June 2017 | Leading for over 100 years

5N Plus chief
Arjang Roshan
on team
chemistry

TOP STEELMAKERS
2017 EDITION
Steel technology
and product
advances
June
Features
20
Cover story
Arjang Roshan, the ceo
of 5N Plus, explains
that good business is
about people and team
chemistry
Top steelmakers
27
Top steelmakers 2017
edition
Metal Bulletin publishes
its annual table of the
top global steelmakers,
and our correspondents
around the world assess
their regional steel
markets
36
Optimism grows
for Turkish steel
MB reporters review
Turkeys steel prospects
in dynamic international
markets
Iron ore
44
Turbulent times for
seaborne iron ore
Interplay between supply
and demand has caused
price volatility this year,
but which way will prices
now go?
20 49 56
Indian iron ore Steel tech from a US
How the Indian perspective
governments influence How American
on the countrys iron ore steelmakers are using
5N PLUS
industry is shaping its new technology to
potential and scope develop an increasing
range of grades of
Steel technology finished products
52 61
A big picture New plant orders
How todays technology The latest quarterly list
is connecting production of plant orders for new
fundamentals with projects and revamps
commercial imperatives
36
SHUTTERSTOCK
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metalbulletin.com
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Bulletin Group
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June 2017 | Metal Bulletin Magazine | 3
June
News and analysis Regulars 25 66
8 7 Innovations
New developments
Non-ferrous Comment
news review High-tech answers in metals technology,
A summary of key processes and products
developments in the
25

BOLIDEN
non-ferrous sector over
the past month People moves 67
New appointments End-user
around the global metals Advances and market
12 industry developments in
applications
Steel news review
A round-up of important
developments in the iron 65 68
and steel sectors over the Supply chain services
News from service Events
past month
providers across the Forthcoming conferences
metals supply chain and exhibitions
14 Prices
Base metals and
steel analysis
Metal Bulletin Research
69
April averages
analyses the drivers of
the base metals, steel
and steel raw materials 8 65
markets
EGYPTIAN STEELALISED HANDLING

18
Regional review
Correspondents in
Europe, North America, 66
CONSTELLIUM

Latin America, Asia, Africa

and the Middle East
discuss topical issues in
12
their regions

70
ABB

Chartist 67
Chinese steel production
WORLDSTEEL/GREGOR SCHLAEGER

at a new peak
BOEING

4 | Metal Bulletin Magazine | June 2017

 C. Steinweg Group

Head Office:
Parmentierplein 1 3088 GN Rotterdam The Netherlands Phone: +31 (0)10 48.79.555 E-mail: info@nl.steinweg.com

C. Steinweg Group, more than 100

own locations worldwide.
Base Metals, Ferro Alloys, Steel,
Minor Metals and Project Cargo.

www.steinweg.com

Independent. Logistics. Since 1847.

Warehousing Chartering Shipping Stevedoring Forwarding Transport Releasing Processing Customs Documentation Risk Management
AN EYE ON
THE FUTURE
Ezz Steel
continues to
invest in Egypt

