Beleggen in staal

[nobody]

Chinese steel industry’s malaise deepens with no relief in sight

After a years-long property slump that has crushed the billion-ton Chinese steel industry’s biggest source of demand, prospects are getting no better. Prices are tumbling, profits are dwindling, and there’s little relief on offer from a government focused on retooling China’s economy for the long term.

Beijing hasn’t delivered a big-bang solution for its real estate woes, nor a boom in infrastructure spending that could keep steel consumption on track. As officials talk of boosting consumer spending and high-tech industries, demand for the alloy is poised to contract this year.

“There’s not many positives for steel and the housing downturn has years to go yet,” said Tomas Gutierrez, an analyst at Kallanish Commodities Ltd. “It’s been clear for a long time that the government views stimulus very differently now.”

The funk in China’s steel market has global implications as iron ore prices languish and China ramps up its steel exports, fuelling trade frictions.

Here are four charts that illustrate the deepening gloom.

Demand doldrums

The main culprit is the prolonged malaise in China’s property market. Steel demand from construction is poised to shrink by 10% this year, according to Kallanish. That would lower the sector’s share of total consumption to around a quarter — a very low proportion by the standards of the past two decades.

Other areas are still expanding — for example consumer appliances and shipbuilding — but they’re too small to offset the hit from property. Kallanish sees overall domestic demand falling 1% in 2024.

“Steel demand is really poor,” said Wei Ying, an analyst at China Industrial Futures Ltd. “With highly indebted provinces focusing on deleveraging, plus a lack of good projects, infrastructure spending is less than ideal.”

Price plunge

The slowdown in demand has triggered a price rout in recent months. Rebar used in construction is at its cheapest since 2017, while hot-rolled coil used in cars and home appliances touched its lowest in four years. Many higher-cost producers are making a loss on every ton produced.

Other more particular factors are weighing on prices. The government is introducing new quality standards for rebar that threaten to make existing inventories harder to ship. That’s triggered some panic selling before the rules go into force in September, according to researcher Mysteel Global.

Export threat

ArcelorMittal SA, the biggest producer outside China, said “aggressive” exports from the Asian nation are creating problems for the global steel industry, pushing prices in the US and Europe below cost. China’s outbound shipments are running at the highest rate since 2016, and Arcelor’s concerns are shared by governments.

A big increase in flows to Latin America triggered trade pushback there, while anti-dumping cases in Vietnam have attracted recent attention. China’s southwestern neighbour is by far its biggest steel buyer, and import restrictions there could add to downward pressure on China’s domestic prices.

Material impact

The steel slowdown has had an impact on iron ore prices this year, affecting earnings at mining giants like BHP Group Ltd and Rio Tinto Group. Futures in Singapore have fallen over 25% since the end of 2023 and have struggled to stay above the key threshold of US$100 a tonne.

Port inventories of the raw material typically draw toward the middle of the year, but instead they’ve risen every month in 2024 to reach more than 150 million tonnes. That’ll weigh on iron ore prices, especially with pressure growing for more production cuts at steel mills, including from a government keen to cap emissions.

Some producers have recently cut output sharply, which is helping to balance supply and demand, said Vicky Wei, chief ferrous analyst at Horizon Insights. But looking ahead, it’s hard to see consumption getting support “unless there are new stimulus measures,” she said.

On the wire

Chilean steel and iron ore producer Cap SA plans to close its mills, saying new tariffs on Chinese products weren’t enough to ensure the profitability of steelmaking in the South American nation.

China’s overflow of goods abroad is set to change course in the next few years, according to Goldman Sachs analysts, though relief isn’t likely for electric vehicles and steel.

The Biden administration is following the paper trails of some biodiesel producers amid heightened concern the fuels are at times being made with deceptive ingredients that violate federal law.

