe this to bea good achievement for Grange and an improvement from theexisting 62pc Fe fines index + Fe content adjustment factor, as itpromotes more efficient pricing,” it said.

Mine operating costs rose to A$101.32/t ($72.30/t) in October-December from A$76.89/t a year earlier but were down fromA$148.15/t in the previous quarter.

Argus Metals, January 23, 2019

Krakatau Steel defends market share amid rising competition inIndonesia

Major Indonesian integrated steelmaker PT Krakatau Steel isdefending its market share of the domestic hot-rolled coil marketin the face of more flat steel capacity coming on stream in thecountry from 2019 onward.

It is adding a second hot strip mill at its 55-hectare complex inCilegon, West Java, which it expects to come online in the secondhalf of this year. The new 1.5-million-tpy mill will add to itsexisting 2.4-million-tpy hot strip capacity.

Krakatau Steel also fired up its first 1.2-million-tpy blast furnacejust last month - on December 20 - after years of delays. The

SEAISI Newsletter, January 2019 3

blow-in was originally scheduled for 2016 but was postponedseveral times to June 2018, before being eventually pushed backto December 2018.

Strategic changes?Market participants in Asia are looking out for any changes toKrakatau Steel’s sales strategy once its new hot strip mill startsup.

“Krakatau Steel has typically kept prices high for the domesticmarket. There may not be much of an impact in terms of HRCimport volumes if domestic prices remain high because buyerswill continue to look toward imports to fulfill their requirements,”an HRC buyer in Southeast Asia said.

But a major shift in HRC trade flows could emerge if KrakatauSteel changes its approach.

“If it chooses a strategy like Formosa Ha Tinh Steel Corp’s andmake its offers very competitive to protect its domestic market,then there will be a change in import volumes,” the same buyersaid.

Indonesia’s existing steel safeguard duties will also almostguarantee import volumes do not increase rapidly, an HRC sellerbased in Singapore said.

The country imposes a duty amounting to 2.19 million rupiah($151) per tonne on imported HRC. Imports from Afghanistan,Kazakhstan, Seychelles, Singapore and Yemen are exempted fromthis duty, which expires on October 3 this year.

“So regardless how you see it, there is no other way to get HRC inIndonesia except through Krakatau Steel or having to payadditional safeguard duties when buying imported cargoes,” thesame trader said.

Krakatau Steel will also enjoy lower production costs with thestart-up of its blast furnace, although this does not guaranteelower selling prices for its HRC.

The steelmaker had previously been relying on electric-arcfurnaces (EAF) to produce its crude steel. But compared with theEAF method, steel production via a blast furnace will reduce itselectricity consumption and its use of electrodes, it said in aDecember 21 announcement.

Krakatau Steel’s managing director Silmy Karim estimates thatthe blast furnace complex would cut its production costs byaround $58 per tonne, local media reports quoted him as saying.

Chinese competitionAt the same time, Chinese steel companies’ rising investments inIndonesia could eat into Krakatau Steel’s market share, sourcessaid.

“Krakatau Steel’s position as an industry leader may be erodedonce more integrated mills start up and increase productionrates in 2019, such as the new projects under Delong Holdingsand the Tsingshan Group,” an industry source with closeknowledge of the Asian flat steel sector said.

Indonesia consumed 8.5 million tonnes of flat steel in 2017,with the building and construction industries accounting for

close to 80% of that. More than 5 million tonnes of flat steel wereimported, while the remainder were produced locally, accordingto data from the South East Asia Iron & Steel Institute (Seaisi).

“Indonesia’s domestic production of flat steel is not sufficient tomeet domestic demand. However, domestic production has beenon the rise,” Seaisi said.

New integrated mills in Indonesia will also accelerate thecountry’s rise as a steel exporter.

For one, Chinese stainless steel giant Tsingshan Group startedup a 3-million-tpy integrated mill in the Indonesia MorowaliIndustrial Park in Central Sulawesi province in 2017 and beganexporting carbon and stainless steel after firing up a mini blastfurnace.

Although Tsingshan’s Indonesian operations primarily producestainless steel at the moment, it had been intermittently switchingto carbon steel production last year and is expected to continueto do so this year, sources told Fastmarkets. The mill’s exactcarbon steel output is not known, but it was heard to have soldaround 20,000 tonnes of HRC each month since mid-2018.

Upcoming Chinese-backed carbon steel project PT Dexin SteelIndonesia - a joint venture involving Delong Holdings - will alsobe located in the same industrial park in Indonesia. The integratedmill will use 2 million tpy of its 3.5 million tpy capacity to produceeither slab or billet, depending on market demand, while thebalance be used for the production of wire rod and debar, asource at the mill said.

Two blast furnaces, each with a volume of 1,780 cubic meters,are scheduled to start operations in March, according to themill source.

“In fact, Indonesia had sent small quantities of HRC to Vietnamin 2018 as trial shipments. As more HRC production capacitycome on stream, Indonesia may start exporting cargoes toregional buyers, especially those in Vietnam and Myanmar,” aSingapore-based industry source said.

The Indonesia Iron & Steel Industry Association expects thecountry’s steel consumption to grow to 21.4 million tonnes by2025, compared with 11.4 million tonnes in 2016, especiallywith the Indonesian government making a push with infrastructureprojects to boost the economy.

Sustained slab demandKrakatau Steel’s blast furnace will begin producing at a rate of20-30% of its 1.2-million-tpy capacity, before ramping upgradually over the next six months to 100% in the second half of2019, according to industry sources familiar with the mill.

“Therefore, Krakatau Steel is expected to continue to buy slab[locally and from overseas] in its usual quantities during thefirst half of [2019],” a producer source in Southeast Asia saidlast month.

The new blast furnace is meant to eventually reduce KrakatauSteel’s reliance on imported slab for its flat steel production. Themill is one of the largest importers of slab in Asia.


But it will still need to purchase about 2 million tonnes of slabper year to feed into its downstream facilities, even after itsblast furnace becomes fully operational, sources in Asia toldFastmarkets MB.

Of that requirement, Krakatau Steel plans to import about 30-40% - or 600,000-800,000 tpy - mainly from a major supplier inthe Commonwealth of Independent States, sources said.

The remainder will be supplied domestically by PT KrakatauPosco, its joint venture with South Korea’s largest steelmaker.

Metal Bulletin, January 17, 2019

Krakatau targets 20-30% output hike

Indonesia’s Krakatau Steel has said it hopes top boost bothproduction and sales by 20-30% in 2019. This will in part beachieved through the commissioning of its new 1.5 million tonne/year hot strip mill in the middle of the year, Kallanish notes.

In 2018 Krakatau targeted a 40% increase in output to 2.8 milliontonnes of finished steel. It did not say if it had reached this targetbut if so, its growth target implies 3.36-3.64mt of output in 2019.It added that its expects Indonesian demand on a crude steelbasis to reach 13-14mt this year, of which only 8-9mt will besupplied by domestic producers.

Once the company commissions its new 1.5m t/y hot strip mill,currently expected in mid-2019, the company will have 3.9m t/yof HRC capacity. The company says it has around a 40% marketshare in HRC in Indonesia, with most of the rest supplied byimports. It expressed concern last year however about unlicensedcarbon steel HRC produced Tsingshan’s plant in Morowali, whichis only licensed for stainless steel production.

The company also ignited its new 1.2m t/y blast furnace inDecember. It hopes this will allow it to shift production frommore costly scrap-based EAF steelmaking alongside buying inslab from its Krakatau Posco joint venture.

Kallanish, January 24, 2019

Japan’s 2018 steel output falls 0.3% on year to 104.33 million mt

Japan’s crude steel production in 2018 decreased by 0.3% yearon year to 104.33 million mt, according to the data releasedWednesday by the Japan Iron & Steel Federation.

A JISF official said Thursday that steel demand has been firmbut natural disasters in the second half of 2018 includingtorrential rain in western Japan during July, Typhoon Jebi inSeptember and the earthquake in Hokkaido also in September,all affected production. He said the facility problems at the millslate last year also forced the overall production to be lower.

