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Steel Shipments in US in April 2021up 40% YoY

The American Iron and Steel Institute reported that for the month of April 2021, US steel mills shipped 7,845,008 net tons, a 39.5 percent increase from the 5,623,229 net tons shipped in April 2020. Shipments were down 1.3 percent from the 7,950,431 net tons shipped in the previous month, March 2021. Shipments year-to-date in 2021 is 29,951,322 net tons, and 0.7 percent increase vs. 2020 shipments of 29,732,832 for four months.

A comparison of shipments year-to-date in 2021 to the first four months of 2020 shows the following changes: hot dipped galvanized sheet, up 11 percent, cold rolled sheet, up 3 percent, and hot rolled sheet, down 2 percent.

Source - Strategic Research Institute
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Ludhiana Steel Users Accuses Government for Steel Price Rise

Times of India reported that Ludhiana based manufacturers have suffered a big blow due to uncontrollable rise in the rates of steel. According to them, there has been 20 to 100% increase in the rates of different types of steel products since July 2020, despite a huge fall in the demand for steel. Ludhiana Beopar Mandal President Mr Maninder Pal Guliani said “Because of the huge increase in the rate of steel raw material of different types, not only manufacturers of engineering goods but also small-time steel traders have been destroyed. The situation is such that the minimum hike is of 20% while there are certain items that have witnessed increase of even 100%. Centre is responsible for this turmoil due to which the industry has suffered its biggest blow. We have written several times to Prime Minister Narendra Modi and several Union ministers to take stock of the situation, but all in vain. It seems that the government itself is hand in glove with big private players, who have raised steel prices by more than 100% within a year and what is even more shocking is that even government steel producers are following the same path. It was only Minister Mr Nitin Gadkari raised the issue of higher steel prices, but the other government functionaries are mum.”

Fasteners Manufacturers Association of India President Mr Narinder Bhamra said “The central government, which is often propagating that it is the most industry-friendly government, has miserably failed on ground to take stock of the problems of the small industry. If this was not the case then the issue of incessant hike in the steel prices would have been resolved by now, as in the last 12 months we have been constantly pleading before the Centre to take notice of it.”

Sewing Machine Development Club President Mr Jagbir Singh Sokhi said “Due to the unjustified hike in the rates of steel, the cost of production of all engineering products, be it sewing machine parts, bicycle parts, auto parts or hand tools, has shot up by a huge percentage. But unfortunately manufacturers have not been able to hike the rate of the finished products due to sluggish demand and therefore we have been forced to absorb the increase ourselves. As a result of this, every single MSME unit is suffering huge losses and several units have closed down their operations temporarily. If the government fails to take steps to counter the situation, it is certain that a large number of factories will close down permanently.”

Source - Strategic Research Institute
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EU & US to Set Up Task Force to Resolve Steel Trade Barriers

US & EU hope that renewed cooperation between the EU and US on trade and China will increase chances for resolving a three year-old trade dispute over US tariffs on steel and aluminium imports. US & EU leaders, following their summit in Brussels, in a joint statement reiterated an end of the year deadline for settling differences on steel and aluminium tariffs. They said "We are determined to work together to resolve tensions arising from the US application of tariffs on imports from the EU under US Section 232, and will work towards allowing trade to recover from its 2020 lows and ending the WTO disputes.”

The European Union and the United States are setting up a working group to address issues surrounding the production and export of steel and aluminium. The aim is to find a solution this year to the punitive taxes imposed by the two powers on each other from 2018.

The conflict dates back to the time when US President Mr Donald Trump was in power. In the spring of 2018, it introduced import tariffs of 25% on steel and 10% on aluminium from almost all countries in the world. The EU retreated with similar measures. Last month, the European Commission suspended plans to impose the sentence until early December.