Uploaded by Magessan Varatharaja

https://theedgemalaysia.com/node/722081

[nobody]

World’s biggest steel producer warns of ‘severe’ industry crisis

(Aug 14): China’s steel industry is facing a crisis more serious than the downturns of 2008 and 2015, the world’s biggest producer warned, highlighting a need to preserve cash and likening conditions to a “severe winter”.

The crisis will likely be “longer, colder and more difficult to endure than we expected”, Hu Wangming, the chairman of China Baowu Steel Group Corp, told the company’s half-year meeting, according to a statement.

China’s steel market — by far the world’s largest — is flashing multiple warning signs as the property downturn and weaker factory activity have ravaged domestic demand this year, with prices plunging to multiyear lows and mills racking up losses. Baowu alone produces about 7% of the world’s steel, and Hu’s stark message will likely be a worry for rivals across Asia, Europe and North America as they grapple with a fresh wave of Chinese exports.

The country’s steel industry suffered devastating slumps during the Global Financial Crisis of 2008-2009, and again in 2015-2016. In both cases, the crises were ultimately resolved by massive stimulus — a prospect that looks more remote in 2024 as Chinese President Xi Jinping bids to reshape the economy.

Baowu didn’t offer much on the causes of the current downturn, focusing on how employees should respond — by preserving cash and minimising risks.

“Financial departments at all levels should pay more attention to the security of the company’s funding,” the statement said, with a need to strengthen controls, including for overdue payments and detecting fake trades. “In the process of crossing the long and harsh winter, cash is more important than profit.”

As mills struggle, iron ore inventories are swelling, while reinforcement bar, used in construction, is cheaper than at any time since 2017. It’s increasingly unprofitable to make steel, putting mills under pressure to cut production. Meanwhile, exports are on course to top 100 million tons, the most since 2016.

Baowu’s warning underscores a darkening mood, with iron ore — the key commodity needed to make steel — tumbling back below US$100 (RM442.72) a ton. Futures fell 1.7% to US$96.85 a ton on Wednesday, taking losses for this year to more than 30%.

Uploaded by Tham Yek Lee

https://theedgemalaysia.com/node/722724

[nobody]

Staalcrisis

Hugo Investing Nederlands

In deze video bespreken we de huidige wereldwijde staalcrisis, een probleem dat veel verder reikt dan de stal van Martin. We kijken naar de recente ontwikkelingen, waaronder de daling van de staalprijzen tot het laagste niveau in vijftien maanden. Wat betekent dit voor de markt en de grootste staalproducenten ter wereld, zoals het Chinese Bouman Steel en ArcelorMittal?

We analyseren de impact van de vastgoedcrisis in China op de staalindustrie en wat dit kan betekenen voor de wereldwijde economie. Ook gaan we dieper in op de waarschuwingen van experts en bedrijven die wijzen op een mogelijke crisis die zwaarder kan zijn dan die van 2008 en 2015. Daarnaast bespreken we de financiële resultaten van ArcelorMittal en hoe deze gigant zich staande probeert te houden in deze moeilijke tijden.

Aan het eind van de video geven we ook onze visie op mogelijke beleggingsstrategieën in deze volatiele markt. Is dit het juiste moment om in te stappen? Wat zijn de risico's en kansen?

00:00 Intro
00:58 Bauwo Steel
04:20 ArcelorMittal
09:02 Conclusie

[nobody]

China puts brakes on new steel mills with industry in crisis

(Aug 23): China has abruptly suspended its system for approving new steel plants, as the government responds to a deep demand slump that has crushed industry profits and fuelled a surge in exports.

Beijing has for years required the elimination of existing capacity as a condition of building new plants. Those rules will no longer apply from Friday, and the government will develop an alternative programme, the Ministry of Industry and Information Technology said in a statement.

There have been growing calls for action from the Chinese authorities in recent months as steel prices plunged amid a worsening glut. Demand has fallen more than 10% since 2020, and many analysts say the industry will need to shrink to fit an economy that’s becoming less reliant on steel-intensive construction.