Ezz Steel recently commissioned

2m tpy Direct Reduction Iron mega
module in Ain Sokhna Suez, Egypt,
a $550m investment.
Comment
High-tech answers
dvanced technology is a recurring theme
in this issue. Our cover profile with 5N
Plus ceo Arjang Roshan describes the
strategy and outlook of a business leader
at the top of an international company
supplying metals, speciality chemicals
and engineered materials for high-tech applications.
As ever, our regular pages cover the latest
developments in ferrous and non-ferrous metal
production and markets, but our feature sections this
month focus on steel from raw materials, notably
iron ore, through to the latest steel products.
Metal Bulletins annual top steelmaker table,
taking centre stage this month with regional
commentaries from our global steel team, ranks the
worlds largest steelmakers by output in 2016. Once
again, ArcelorMittal takes the top spot, but a new
company, Chinas Baowu Steel Group, formed by
the merger of Baosteel and Wuhan Iron & Steel,
appears at number 2.
Both of those companies have the advantages of
economy of scale and the size of R&D budget to
invest in product development and the latest
technology across a diverse range. Many of the
smaller companies listed strive for excellence within
a niche in terms of product type and/or geographical
location.
Whatever the size or strategy of steelmakers,
plantmakers stand ready to adjust, maintain,
modernise or replace their equipment to serve their
aims. Out latest listing of new plant orders and a
complementary article summarising broad
technology trends illustrates the wide range of
technological packages they provide to retrofit
existing, or build new green-field, works.
Ultimately, for business, technology is there to
serve commercial goals, optimise productivity,
reliably ensure quality, and often to drive down
operating costs. Connecting everything together to
work harmoniously is the stuff of Big Data, the
Internet of Things, Industry 4.0 and smart factories
topics we will be looking at in more detail in our
next issue.
Find us online at www.metalbulletin.com
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Newsreview:non-ferrous
Constellium opens
aluminium automotive
plant
Constellium N.V. has officially
opened its new plant in White,
Georgia, USA, dedicated to the
production of advanced
aluminium automotive
structural components and
crash management systems. The
135,000 sq ft facility has been
located to supply automakers in
the Southeast USA and may be
expanded to 220,000 sq ft to
meet customers supply needs in
the future.
Being closer to our
customers assembly plants will
allow us to better serve
automakers in their mission to
make vehicles lighter and safer
and to respond to the industrys
growing demand for aluminium
structural parts, said Paul
Warton, president of
Constelliums Automotive
Structures & Industry business
unit.
Viant joint venture
with KME
Singaporean metals trading firm
Viant Commodities has launched
a joint venture with international
copper giant KME, which is
based in Switzerland. Tekvalia
AG, run from Viants office in
Zug, will combine KMEs
expertise in manufacturing
copper products with Viants
financing capabilities and trading
networks. Tekvalias ownership
is split 51% to Viant and 49%
to KME.
Arconic sells Fusina
rolling mill
Arconic has confirmed the sale
of its Italian Fusina rolling mill to
Slim Aluminium, owned by
German private equity firm
Quantum Capital Partners AG.
The plant, which came under
Arconics ownership after Alcoa
split its upstream and
downstream businesses late last
year, was mothballed in 2013.
Arconic said that the sale comes
as part of a thorough review
process that aims to convert the
8 | Metal Bulletin Magazine | June 2017
Constellium may expand its new automotive aluminium plant if
there is the demand for further increased output
business from a commodity
producer to a high-margin
aerospace and automotive
supplier.
DGCX launches Shanghai
gold futures
The Dubai Gold and
Commodities Exchange
(DGCX) has launched a
yuan-denominated gold
contract known as the DGCX
Shanghai Gold Futures. The
listing comes after the DGCX
said in October last year that it
had obtained a licence from the
Shanghai Gold Exchange to use
the Shanghai Gold Benchmark
as the pricing mechanism for the
contract. The contract marks
the first-ever usage of the
Shanghai Gold Benchmark in
international markets, according
to DGCX.
Russia to increase
vanadium production
The Russian government is
planning to significantly
increase the volume of domestic
vanadium production,
according to a statement from
Russias minister of industry and
trade Denis Manturov to Metal
Bulletin.
Russia has the worlds largest
deposits of vanadium-titanium
magnetite ore. The reserves of
the Ural Kachkanarsky field are
estimated at approximately 9
million tonnes of vanadium,
while in the case of Chineyskoye,
which is located in Transbaikal,
[it is] up to 5 million tonnes,
CONSTELLIUM
Manturov said. According to
state plans, production should
be significantly expanded at the
majority of Russias largest
vanadium fields over the coming
years.
A spokesman for Manturov
said the expansion will be
achieved by paying subsidies to
the countrys largest vanadium
producers, directly and through
indirect support, such as tax
breaks. He said subsidies of up to
2 billion roubles ($35 million)
will be made available to each
supported company this year,
with the money being spent by
September.
Three aluminium
projects halted in China
The local government in
Xinjiang, western China, has
halted three new aluminium
projects with a combined
capacity of two million tonnes
for violating rules aimed at
curbing capacity, according to
an official statement posted on
the government website of
Changji County in Xinjiang. The
halted capacity includes
800,000 tonnes from Xinjiang
East Hope Nonferrous Metals,
800,000 tonnes from Xinjiang
Qiya Energy Aluminium
Electric and 400,000 tonnes
from Xinjiang Jiarun Resources
all based in Xinjiang. The
decision to suspend the capacity
was made in accordance with
China State Council guidelines
on curbing excess production
capacity, according to the
statement.
Get the latest metals news at
www.metalbulletin.com
Atlas Copco opens
expanded Indian plant
Atlas Copco has invested 800m
Indian Rupees ($12 million) in
the expansion of its factory in
Hyderabad, India, doubling its
capacity. The plant
manufactures drilling
consumables for surface mining
applications and the new facility
includes a world-class R&D test
centre for rock drilling products.
The expanded factory will
strengthen our delivery process,
enhancing productivity for our
customers globally, said Helena
Hedblom, president of Atlas
Copcos Mining and Rock
Excavation Technique business
area. It will also ensure the
development of competitive
products at a faster pace.
Aqua Metals acquires
Ebonex IPR
Aqua Metals has acquired
UK-based Ebonex IPR Ltd, a
company with an extensive
portfolio of patents and other
intellectual property focused on
advanced lead-acid batteries.
The company said Ebonexs
advanced materials have the
potential to advance lead acid
chemistry with higher energy
density, increased cycle life and
faster charging. If successful, this
could mean high-performance
lead acid batteries that can be
distributed through existing
closed loop supply chains and
then fully recycled.
Aqua has said that this year it
plans to continue to expand its
Nevada refinery, expand its
technology licensing
programme and look to build
more refineries.
China Nonferrous and
Yunnan Copper set for
smelting jv
China Nonferrous Mining
Corporation (CNMC) and
Yunnan Copper will set up a
refined copper smelting joint
venture in the Democratic
Republic of the Congo, Hong
Kong Stock Exchange-listed
CNMC has said.
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June 2017 | Metal Bulletin Magazine | 9