American Iron and Steel Institute President & CEO Mr Kevin Dempsey said “We welcome the Biden administration’s renewed commitment to ensure the long-term viability of the American steel industry and address the problem of global excess steel capacity. Addressing these challenges will require the implementation of new and effective measures to eliminate government subsidies and other market distorting policies in many countries that have contributed to the on going global steel overcapacity crisis. Recognizing that these changes in government policies around the world, including in the EU, will take time and will not be easy to achieve, it is essential that the United States maintain strong and effective trade measures to prevent surges in steel imports from around the world that could quickly undermine the U.S. industry and our national security.”

Reduced tariffs on EU steel and aluminium products could have an impact on flows into the US. US imports of steel products from the EU fell by half in 2020 to 2.5 million tonnes from 2017 levels, while total US imports were down at 20 million tonnes in 2020 from 35 million tonnes in 2017.

In addition US & EU agreed to a five year truce in their 17 year dispute over aircraft subsidies to Airbus and Boeing that saw the allies impose tariffs on USD 11.5 billion of each other’s exports. Under the Airbus Boeing deal, all future passenger aircraft will be required to be developed without subsidies. The agreement was driven, in part, by a growing awareness that China’s state sponsored aerospace manufacturer Commercial Aircraft Corp of China, Comac, is on track to become a legitimate rival in global plane making by the end of the decade. The feud dates back to 2004, when the U.S. lodged a legal case at the World Trade Organization against the EU over member-state support to Airbus for commercial aircraft development. A parallel case opened by the bloc argued that Boeing benefited from US subsidies as well as space and military contracts, which defrayed the cost of civilian aircraft development.

Source - Strategic Research Institute
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Voestalpine Secures Patent for DRI&HBI for Green Steel Production

Austrian steel maker Voestalpine has developed an industrial scale process for carbon neutral steel production without the use of fossil carbon and secured the intellectual property rights to the process from the European Patent Office. The patent is valid in all major European steel manufacturing countries and specifically covers the production of sponge iron, DRI & HBI, using green hydrogen and biogas in the direct reduction process. The process developed by Voestalpine uses green hydrogen and biogas in the direct reduction process. In addition to carbon neutrality, the process offers other advantages. For example, the biogenic carbon allows carburization of the sponge iron, for efficient melting in the electric arc furnace. The steel and technology Group will grant patent licenses for the carbon-neutral pre material used in steel production and plans to work with the license holders to transfer the necessary know-how.

Greentec Steel is the ambitious plan developed by Voestalpine to decarbonize steel production. Using a hybrid technology and electric arc furnaces would allow CO2 emissions to be reduced by around 30% in a first step to 2030. As a global benchmark in climate and environmental protection, Voestalpine is conscious of the ecological and social responsibility which comes with its Europe-wide intellectual property rights to climate-neutral steel manufacturing. The steel and technology group’s long term goal is to successively increase the share of green electricity and hydrogen used in the steel production process, together with tomorrow’s climate neutral pre materials DRI and HBI, to achieve the goal of carbon neutral steel production by 2050.

Europe’s climate goals are facing the steel industry with profound technological challenges. The political objective of achieving climate neutrality by 2050 can only be met with new production technologies.

Source - Strategic Research Institute
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SAIL & RINL Trade Unions Call Strike on June 30 over Wage Revision

India’s state owned steel makers Steel Authority of India Limited & Rashtriya Ispat Nigam Limited’s employees have called for a strike on June 30 to press for their wage revision demand. The strike will be across plants and mining operations, and almost all the trade unions under the National Joint Committee for the Steel Industry will participate Steel, Metal and Engineering Workers Federation of India HMS General Secretary & Core Group Member of National Joint Committee for the Steel Industry Mr Sanjay S Vadahavkar said "All members of the National Joint Committee for the Steel Industry reached consensus to go for a joint trade union action, including 24 hours strike on June 30 in SAIL and Rashtriya Ispat Nigam Ltd."

They added that Trinamool Congress backed union will also join the strike for the first time as the decision to dissolve Steel Authority of India's Raw Material Division Headquarters in Kolkata has also irked the union.

Trade union leaders claimed that the decision could affect the production and mining activities on that day as about two-lakh permanent and contractual workers are expected to join the cease work.