Chinese steel exports have ballooned this year to their highest since 2016, a sign that mills are struggling to find domestic markets for about one billion tons a year of output.

“Our view is that this move would not do enough to meaningfully phase out excess capacity,” Citigroup Inc analysts including Jack Shang said in a note. “We believe the weakening demand on the ground calls for more drastic measures (aggressive production control, etc), along with strong government enforcement.”

The head of China Baowu Steel Group Corp, the world’s biggest producer, warned last week that the industry faces a situation worse than the crises it endured in 2008 and 2015. Global peers — including ArcelorMittal SA — have also complained about the impact of rising Chinese exports.

Market reaction to the latest announcement was relatively muted, with steel futures up slightly in Shanghai. A key issue is that many new plants have already been approved, and could enter the market anyway in the coming two years. Citigroup estimated that more than 80 million tons of approved capacity is not yet online.

“The supply and demand relationship in the steel industry is facing new challenges,” the ministry said in the statement. “There are still problems such as inadequate policy implementation, imperfect supervision and implementation mechanisms, and incompatibility with the industry’s development situation and needs.”

Iron ore prices have fallen as the dire situation facing Chinese steelmakers became more apparent in recent weeks. They have lost around 10% this quarter and touched the lowest since 2022 last week. Futures in Singapore dropped 1.1% on Friday to US$96.25 (RM421.12) a ton as of 2.20pm local time, trimming a weekly gain.

More serious

Beijing first introduced so-called “capacity swaps” for heavy industries including steel in the middle of last decade, as the government began to tackle untrammelled expansion. Under the latest rules introduced three years ago, each ton of annual steel capacity added in environmentally sensitive areas had to be matched by the closure of 1.5 tons of existing capacity, or by 1.25 tons in all other areas.

But there were also significant exceptions, largely designed to encourage “electric arc furnace” plants that rely on scrap — rather than the coal-fired blast furnaces that dominate China’s industry.

“The capacity swap programme has actually led to growth, as mills often opted to demolish outdated plants for bigger ones,” said He Jianhui, an analyst at SDIC Essence Futures Co. “Now that the whole industry demand is clearly declining, overcapacity is becoming more and more serious, and this document from the ministry is sending a signal of control.”

The ministry said it would accelerate research into a new capacity-swap policy. Local authorities that announce any new replacement plans would be deemed to have added capacity illegally, it added.

https://theedgemalaysia.com/node/724026

[nobody]

Nippon Steel looks to woo union with extra US$1.3b to gain support for US Steel takeover

(Aug 29): Nippon Steel Corp plans to invest an additional US$1.3 billion (RM5.63 billion) at plants operated by US Steel Corp, as the Japanese company steps up efforts to secure union support for a takeover bid that has been opposed by both President Joe Biden and Republican presidential candidate Donald Trump.

Nippon Steel plans to make the investments at the Mon Valley Works and Gary Works, as part of its pending US$14.1 billion acquisition of US Steel, it said on Wednesday in a statement.

Mon Valley, a flagship plant where founder Andrew Carnegie built his first mill in the 1870s, and Gary are among the legacy US Steel operations that use traditional blast-furnace production of steel from iron ore. Those types of facilities are typically unionised, and increasing spending to extend their lifelines is part of a bid by Nippon Steel to garner support from the United Steelworkers union, which has so far opposed the corporate tie-up.

The potential deal has been at the centre of a political firestorm, with politicians from both sides of the aisle and on many levels expressing concern over the takeover of the iconic American steelmaker. The transaction is also subject to a national security review, despite Japan being a close ally. The staunch opposition by United Steelworkers has increased the political pressure on lawmakers in an election year.

The union opposition held firm on Wednesday, with the labour group saying the following in a statement after the Nippon Steel announcement: “Nippon is still trying to hide behind its North American shell company to shield itself from its contractual obligations to retirees and our communities, and it still needs to answer to pressing concerns regarding our critical supply chains and national security.”