Newsreview:non-ferrous
The joint venture will focus on
fire-refining blister copper and
will have a capacity of 400,000
tpy of copper concentrates,
according to CNMCs
statement. CNMC will control a
60% stake of the smelter through
its wholly-owned subsidiary,
CNHKI, while Yunnan Copper
will own the remaining 40%
through its subsidiary, YH Metal.
Suzuki jv to build Indian
EV battery plant
Japan-based Suzuki Motor
Corporation has reached a
AFRARK
joint-venture agreement with
Toshiba and Denso to produce
electric vehicle batteries in India.
The market capitalisation of the
venture will be 2 billion yen
($18.4 million), of which Suzuki
will contribute 50%, with
Toshiba and Denso investing
40% and 10% respectively.
Suzuki expects to produce
around 600,000 battery packs
per year once production begins,
a company spokesman
toldMetal Bulletin.
Xinxing starts work on
fourth NPI furnace
Chinas Xinxing Ductile Iron
Pipes Co started construction on
a fourth rotary kiln electrical
furnace (RKEF) for nickel pig
iron (NPI) production on Obi
Island in Indonesias North
Maluku province at the start of
April, a company official
toldMetal Bulletin.
Since putting into operation
three 33,000-KVA RKEFs in
February, Xinxing has had NPI
capacity of 190,000 tpy with
10% nickel content, the official
said. Pilot production at the
fourth 33,000-KVA RKEF is
planned for November of this
year; Xinxing aims to have NPI
capacity of 250,000 tpy by the
end of 2017, the official added.
Afarak converts Mogale
furnace to FeCr
The Afarak Group, the Finland-
based ferro-alloy producer, has
converted a second furnace from
producing silico-manganese to
10 | Metal Bulletin Magazine | June 2017
Afarak Group has converted a second furnace to ferro-chrome production at its Mogale plant
ferro-chrome at its South
Africa-based Mogale plant. The
furnace transition marks the
second shift from silico-
manganese production to
ferro-chrome in recent months
after Afarak opted to transition
another furnace to produce
ferro-chrome in December,
citing favourable ferro-chrome
market conditions.
ICD Alloys expands
into EU
ICD Alloys & Metals LLC has
extended its reach into the
European market by establishing
the subsidiary ICD Europe Ltd
in the UK. Our purpose-built
facility is based in the heart of the
British steelmaking and
metallurgy industry in Sheffield,
ICD said in a statement. ICD
Europe is perfectly positioned to
cater for customers in the UK
and across Europe. The new
Anglo American is preparing to restart its El Soldado copper
mine in Chile
facility is now fully equipped to
handle the processing and
handling of superalloys, prime
metals and ferro-alloys, IDC
Alloys & Metals LLC md Wayne
Hawkes confirmed to Metal
Bulletin sister publication AMM,
while noting that the plant is also
capable of vacuum preparation.
Indonesian ferro-
manganese furnaces
for GMC
Australia-listed manganese
alloys producer Gulf Manganese
Corp (GMC) has announced that
it will build eight ferro-
manganese furnaces at its
Kupang smelter complex in
Timor, Indonesia. The Kupang
smelter complexs furnaces will
be supplied by high-grade
manganese ore from West Timor
and will be built in stages as the
ore supply chain develops,
according to the company.
ANGLO AMERICAN
Get the latest metals news at
www.metalbulletin.com
[The] first two units have
already been sourced from South
Africa and are expected to be
commissioned by the first
quarter of 2018, GMC said. The
cost of installing the first two
furnaces, including working
capital, was estimated at $17
million, GMC said. Production
would start at 22,000 tpy of
ferro-manganese before
ramping up to 155,000 tpy once
all furnaces are operational, the
company added.
Anglo American resumes
operations at El Soldado
Anglo American is taking steps
to promptly restart operations at
its mid-sized El Soldado copper
mine in Chile after the countrys
mining regulator Sernageomin
approved its latest updated plan
for the operation. Anglo
American will adopt
immediately the needed steps to
resume the operation of the mine
as soon as possible, fulfilling all of
Sernageomins requirements
and the companys safety
procedures, the company said.
Anglo suspended operations
at El Soldado on February 17
after failing to secure regulatory
approval from Sernageomin for
an update to its mining plan. This
led to a production loss of around
3,000 tonnes during the first
quarter of 2017, Anglo said.
Situated in Chiles Valparaiso
region, El Soldado produced
47,000 tonnes of copper in 2016.
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Newsreview:steel
Voestalpines $33m
aerospace facility
Austrian steelmaker
voestalpine is to invest 30
million ($32.75 million) in an
aerospace component
production facility at its Bhler
Edelstahl special steels division
in Kapfenerg in the east of the
country. The investment will
take place over the next two
years and the automated facility
is expected to be fully
operational as early as 2019,
voestalpine said.
This investment is designed
VOESTALPINE AEROSPACE

specifically to meet the growing

demand for [the] extremely
high load-bearing, weight-
saving structural parts in
titanium and special steels voestalpine is to invest 30 million ($32.75 million) in an aerospace component production facility
[that] are used in aircraft
construction, the company said. with Usibor 1500 in their cars, Valbrunas modernised which Liberty House can
Franz Rotter, head of leading to a lightweight stainless steel billet launch its strategy, according to
voestalpines special steel solution at a controlled cost, Liberty House executive
division said the move made together with a dramatic caster chairman Sanjeev Gupta.
sense as the aerospace industry improvement in crash Acciaierie Valbruna has started
continues to grow. With an behaviour, Vama, a joint production from its ThyssenKrupps cost-
average annual growth rate of venture between ArcelorMittal modernised 200,000 tpy
[more than] 3%, the aerospace and Chinas Valin Group, said. continuous billet caster to cutting plan
industry demonstrates a clear Developed and patented by produce stainless steel and alloy ThyssenKrupp will idle some of
and continuing upward trend, ArcelorMittal over ten years bars with cross-sections up to its heavy plate production
he said. ago, Usibor 1500 is a formable 180 mm, following capacity as part of a major
Voestalpine said it currently steel coated product meant for modernisation work carried cost-savings plan within its
generates around 300 million hot stamping applications in out in September 2016. European operations. In
($327.54 million) of its the automotive market and Previously, Valbruna was addition to investments in
revenues in the aerospace usually supplied in the form of manufacturing products in viable businesses and
sector, and this should shaped blanks. sizes up to 160 mm cross- applications, [ThyssenKrupp]
increase to 500 million section at its Bolzano plant in is planning to significantly
[$545.90 million] over the Japan launches steel northern Italy. It has the improve the cost base of [the]
medium-term. capacity to produce 170,000 Steel Europe [division] over the
pipe fittings probe tpy of special steel. next three years by around
Japanese authorities have 500 million [$529 million],
Vama targets China initiated an anti-dumping the firm said.
Valin ArcelorMittal investigation into imports of The management board of
Automotive Steel (Vama) is carbon steel, welded, and pipe
Liberty House to buy Steel Europe also [wants] an
banking on a growing fittings from China and South ArcelorMittal wire immediate improvement in the
acceptance of its high-strength Korea. rod mill results of the heavy plate
coated steel product, Usibor The probe was launched on Liberty House Group has taken business unit, ThyssenKrupp
1500, in Chinas automotive March 31 and is expected to its first steps in the US steel said. This includes the closure
market to drive its sales. Both take a year to complete. The market, with an agreement in of sub-plants, [but] how many
production and sales of the focus of the investigations will principle to buy ArcelorMittals jobs will be affected is unclear at
product have risen to levels that be on imports from October former wire rod mill in this time.
put Vama in a strong position in 2015 to September 2016. Georgetown, South Carolina.
the Chinese market for During that period, South The proposed deal comes after Dana commissions UAE
high-strength automotive steel Korea and China exported several months of discussion,
products, the company told 1,996 tonnes and 821 tonnes of the two companies said in a steel service centre
Metal Bulletin. the products, respectively, to joint statement. The UAEs Dana Steel has
Almost all foreign brands Japan at prices some 25-35% The Georgetown mill, with a commissioned its fourth steel
and a growing number of below those of Japanese melt capacity of 600,000 tpy service centre in the UAE, at
domestic brands have materials, Japans finance and rolling capacity of 750,000 Ajman. Located in the Ajman
implemented hot stamping ministry said. tpy, is a strong platform from Al Jurf 2 Industrial Area, the