The trade union leaders noted that the wage revision of the workers of SAIL and RINL have fallen due for more than 46 months and they had waited patiently for the bipartite wage revision talks to commence. The unions had tried their best to convince their managements to start negotiations but the efforts failed as the management failed to come with a respectable offer for wage increase for both regular and contract workers. The other demands of the workers include: stoppage of strategic sale of RINL VSP, the Minimum Guaranteed Benefit should not be less than 15%, payment of full arrears of wage revision of January 1, 2017, 35% increase in perks, variable DA, treatment of death due to COVID-19 as death in the course of employment for both permanent and contract workers and compassionate recruitment should be provided and full implementation of all the provisions of the last wage agreement on pension contribution from January 1, 2012.

Source - Strategic Research Institute
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OMK Starts Production of Bimetallic Steel Sheets

Russian steel maker United Metallurgical Company OMK has begun production of stainless steel coated bimetallic sheets for the petrochemical industry, nuclear engineering and shipbuilding at its Vyksa plant in the Nizhny Novgorod region. A layer of stainless steel gives metal and metal products special protective anticorrosive properties, distinguished by durability, resistance to aggressive environments and mechanical damage. To manufacture a new type of product, the enterprise mastered the assembly of its own bimetallic bags from rolled slabs of steel and stainless steel sheet by welding. The equipment of the modern metallurgical complex stan-5000 OMK makes it possible to produce sheets of large sizes, up to 18 meters in length and 4.5 meters in width. The total thickness of the clad sheet varies from 18 to 50 mm. The layer of stainless steel on the finished sheet is from two to eight millimeters, depending on the customer's requirements. The first orders were shipped to consumers in the spring.

Cladding is applying a thin layer of another metal or alloy to the surface of metal sheets, plates, wires or pipes by the thermo mechanical method by hot rolling. Plated are metals coated with any metallic or non-metallic material. If the cladding layer is metallic, then such a material is called bimetal or two-layer metal. Bonding between metals occurs as a result of diffusion under the influence of joint deformation of the hot work piece. The purpose of cladding is to create a layer of material with special protective properties on the surface of ferrous metal.

Source - Strategic Research Institute
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US Steel Production Capacity Utilization Climbs Further in Week 23

American Iron & Steel Institute announced that in the week ending on June 12, 2021, domestic raw steel production was 1,834,000 net tons while the capability utilization rate was 82.6%. Production was 1,272,000 net tons in the week ending June 12, 2020 while the capability utilization then was 56.8%. The current week production represents a 44.2% increase from the same period in the previous year. Production for the week ending June 12, 2021 is down 0.3% from the previous week ending June 5, 2021 when production was 1,840,000 net tons and the rate of capability utilization was 82.3%.

Adjusted year-to-date production through June 12, 2021 was 41,380,000 net tons, at a capability utilization rate of 78.5%. That is up 13.2 percent from the 36,564,000 net tons during the same period last year, when the capability utilization rate was 67.8%.

Broken down by districts, here’s production for the week ending June 12, 2021 in thousands of net tons: North East: 143; Great Lakes: 627; Midwest: 196; Southern: 794 and Western: 74 for a total of 1834.

Source - Strategic Research Institute
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NBCC to Submit DPR for RINL Land Development in Vizag

State owned NBCC will submit the detailed project report to Rashtriya Ispat Nigam Limited by June end for steel maker’s 22.19 acre land in Visakhapatnam city, a popular tourist destination in Andhra Pradesh. NBCC said "NBCC is conducting the DPR on the project and submit it to RINL by end of June.”

In March 2021, construction firm NBCC had informed about signing a MoU with Rashtriya Ispat Nigam Ltd for redevelopment and monetisation of its 22.19 acre land in the port city. The redevelopment and monetisation would be undertaken on a self-sustainable model. NBCC shall be paid Project Management Consultancy fee at 7% of the estimated/approved project cost or actual project cost, whichever is lower. NBCC will also get a project marketing fee of 1 percent of actual sale proceeds on account of expenditure towards the appointment of the real estate consultant, publicity, marketing, and sale of commercial and residential spaces. Post signing of the MoU, RINL asked NBCC to conduct a DPR to ascertain the value of the land.

