Steel raw materials
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Q&A: Italy's Beltrame eyes slab production
Q&A: Italy's Beltrame eyes slab production
London, 22 October (Argus) — Italian long steel producer Beltrame is diversifying its product range by installing a slab caster at its Vicenza mill with the aim of optimising the group's production. Argus spoke to the steelmaker's chief commercial officer Enrico Fornelli about technical details, reasons for the investment and green premiums. What are the expected dates for the start of testing and commercial production of slabs? When do you expect to complete the plant commissioning and start full production? We expect the test phase to commence towards the end of this year and it will probably last until the early months of 2025. We know that delays are always possible during the construction phase, but we are hoping that the first quarter of next year will mark the start of commercial production. The caster will have a capacity of 200,000-300,000 t/yr. Is the new slab caster a newbuild or is it a conversion of an existing billet caster, and will the slabs produced be sized for both coil and plate producers? We can define the machinery as "ex-novo", no conversion has been made, in fact the slab caster sits next to a billet caster in the facility. To answer your second question yes, the final goal of the project is to produce a wide range of dimensions suitable for both coil and plate producers. I understand that there are several reasons behind your decision to enter the slab market. What are they and are there any synergies with the longs market? There are two main reasons why we made this investment. First, we need to consider the optimisation of our steel plant. Optimising our production means making sure we achieve top performance levels, so that the mill works at full capacity and benefits from lower costs. Simply put, an asset that is operating at 70pc capacity will not have the same efficiencies as an asset that is at full capacity. Second of all, we have felt a strong necessity to embark on a road of diversification in regards to our product range. On the billet side, we do see an issue of overproduction, and the excess supply we are not able to sell locally forces us on the international markets, where Italian and European producers are not competitive. It is no secret that our energy costs are holding European producers back. The conflict in Ukraine and the reduction of imports from Russia have drastically changed the slab market, considering that Ukraine was also an important supplier for European and Italian steel mills. How did these events influence your decision to enter the market? First and foremost, I want to reiterate that optimisation is the leading reason that led us to make this investment decision. What I can say on our current situation is that Italy is a net importer of slab, as it currently buys 2mn-3mn t/yr of the product from abroad. Have you already concluded some supply contracts, and can you give us an idea of the amount of orders collected so far? At the moment we have not finalised any pre-sales. We are in no rush, when we are ready we will call our customers. Once word spread that Beltrame was looking to enter the slab market, we received many phone calls and a lot of interest, about 7-8 Italian groups that buy significant quantities of slab have contacted us. Our production capacities are a drop in the ocean when compared with the size of the market, I am sure we will have no issue to sell our allocation. Beltrame has a joint venture with the Grigoli plate rolling mill; what percentage of the slab production will be allocated to this project? I can say that a small percentage will go to the Grigoli re-rolling facility, we have an agreement that they will test the material initially and help us perfect our product. The first batches of our production will be delivered to them. Do you expect to get a green premium on your slabs? We do expect to achieve a green premium, and we are already doing it with our range of Chalibra products, especially in northern Europe where we have some buyers that only request this type of material. The landscape has changed a lot in the past 3-4 years on this front, no matter the pace the future is anyways going towards the direction of decarbonisation. Buyers in recent times have looked evermore east to secure volumes, but with CBAM regulation coming into force, compounded by a volatile geopolitical environment, we can definitely achieve a green premium. What we believe is that our customers will have no issue paying something like €30/t more, for the security of having low-carbon slab only at about a 200km distance from them. On top of this we need Europe to urgently standardise and set some sort of benchmark for the industry on low-carbon steel. At the moment we see both voluntary and involuntary greenwashing occurring. If the project in Vicenza is successful, do you plan to replicate the facility in other countries? Are there any plans to increase production capacity or make new investments, both in Italy and abroad? We are evaluating further investments in the field, but first we need to see how this current project goes. One idea would be to replicate this kind of investment in France not too close to our plant, where we could benefit from low energy costs. We would take up, again, a very small amount of the market share. I think an investment of this type could be useful for our group, would not look to harm our competitors, and above all help reduce the dependence on steel imports in Europe. By Carlo Da Cas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Miners Vale, BHP advance Fundao dam collapse deal
Miners Vale, BHP advance Fundao dam collapse deal
Sao Paulo, 21 October (Argus) — Brazilian mining company Vale and BHP are advancing negotiations for an agreement with Brazil over the 2015 collapse of the Samarco Fundao iron ore tailings dam. Both companies are negotiating the definitive terms of the resolution, following several offers and counteroffers over the months. The agreement includes a R170bn ($30bn) payment, Vale said on 18 October. The two have already paid R38bn of the sum, while R100bn would be paid in installments over 20 years to Brazil's federal government, the Espirito Santo and Minas Gerais states and their municipalities, and the remainder would be disbursed under performance obligations by Samarco, a joint venture between ore miner Vale and BHP, including "initiatives for individual indemnification, resettlement, and environmental recovery." In a separate statement, BHP stressed that Samarco would be the primary party bound to the settlement obligations, and that BHP Brasil and Vale are each "secondary obligors of any obligation that Samarco cannot fund or perform." Vale noted that the negotiations are ongoing, and that no final agreement has been signed. Brazilian president Luiz Inacio Lula da Silva said in September the government expected to reach an agreement with the companies by October. Vale and BHP have been facing claims from hundreds of victims of the collapse of the dam, located in Minas Gerais state, that killed 19 people and caused environmental damage in the region in 2015. Analysts at BTG Pactual bank said that the agreement's resolution would cause investors' focus "to shift back toward Vale's operational performance, which has been improving." By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Stainless steel prices stabilise but downside remains