12 | Metal Bulletin Magazine | June 2017

 Get the latest metals news at
www.metalbulletin.com

service centre has 250,000 tpy speech at the Singapore Iron

steel processing capacity, Ore Forum, the anchor event of
bringing the companys total the Singapore Iron Ore Week.
steel processing capacity to SFLA has very low alumina
600,000 tpy. The centre has levels and will be one of the
cut-to-length and slitting lowest-alumina traded ores,
machines. Meriz said. The alumina/silica
The construction of the new ratio of SFLA is 0.14, while that
cut-to-length and slitting line of typical Chinese concentrate
was part of Dana Groups is 0.17 1% alumina and 6%
[operational efficiency] silica, Meriz told delegates.
programme, [which aims to
enable] the company to adjust Cliffs to build its own
its operations in response to
changing demand in the steel DRI plant
industry, specifically for the Cliffs Natural Resources plans
Middle East North Africa to build a direct-reduced iron
(Mena) region and Southeast (DRI) plant in the USA in 2018.
Asia, according to ceo Ankur The planned unit, which is
Dana. likely to be the first of a series
throughout the USA, will have
WORLDSTEEL/GREGOR SCHLAEGER

Malaysia applies duties capacity for 1.5m tpy, Cliffs

chairman, ceo and president
to long steel imports Lourenco Goncalves said
The Malaysian government has during an earnings conference
announced definitive call. The Cleveland-based iron
safeguarding duties on imports ore miner and pellet producer
of steel rebar, wire rod and The Malaysian government has decided upon import duties on will feed the plant with 2m tpy
deformed rebar (debar) rebar, wire rod and deformed rebar of direct-reduced grade pellets
following an investigation. from its own operations, he said.
The duties on all three products Sulawesi project in July 2013, Nucor targets 1m tpy of
will be imposed on imports establishing the first phase with tube shipments Evraz to supply linepipe
from the EU, China, Japan, a 300,000 tpy capacity, at the
Australia, New Zealand, end of 2014. The projects US steelmaker Nucor intends to Trans Mountain
Canada, the USA, Armenia, second phase had a capacity of to ship one million tpy of tubular Evraz North America Inc. will
Switzerland and Liechtenstein. 600,000 tpy and was products, ceo John Ferriola said provide most of the steel
The duties on wire rod and completed at the end of 2015. during an earnings call on April linepipe for the Trans
debar will also be applied to 20. The newly formed division Mountain pipeline expansion
imports from South Korea and Industry restructuring has shown a strong financial in western Canada, according
Singapore. performance and synergy with to the developer.
fund established Nucors sheet mills, he added. About 250,000 tonnes of
Tsingshan Groups NPI in China The tube sites now buy 75-80% linepipe will be made at the
Chinas first restructuring fund of their steel requirements Evraz mill in Regina,
project adds capacity for the steel industry, Siyuanhe from Nucor. The company will Saskatchewan, Kinder Morgan
Tsingshan Groups Sulawesi Steel Industry Restructure try to increase that to 90%. The Canadas Trans Mountain
project has added 60,000- Fund, has been established in hollow structural section (HSS) Expansion Project unit said.
72,000 tpy of nickel metal Shanghai to help push forward and electrical conduit sectors That represents about 500
capacity to global supply after the countrys supply-side are somewhat insulated against miles of pipe, more than 75% of
completing the third phase of reform plans, which have competition from imported the projects total.
its Indonesian nickel pig iron included cutting crude steel materials, compared with the
(NPI) project at the end of capacity by more than 65 broader pipe and tube markets, Severstal sells Italian
March. The project now has a million tonnes in 2016, and a he said.
capacity of 1.5 million tpy of target cutting a further 50 steel wire rope unit
NPI with 10-12% nickel metal million tonnes or more of Russian steelmaker Severstal has
content and twenty 33,000 capacity in 2017.
Vale developing new sold its steel wire rope production
kVA electric furnaces, following Ma Guoqiang, Baowu Steels iron ore product unit in Italy. Severstal-metiz, the
the completion of phase three chairman, was quoted by China Vale is developing a new steelmakers subsidiary focused
of construction. The third Daily as saying the fund will product called the Sinter Feed on metalware production, has
phase added 600,000 tpy of help Chinas steel industry to Low Alumina (SFLA) for the completed the sale of Redaelli
capacity and eight 33,000 kVA push forward de-capacity and iron ore market, its shipping Tecna for 50 million ($54.56
furnaces to the operation. restructuring, raise industry and iron ore marketing director million) to Austria-based metal
Tsingshan Group began concentration and promote Luiz Meriz said. He introduced wire rope producer Teufelberger
construction of its Indonesian international cooperation. the brand during his keynote Wirerope.

