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Tag Archives: steelmakers

EU forges ahead with steel sector M&A – but it won’t solve overcapacity

European steel’s current major M&A activity — driven by market recovery since mid-2017 — aims to achieve synergies and boost cost-effectiveness in a global steel sector still plagued by as much as 657 million mt of overcapacity, according to Organization for Economic Cooperation and Development estimates. ArcelorMittal (AM), the world’s biggest steelmaker, is to acquire Italy’s biggest, Ilva, while the knot has been tied between Thyssenkrupp Steel Europe and...

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China encouraging electric arc furnace capacity expansion?

Monday’s release by China’s Ministry of Industry and Information Technology of revised steel capacity replacement measures has sparked market debate about MIIT’s real intentions regarding electric arc furnaces. Some pundits Tuesday were adamant the new rules encourage the replacement of converters with EAFs and would result in net EAF steel capacity expanding. MIIT’s revised measures, published on Monday, were based on directives issued in early 2015. According to the revised...

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The iron ore contango: Why now?

The iron ore forward curve has made history in November by recording the longest period of contango* in its brief existence. On November 1, Platts assessed The Steel Index 62% Fe CFR China swaps in contango from the December strip out to Q2 2018, which has been sustained until now. Unlike many bulk commodities in recent years, iron ore’s forward curve has remained stubbornly backwardated, with prices further down the curve being lower than those at the prompt. This has puzzled many market...

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Will Trump punt in US Section 232 steel investigation?

Football season is in full swing in America, and it looks like political football season is about to kick off for American steelmakers. The football getting kicked around and passed back and forth, is President Donald Trump’s virtual promise to protect domestic steelmakers by sacking unfairly traded imports. So far that “promise” has caused some blindside hits on American steelmakers, as imports rallied after the Trump administration’s April announcement that it would...

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Chinese steelmaking cuts hammer market

Chinese domestic market strength and reduced export volumes have been a primary driver of the global steel and iron ore rally this year. But there are growing signs that dark clouds are gathering over the world’s largest steel market. Shanghai Futures Exchange rebar and Dalian Commodities Exchange iron ore futures have taken a bath over the last few weeks, driving bearish sentiment in the physical steel market. The S&P Global Ratings downgrade of China pushed them markedly lower...

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Why Indian steelmakers are delaying expansion plans

Steelmakers in the port town of Visakhapatnam on the south eastern coast of India are postponing expansions as they wait for work to begin on publicly-funded infrastructure projects, company officials told S&P Global Platts during a recent visit. Officials at long steel manufacturers, state-owned Rashtriya Ispat Nigam Limited (RINL) and privately-listed Steel Exchange India Limited (SEIL), both said they had postponed planned expansion due to receding demand from the regional construction...

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Latest US trade restriction beef pits farmers against steelworkers

It was one of 18 American agricultural associations that came out against President Donald Trump’s initiative to protect the domestic steel and aluminum industries under the US’ Section 232 national defense provision on trade. The July 11 letter to Commerce Secretary Wilbur Ross expressed extreme concern that application of the 1962 law “could be disastrous for the global trading system” and for US agriculture in particular. “US agriculture is highly dependent on...

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The waiting is the hardest part for US steel markets

The American steel industry is desperately in need of relief, but it’s not what you think. We have heard a lot about the possibility of import restrictions stemming from the government’s ongoing Section 232 investigation — that is the big issue. But the smaller, more pressing matter right now is the announcement of that relief, or lack thereof. American steel markets are seemingly at a standstill because Commerce Secretary Wilbur Ross has suggested on several occasions that while...

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US importers challenge the call for more steel trade restrictions

The American Institute for International Steel recently hosted a forum in Washington DC for those likely to be negatively impacted by steel import restrictions that could follow the government’s ongoing Section 232 investigation. They included speakers representing US traders, ports and steel end-users who believe the outcome of the 232 case — aimed at limiting imports on national security grounds — could have negative economic consequences for the US and serve to ultimately weaken US...

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European mill consolidation concerns independent stockists, distributors

Mergers and acquisitions in European steelmaking could have important consequences downstream, with independent service centers increasingly nervous they will be squeezed out of the market. Investment bank Jefferies suggests ArcelorMittal will account for 40% of European coil market supply once it completes its acquisition of Italian producer Ilva, while a merged Tata/ThyssenKrupp would have a share of around a quarter. This increase in consolidation should be good for the mills and their...

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