RINL is expecting to get around INR 1,000 crore from the sale of the land parcel in Maddilapalem which is a prime location situated about 3-4 km from the beach. The land is in the proximity of tourist attractions like zoo, Simhachalam temple, stadium etc.

Source - Strategic Research Institute
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LIBERTY Galati Appoints Ms Aida Nechifor as General Director

LIBERTY Steel Group announced on May 30 that it has appointed Ms Aida Nechifor as the General Director of its LIBERTY Galati plant in Romania. Ms Aida, who has worked at the plant for more than 20 years, is the first woman to lead the plant in its 55 year history as well as being the first woman to lead any major Romanian steel plant. She will also have management responsibility for LIBERTY Skopje, a downstream site in North Macedonia.

Ms Aida, who was previously the plant’s Chief Financial Officer and a member of the Management Committee since December 2018, joined the Galati steelworks in 2001. She initially joined as an economist before leading teams across sales, accounting, financial reporting, planning and analysis functions. She is a graduate of the Economic and Business Administration Faculty of Alexandru Ioan Cuza University in Iasi.

Mr Prasanta Kumar Mishra, who was appointed the plant’s interim General Manager in February 2021, has been appointed the new Executive Director of LIBERTY Gala?i. In that role, Mr Prasanta will continue to work closely with Aida to steer the operational and the technical aspects of the plant’s production activity and will lead on the preparation of the key strategic development projects, such as the plant’s new electric arc furnace, DRI plant and MI.DA mini-mill.

Source - Strategic Research Institute

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15 WireDrawing Units in Ludhiana Booked for Using HCL for Pickling

Hindustan Times reported that the Punjab Pollution Control Board said that 15 firms, engaged in wire drawing process, are in the dock regarding the use of HCL for the pickling process and further lifting of the spent acid to re-processors, which have no methodology to treat the spent effluent generated from the use of HCL. The role of the common effluent treatment plant, which is operated by a private company, JBR Technologies, is also questionable as per the PPCB report for lifting effluent from hydrochloric acid consuming units without having the requisite methodology to treat the same.

Punjab Government’s Principal Secretary Science, Technology & Environment, Mr Anurag Verma said “After complaints, scientific and technical teams of the PPCB collected samples from the pickling tanks installed by the industries. Of the 24 units inspected, 12 were found using HCL in the pickling process, nine units were found to be H2SO4 consuming and three units were consuming both HCL as well as H2SO4 for the acid pickling process. Firms found using HCL against the norms were identified as Abhay Steel Pvt Limited, Vishnu Wires, United Marathan Engineers, Aggarson Fasteners, Ashish International, Kiscon industries, BD wires and allied industries, Ravindera Alloys Industries, Bansal Industries, Sond Impex, Vallabh Steel and Ganpati Fasteners, Sua Road. These industries have entered agreements for lifting of effluent with JBR Technologies, which is a spent sulphuric acid processing unit.”

The inquiry revealed that sulphuric acid is used for better quality, but the process is time consuming and comes at higher costs. As small and marginal industries are always cost conscious, they tend to use HCL instead of sulphuric acid.

Source - Strategic Research Institute
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Siemens to Supply Digitalised Switchgear to 3 Steel Makers in Jalna

Siemens announced that it will supply advanced power transmission equipment with integrated digital technologies to Icon Steel, Geetai Steels and Gajkesari Steels & Alloys Jalna in Maharashtra. The installation includes 11 bays of state of the art 132 kilovolts gas insulated switchgear, which have a modular design and will enable increased efficiency, reduced operational costs and ensure safe operations even under extreme environmental conditions.

The gas-insulated switchgear will be designed as Sensgear devices, the first of its kind digitalised substation products that offer valuable data analytics applications for the transmission industry, manufactured at Siemens’ Aurangabad Factory and based on digitalisation solution from Siemens globally.