June 2017 | Metal Bulletin Magazine | 13

MBR analysis
Aluminium Lead
False impressions Deficit postponed
Aluminium prices are likely to LME cash price, $/t Lead prices have been through LME cash price, $/t
continue range-trading as the 2,000 a soft patch that has taken 2,500
market has already sufficiently them as low as $2,044/tonne
priced in bullish developments 1,750 in mid-May, from a high of
in China (supply-side reforms, $2,459/tonne earlier in the 2,000
environmental regulations and 1,250 year.
the closure of illegally LME/MBR
The price weakness is part of LME/MBR
constructed smelting capacity). 1,000 a necessary period of 1,500
May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16

May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jun 17f

Without any further policy
stimulus, prices may struggle to
rally further. Good dip-buying
appetite has been providing a
firm floor, and this should
continue. We have our doubts
about data that may be creating a
falsely bullish impression of the
fundamentals if taken at face
value. WBMS data indicating a
global 8.3% year-on-year
increase in apparent demand
during Q1, including 21.3% in
China, is overstating the
strength of real consumption.
Meanwhile, NBS data the
latest print of which suggests
Chinese aluminium production
grew in April at 7.7% month-on-
month and 5.9% year-on-year
is understating domestic output.
A reality of less demand and
more supply than reported is not
bullish and should cap the upside
for prices. Our Q2 cash price
forecast remains $1,960/tonne.
correction and adjustment
after the market rallied too far,
too fast last year, reaching
$2,577/tonne in November.
Even as most of the other
metals were putting in decent
rebounds in the second half of
May lead continued to
struggle.
We think it will catch up,
but if we are looking for some
fundamental reasons why it
seems reluctant, there are
a few.
Nov 16
Jan 17
Mar 17
May 17
Jun 17f
Lead is sensitive to the
auto market and the recent
deterioration in sales data
is a clear cause for concern.
And the hoarded scrap
attracted into the supply
chain by the Q4 2016 price
spike has postponed the
emergence of a sustainable
refined market deficit until
after the scrap glut has been
worked through.

Copper Nickel
Q1 mine losses not fully priced in Supply outlook raised, price forecasts lowered
Our outlook for copper has LME cash price, $/t Our base case price forecast for LME cash price, $/t
been bullish for Q1, neutral 7,000 Q2 was $10,350/tonne. It was 16,000
for Q2 and we are bullish never really asking too much of a 14,000
again for Q3-Q4. market that was toying with 12,000
So far the market is moving 5,000 $11,000/tonne as recently as
10,000
nicely in line with this view. March and has been primed for
Our Q1 price forecast turned LME/MBR short-covering rallies. 8,000
LME/MBR
out to be 98.7% accurate and 3,000 We had factored in 6,000
May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jun 17f
May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jun 17f

the stronger tone at the time re-emerging concerns over

of writing heading towards
the end of May puts our Q2
forecast of $5,750/tonne on
track. We are not too
concerned about fluctuations
in LME stocks, as long as they
remain within recent
extremes, as they do not
reflect the underlying
fundamentals.
We dont believe the big
slump in mine output in Q1
has been factored into the
copper price yet.
Production in Chile
dropped 15% year-on-year
and the top ten miners
globally saw a 13.2% fall a
loss of 384kt versus Q1 2016
or 454kt versus Q4 2016. It
takes time for disruptions at
mine sites to work
downstream, so these huge
losses should be felt in the
physical refined market in H2.
Chinas economy and
impatience over president
Trumps slow progress in
following through on his
manifesto. We had also factored
in ongoing uncertainties about
Southeast Asian ore supply that
we thought should justify more
of a sideways drift typical of a
market in wait-and-see mode.
We had not allowed for the
replacement of Philippine
environmental secretary Regina
Lopez, but this has been the
surprise of the quarter.
It has put sentiment and
prices on a far more bearish
footing, because now ore exports
from the country, and NPI
production in China, look likely
to be higher than might have
been expected. We have revised
up our NPI forecasts, and revised
down our Q2 price forecast to
$9,600/tonne.

In this regular section, MBRs base metals team summarise their

in-depth reports to highlight key factors driving the markets and
short-term price forecasts. MBRs Base Metals Weekly Tracker service