“The production during 2018 fiscal year (April 2018-March 2019)may become higher,” the JISF official said. Production byconverters in 2018 was 78.23 million mt, down 1.4% year onyear while those by electric arc furnace was 26.1 million mt, up

J A P A N

3.1% year on year. The JISF official said that both ordinary andspecial electric arc furnaces were producing at high levels tocorrespond to the firm demand from construction steel andspecial steel for the automobile industry.

By product, output of hot rolled coil in 2018 was 41.1 million mt,down 3.7% in the same period and small bar production was8.57 million mt, up 0.8% year on year. Production of H-beamswas 4.02 million mt, up 4.1% in the same period. according tothe data.

Platts, January 24, 2019

Lion Industries sells non-core asset to fund flat steel venture

Lion Industries Corp Bhd is divesting its entire 50% stake inSingapore-based Angkasa Amsteel Pte Ltd (AAPL) to a South Koreansteel manufacturer for S$26.65 million, equivalent to RM80.90million, to raise funds for its flat steel business venture.

In a filing with Bursa Malaysia yesterday, Lion Industries said ithad signed a conditional agreement with Daehan Steel Co Ltd forthe proposed disposal, which is expected to be completed by thefirst quarter of this year if its shareholders approve the deal.

AAPL is involved in the business of steel trading and fabrication,and the trading of other building materials. Lion Industriespurchased the 50% stake in AAPL in 2011 and 2012 for RM38.05million in total. The remaining 50% is held by LTC Corp Ltd.

The group said the proposed disposal, which allows it to disposeof its non-core assets, is not expected to result in any gain orloss for the group.

The proceeds from the disposal will be used for its expansioninto the flat steel business, which will require about RM636million.

The investment involves funding for the proposed acquisition offlat steel assets with a production capacity of up to 3.2 milliontonnes per annum of hot rolled coils and up to 700,000 tonnesper annum of cold rolled coils.

Prior to the disposal, AAPL will transfer its stakes in its Malaysianunits to Lion Industries and LTC, proportionate to theirshareholdings, by way of a distribution of dividends in specie.

These units will be liquidated after AAPL’s sale, from which LionIndustries expects to get another S$10.16 million (about RM30.84million). Total proceeds from the proposed disposal and therestructuring exercise would be S$36.81 million (about RM111.74million), the group added.

Lion Industries shares finished 3.5 sen or 6.7% up at 56 senyesterday, giving it a market capitalisation of RM381.26 million.

The Edge, January 9, 2019

M A L A Y S I A


Govt imposes safeguard duty on imported cement

The government imposed a provisional safeguard duty of P8.40per 40-kilogram bag of imported cement to protect the localindustry amid the surge of imports.

The safeguard duty represents about 4 percent of the averageretail price of cement and would be implemented for 200 dayswhile the Tariff Commission is conducting a formal investigation.

The Trade Department earlier initiated a motu proprio or apreliminary investigation to determine whether increasedimports of cement were causing or threatening to cause seriousinjury to the domestic industry.

Trade Secretary Ramon Lopez said the provisional safeguard dutyis at “a level that will ensure price and supply.”

He said safeguard duties were legitimate tools in trade remediesallowed by the World Trade Organization to assist industriesthat have experienced a surge in imports and a decline in salesand profit.

Data supplied by cement manufacturers to the Trade Departmentshowed that from 3,558 metric tons in 2013, imports rose tomore than 3 million MT in 2017 while the share of imports bytraders went up from only 0.02 percent to 15 percent during thesame period.

Data also showed that the industry experienced a sharp declineof 49 percent in income in 2017.

The department said despite the safeguard tariff, it expectedimports to continue coming into the country. It said that contraryto importers data, there would be enough supply to supportdemand.

It estimated the domestic capacity at 35 million metric tonsversus the estimated demand 25 million MT.

The Philippine Cement Importers Association Inc. earlier askedthe Trade Department to explain its motive for initiating aninvestigation on imported cement which it said could exacerbatethe cement shortage in the country as the government undertakesthe ‘Build, Build’ Build’ infrastructure program.

PCIA president Napoleon Co said it was a bit perplexing why amotu proprio investigation was necessary when the country wasfollowing open trade.

Lopez assured that prices of domestic cement would remain stabledespite the higher tariff on imports.

“We are requiring the cement manufacturers to maintain theircurrent retail price levels. We will closely monitor the sellingprice of cement manufacturers and ensure that they will notimplement increases,” Lopez said.

“At the same time, it will encourage existing and new players tobuild additional facilities to attain a healthy level of domesticcapacity that will address our perennial trade deficits, and ensure

long-run supply of cement needed for public infrastructureprojects and for building homes for Filipinos; and moreimportantly generate more jobs here in the country, instead ofhelping job generation in other countries every time we import,”he said.

The provisional authority is good for 200 days in the form ofcash bond on imported cement, while the Tariff Commissionundertakes and concludes its formal investigation.

Lopez said the Trade Department was balancing the interests ofall stakeholders and giving particular attention to ensuring thatcement supply remained steady and that prices would notincrease.

He said the country should not solely rely on imports as globalsupply and demand situation would be risky. He said too muchdependence on imports would also lead to perennial trade deficit.

Co said, however, there was no need for the department to protectthe robust domestic cement industry, given its massive earnings.

Cement manufacturers continued to rake in huge profits, postingindustry sales of P109 billion and industry earnings of P14.7billion in 2017, he said.

Manila Standard, January 18, 2019

Rebar import prices in Singapore fall further on limited demand

Import prices for rebar in Singapore continued to fall over thepast week due to limited end-user demand.

South East Asia Import Rebar $ per tonne cfr (Singapore)

Fastmarkets MB’s import price assessment for rebar in SoutheastAsia - which mainly looks at cargoes sold into Singapore on atheoretical weight basis - was $460-470 per tonne cfr for theweek to Monday January 21, down from $470 per tonne cfr aweek earlier.

Turkish rebar was offered at $470-480 per tonne cfr Singaporeover the past week, while end users were bidding at $450-460per tonne cfr.

There was talk of a large shipment of Turkish rebar being sold at$455 per tonne cfr but this could not be confirmed at the time ofwriting.

Market sources considered such a price as “too low” consideringthe rising ferrous scrap prices in Turkey, and as such weredoubtful about whether a transaction had indeed taken place atthat level.

Stockists in Singapore were on the sidelines to wait for a clearerprice trend to emerge before they start to buy.

“End-user demand is not that strong, although it is stable,” aseller of Chinese rebar told Fastmarkets MB last Friday.

The MB fob China Rebar Index was steady last week, moving in atight range of $487.50-488.29 per tonne last week.

P H I L I P P I N E S

S I N G A P O R E


The Southeast Asian wire rod market also saw limited end-userdemand in the past week.

A deal was heard to have been concluded at $500 per tonne cfrSoutheast Asia. Bids were also made at that level.

Wire rod was offered at $503-510 per tonne cfr Southeast Asiaover the past week. Market sources said transactions were beingnegotiated around $500-505 per tonne cfr Southeast Asia.


Container scrap rebounds in Taiwan

The Taiwanese container scrap import market edged up thisweek, Kallanish understands.

The traded price for imported HMS 1&2 80:20 in-container fromUS rose above $260/tonne cfr, which was the level where priceshad bottomed out in the past two weeks. Traders heard somedeals recently concluded at $265-267/t cfr.

Kallanish raised its HMS 1&2 80:20 scrap assessment onWednesday to $265-267/t cfr Taiwan, up $6 on week.

A Taipei trader says that a small quantity was ordered at $267/tcfr and adds that he cannot see any supply at below this level.Many suppliers in South America and Central America are notmaking offers and instead are watching the market, he says.“Demand is still slow but some buyers in Taiwan need to coverfor some tonnages as they have not been buying,” he explains.Another says that “$265-267/t is the right range.”

The wide gap between bulk and container scrap prices hasdeterred container scrap suppliers from selling to the regiontoo. The existing $35/t gap between container and bulk scrap islarge when compared to the typical $20/t gap..