Sensgear devices have a smart and robust IoT gateway securely transmitting the minimum amount of required information to a cloud-based storage and visualisation platform, providing operators with a comprehensive and quick overview of their assets. Through the fast and efficient collection, analysis and usage of mass data produced by the gas-insulated switchgear in real-time, asset-related decisions will be facilitated, resulting in improved performance and optimised operations.

Source - Strategic Research Institute
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Majestic Steel Appoints Mr Jeff Suellentrop as CITO

Leading US steel service center Majestic Steel USA Inc has hired Mr Jeff Suellentrop as Chief Information and Technology Officer. Mr Jeff is an experienced business and information technology executive who is highly skilled in digital strategy and transformations, enterprise architecture, application development and process optimization. He has extensive experience developing, innovating and architecting strategies for high growth, global companies across various industries. His addition continues Majestic's strategic initiative to modernize and disrupt by hiring top talent new to steel.

Most recently, Mr Jeff served as Vice President Enterprise Architecture and Programs with Breville, where he led the global integration of multiple regional business processes and technology stacks into one global structure. Prior to Breville, he served as the Chief Enterprise Architect for 7-Eleven Inc focusing on business value delivery across 9,000+ US and Canadian stores. His experience also includes positions at Petco, Home Depot and Nike.

Mr Jeff holds a Bachelor of Science Degree in Industrial Management from Missouri State University. He also holds his APICS certification (Certified in Basics of Supply Chain Management).

Majestic Steel USA, founded in 1979 and headquartered in Cleveland in Ohio, is a privately held and family owned distributor and processor of flat-rolled steel. Majestic serves its customers in manufacturing, construction, and distribution from its network of locations throughout North America.

Source - Strategic Research Institute
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Housejoy Partners with Tata Steel Nest-In for Modular Housing

Bengaluru headquartered Housejoy has announced its tie up with Tata Steel Nest-In for providing their Nestudio concept pre fabricated modular housing solution in Bengaluru. Under the partnership, Housejoy will enable in building steel-intensive modular homes in Bengaluru with Tata Steel's prefabricated construction solutions. Under the partnership, houses will be constructed under the brand name of Tata Steel Nest-In. Housejoy will be the point of contact for customers from enquiry to handover of the project. Nest-In will support with initial design development, manufacturing of steel components and panels, and supply chain management.

Nestudio is a designer grade, modular home extension solution from the house of Tata Steel. It combines the construction convenience of prefab homes with the design elements of a carefully planned brick-and-mortar home. The construction is three-times quicker than a traditional brick-and-mortar housing and can be completed in just six weeks. The houses are also 15 times lighter; resistant to weather and seismic disturbances; and can be dismantled and relocated

The Nestudio technology has been proven and has been widely used in the Delhi NCR region.

Housejoy has so far raised investment to the tune of USD 30.2 million from investors such as Amazon, Matrix Partners, Vertex Ventures, Qualcomm, and Ru-Net Technology Partners. It has completed 200+ projects in renovation and have plans to complete 200+ construction projects within the year.

Source - Strategic Research Institute
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LB Foster Provides Sheet Piles for Sabine Pass LNG Export Facility

Pittsburgh head quartered LB Foster Company recently announced the supply of over 3,000 tons of steel piling to engineering and construction contractor Bechtel Energy Inc for the construction of Cheniere Energy Partners LP’s Sabine Pass Liquefaction third marine berth expansion project. Construction of the berth is currently underway on the Sabine Pass Channel in Cameron Parish in LA utilizing an innovative OPEN CELL bulkhead design system to construct the LNG docking facility. LB Foster participated in supplying material for this type of unique bulkhead design which was specified by the owner back in 2007 requiring over 4,300 tons of steel piling to construct SPL’s original docking berths.