14 | Metal Bulletin Magazine | June 2017


Tin
Eyes on China
May saw LME tin stocks slip to
fresh multi-decade lows, the
nearby backwardation flare
and outright prices break
upwards out of their
four-month-long triangular
consolidation pattern. Already
back into the mid-$20,000s,
this squeeze may be the trigger
to push prices higher still.
What we might see over the
next couple of weeks, should
the nearby spreads widen
further, is a pick-up in exports
from China. There is clearly no
shortage of metal in the
country there is more tin in
warehouses in Shanghai than
in the entire LME network and
Chinese production hit the
200 ktpy mark on an
annualised basis in March for
Zinc
Not bearish, just a little less bullish
Despite softer prices in May,
falling exchange stocks and rising
premiums support our view that
the underlying refined market
deficit is becoming more
pronounced.
The maintenance closures
announced at some of Chinas
largest zinc smelters is a key
factor and production has
slipped to an annualised
5.6-5.7m tpy pace in April from
around 6.0-6.1m tpy in Q1 and
6.5-6.5m tpy in Q4 2016. For
zinc bulls the big question now is
how quickly will the supply
response from miners lead to a
rebound in smelter output. With
all Q1 results now in from our
sample set of around 70% of
global mine production outside
China, we can see that zinc
Analysis by Andy Cole, base metals analyst and editor of MBRs Base
Metals Weekly Market Tracker. Email: Acole@metalbulletinresearch.com
provides independent, detailed and timely analysis on the latest data,
price movements and developments that impact the market conditions
and outlook for LME-traded base metals.
World leading market analysis
www.metalbulletinresearch.com
Ask an analyst
Is China getting a grip on steelmaking
LME cash price, $/t
over-capacity?
25,000
China has been actively cutting the end of last year, China still
20,000 steelmaking capacity, but by had 1.11 billion tpy of crude
how much is unclear. steel making capacity; another
15,000 The Chinese government 50m tonne cut would bring the
says it has cut 65 million tpy of number down to 1.06 billion
LME/MBR
10,000
May 15 steel capacity, of which 10 tonnes, given that 100-150
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jun 17f
million tonnes was from million tpy capacity from
state-owned mills. Individual induction furnaces was not
the first time since last provinces also announced their counted in the first place.
summer. targets separately, which by our Chinese media have reported
What is not so clear is calculations exceed 90 million that Ning Jizhe, deputy director
whether the tin that is available tonnes. of the National Development
in China is LME-deliverable. Our capacity and capex study and Reform Commission,
We think tin prices, spreads records a 54 million tpy steel estimates that the overall
and stocks are in for a bumpy capacity cut in 2016. This is Chinese steelmaking capacity
ride in the coming weeks and lower than the governments utilisation rate could be about
months. At the moment, we data, but certainly eliminates the 80% this year. Based on our
are sticking with our Q2 cash possibility of 90 million tonnes capacity estimations, that would
price average of $20,000/ reported by provinces. mean China could be producing
tonne. What matters most is that, a record 848 million tonnes, or
despite capacity cuts last year, 40 million tonnes more than in
crude steel production rose by 2015.
3.4% year-on-year in the second
half of 2016.
This year Chinese production
is actually likely to continue
The Chinese government slowing down, reflecting the
plans to cut another 50 million patterns recorded since January,
LME cash price, $/t tpy capacity this year, of which not because of capacity cuts, but
3,000 six million is from state-owned because of demand. Amid the
mills. Our research team revival in apparent steel demand
2,500
understands this target does not within China and the positive
2,000 include the 100-150m tpy knock-on effects on mills
capacity from induction profitability, inventory has also
1,500
LME/MBR
furnaces that - has been off the been built up. It is this
1,000 record since the beginning. If we emergence of surplus supply
May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jun 17f
are assuming the Chinese conditions within China that
government succeeds with eventually led to a price crash in
concentrate output increased by reported plans to permanently March this year. We anticipate
6.2% year-on-year or around close all steelmaking induction mills will cut production from
70kt. furnaces by the end of June, May/June in order to restore the
Even assuming that Glencore China would cut 150-200 modest profitability gained over
keeps its shuttered capacity million tonnes in gross terms. the past year. MBR forecasts a
off-line this year, available We have seen positive sentiment modest increase in production
guidance suggests full-year created over potentially by 1% in 2017, to 816 million
output is set to increase by a tightening supply, if more in tonnes.
not-insignificant 440kt in 2017. long- than flat-rolled products.
We have lowered our Q2 price Does that mean China will Analysis by Duo Fu,
forecast to $2,650/tonne, but reduce production this year? By Metal Bulletin Research
still expect higher prices in H2.
Every month an MBR analyst answers a question raised by
readers. If you have a question for our analysts, please email:
acole@metalbulletinresearch.com
For free samples of MBRs reports, please call Harriet Hall
(tel: +44 (0)20 7779 8000) or access
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June 2017 | Metal Bulletin Magazine | 15
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MBR analysis
Steel Steel raw materials
Signs of revival beginning to appear Supply-side pressure on raw material prices
After sharper than expected 110 A strong Chinese market drove 140 Jan 2012 = 100
MBR
drops through April steel has 100 bullish sentiment in Q1 2017,
begun to revive, driven by 90 fuelling steel production and iron 100
developments in China, most 80
ore consumption. However,
70 60
notably flat-rolled products. steel run rates slowing down is
60
Deducting for local taxes, prices likely to pull down iron ore
50Jan 12 20
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16

Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17
May 17

of HRC across the three Chinese
markets MB covers have revived
by close to $30/tonne over the
past month to an average just
Jan 17
May 17
consumption rates while
Global flat products index restricting growth in imports, Asian import HMS No1 CFR
Global long products index Jan 2012 = 100 which have grown more quickly Fines 63.5% cfr main China ports ($/tonne)
Steel price index MBR than demand. The result has Australian hard coking spot fob price (metric)