The spate of bulk scrap deals this month will divert a largequantity of scrap to South Korea. Orders for six bulk cargoesfrom the US, closed at $302/t cfr HMS 1 basis in mid-January,down from $311/t cfr in early January (see Kallanish 16 January)

On Monday, leading Taiwanese EAF mill Feng Hsin Iron & Steelmaintained its domestic scrap purchase and rebar sales pricesfor the third consecutive week. However, traders report thatcertain EAF mills in Southern Taiwan have raised their domesticscrap procurement prices by TWD 200/t on Tuesday.

Feng Hsin’s purchase price for HMS 1 scrap remains at TWD7,600/t ($246/t). The mill’s ex-works list price for #5 (5/8 inchesor 15.875mm nominal diameter base) rebar is at TWD 16,600/tand around TWD 16,000/t for big tonnages.


T H A I L A N D

Country Company Tariff

ChinaYieh Phui (China) Technomaterial Co

2.65%

Others 29,5%South Korea Dongbu Steel Co 16.25%

Dongkuk Steel Mill Co. 6.31%Posco Coated & Color Steel Co. 15.40%Hyundai Hysco Co. 15.40%Others 22.55%

Taiwan Yieh Phui Enterprise Co 5.85%Prosperity Tieh Enterprise Co. 12.23%Others 24.14%


Thailand targets steel sector strategy

Thailand’s steel mills are reportedly being asked to work togetherto develop a road map for the industry for the coming 5-10 yearswith the Industry Ministry. Thai government infrastructurespending has been supporting demand this year, but the ministryhopes the industry will in futures support the manufacturingsector, Kallanish notes.

The goal is to integrate the development of the steel sector withthe development of the Eastern Economic Corridor. This will seea number of government-led ‘megaprojects’ start to beimplemented from 2019. These infrastructure projects willrequire large volumes of steel.

The longer term plan however is to upgrade the quality of steelproduced in Thailand to serve some of the downstream industriesthat are being developed. Industry minister Uttama Savanayananotes that the large Thai automotive industry required high gradesteels that are not sourced locally. Most autosheet used inThailand is imported from Japan.

Kallanish, December 20, 2018

T A I W A N

Thailand extends galvalume AD, Vietnam exempts colour-coatedsafeguards

Thailand and Vietnam have recently issued decisions relating tothe import of galvalume and colour-coated steel respectively,Kallanish notes.

Thailand’s Ministry of Commerce has extended the antidumpingduties on galvalume steel imported from China, South Korea andTaiwan for another five years with effect from 10 January. Importsfrom China will continue to face antidumping duties of 2.65-29.5%, those from South Korea, 6.31% to 22.55%, and those fromTaiwan, 5.85-24.14% (see table below).

Meanwhile, Vietnam’s Ministry of Industry and Trade hasexempted safeguard duties on colour-coated hot dippedgalvanized and colour-coated galvalume steel for 11 companiesusing these products. The products are classified under HS code701070, industry sources say.

The Vietnam Ministry issued its decision for the exemptions on27 December in its first phase and these exemptions will coverfor 32,285 tonnes of colour coated steel for 2019. It will continueto review and process other applications for exemptions in the

future.


Vietnamese steel exports surge

Vietnamese steel exports surged in 2018 while import volumesfell more slowly, according to the Vietnam Steel Association (VSA).Steelmaking raw materials imports, meanwhile, have been drivenby the ramping up of Formosa Ha Tinh, Kallanish notes.

Vietnam’s import volumes were down -9.6% year-on-year in 2018at 13.6 million tonnes, VSA says. Because of higher prices, importsby value were up 9% to $9.9 billion. Imports were still mainlyfrom China, Japan and Korea but imports from China have slowedsharply.

Chinese customs data shows that over January-November 2018China exported 6.44mt of steel to Vietnam, down -10.89% y-o-y.This was mainly due to high Chinese prices but also because ofthe ramp-up of Vietnam’s domestic capacity.

Vietnam’s exports saw the most dramatic growth, however, up33.5% y-o-y to 6.3mt. These were mainly to the USA, Thailand andCambodia. By value, exports were up 44.8% at $4.6 billion.Vietnamese re-rollers and galvanisers say they are activelylooking for new export markets as the domestic market has notbeen strong and they are concerned about being shut out of theUS market. Domestic finished steel producers are producing atonly 63% capacity utilisation, notes VSA.

Another driver of steel and raw materials trade, meanwhile, isthe ramping up of Son Duong port, which serves Formosa HaTinh Steel. This is only the third major deep-water port in Vietnam.It expects to see imports increase to 28mt in 2019 from 21.6mt in2018. This is driven by Formosa Ha Tinh ramping up to capacityat its two blast furnaces. The port mainly handles iron ore andcoal imports but is also the base for Formosa’s exports of hotrolled coil and wire rod. The port now has twelve wharfs handlingships up to 200,000dwt.


Over 32,000 tonnes of colour-coated iron exempted fromsafeguard measures

The Ministry of Industry and Trade (MoIT) has decided to liftsafeguard measures from imports of colour-coated iron for 11enterprises, totalling more than 32,000 tonnes, in 2019.

On May 31, 2017, the MoIT issued Decision No 1931/QÐ-BCTapplying safeguards on colour-coated iron sheets imported fromvarious countries and territories.

Since the decision, the MoIT’s Viet Nam Competition Authority(VCA) has received dossiers requesting exemptions of safeguardmeasures on imported high-quality colour-coated iron forproduction purposes.

After appraising the dossiers, the MoIT chose to exempt safeguardmeasures for the production of welding materials on imports for11 enterprises including Superior Multi Packaging Viet NamCompany Limited, LG Electronics Viet Nam Hai Phòng Company,Savican JSC, Minh Quân Food Packaging Company, PanasonicAppliances Viet Nam Company Limited, Panasonic Viet Nam

Company Limited, Hòa Phát Refrigeration Engineering Company,Aqua Viet Nam Company, Dong Anh Investment Contruction andMaterials JSC, Tân Hà Education Equipment Company Ltd andViet Nam Printing And Metal Packaging Joint Stock Company.

The ministry would continue to review other applications forexemptions in the future.

Enterprises exempted from safeguards must submit reports onthe imports to the VCA within the first 15 days of the followingquarter. Any queries and opinions of organisations andindividuals on the application of safeguard measures forimported painted steel products should be sent to Injury andSafeguards Investigation Division under the Trade RemediesAuthority.

Viet Nam News, January 10, 2019

Vietnam’s 2018 steel output hits 24.19 million mt, up 15% onyear

Vietnam’s steel production totaled 24.19 million mt in 2018, up14.9% year on year, data from the Vietnam Steel Associationshowed.

The annual figure was derived after including December’s 2.02million mt output, which itself was 1.6% higher from the previousyear, the association said.

The higher production could be attributed to Formosa Ha TinhSteel Corp., which fired up a second blast furnace on May 18,2018, thereby doubling its crude steel production capacity to 7million mt/year.

Annual sales totaled 21.74 million mt and exports reached 4.75million mt, up 20.9% and 26.6%, respectively, it said, aftersumming up sales of 1.81 million mt and exports of 411,741 mtin December 2018, down 3% and up 1% from the same period in2017, respectively.

Amid the higher figures, Vietnam’s steel production is expectedto remain on an upward trend in 2019, due to a lot of newcapacities to come on line later this year.

For example, Hoa Phat Group plans to start up its new Hoa PhatDung Quat steel complex in 2019. The complex will have fourblast furnaces with an overall production capacity of 5 millionmt/year.


Russian steel exports grow over January-November

Russia’s exports of ferrous products have maintained anexpanding trend year-on-year over January-November, butmonthly volumes continued to decline. This reflects fallingdemand and lower prices towards the end of 2018, Kallanishlearns from the country’s federal customs data.