The berth’s OPEN CELL bulkhead design is an engineered and patented system by PND Engineers that uses PS31 flat web sheet piles, fabricated wye connectors and anchor H piles, which viewed from above the structure becomes a series of U-shaped horizontal membranes supported by soil contact with embedded sheet pile tail anchor walls. The engineered solution creates an integral reinforced soil system that can withstand large settlement and support a variety of loads. Most of the steel material was coated with glass flake epoxy for additional corrosion protection.

LB Foster worked closely with supply partners Gerdau and Steel Dynamics to manage delivery of the steel sheets and H piles beginning in mid-2020 with installation completed in April 2021.

The infrastructure at Sabine Pass LNG facility is designed to support its high volume of LNG shipments. As noted on Cheniere’s website, the third berth will be used to load LNG vessels for export and is sized to accommodate vessels with transport capacity between 125,000-180,000 cubic meters of LNG.

Source - Strategic Research Institute
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Canada Finds Injury to Domestic Industry from Rebar Imports

The Canadian International Trade Tribunal has conducted Dumping and Subsidizing inquiry to determine whether the dumping of hot rolled deformed steel concrete reinforcing bar originating in or exported from Algeria, Egypt, Indonesia, Italy, Malaysia, Singapore and Vietnam, has caused injury or retardation or is threatening to cause injury. Further to the Tribunal’s inquiry, and following the issuance by the President of the Canada Border Services Agency of a final determination dated May 5, 2021, that the above-mentioned goods have been dumped, the Tribunal hereby finds that the said dumping has caused injury to the domestic industry.

The hot rolled deformed steel concrete reinforcing bar in straight lengths or coils, commonly identified as rebar, in various diameters up to and including 56.4 millimetres, in various finishes, excluding plain round bar and fabricated rebar products. The product definition also excludes 10 mm diameter rebar produced to meet the requirements of CSA G30 18.09 (or equivalent standards) that is coated to meet the requirements of epoxy standard ASTM A775/A 775M 04a (or equivalent standards) in lengths from 1 foot (30.48 cm) up to and including 8 feet (243.84 cm).

Source - Strategic Research Institute
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Desktop Metal Qualifies 4140 Steel for Additive Manufacturing

Leading mass production additive manufacturing solutions provider Desktop Metal announced that it has qualified the use of 4140 low-alloy steel for the Production SystemTM platform, which leverages patent pending Single Pass JettingTM technology designed to achieve the fastest build speeds in the metal additive manufacturing industry. Desktop Metal is the first and only company to qualify 4140 low-alloy steel for use with metal binder jetting systems, enabling its use in mass production end-use part applications.

Considered one of the most versatile low-alloy steels, 4140 is critical all-purpose and heat-treatable steel used extensively in a variety of automotive, oil and gas, and industrial applications, such as gears, downhole tool components, couplings, spindles, bolts and nuts, and many other mechanical parts. This linear pneumatic piston is used to convert air pressure into rotary motion through a rack and pinion with 4140 providing the toughness and wear resistance required for this application. The Production System P-50 enables production of up to 690,000 parts per year at a cost as low as $0.28 per cubic centimeter of sintered 4140 low-alloy steel.

Considered one of the most versatile low-alloy steels, 4140 is characterized by its toughness, high tensile strength, and abrasion and impact resistance. It is a critical all-purpose and heat-treatable steel used extensively in a variety of automotive, oil and gas, and industrial applications, such as gears, downhole tool components, couplings, spindles, bolts and nuts, and many other mechanical parts.

Power Steering Joint - This joint is used for power transfer between an electric power steering motor and the steering shaft in an automobile. 4140 provides excellent strength and hardness, which is essential for the spline teeth that connect this part to the rest of its assembly. While production using a conventional press and sinter process would require an expensive mold, the Production System P-50 enables production with no tooling, reducing lead times and enabling more flexible design for quantities up to 1.2 million per year at a fully burdened part cost as low as $2.45.

Herringbone Gear - Herringbone gears, which are found in a variety of industrial machinery applications, benefit from the excellent hardness of 4140 low-alloy steel and can be lightweighted using complex lattice designs made possible by additive manufacturing, reducing material cost and reducing wear on external components, such as motors and bearings. This part can be mass produced on the Production System P-50 in quantities up to 200,000 per year with 120 parts nested in each build.