under $400/tonne. Real-time been increased inventories at

margins have risen sharply given
the ongoing erosion in Chinese
steelmaking raw materials
prices. We understand that
Chinese finished and crude steel
production cuts have helped
tighten the market, restoring
some operating profitability in
basic HRC production and the
premium for CRC.
Nominal margins at Chinese
rebar producers remain much
stronger and local prices are
recovering more rapidly than for
flat-rolled steels. Manufacturing
activity may have started to slow
down in China, but the
construction sector which more
closely drives longs is still amid a
seasonal and underlying boom.
Prices in the EU and the USA are
being left behind, in spite of the
relative firmness of obsolete
scrap prices, but Turkish
suppliers are finally riding on
Chinas wave. Margins over
scrap, which hovered around
$160/tonne between last
December and April, shot back
over $210/tonne in May as local
and export prices revived.
While the Chinese price
revival is logical after a
temporary fall in production, it
seems far from certain that the
Turkish or recent CIS revival can
continue. Indeed, in an unusual
development, it is the Chinese
market that appears especially
tight: production is rising far less Chinas major ports. However,
quickly than in the rest of the despite the recent fall to around
world. Based on the World Steel $60/tonne, the majority of
Associations estimates for 99% high-cost miners are expected to
of global production, Chinese exacerbate the supply situation
output has risen by 4.6% whereas unless the market drives prices to
the rest of the world, led by rival a clearing level to restore a
export markets from Turkey to balance with demand.
Brazil, has increased by 5.7% at Spot prices of seaborne coking
the same time. coals have settled at more
Clearly, duties against Chinese realistic levels. In a months span,
trade are having an impact on spot prices on an fob Australia
Chinas and, in turn, the rest of basis have fallen by over 45%,
the worlds production. Indeed, with the effects of supply
US crude steel production disruptions from cyclone Debbie
cannot keep up with flat-rolled dissipating almost as quickly as
demand, thereby drawing in they emerged. Queenslands
huge imports of slab. The general exports plunged 47% year-on-
lack of demand growth outside of year last month to just 8.49m
China threatens to end the tonnes as producers declared
semblance of international price force majeure following the
recovery. With attention in breakdown of rail systems that
European producing circles transport coal to ports.
moving away from China, the April data from Chinas
chance of duties against other National Bureau of statistics
countries being made draws suggest that the countrys miners
more focus. High local prices and produced 294.5m tonnes of
relatively attractive import offers thermal and metallurgical coal,
caused producers to lose some up by 9.9% year-on-year, with
market share in recent months 38.3m tonnes of coke, up 5.9%
and while we continue to suspect from the same time last year.
local prices will be brought lower This growth has outpaced
in the short-term, a decision on Chinas steel output, which
duties, likely to be made over the recorded a 4.8% year-on-year
summer, provides some upside rise in April. If steel output is
risk into the autumn season. being curbed over excessive
supply, it will impact coking coal
Analysis by Alistair Ramsay, needs and intensifying demand
Metal Bulletin Research side pressure. Nevertheless,
purchasing activity is cautiously
picking up as spot prices plunge.
Interestingly, there has been a
demand-side pull for scrap in the
USA this month, which is not
from external markets as is
normally the case, but from local
mini mills. Domestic demand in
the USA was mainly driven by
pronounced revival in local steel
production, particularly among
tubular goods producers.
Scraps dynamics are putting a
downwards pressure on
steelmakers margins, which are
likely to resume failing to compete
against cheaper imports. While
rebar margins over shredded are
falling far below recent (two-year)
averages, HRC spread over
bushing is also trending down
and is likely to fall further.
Chinese scrap exports are seen
emerging despite 40% duty with
material mainly offered to Indian
importers and to mini mills in
South Korea.
Japanese scrap prices have
fallen to an average of $205/
tonne in the second week of May
amid weakening consumption
within the country. Without a
pull from integrated mills, scrap
prices seem destined to fall,
especially in the higher priced
markets.
Analysis by Shruti Salwan,
Metal Bulletin Research

For access to MBRs detailed product and regional price, supply and demand forecasts or for a free sample of MBRs Steel
or Steel Raw Materials Market Trackers: www.metalbulletinresearch.com/freesample.aspx

In this section, MBRs steel and steel raw materials team summarise their in-depth reports to highlight key
factors driving the markets and short-term price forecasts. MBR is a leading independent supplier of product and
regional price, supply and demand forecasts for steel and raw materials. For free samples of MBRs reports, call
Harriet Hall (+44 (0)20 7779 8000) or access www.metalbulletinresearch.com/freesample