Uploaded by Tham Yek Lee

https://theedgemalaysia.com/node/724738

[nobody]

Steel industry leaders in US have high hopes for revival in 2025

(Sept 1): American steel executives say they are optimistic that demand for the industrial material will rebound next year, recovering from the lacklustre demand and low prices that have hobbled the industry in 2024.

Many industry leaders who gathered at the SMU Steel Summit in Atlanta earlier this week said they have high hopes in 2025. They see a turnaround fuelled by an improving US economy, as large infrastructure projects get built and interest-rate cuts encourage consumer spending.

“If it’s a good economy, if people are out buying washing machines, they are buying cars, they are buying houses and building commercial buildings,” said Mike Barnett, the president of Grand Steel Products Inc, a steel service center based in Wixom, Michigan. “That’s really good for us.”

The US steel industry has been dominated this year by Nippon Steel Corp’s proposed takeover of US Steel Corp, the country’s largest producer. The US$14.10 billion (RM61.15 billion) deal, which has become a hot political issue following opposition from US President Joe Biden and union workers, is driven by the Japanese company’s optimism of more growth within the US.

Yet despite the potential for more spending on major energy projects due to government incentives, higher borrowing costs have been a drag on manufacturing and economic growth. Steel demand in the first half of this year was 50.9 million tons, about 0.4% less than the same period a year ago, according to data from the American Iron and Steel Institute.

Benchmark US steel futures are down 37% since the start of the year and earlier in the summer hit the lowest levels since December 2022.

The Federal Reserve’s signalling of rate cuts as soon as September lifts the prospects of a turnaround for sectors that rely on steel.

“We are expecting growth in demand domestically here from construction, with all of the investment driven by government policy over recent years,” Kevin Dempsey, the president of the American Iron and Steel Institute, said in an interview.

Among those are the Biden administration’s Infrastructure and Investment Jobs Act of 2021, which included mandates to build projects with American steel. Geoff Gilmore, the chief executive officer of Columbus, Ohio-based processor Worthington Steel, said the act included US$550 billion (RM2.39 trillion) for projects using steel — equal to about 50 million tons of the material.

“That definitely would be a boost for the sector,” he said in an interview.

Despite the optimism, CRU’s senior steel analyst Alexandra Anderson still sees challenges ahead for the industry. New steel capacity is also set to come online in the coming months in the US, including US Steel’s new Big River 2 plant in Arkansas, which threatens to outpace growth in demand.

According to the American Iron and Steel Institute, US raw steel production rose 1.1% last year to reach 89.7 million net tons.

The US industry is also dealing with ongoing trade issues, including slumping global prices from an overabundance of Chinese steel and an influx of cheap foreign steel despite protective tariffs. Another wildcard is the US presidential election, pitting Vice President Kamala Harris against Republican nominee Donald Trump.

“One of the features of US elections is investors get a little bit rattled and cautious ahead of the election,” said Tom Price, a senior commodities analyst at Panmure Liberum. “Whatever the result is, Trump or Harris, there will be a relief rally after the election.”

https://theedgemalaysia.com/node/725118

[nobody]

Kooksgasfabrieken Tata Steel blijven onder verscherpt toezicht

Beide kooksgasfabrieken van Tata Steel blijven onder verscherpt toezicht staan. Dat was ingesteld in juni 2023 en blijft dus ondanks enkele verbeteringen van kracht. Dat heeft toezichthouder OD NZKG dinsdag na een tussentijdse evaluatie besloten.

Het verscherpte toezicht werd in juni vorig jaar van kracht, omdat de problemen bij de vervuilende installaties zich bleven opstapelen. De omgevingsdienst moest steeds vaker ingrijpen en legde meerdere dwangsommen op. Ook plaatste de toezichthouder camera's.

Hoewel Tata Steel sindsdien enkele verbeteringen heeft doorgevoerd, is er volgens de Omgevingsdienst Noordzeekanaalgebied (OD NZKG) geen reden om het toezicht te versoepelen.