Stainless steel prices stabilise but downside remains
London, 21 October (Argus) — European finished stainless steel prices stabilised over the past two weeks on projected supply tightness following Spanish stainless steel producer Acerinox's decision to curtail production at its Acerinox Europa plant in Los Barrios, Cadiz, Spain, alongside a maintenance-related stoppage at Finnish producer Outokumpu. Trading companies surveyed by Argus said prices were in a downward trajectory in the first week of October, but were no longer falling and even heard to be marginally increasing in Germany on better demand prospects. The Argus assessment for stainless steel 304 cold-rolled 2mm sheet delivered northwest Europe (NWE) for October fell by €150/t on the month to €2,700-2,750/t. Prices were declining sharply from this level at the beginning of this month but have since settled back close to this range, trading companies said. Demand remains low in most regions, with few transactions having been reported over the past week, but an unexpected uptick in interest from buyers in Germany has driven a small price increase in the country. This support is expected to be temporary as the market prepares for a challenging final quarter. Trading firms said service centres are postponing purchases until next year, except for small pockets of demand. In raw materials, stainless steel scrap prices saw a surprise increase last week because of mounting export interest despite low domestic steelmaker demand. The Argus assessment for stainless steel scrap 304 (18-8) solids cif Rotterdam rose by 4.72pc week on the week to €1,210-1,230/t, with the corresponding assessment for 316 scrap rising by 4.5pc to €2,200-2,240/t. Early indications this week indicate prices are expected to fall back to the level of two weeks ago, as mills continue to pile the pressure on sellers. Demand for ferro-alloys from the steel industry has been tepid in recent weeks, with most steel companies relying on their existing term contracts. Market participants told Argus that high ferro-molybdenum prices, supported by rising material costs and greater demand from Asia, are putting pressure on European steelmakers. Producers have been trying to maximise their production by focusing on lower-margin steels, but this strategy can lead to shrinking profitability, a trading firm said. Few enquiries for ferro-molybdenum truckloads have been made this month, with delivery delays having been reported at German and Italian plants. Despite the low demand, ferro-molybdenum prices have held relatively steady, averaging $51.10/kg over the past month. An increase in Indian ferro-chrome exports to Europe over the first six months of this year led to excess supply on mainland Europe, pushing down prices in the early autumn to the benefit of European steel mills. Indian ferro-alloy sellers moved aggressively to gain market share and offered material at low levels in September. Sellers, seeking to move material out of European warehouses, have shown themselves to be willing to conclude transactions with slim margins to shed stock. Prices of high-carbon ferro-chrome 65pc Cr fell by 8pc over the course of September, with further declines having been registered since the beginning of October as Kazakh and Indian producers slashed offers. The majority of long-term contracts for next year will be concluded in the coming weeks, at which point many market participants expect ferro-chrome prices to rebound. Argus assessed high-carbon ferro-chrome 65pc Cr at $1.30-1.50/lb ddp NWE on 17 October, down by 15pc from $1.60-1.70/lb ddp on 3 September. The wider demand outlook for stainless steel raw material prices remains pessimistic for the rest of this year. "We might see steel plants closing down for the winter period sooner and come back to production later due to low order books," a European ferro-alloy trading firm told Argus . By Roxana Lazar, Maeve Flaherty and Raghav Jain Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Boeing, union reach tentative deal to end strike
Boeing, union reach tentative deal to end strike
Houston, 19 October (Argus) — Aerospace manufacturer Boeing and union leadership negotiating on behalf of more than 32,000 of the company's machinists reached a tentative labor agreement Saturday that, if approved, would end a five-week strike that has halted production of several aircraft programs. Factory workers backed by the International Association of Machinists and Aerospace Workers (IAMAW) will decide on 23 October whether to ratify the new contract, Boeing and the union said. Only a simple majority — 50pc plus one — will be needed to determine the outcome of the vote. The new deal includes a general wage increase (GWI) of 35pc spread over four years and a ratification bonus of $7,000, both up from 25pc and $3,000, respectively, from Boeing's initial offer from 8 September. The company also would bring back its incentive plan and increase employee retirement benefits. It remains to be seen whether workers will approve the agreement after overwhelmingly rejecting Boeing's first proposal, which included a 25pc GWI, by a vote of 95pc. Union leadership urged consideration of the offer, saying "it warrants presenting" to members. Boeing said it looked forward to its employees voting on the negotiated proposal. The work stoppage, which began 13 September, has paused output of Boeing's flagship 737 Max aircraft, along with its 767 and 777 programs. The company announced it would be laying off 10pc of its workforce and would delay first deliveries of its new 777-9 commercial jet — part of its new 777X widebody family — as a result of the strike and other operational challenges. Recent estimates from Anderson Economic Group put Boeing's losses at $4.5bn over the course of the strike. Costs to the company's suppliers were estimated at nearly $1.8bn in the same time frame. Spirit Aerosystems, which Boeing is in the process of reacquiring, said on Friday that beginning 28 October it planned to start furloughing 700 employees who work on the 767 and 777 programs. Spirit produces shipsets for those aircraft and no longer has storage capacity to warehouse new production, having built up "significant inventory" because of the strike. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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