Russia’s January-November ferrous exports under the HS code72 rose 10.6% to 42.2 million tonnes, but November export

V I E T N A M

R U S S I A


volumes were -1.4% down on those in October. January-Novemberexports increased in value by 27.2% to $21.4 billion, reflectingthe strength of steel prices throughout first half of the year. Thesefell however by -4.6% to $1.84 billion in November, as steel pricesstarted to decline.

January-November exports of semi-finished steel products roseby 10.8% on-year to 14.4mt, having gained 34% in value at $7.3billion. November semis exports meanwhile remained flat onOctober at 1.25mt, but lost -6.2% in value at $577 million. Thisdemonstrates the decline in both demand and prices in Septemberand early October, when the majority of November shippedvolumes was sold.

Flat products export volumes fell by -4.3% in the first elevenmonths of 2019, to 7.9mt, but their value gained 10.6% on-yearat $4.6 billion. November exports also fell by -2.5% on-month to406,800t, losing -5.9% in value at $406.8m.

Meanwhile, Imports of ferrous products into Russia in January-November continued to increase, having gained 7.8% on-year to6.7mt, and gaining 11.1% in value that totalled $4.9 billion.November import volumes fell -16.6% to 449,700t, losing -16.3%y-o-y in value at $355.1m.


Japanese, South Korean firms evince interest in Indian steelsector: Steel Minister Chaudhary Birender Singh

Steel companies from South Korea and Japan have shown interestto invest in India for manufacturing value-added products, SteelMinister Chaudhary Birender Singh said. A source in the ministrysaid: “The steel ministry is already in talks with Posco andHyundai Steel to explore possibilities of investing in India forproducing value-added steel products.”

When asked if India has written or is in talks with some foreigncompanies such as Posco and Hyundai Steel to form jointventures (JVs) with state-run companies Steel Authority of IndiaLtd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), Minister Singhgave an affirmative reply.

Sources in the ministry said the ministry has held several roundsof meetings and discussions to facilitate manufacturing of high-grade steel in India with the help of foreign companies especiallyfrom Korea and Japan.

In November, the Ambassador of South Korea met Steel SecretaryBinoy Kumar and said that Posco and Hyundai Steel might formJVs with RINL in due course of time.

The Ambassador also requested the top official to assure iron-ore linkage and incentives to the Korean companies for makingthem invest in India.

During the same month, the Ambassador of Japan also met thesteel secretary regarding setting up of JVs or steel plant of highgrade in India.

The minister earlier had said public sector companies haveadvantages such as captive mines and they must go for value-added special grades of steel.

India should cut its dependence on special steel product importsthrough value addition and form JVs with global leaders fortechnological know-how, he had said.

“Transfer of technology for production of automotive steel andother special steel will be facilitated by helping set up JVs withglobal leaders in such products,” the minister has said.

The Economic Times, January 14, 2019

India: Steel production rises 4.5%, consumption up 8.4% duringApril-Dec in FY19

India’s finished steel production during April to December periodof the current financial year (FY19) rose by 4.5 per cent to 97.358million tonnes (mt) while the country’s consumption grew by 8.4per cent to 71.862 mt in the same period, a Steel Ministry’s reportsaid.

However, India’s finished steel export during the first nine monthsof 2018-19, was down by 38.5 per cent to 4.675 mt over the sameperiod of 2017-18 and imports during the period under reviewstood at 5.908 mt, down by 3.1 per cent over correspondingmonths of previous fiscal.India was a net importer of total finished steel in April-December2018.

“Gross production of total finished steel was at 97.358 mt, andgrew by 4.5 per cent during April-December 2018 over the sameperiod of last year,” the ministry’s Joint Plant Committee’s (JPC)report said.

It also said, “India’s consumption of total finished steel saw agrowth of 8.4 per cent in April-December 2018 (71.862 mt) oversame period of last year, under the influence of a rising indigenoussupply side.

Steel Authority of India (SAIL), Rashtriya Ispat Nigam Ltd (RINL),Tata Steel Ltd (TSL), Essar, JSW Ltd and Jindal Steel and Power Ltd(JSPL) together produced 54.154 mt during April-December 2018which was a growth of 6.2 per cent over same period of last year.

The rest, 43.204 mt, came from the other producers, clocking agrowth of 2.4 per cent over the same period of previous year.

According to it, the production of total finished steel was at11.422 mt in December 2018, up by 4.3 per cent overcorresponding month of previous year and it was up by 4.9 percent over November 2018.

Consumption stood at 8.339 mt in December, up by 9.4 per centover year-ago month and was also up by 9.2 per cent overprevious month (November 2018), the report said.

Imports in the last month only, stood at 0.548 mt, down by 2.5per cent over corresponding month of previous year and was upby 6 per cent over November 2018.

I N D I A


“Exports stood at 0.367 mt in December 2018, down by 61.9 percent over December 2017 and was up by 7.9 per cent overNovember 2018,” it added.

IANS, January 18, 2019

Indian steel producers push for higher import duties

Indian steel producers are lobbying for higher duties to beimposed on imports after the country became a net steel importerin April-December 2018.

Steel imports from Japan and South Korea are increasing quickly,while slower steel demand in China may increase inflows fromthat country in 2019, steel producers said at the India Steel 2019conference in Mumbai.

India’s steel imports fell by 3.1pc from a year earlier to 5.91mnt in April-December, the first nine months of India’s 2018-19financial year. But exports fell far more sharply, dropping by38.5pc to 4.67mn t, according to government data. India was anet exporter of steel in 2017-18.

“India is facing a threat of more imports coming in from Chinaand Turkey. The 25pc import duty imposed by the US is divertingsupplies to India. On the other hand, Indian steel exports arelargely price-uncompetitive in world markets,” said Anil KumarChaudhary, chairman of state-owned producer Steel Authority ofIndia (Sail).

“India’s trade barriers are becoming ineffective for steel whilemore imports are coming from Japan and South Korea, whichhave free-trade agreements with India. Steel import volumes arebecoming more and more,” said Dilip Oomen, managing directorof private-sector Essar Steel. “I urge the government to reviewsafeguard duties as well as the contents of the FTAs with Japanand South Korea.”

Flat products, which account for the biggest portion of importsto India, attract a 12.5pc basic customs duty, although this isnot applicable on imports from Japan and Korea. But anti-dumping and safeguard duties that protect most flat steelproducts are also applied to these countries.

India’s steel consumption is expected to grow by 8pc in the 2018-19 financial year, while output growth will only be around 4-4.5pc. But another 12mn t/yr of steel capacity will be added inIndia in the next 18 months, which could create a supply glutunless imports are kept in check, said Seshagiri Rao, managingdirector of private-sector JSW Steel. India needs to introduceadditional safeguard duties, he said.

Recently-introduced quality standards for several steel productsmade by domestic and overseas suppliers have not been properlyenforced for imports, leading to inflows of sub-standard steelsuch as coated products from southeast Asia, Rao said.

“India’s steel exports are subject to non-tariff barriers in manycountries,” said Naushad Ansari, joint managing director ofprivate-sector Jindal Steel & Power, hinting that the Indiangovernment could explore similar means of curbing imports.“Steel dumping is a big problem and the industry is quite wary ofincreased dumping.”

But the Indian government is not too concerned. “Neither thesteel industry nor the government are jittery about imports. Ialso do not think there is much demand for imported steel inIndia,” said Birender Singh, India’s steel minister. “There is nohurry to take any steps on increasing duties. If the situationworsens, we will see what to do.”

“Imports into India are not alarming right now. But our tariffbarriers are not very effective at current low global steel pricelevels,” a steel ministry official said.


India may face iron ore shortage in 2020

India may face a significant shortage of iron ore in 2020 asprivate-sector merchant mining leases expire.

The mining leases, which are due to expire on 31 March 2020,cannot be automatically renewed and instead have to be put upfor auction and granted new environmental clearances. Thisprocess typically takes up to 3-4 years to complete.

Estimates of the likely impact on production vary. Iron ore outputmay fall as much as 50mn t/yr, AS Firoz, chief economist at thesteel ministry, said on the sidelines of the India Steel 2019conference in Mumbai. India-focused ratings agency Crisil hasestimated production will be around 80mn t.