Linear Pneumatic Piston - Linear pneumatic pistons are used to convert air pressure into rotary motion through a rack and pinion with 4140 providing the toughness and wear resistance required for this application. These parts are traditionally assembled from multiple components due to the geometry and cost limitations of conventional manufacturing processes. The Production System P-50 enables production of up to 690,000 parts per year at a cost as low as $0.28 per cubic centimeter of sintered 4140 low-alloy steel.

Lever Drive - Lever drives are often used in machine design to linearly adjust the location of components in a machine. Binder jetting easily facilitates features such as the precise grooves critical for locating the correct position of external components. While producing a mid-volume run of 10,000 parts would not be cost-effective with conventional manufacturing given the upfront tooling costs or the labor costs associated with machining, the Production System P-50 can print the required quantities in a day with sintered parts ready in less than a week.

Source - Strategic Research Institute
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Hannibal Industries Sets Steel Rack Record as eCommerce Booms

One of US’s largest steel pallet rack manufacturers Hannibal Industries announced that its Houston location set a facility record in May, by shipping more than 22 million pounds (11KT) of steel rack products in a single month in May 2021. The record, set by Hannibal’s Houston facility, was a key factor in an unprecedented company-wide record with both locations combining to exceed 40 million pounds of racking material in a single month.

With the global growth in eCommerce and the need for large and robust warehouse space continuing to climb, Hannibal Industries has increased its customer base, created new jobs across its locations and invested in manufacturing processes that keep safety and efficiency in mind.

Source - Strategic Research Institute
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China Crude Steel Production in May 2021 at New Monthly Record

China’s crude steel output hit a monthly record in May 2021, rising 1.6% MoM from April 2021 following resilient downstream demand and firm profit margins, despite a steep drop in margins towards the end of the month. According to latest National Bureau of Statistics data, China produced 99.45 million tonnes of crude steel in May 2021, compared with 97.85 million tonnes of output in April 2021 and was 7.7% higher than in May 2020. However, average daily output of 3.206 million tonnes crude steel in May fell by 1.6% MoM from 3.261 million tonnes in April. In the first five months of 2021, China produced 473.1 million tonnes of crude steel, up 13.9% YoY, which translate to average monthly production of 94.62 million tonnes to take annualized figure of 1.135 billion tonnes for 2021, up by about 7% YoY as compared to 1.065 billion tonnes in 2020.

However, contrary to continued surge in crude steel production in China since May 2020, a report in Global Times has highlighted that China's largest steel producing Hebei Province has continued to reduce excess capacity with the number of steel production enterprises reduced from 107 to 68 and steel production capacity has been reduced from a peak of 320 million tonnes to less than 200 million tonnes. Hebei Daily reported that “The province is on track to achieve its goal of withdrawing iron and steel production from the city and relocating 150,700 workers with a resettlement rate of 100%.”

Source - Strategic Research Institute
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China Steps Up Campaign to Control Iron Ore Prices

Bloomberg, citing people with knowledge of the matter, reported that China has stepped up its campaign to rein in commodity prices and reduce speculation in a bid to ease the threat to its pandemic rebound from soaring raw material costs. The State owned Assets Supervision and Administration Commission has ordered state owned enterprises to control risks and limit their exposure to overseas commodities markets and companies have been asked to report their futures positions for Sasac to review. It’s unclear what could have triggered Sasac’s latest order but the regulator hasn’t ruled out further measures, including those that target specific companies under its control. The government had already asked domestic firms, including steel mills, commodities merchants and brokerages, to reduce bullish bets on local futures markets for highly volatile raw materials like iron ore and coal.

China has accelerated its efforts in recent weeks to curb the inflationary pressures that threaten its economic recovery from the pandemic. The surge in iron ore prices has raised concerns about market speculation with Chinese officials, who have been ramping up measures to cool the market down. Government inspections aim to stop speculation and irregularities. China Iron and Steel Association proposed an industry self-review initiative last month, urging the iron and steel industry to strengthen market order to further promote high-quality development of the industry while vowing steel enterprises will adjust their export strategies to safeguard the domestic supply.