Dat komt voornamelijk doordat een groot deel van de verbeterprojecten van Tata Steel nog loopt. De staalfabriek heeft die in de zomer van vorig jaar in gang gezet om de hoeveelheid ongare kooks terug te dringen. Er komen dan minder schadelijke stoffen vrij wanneer de kooksoven wordt geleegd.

Daarnaast heeft Tata Steel het milieubeheersysteem dat ervoor moet zorgen dat de regels worden nageleefd verbeterd. Ook heeft het bedrijf de bedrijfsvoering verbeterd en bouwkundige maatregelen getroffen. De houding van Tata wat betreft de naleving van de vergunningsvoorwaarden is verschoven "van reactief naar proactief", is een van de conclusies uit de evaluatie.

Maar die projecten lopen dus nog. Ook zijn er bij de toezichthouder opnieuw meldingen over de ongewenste uitstoot van vervuilende stoffen binnengekomen.

Daarnaast is de OD NZKG nog bezig met extra controles van het onderhoud, milieu en voorkomen van ongare kooks. Al met al blijven de kooksgasfabrieken dus voorlopig nog onder toezicht.

Volgend jaar nieuwe evaluatie, nu nog te vroeg voor conclusies
Volgend jaar april doet de toezichthouder een nieuwe evaluatie. Dan moet het verbeterplan van Tata Steel zijn afgerond.

Het is nu nog te vroeg om te concluderen of Tata voldoet aan de wet- en regelgeving, vat de OD NZKG samen. Het verscherpte toezicht staat los van het onderzoek van de omgevingsdienst naar de mogelijkheden om de twee fabrieken te sluiten.

Actiegroepen voeren geregeld actie om ervoor te zorgen dat "de meest ziekmakende onderdelen" van Tata Steel per direct gesloten worden.

De Expertgroep Gezondheid IJmond adviseerde eerder dit jaar Kooksgasfabriek 2 zo snel mogelijk te sluiten om de gezondheidsrisico's te verkleinen. Tata zelf wil die fabriek uiterlijk in 2029 sluiten.

https://www.nu.nl/economie/6326889/kook ... zicht.html

[nobody]

US Steel expects to shut mills if US$14.9b Nippon deal collapses

(Sept 4): US Steel would close mills and likely move its headquarters out of Pittsburgh if the US$14.9 billion (RM64.7 billion) buyout by Nippon Steel collapses, the Wall Street Journal reported on Wednesday citing an interview with the company's CEO.

The steelmaker's CEO David Burritt told WSJ the nearly US$3 billion Nippon had pledged to invest in US Steel's older mills was crucial to remain competitive and maintain workers' jobs.

"We wouldn't do that if the deal falls through," Burritt told the WSJ. "I don't have the money."

The deal has come under increasing criticism from US politicians and the United Steelworkers union since it was announced in December.

On Tuesday, Democratic presidential candidate Kamala Harris said US Steel should remain in domestic hands, while Republican nominee Donald Trump said he would move to block the deal if elected.

US Steel and Nippon Steel have tried to assuage concerns around the deal and have touted its benefits.

Earlier on Wednesday, Nippon said the core senior management as well as a majority of board members at the US company would be US citizens, if the deal goes ahead.

Burritt told WSJ the expanded Arkansas mill would allow the company to close Mon Valley, its last steelmaking operation in Pittsburgh. The company would likely look to move its headquarters to the South too.

The deal has received all regulatory approvals from outside the US and a greenlight from US Steel's shareholders. It is now under the regulatory review process in the United States.

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https://theedgemalaysia.com/node/725539

[nobody]

India probeert staalindustrie te beschermen tegen goedkopere import met tariefverhoging

Key takeaways

- De minister van Staal in India heeft voorgesteld om de invoerrechten op staal te verhogen om binnenlandse fabrieken te beschermen.