Both estimates account for a sizeable chunk of India’s iron oreproduction, which totalled 210mn t in the financial year thatended 31 March 2018.

Government officials said they are confident the process ofholding fresh auctions and securing environmental clearanceswill be handled expeditiously to ensure sufficient supplies areavailable for domestic steelmakers.

“The ministry of mines is monitoring the situation closely. Wewill ensure that there is no disruption to mining. All the mineswill go for fresh auction and we will co-ordinate closely with theministry of environment for faster clearance,” said Bipul Pathak,joint secretary at the ministry of mines.

The Indian government has set a deadline of 1 April 2019 forstates to start the auction process, although the deadline is notbinding. But general elections are due in April and May, so stategovernments may be focused on more politically-sensitiveprojects. Most of the leases that are due to expire are in thelargest producing state of Odisha, followed by Goa andKarnataka.

Any shortfall of iron ore supplies may lead to a spike in imports.“Coastal Indian mills typically import more iron ore, but in caseof a supply crisis, even mills in the hinterland may step upimports,” said Pankaj Saini, partner at iron ore trading firm ElanInterTrade.

“The country cannot afford a serious iron ore shortage. I amsure the government will find a way of resolving the issue withouta significant drop in supply,” said Jayant Acharya, director ofsteel producer JSW Steel. Asked if there could be a sharp increasein imports in 2020, he said: “I hope not”.



How China is dodging duty wall to continue dumping stainlesssteel in India

Responding to the Indian government’s move to levy 18.95 percent countervailing duty (CVD) on direct imports from China,companies from that country have started using the Indonesianroute to continue dumping stainless steel into India.

Over the past couple of years, investors have installed threemillion tonnes of production capacity in Indonesia against thatcountry’s total consumption of 150,000 tonnes. Indian stainlesssteel producers fear that the new capacity installed in Indonesiais primarily coming in from Chinese companies, whose aim is tocontinue dumping the product into India under the South AsianFree Trade Area (SAFTA).

“The stainless steel industry is facing several challenges suchas high cost of finance, regional and free trade agreements (FTAs)signed with partner countries, said Abhyuday Jindal, ManagingDirector, Jindal Stainless Ltd. He asserted that the capacity build-up in Indonesia is posing another threat to an alreadybeleaguered sector in India.

India has a total stainless steel production capacity of 5.4 milliontonnes which is underutilized. With an estimated consumptionof 3.2 million tonnes per annum, India’s capacity utilisationstands at around 70 per cent. This means nearly, 30 per centinstalled capacity remains idle.

India imports around 0.5 million tonnes of specialized stainlesssteel and exports an equal quantity annually.

Another challenge that the Indian stainless steel industry facingis the inverted duty structure. India has signed FTAs with Japanand Korea from where finished stainless steel (both flat andlong) is imported duty free. By contrast, import of ferro nickel, araw material, attracts 2.5 per cent import duty.

“Since India does not produce ferro nickel, the government mustprovide a level-playing field to domestic producers which maypromote ‘Make in India’ initiative also,” said Vijay Sharma, SeniorVice President, Jindal Stainless.

On the issue of competitiveness, Jindal said the interest cost onworking capital works out to 10-12 per cent in India as comparedto 5-6 per cent in China and other competing countries.

“With growing impetus from the government on infrastructuresuch as railway wagons, coaches, airports, the overall use ofstainless steel is set to grow in future,” Sharma added.

Business Standard, January 23, 2019

Chinese steel consumption is expected to rise in 2019

Steel demand in China is set to increase on the back of newlyapproved policies in support of its construction sector. The newpolicies would cut taxes, improve the funding for localgovernments and boost up the infrastructure building andhousing projects in 2019.

The proposal of new economic actions has already beenapproved by China’s President Xi Jinping in December 2018,which indicates more spending on construction andinfrastructure to support economic activity in the country.

Commodity Inside assesses that over half of the Chinese steeldemand comes from the construction and infrastructure sector.Growth in infrastructure has been on a downward trajectory asChina has already developed necessary infrastructure while itsreal estate sector has also saturated in major cities.

The Chinese government also plans to develop northeast andwest of the country which is left comparatively underdeveloped.The country has the plan to move around 100 million more peopleto urban areas before 2020 by promoting developments in thecities of these areas.

The new policies indicate that the investments will be focusedon transportation, logistics, infrastructure, rural developments,public service facilities etc. during the next year. This will helprevive growth in the infrastructure sector.

Commodity Inside, January 7, 2019

China’s steel exports fall 8.1% on year to 69.34 mil mt in 2018

China’s finished steel exports reached 5.556 million mt inDecember, up 4.9% month on month but down 2% from theprevious year, preliminary data released Monday by the GeneralAdministration of Customs showed.

Exports rebounded in December after having fallen for twoconsecutive months, as overseas order bookings over Octoberand November improved in tandem with falling Chinese steelprices.

In 2018, China’s steel exports totaled 69.336 million mt, down8.1% from 2017.

Steel imports in December were at 1.006 million mt, down 4.2%from November and by 16.2% year on year.

In 2018, steel imports were down 1% year on year at 13.166million mt.

Net steel exports in December were at 4.55 million mt, up 7.1%month on month and 1.8% year on year. In 2018, net steel exportsfell 9.6% year on year to 56.17 million mt.


China to focus on improving steel capacity structure – assn chief

China’s steel industry will shift its focus to optimising capacitystructure, including products, location and ownership, in 2019,from reducing overall capacity, said an executive of the country’siron and steel association on Monday.

China is entering the fourth year of its supply-side reform pushto streamline its bloated heavy industry and to pursue “high-quality development” from “fast-speed development.”

C H I N A


Since 2016, the world’s largest steel maker has eliminated nearly300 million tonnes of outdated steel production capacity andlow-grade steel capacity, but around 908 million tonnes stillremains.

“(China’s steel industry) is still far from accomplishing thesupply-side reform task,” said Yu Yong, the chairman of ChinaIron and Steel Association at an annual industry meeting. “(A)major campaign in 2019 will be optimising production structure,adjusting layout of steel mills and pushing merger andacquisition.”

But he also acknowledged that the pressure of oversupply fromillegally-added capacity and new projects remains as mills tryto cash in on high profit margins.

“Main source of China’s economic growth has turned toconsumption from investment, which leads to fewer demand forsteel products and higher requirement of products quality,” saidYu.

The China Metallurgical Industry Planning and ResearchInstitute, a government consultancy, predicted last month thatsteel consumption in the country would fall to 800 million tonnesin 2019 from 820 million tonnes in 2018, because of waningdemand in the property, automobile and energy sectors.China’s car sales fell 2.8 percent in 2018 from the previous year,the first annual decline in 28 years.

Yu also called on steel mills to prepare for further Sino-U.S. tradefriction and to pay close attention to the indirect impacts onChinese steel exports.

Total steel exports fell to 69.54 million tonnes last year, the lowestsince 2013, data from the General Administration of Customsshowed on Monday.

Reuters, January 15, 2019

China’s inspections to speed up rebar standards rollout

China is stepping up inspections to enforce new rebar standardsthat smaller mills have been slow to adopt since they took effectin November, adding support for vanadium and rebar prices.

The China state bureau of quality and technical supervision(CSBTS) earlier this month conducted quality inspections on rebarproducers in Jieyang in Guangdong province and this week visitedmills in Xuzhou city in east China’s Jiangsu province.

The standards, which came into effect on 1 November 2018,eliminated rebar grade HRB335 and established a new HRB600grade that is more able to withstand earthquakes with a highercontent of vanadium alloys and lower tolerance level.

Steel market participants said enforcement has been lax andaround 30-40pc of mills, mostly smaller ones, have not fullyswitched to the new standards. Jieyang blast furnace operatorswere confident they passed the inspection, but re-rolling millsthat buy billet from the inspected mills to make rebar were notas confident, market participants said.

