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China’s steel industry remains under pressure amid low prices and weak demand.
"This year, China’s steel industry will maintain its current status of low growth, low prices, low profit and high pressure," north China steel major Hebei Steel said it its latest results.
Net profit at Angang Steel Co (Ansteel), the listed arm of north-eastern China’s Anshan Iron & Steel Group plunged by 93.4% year-on-year in the first quarter on a weak steel market.
The steelmaker, based at Liaoning in north-eastern China, announced that it will sell its 50% stake in an automotive steel joint venture to its partner, Xichang Vanadium Steel.
Net profits at Wuhan Iron & Steel (Wisco) surged in the first quarter of 2015, as slumping steel prices were offset by lower production costs, although the central China steelmaker lowered its output target for the year.
Iron ore price rise & fall
Iron ore spot prices climbed towards the $60-mark at the beginning of the week, but by the time the market closed for the Labour Day public holidays most of the gains had been lost again.
The Metal Bulletin index for 62% Fe material stood at $56.18 per tonne cfr Qingdao, up $1.36 week-on-week, but down $3.70 from the Tuesday high of $59.88 per tonne.
Equity broker CLSA expects seaborne iron ore supply to experience zero net growth this year.
Meanwhile, investment bank Jefferies expects iron ore prices to fall close to $40 per tonne over the next six months, as mining majors continue to focus on growth.
Tube & pipe
Our colleagues at Metal Bulletin Research (MBR) took a look at the market for cold drawn seamless precision tubes in our weekly Steel First Outlook column.
French tube & pipe producer Vallourec announced that it will shrink its European tube capacity by one third and slash 2,000 jobs in a bid to reduce costs.
The severe drop in the oil and gas market dragged down the French tube and pipe producer’s earnings in the first quarter of 2015.
From around the world
Brazil-based miner Vale reported a net loss of $3.12 billion in the first quarter of 2015, due to lower iron ore prices and currency effects. The loss was mainly due to a $3 billion rise in the company’s net debt, as a result of the devaluation by 20.8% of the Brazilian Real against the US dollar during the quarter, Vale said.
The miner said it is “ready” to reduce iron ore production from mines with high costs and low-quality output, and to replace them with new capacity, to increase margins.
Turkish steelmaker Tosyali Holding expects to start operations at its new 500,000-tpy wire rod rolling mill in Algeria by early June following several delays.
The forthcoming addition of wire rod supplies will have a negative impact on export volumes from Southern Europe, sources told Steel First.
In Russia, an increase in long steel production capacity is still planned for the next two years, despite pessimism over prospects for the market.
Our Man of Steel column looked at how distributors in the USA and Europe are adapting to current market conditions.
The European Commission has opened an anti-dumping (AD) investigation into imports of high fatigue performance (HFP) rebar from China.
Malaysia has launched an anti-dumping investigation into imports of cold rolled stainless steel from Taiwan, France, Hong Kong, Japan, China, Finland, Indonesia, South Korea and Vietnam.
This has worried exporters as they fear the loss of another trade outlet.
India’s Ministry of Steel and Ministry of Commerce are heading for a major row over what to do about steel imports.
Meanwhile, the Indian government has reduced to 10% the rate of duty imposed on exports of iron ore with an iron content of less than 58%.
The Canadian International Trade Tribunal (CITT) will initiate an inquiry to determine whether recently imposed trade duties on rebar imports from China, South Korea and Turkey harm the country’s public interest.
Editor Vera Blei looks at the main news covered by Steel First over the past week.