- India werd netto-importeur van staal in het fiscale jaar tot en met maart en deze trend zette zich voort in de eerste vier maanden van het nieuwe fiscale jaar.

- Grote staalproducenten zoals JSW Steel en Tata Steel zijn in gesprek met de overheid over handelsmaatregelen.

De Indiase staalindustrie staat voor grote uitdagingen door de toegenomen invoer van goedkoper staal uit landen als China. Om dit probleem aan te pakken, heeft de minister van Staal voorgesteld om de invoerheffingen op staal te verhogen om binnenlandse fabrieken te beschermen.

Het land werd netto-importeur van staal in het fiscale jaar tot en met maart en deze trend zette zich voort in de eerste vier maanden van het nieuwe fiscale jaar. De invoer uit China, de grootste exporteur naar India in deze periode, bedroeg 807.000 ton.

Maatregelen van de overheid om de staalindustrie te beschermen

Het staalministerie heeft het ministerie van Financiën gevraagd verschillende maatregelen te nemen om de industrie te beschermen tegen goedkopere importen. Hieronder valt het ondersteunen van de eis van de industrie om de tarieven op staalimport te verhogen van de huidige 7,5 procent naar 10-12 procent.

De Indiase overheid is al een antidumpingonderzoek gestart naar bepaalde staalproducten die uit Vietnam worden geïmporteerd. Grote staalproducenten zoals JSW Steel en Tata Steel zijn actief in gesprek met de overheid over handelsmaatregelen.

Invloed van handelsmaatregelen

De staalprijzen in India zijn gedaald tot het laagste niveau in meer dan drie jaar door de sterke import en de zwakke exportvraag.

https://www.msn.com/nl-be/nieuws/other/ ... f3b3&ei=40

[nobody]

Nippon Steel, US Steel make last-ditch effort to win US nod

A top Nippon Steel executive and US Steel’s CEO are meeting with senior US officials on Wednesday in an effort to salvage Nippon’s $14.9 billion bid for US Steel, a person familiar with the matter said.

The meeting, including Takahiro Mori, a key Nippon negotiator on the deal, and US Steel CEO David Burritt, is also expected to include Treasury Deputy Secretary Wally Adeyemo and Commerce Deputy Secretary Don Graves among other officials, said the person, who declined to be named because he was not authorized to speak about the matter.

The Treasury Department, which leads the Committee on Foreign Investment in the United States (CFIUS), Nippon Steel and US Steel all declined to comment. The Commerce Department and the White House did not immediately respond to requests for comment.

A number of US business groups, in a letter to Treasury Secretary Janet Yellen on Wednesday, raised concerns that the Biden administration’s national security review of Nippon Steel’s planned acquisition of US Steel is being unduly influenced by political pressure. The review is being conducted by CFIUS.

CFIUS sent a letter in late August warning the companies that their proposed tie-up would threaten US national security by weakening the country’s steel supply chain, as first reported by Reuters, appearing to doom the proposed deal.

“CFIUS should never become a tool for political posturing and should not morph into industrial policy masquerading as national security,” the business groups said in their letter. “We fear that the CFIUS process is being used to further political agendas that are outside the committee’s purview and putting the US economy and workers at risk.”

The companies countered in a 100-page letter also seen by Reuters that the deal would actually strengthen US steel output, by allowing a much-needed cash injection from a company in an allied nation into a struggling American company in a critical industry.

Wednesday’s meeting comes amid opposition to the deal by both Republican presidential nominee Donald Trump and Democratic nominee Kamala Harris. They are vying to win the critical swing state of Pennsylvania, where US Steel is headquartered.

Burritt plans to discuss the merger at an appearance next week at the Detroit Economic Club. An unsolicited bid for US Steel last year by rival Cleveland-Cliffs that was rejected by US Steel had drawn concerns from US automakers.

(By Alexandra Alper and David Shepardson; Editing by Chris Sanders and Leslie Adler)

https://www.mining.com/web/nippon-steel ... urce-says/