The new standards will eliminate outdated rebar productionprocesses, squeezing smaller operators that cannot afford toimplement them from the market. The alloys required to be addedto the converter will increase costs by Yn100-300/t ($15-44/t).Mills will no longer be allowed to use water to cool rebar afterrolling because it promotes rust.

The standards also require thinner rebar dimensions to engravelabelling to reduce counterfeit supplies and set stricter limitsfor tolerance, or variation of diameter, on some grades with themaximum tolerance for 6mm-12mm rebar reduced to 6pc from7pc.

The standards were initially expected to boost demand for ferro-vanadium and vanadium-nitrogen alloys. Production of onetonne of rebar needs 0.5kg of 50pc grade ferro-vanadium or0.31kg of vanadium-nitrogen alloy.

But lax enforcement in the first two months has provided littlesupport to vanadium demand. Prices for 50pc grade ferro-vanadium rose to 500,000-520,000 yuan/t ($148-154/kg) in earlyNovember after the new standards took effect, but have sincehalved as major mills held sufficient inventories and smallermills were reluctant to implement the standards.

Increased demand this month has come from mills restocking toavoid logistics problems during the lunar new year early nextmonth, with 50pc grade alloy prices rising by Yn10,000/t toYn230,000-250,000/t ($68-74/kg) ex-works today.Domestic rebar prices have also fallen from November peaks.Shanghai ex-warehouse prices for rebar at Yn3,690/t yesterdayare 21pc lower than the recent high of Yn4,700/t in late October.

More mills are inclined to use vanadium-nitrogen as feedstockto produce rebar as it can save 32-38pc of production costscompared with using 50pc grade ferro-vanadium.

Steel mills including Laiwu Iron and Steel, Shaoguan Iron andSteel, Anhui Changjiang Gangtie, Shagang, Zenith Steel, HunanValin Xiangtan, Hebei Jingye, Nanjing Iron and Steel, XinxingDuctile Iron Pipes, Fujian Sanming Steel, and Jiangsu Shente Steelare mainly using vanadium-nitrogen alloy to produce rebar.

Maanshan Iron and Steel (Magang), Dongbei Special Steel,Eastern Special Steel, Hengyang Valin Steel Tube, Jiyuan SpecialSteel, Citic Pacific and Baosteel are using ferro-vanadium as aningredient to make rebar.


China’s crude steel output exceeds 900 mln tonnes in 2018

China’s crude steel output rose to a new high in 2018 on healthyprofit margins among mills and growth in downstream demand.

The world’s second-largest economy produced a total of 928.26million tonnes of crude steel last year, the National Bureau ofStatistics (NBS) said on Monday January 21.

The bureau said this is up 6.6% from that in 2017.

Chinese mills produced 1.11 billion tonnes of finished steel in2018, up 8.5% year on year, according to the NBS.


In December, mills produced 76.12 million tonnes of crude steel.This is up 8.2% on a year-on-year basis but down 1.9% from thatin November, it said.

They produced 93.65 million tonnes of finished steel last month,up 9.1% from a year earlier but 0.6% lower month on month, theNBS added.

The wide profit margins that resulted from last year’s high steelprices encouraged mills to raise their production, market sourcessaid.“China’s steel mills made a profit almost every day in 2018,” anindustry analyst based in Shanghai said.

Rebar prices in east China averaged 4,076 yuan ($601) per tonnein 2018, 312 yuan per tonne higher than 2017’s average of 3,764yuan per tonne, according to Fastmarkets MB’s price archive.

Those for hot-rolled coil - another major steel product - averaged4,120 yuan per tonne last year, up 364 yuan per tonne from3,756 yuan per tonne in 2017.

Market sources also cited healthy growth in most downstreamindustries as another reason for the higher steel output.

For instance, in the housing market, new building acreage totaled2.09 billion square meters in 2018, up 17.2% year on year,according to NBS.


Six companies to watch on the steel M&A front in 2019

Fastmarkets AMM reviews recent merger-and-acquisition dealsfor some heavy hitters in the steel industry. Each company’songoing purchases - big and small - are intended to expand theirglobal reach as well as develop products and services throughout2019.

Here are six companies to keep an eye on this year:

Commercial Metals Co (CMC)CMC bought four US rebar mills and 33 rebar fabrication facilitiesfrom Gerdau for $600 million in November.

The assets acquisition from Gerdau adds approximately 2.5million tons to CMC’s melting capacity.

CMC recorded fiscal first-quarter net income of $19.7 million,down by 46.4% from $36.8 million in the same year-ago period,although net sales rose by 18.7% year on year to $1.28 billionfrom $1.08 billion.

The company is also expected to add about 800,000 tons offabricated rebar shipments based on recent annual shipmentvolumes, president and chief executive officer Barbara R. Smithsaid during a conference call on Monday January 7 on CMC’searnings result for the three months ended November 30.

Steel Dynamics Inc (SDI)SDI had two major acquisitions last year. First, the companybought Kentucky Electric Steel. The acquisition will add flat

product and specialty alloy bar to the existing product line atSteel of West Virginia, a subsidiary of SDI.

The company also closed a $400-million purchase of HeartlandSteel Processing LLC, which was the former US operation ofBrazilian iron ore and steel producer Cia Siderurgica Nacional.

ArcelorMittalArcelorMittal USA recently agreed to take over management ofiron ore operations at Hibbing Taconite. ArcelorMittal produced62 million tons of iron in 2017, including from its Minorca Minelocated 30 minutes northeast of the Hibbing facility.

ArcelorMittal also closed its acquisition of IIva and has assumedfull management control of the Italian steelmaker, which willform a new business cluster within the ArcelorMittal Europe -Flat Products group called ArcelorMittal Italia.

Liberty House GroupA subsidiary of GFG Alliance, Liberty House intends to buy fourEuropean mills from ArcelorMittal. Liberty House in October senta binding offer for the acquisition of ArcelorMittal’s steel plantin Ostrava, Czech Republic; the Galati mill in Romania; the Skopjefacility in Macedonia; and the hot-dipped galvanized productionplant in Piombino, Italy.

Liberty House could become one of the largest wire rod producersin the United States, with a national reach due to recentacquisitions - the latest being its $320-million buy of KeystoneConsolidated Industries Inc’s (KCI) assets.

Assets for Dallas-based KCI include a wire rod facility with anelectric-arc (EAF) furnace, a bar mill, three welded wirereinforcement mesh facilities and a pre-stressed concrete strandfacility.

KCI will be combined with Liberty House’s operations inGeorgetown, South Carolina, and could give Liberty an annualUS EAF-based melting capacity of 1.8 million tons, along with 2million tpy of wire rod rolling capacity, GFG said on its website.

Halfway through last year, Liberty House said it aimed to makemore than “5 billion in investments over the next few years”across the United stated and Canada. A month later in July 2018it also reopened its wire rod mill in Georgetown, South Carolina.

The acquisition lends support to Liberty’s plan to launch an initialpublic offering (IPO). A spokesperson for GFG Alliance said onJanuary 3 that the IPO will take place this year, although thereare no further details at this time.

Olympic Steel IncService center Olympic Steel saw its third-quarter net incomesurge by fivefold to $11.6 million from $2.3 million in the same2017 period on net sales that increased by 37.9% to nearly $457million from $331.4 million.

Last year the company acquired specialty steel processor BerlinMetals in an all-cash deal, which supplies light-gauge cold-rolledsheet and strip as well as galvanized and other coated flat-rolledproducts to customers in the building products, automotive andindustrial markets.

W O R L D


Olympic continues to eye niche acquisitions across its threemain segments of carbon flat steel, specialty flat metals andpipe and tube. The company on January 2 concluded itsacquisition of McCullough Industries in an all-cash deal.

Specific terms of these deals were not disclosed.

Norfolk Iron & MetalsNorfolk Iron started the year by acquiring O’Neal Flat RolledMetals (OFR Metals), adding eight locations and enhancing theNebraska-based company’s product lines and capabilities forprocessing flat-rolled carbon, stainless and aluminium products.