Global Times separately reported that China Iron and Steel Association Vice President Mr Luo Tiejun held a meeting with the Nippon Steel's China Chief Representative on 15 June. The two parties held a friendly exchange on issues such as controlling production capacity, raw material prices, regulating iron ore pricing mechanisms and steel market trends in the second half of the year. Exchanges and working in partnership on steel and iron ore market between China and Japan are conducive to clamping down on global soaring prices of iron ore and a more reasonable pricing mechanism is one measure which could address under pressure supply chains. Given current China Australia souring ties, diversifying the sources of supply for much needed iron ore has become part of China's long term strategy to fend off the risks of too much reliance on any single source.

China’s National Development and Reform Commission in May briefing had directed that Chinese firms should boost domestic exploration for iron ore, widen their sources of imports and explore overseas ore resources. China has been ramping up efforts to reduce trade risks. One conspicuous case is the reduction of Australian coal imports. In 2020, China imported 300 million tonnes of coal in total, of which 78.09 million tonnes were from Australia, accounting for 26%, second only to Indonesia accounting for 46%. This year, Mongolia has become China's biggest supplier of coking coal after China banned imports of Australian coal. While an outright ban would be almost unimaginable, various forms of restrictions, delays or increased administrative burdens on Australian iron ore imports cannot be ruled out.

Japan imported around 99 million tonnes of iron ore in 2020, decreasing for the sixth year in a row. On the other hand, China's imports were nearly tenfold of that, with more than 80% sourced from Australia and Brazil. China's imports of iron ore from Australia accounted for 61% of China's total imports in 2020. The latest data from China's customs authority showed that China's imports of iron ore in January to May 2021 surged by 6% YoY to 472 million tonnes.

Driven by strong demand recovery & margins, Chinese steel mills are continuing to produce steel at record levels, thus needing additional volumes of imported iron ore. As a result, average iron ore prices in May & June have surged to USD 212 CFR China & USD 222 CFR China, more than double of USD 94-103 CFR in May & June 2020.

Source - Strategic Research Institute
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Volvo Cars to Explore Using Green Steel from SSAB

Swedish steel maker SSAB is teaming up with Volvo Cars to jointly explore the development of fossil free, high quality steel for use in the automotive industry. The collaboration makes Volvo Cars the first carmaker to work with SSAB and its HYBRIT initiative, the steel industry’s most ambitious and advanced project in fossil-free steel development. As part of the collaboration, Volvo Cars will be the first carmaker to secure SSAB steel made from hydrogen-reduced iron from the HYBRIT pilot plant in Luleå in Sweden. This steel will be used for testing purposes and may be used in a concept car. In 2026, SSAB aims to supply the market with fossil-free steel at a commercial scale. Volvo Cars aims to also be the first carmaker to use fossil-free steel for its own actual car production.

The HYBRIT initiative was started by SSAB, iron ore producer LKAB and energy firm Vattenfall. The initiative aims to replace coking coal, traditionally needed for iron ore-based steelmaking, with fossil-free electricity and hydrogen. The result is expected to be the world’s first fossil-free steelmaking technology, with virtually no carbon footprint. SSAB aims to reduce Sweden’s CO2 emissions by 10 % and those in Finland by 7 %, through HYBRIT technology, using hydrogen produced from water and fossil-free electricity instead of coking coal.

The collaboration with SSAB is the latest initiative that supports Volvo Cars overall climate action plan, one of the most ambitious in the car industry. The centrepiece of the plan is Volvo Cars ambition to be a fully electric car brand by 2030, with only pure electric cars in its line up. For Volvo Cars, the CO2 emissions related to steel and iron production for its cars amount to around 35 % in a traditionally powered car and 20 % in a fully electric car of the total CO2 emissions from the material and production of the components going into the car.

Source - Strategic Research Institute
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