OFR Metals is a processor and distributor of non-ferrous andcarbon flat-rolled products, with its eight facilities have morethan 650,000 square feet of processing and warehousingcapabilities and its in-house processing solutions includeleveling, slitting, blanking, shearing and polishing.

Under Norfolk Iron, OFR Metals has returned to its former nameof Metalwest.


EU agrees to extend steel import curbs until 2021

The European Union will limit imports of steel into the blocfollowing U.S. President Donald Trump’s imposition of metalstariffs after EU governments backed the plan in a vote on Jan. 16.It means that all steel imports will be subject to an effective capuntil July 2021 to counter concerns of EU producers that Europeanmarkets could be flooded by steel products that are no longerbeing imported into the U.S.

The European Commission said on Jan. 16 that EU membercountries had backed its plan to impose “safeguards” and thatdefinitive measures would enter force early in February.

The bloc had already imposed safeguards on a provisional basison imports of 23 steel product types in July, with an expiry dateof Feb 4.

The Commission’s plan involves a quota set at the average levelof imports over the past three years, plus 5 percent. A 25 percenttariff would apply once the quotas are filled.

There are also specific limits for major exporting countries. Thequotas would apply for three-month periods in order to limitstockpiling and could also be increased by 5 percent each year.

European auto manufacturers association ACEA has called themeasures protectionist. It has said that steel exports to the UnitedStates have only dropped slightly and so little extra steel hasbeing diverted to Europe.

The Commission says that import volumes into the EU increasedsignificantly from March 2018, when the United States imposedtariffs of 25 percent on imports of steel and 10 percent onaluminium. It extended these measures to the European Union,Canada and Mexico in June.

Steel group Eurofer, whose members include world number oneArcelorMittal and Germany’s ThyssenKrupp, has welcomed thesafeguards.

The main exporters of steel to the EU are China, India, Russia,South Korea, Turkey and Ukraine.

Hurriyet Daily News, January 17, 2019

Definitive safeguard measures might not be enough to protectEU market, Eurofer says

European steel association Eurofer is concerned that thedefinitive measures in the European Commission’s safeguardcase against steel product imports will not be enough to protectthe region’s markets from material redirected from the UnitedStates.

“While we welcome this endorsement, we are neverthelessworried that the form of the final measures may undermine theirintended safeguarding function,” the director general of Eurofer,Axel Eggert, said on Thursday January 17.

“It is therefore vital that the [European] Commission closelymonitors EU steel demand development, and adjusts the generousincrease of the tariff-free import quota accordingly in July 2019,if necessary,” he added.

The EU member states voted on January 16 to support theproposal for definitive measures in the region’s safeguardinvestigation into imported steel.

The European Commission (EC) will now finalise the procedure,so that the definitive measures can enter into force by February4, 2019. The measures will remain in place until July 2021.

The EC notified the World Trade Organization (WTO) on January4 that it intended to impose definitive measures in the form oftariff-rate, partially country-specific and quarterly quotas for26 steel product categories.

The case was started in an attempt to prevent steel shipmentsfrom being redirected to the EU after the United States imposed a25% import tariff on steel products as part of its Section 232investigation, which it said was intended to protect US nationalsecurity.

“EU steel imports rose by an unprecedented 12% in 2018. Forevery three tonnes of steel blocked by the US’ Section 232 tariffs,two tonnes have been shipped to the open EU market,” Eggertsaid.

The final measures to be taken by the EC include an immediate“relaxation”, increasing the size of the quota by 5%, calculatedon the base years of 2015-17. This will be followed by a further5% relaxation in July 2019 and another 5% in July 2020, subjectto review.

This is despite the fact that steel demand is expected to increaseby only 1% in 2019, according to Eurofer.

“This means that the rise in the quota may be several timeslarger than the increase in the size of the market, leaving EU


producers to fight over a shrinking market share,” Eggert said.“Imports already account for around one-quarter of the market,up from less than one-fifth historically.”

The final measures will set country-specific quotas for the mainsteel exporters to the EU. The remaining “residual” quota forother countries will be set quarterly. Countries with their ownquotas will be free to take up some of the residual quota oncethey have filled their own allocation.

The final safeguard measures will also continue to exempt somedeveloping countries because their shares of the imported totalwere less than 3%, despite exceeding this threshold during 2018.This is, for instance, the case for Indonesia, whose share of thestainless hot-rolled flat steel product segment reached 9.5% in2018.

But it will be essential that such countries lose their exemptionsin future revisions, Eurofer said.

“So, while we reiterate our welcome for the final measures, andthe overwhelming backing they have received from memberstates,” Eggert said, “we caution that steel demand must bemonitored closely… if this mechanism is to prove effective in thelong run.”


Iron ore and steel: points to watch in 2019

Energy consultant Wood Mackenzie (WoodMac) has put forwardsome thoughts for the new year concerning iron ore and steel.

The company is claiming that the global iron ore industry startsthe new year in ‘surprisingly good shape’. Prices are ‘holdingcomfortably’ despite all the rhetoric over a China ‘hard landing’and escalating trade tensions, not to mention a steel profitabilitysqueeze.

According to WoodMac, iron ore prices are holding comfortablyabove US$70/tonne CFR with little if any evidence of margincompression. The company’s base case view for 2019 suggestthat ongoing restructuring of the Chinese steel and iron oreindustry, in response to increasingly stringent environmentalcontrols, will continue to support demand for seaborne iron ore.However, compliance comes at a cost, says WoodMac,particularly for domestic mines in China, some of which will beforced to go underground, meaning higher operating and capitalcosts.

WoodMac claims that India could be 2019’s big story. “We believethe rise in Indian imports in 2018 wast he start of a long-termstructural trend rather than a one-off blip. With China stillgrowing and India on the rise, global growth in seaborne tradeof at least 30Mt should be achievable this year, supporting pricesfor 62% Fe sinter fines at US$65-70/tonne CFR,” it said.

However, given the high level of economic and geopolitical riskaround the world, there will be bumps along the way.

Where steel is concerned, WoodMac believes that 2019 is‘shaping up as a year of reckoning and resetting of expectations.The steel industry, says WoodMac, enjoyed a stellar run since

H2 2017, but in November 2018 steel prices started to fall,compressing steelmakers’ margins to uncomfortable levels.

Where Chinese steel demand is concerned, WoodMac asks: isthere another rabbit in that hat? The company claims that ‘thepolicy-making finesse required to rebalance the Chinese economy(and support steel demand) will be put to ever-harder tests.Chinese leaders, it is argued, have so far prevented a hard landingin construction. “Stimulus measures point to a repeat of thatfeat, but stimulating construction is increasingly difficult andconsumption of steel-intensive goods has taken a hit.”

As for trade wars, while demand was soaring, trade wards broughtextra prices support to US steelmakers. As demand growth easesin 2019, will trade wards bring about ‘demand destruction’?

In terms of capacity growth in India, WoodMac wonders about a2019 revival, claiming that the state of Odisha’s recentreallocation of land from the infamous POSCO mega project toJSW and Steel Authority of India Ltd (SAIL) might spur the long-awaited greenfield capacity growth.

Lastly, WoodMac tackles ‘green steel’, stating that in the recentlyconcluded steel-capacity clean-up, China focused on air, soiland water pollution, while the EU is tightening the screws onCO2 emissions. The big question, says WoodMac, is: with thewill to co-ordinate policies internationally at historic lows, willthe cost of protecting the environment trigger moreprotectionism?

Steel Times International, January 23, 2019

China’s steel export to ASEAN-6, January to November 2018

Total China’s finished steel export to ASEAN-6 declined marginallyby 1% y-o-y in the first eleven months of 2018. Export of longproduct dropped 12% y-o-y while flat steel export from China toASEAN-6 increased slightly, by 3% y-o-y in the same period.

China’s export of section to the region increased 13.6% y-o-y to944,783 tonnes from January to November 2018. The volumeaccounted for around 40% of total section export from China.Philippines was the largest destination among the six countriesin ASEAN, with total of 336,562 tonnes, an increase of 45% y-o-y.Export to Malaysia was 292,110 tonnes, an increase of 31% y-o-y during the same period, followed by the export to Indonesia, at108,928 tonnes, an increase of 35% y-o-y. Export to Singapore,Vietnam and Thailand registered less than 100,000 tonnes eachin the first eleven months of 2018. Vietnam was the only countryin the region that saw a decline in China’s section export in thefirst eleven months of 2018, with volume dipping 59% y-o-y.

China’s bar export to ASEAN-6 continued to decline in the periodJanuary to November 2018 with volume falling 24% y-o-y.Nevertheless, the volume constituted one-third of total bar exportfrom China. However, the decline was less significant whencompared to the negative growth rate in 2017, at 78% y-o-y. Barexport from China to many countries in ASEAN-6 decreasedsignificantly, except for export to Malaysia and Thailand. Exportto Malaysia, at 372,399 tonnes, in the first eleven months of2018 was an increase of 61% y-o-y. Export to Thailand registered

H E A D L I N E S


430,192 tonnes, an increase of 21% y-o-y. China’s bar export toSingapore, the largest destination in the region, registered528,919 tonnes, a decrease of 26.3% y-o-y. Export to Vietnamdeclined 13.8% y-o-y to 181,394 tonnes in the first eleven monthsof 2018. Export to Philippines registered the highest percentagedecrease from 630,775 tonnes in the first eleven months of 2017to 255,400 tonnes in the same period of 2018, a steep drop of59.5% y-o-y.

China’s export of wire rod to ASEAN dropped moderately, by 6.5%y-o-y to 2.62 million tonnes. The volume constituted around halfof total wire rod export from China for the period January toNovember 2018. Thailand and Philippines were the largestdestinations in ASEAN-6 for China’s wire rod export in the firsteleven months of 2018. Export to Thailand registered 698,769tonnes, a moderate decline of 5% y-o-y. Export to Philippineswas 696,609 tonnes, an increase of 7% y-o-y. Export to Vietnamand Indonesia registered more than 400,000 tonnes each. Exportto Malaysia recorded the lowest volume in the region, at 173,044tonnes, a decline of 5.5% y-o-y.

China’s hot rolled plate export to ASEAN-6 dropped 8.6% y-o-y to1.56 million tonnes from January to November 2018, accountingfor one-third of total China’s total hot rolled plate export in thesame period. Vietnam, the largest destination for total China’shot rolled plate export to the world, recorded a volume of 869,927tonnes, a decline of 9% y-o-y. Export to Philippines continued toincrease at 13% y-o-y to 334,312tonnes, followed by the exportto Malaysia, at 125,287 tonnes, a decline of 6.5% y-o-y. China’sexport of hot rolled plates to Indonesia, Singapore and Thailandregistered less than 100,000 tonnes each in the first elevenmonths of 2018.

China exported significant volumes of hot rolled coil to ASEAN,40% of total hot rolled coil export from the country during thefirst eleven months of 2018. Hot rolled coil export from China toASEAN-6 declined moderately, by 8.3% y-o-y to 4.08 million tonnesduring the period. Vietnam was the major destination for theexport, at nearly 3 million tonnes, a decline of 8.9% y-o-y. Exportto Indonesia was 453,423 tonnes and the volume declinedslightly, by 3.8% y-o-y, followed by export to Philippines, at252,121 tonnes, a decline of 4.3% y-o-y. Export to Malaysia, at201,608 tonnes, was an increase of 8.4% y-o-y while export toThailand dropped by a double digit of 29.5% y-o-y to 166,204tonnes. Export to Singapore was not significant, at 15,717 tonnes.

Export of cold rolled coil from China to ASEAN-6 increased 11.9%y-o-y to 1.3 million tonnes from January to November 2018. Thelargest destination in ASEAN-6 was Vietnam, followed byPhilippines and Indonesia, at 395,001 tonnes, 329,801 tonnesand 251,941 tonnes, respectively. Export to Vietnam, however,declined significantly, by 17.6% y-o-y, while export to Philippinesand Indonesia registered a sharp increase of 17.9% y-o-y and74.8% y-o-y, respectively. Export to Thailand and Singapore wasless than 100,000 tonnes each. However, the volume increasedrobustly, by 34.2% y-o-y and 80.2% y-o-y, respectively during thesame period.

China’s total export of coated sheet dropped slightly, by 1.5% y-o-y to 16.9 million tonnes from January to November 2018.However, the export volume to ASEAN-6 increased 20.4% y-o-y to4.65 million tonnes during the same period. Major destinations

of the export within ASEAN-6 were Thailand, Philippines andVietnam.

China’s coated sheet export to Thailand in the first eleven monthsof 2018 registered 1.37 million tonnes, an increase of 30% y-o-y.The bulk of the export volume was for hot dipped galvanizedsheet, at 691,909 tonnes, a significant increase of 37.6% y-o-y,followed by export of color coated sheet, at 254,552 tonnes, anincrease of 26.5% y-o-y. China’s export of ZnAl to Thailandregistered a significant volume of 193,883 tonnes, a slightdecrease of 1.7% y-o-y. Tin plates export from China to Thailandwas also significant, at 114,965 tonnes, a slight increase of 4.3%y-o-y.

Export of coated sheet from China to Philippines, at 1.12 milliontonnes, was an increase of 26.6% y-o-y in the first eleven monthsof 2018. Major export item was HDG, at 513,164 tonnes, anincrease of 24.7% y-o-y, followed by the export of color coatedsheet, at 350,291 tonnes, an increase of 32.8% y-o-y. Export ofZnAl increased 19.2% y-o-y to 192,217 tonnes from January toNovember 2018.

China’s export of coated sheet to Vietnam totalled 1.08 milliontonnes in the first eleven months of 2018, a decline of 7.9% y-o-y. Major products were HDG and color coated sheet. Export ofHDG declined significantly, by 16.4% y-o-y to 548,885 tonnes.Export of color coated remained unchanged, at 476,510 tonnes.

Pipes & tubes export from China to ASEAN-6 increased by a doubledigit of 13.7% y-o-y to 1.38 million tonnes for the period Januaryto November 2018. The export of both welded pipe and seamlesspipe recorded almost equal amount. Export of seamless pipes toASEAN-6 increased significantly, by 23.7% y-o-y to 646,547 tonnesfrom January to November 2018. China exports seamless pipesto many countries in the region. However, the largest destinationswere Thailand and Indonesia, at around 160,000 tonnes each.Export to other countries in the region registered around 100,000tonnes each.

China’s export of welded pipes to ASEAN-6 increased moderately,by 6.1% y-o-y to 734,577 tonnes from January to November 2018.The export went to all six countries in the region. However, themajor destinations were Singapore and Vietnam, at 93,936tonnes and 88,775 tonnes, respectively, while the volume of exportto Thailand was only 34,286 tonnes during the same period.

Remarks: The countries in ASEAN-6 are Indonesia, Malaysia,Philippines, Singapore, Thailand and Vietnam.

SEAISI, January 2019

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Suggested Topics :

1. Steel Market Developments and Outlook2. Development of ASEAN Steel Value Chain3. Circular Economy and Steel Industry4. Trade Wars and Impact on ASEAN Steel Industry5. Digital Developments in Steel Industry6. Carbon-free Technology for Steel Production7. Renewable Energy for Better Production in Steel Industry8. Smart Mobility Technology for Steel Industry9. Production of Special Steel in ASEAN10. Raw Materials 11. New Product Developments12. New Technologies13. Process Improvement14. Quality Improvement15. New Steel Applications16. Plant Management17. Environmental Management18. Cost & Energy Savings19. Safety Improvement in Steel Production

2019 SEAISI Conference & Exhibition

Theme: Sustainable Development of ASEAN Steel Value Chain

Date: 17-20 June 2019Venue: The Athenee Hotel, a Luxury Collection Hotel, Bangkok, Thailand

Deadline for paper synopsis submission: 22 March 2019Deadline for full paper submission: 29 April 2019

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