June 2017 | Metal Bulletin Magazine | 17

Regional review
North America
Myra Pinkham
Industry concerns over Section 232 investigation
Trade issues,
including
anti-dumping
cases, the
Section 232
investigation and the pending
renegotiation of the North
American Free Trade
Agreement weigh heavily on
the US steel industry as it
teeters at what some see as an
inflexion point.
While there is a lot of cause
for optimism, there are also a
lot of reasons why the US steel
industry needs to work
together to help to solve the
problems we face, Philip K.
Bell, president of the Steel
Manufacturers Association
(SMA), said at a joint
SMA-American Iron and Steel
Institute (AISI) press
roundtable held before the
May 24 US Commerce
Department hearing on the
Section 232 steel
investigation.
One of the reasons that
something like the Section 232
is in play is the old whack-a-
mole problem with imports,
maintains Thomas J. Gibson,
AISIs president and ceo, who
observes that despite positive
determinations in a number of
trade cases, US import
Asia
Juan Weik
One Belt One Road
The Chinese
metals markets
received support
last month from
new updates on
the countrys
One Belt One Road (OBOR)
initiative. Put forward in 2013
by president Xi Jinping, the
so-called new Silk Road will
establish massive infrastructure
projects connecting China to
Central Asia, the Middle East
18 | Metal Bulletin Magazine | June 2017
penetration remains at 26%,
which he terms as being a very
high level. Meanwhile, he says,
US steel capacity utilisation
has been hovering at about
74% and the industrys
employment is just a little over
140,000 jobs after losing
14,000 jobs in 2015 and 2016.
Gibson says this is in large
part due to foreign subsidies
and other market-distorting
policies, especially in China,
although he says other nations,
such as India, Brazil and
Turkey, continue to use
subsidies, tax and trade
policies to protect their
markets and to expand steel
production and exports. For
this reason, he calls for a
combination of aggressive
trade enforcement and trade
diplomacy.
At the end of the day it isnt
about what country or
company imports are coming
from, it is whether or not they
are being traded fairly,
explains John Ferriola,
chairman, president and ceo of
Nucor. The best way to
ensure global prosperity is to
have an open, free, fair global
trade policy including
effective trade laws that
everyone follows.
and Europe, along the ancient
Silk Road trading route.
In the middle of May, China
hosted its first summit on the
initiative, which drew much
attention from international
media channels. The scope of
the whole project now extends
to 64 countries, with whom
Chinas annual trade already
surpasses $1 trillion, Rajiv
Biswas, Asia Pacific chief
economist for IHS Global
Europe
Richard Barrett
One recycling rate for all
Three European
trade
associations,
representing
steel (Eurofer),
non-ferrous metals
(Eurometaux) and paper (CEPI)
industries, made a joint call in
mid-May for EU member
nations to have a single measure
of recycling. They say that
reaching agreement about the
point at which material
recycling will be measured is key
(see MB Magazine April 2017
European regional review).
Their call was made to EU
Circular Economy trialogue
negotiators. EU member states
have agreed their negotiating
mandate on Circular Economy
waste proposals, paving the way
for the trialogues with the
European Commission and
parliament.
Axel Eggert, Eurofers
director general, stated: Every
institution has now
acknowledged that member
states need to start calculating
recycling rates at the same
point, which is not the case
under present legislation.
However, the parliament has
been the only institution to
propose the right solution: a
single measure without
Insight, said in a note.
Multilateral and bilateral
financing flows for
infrastructure development
projects under the One Belt
One Road initiative are already
underway in many countries,
and are expected to gain
momentum over the next three
to five years as major new
projects enter the construction
phase, he pointed out.
On the metals front, analysts
from Citi Research forecast the
whole initiative could generate
around 120 million tonnes of
crude steel demand in the
medium term, as well as 4.5
million tonnes of aluminium
derogation. Well be working
with policymakers to make the
best of the proposals, and to aim
for one measurement at the
input point of the final recycling
process. The worst possible
outcome is one where we are left
with a permanent loophole that
allows member states to
circumvent requirements.
Guy Thiran, Eurometauxs
director general, concurred:
Until we have a common
method to measure how much
of our waste gets recycled, it
doesnt matter whether the
EUs headline recycling target is
65% or 70%. EU negotiators
need to make a strong
calculation method their top
priority. We can only gauge the
realism and ambition of
recycling targets once we know
what member states will be
measuring.
CEPIs director general,
Sylvain Lhote, noted that three
of Europes recycling leaders
have united to emphasise the
importance of measuring real
recycling rates: Making the
Circular Economy happen in
Europe means we must be able
to measure the actual recycling
rate. This will allow better
targeting of investment where it
matters most.
and 1.5 million tonnes of
copper. Such volumes are
estimated based on a figure
around $900 billion worth of
direct overseas infrastructure
projects which are now either
underway or in detailed
planning stages, according to
data from the China
Development Bank, Citi
Research said.
Given its initial emphasis on
building infrastructure links
with China, the programme has
the potential to create a large
demand for industrial
commodities demand,
primarily in emerging market
countries, it added.

Middle East
Serife Durmus
Steel imports falling, buyers prefer local material
Market
participants
preferred local
material in May
as steel imports
to the region continued to fall.
In a meeting of the UAEs
Magnet discussion group in
Abu Dhabi, in May, executives
from Conares Steel, Emirates
Steel, Hamriyah Steel, Jindal
Shadeed Iron & Steel, and
Union Iron & Steel noted that
steel producers in the UAE
have enjoyed an increased
market share for locally
produced rebar recently, and
expect to see good demand
from projects in the region,
especially those related to
infrastructure developments
for World Expo 2020 in Dubai.
The current steel market
outlook for the UAE is
positive, and demand remains
stable. Consumption of rebar
in the UAE is 300,000 tpm
and we believe the country
will continue [with] the same
[level of ] consumption until the
end of the year. Local mills are
well placed to cater for this
demand until 2021, Bharat
Bhatia, ceo of Conares Steel,
said.
Africa
Bianca Markram
Tanzanian miners must list on local bourse
Tanzania will
require all
mining firms to
have at least
30% of their
shares listed on the Dar es
Salaam Stock Exchange by
August 23. If not, they risk
losing their mining licences a
move designed to make
companies earnings more
transparent to the
government, according to the
countrys president John
Magufuli.
The market share [taken by]
imported steel has decreased
significantly, allowing local
manufacturers to satisfy local
demand, Omar Al Mashour,
gm of Union Iron & Steel, added.
Steel consumption is
expected to increase by 10% in
2017 in the UAE, and domestic
production capacity is enough
to meet the demand, according
to the Magnet group.
Turkish steel exports rose to
an 11-year high of 6.90 million
tonnes in the first four months
of the year, the Turkish Steel
Exporters Assn (IB) said.
January-April steel exports
were up 23.9% year-on-year,
while the value of the exports
was also up, by 42.8% year-on-
year, to $4 billion. The country
significantly increased its
exports to East Asia, Southeast
Asia and Latin America over
the period.
[Rising] steel export prices
in global markets especially in
China [have had a] positive
impact on the Turkish steel
industry. We expect to catch
the record-breaking 2012
export figures if these
conditions last, IB chairman
Namik Ekinci said.
Tanzania initially published
the regulation to list in October
last year, requiring mining
firms to comply within two
years of publishing the law, but
the deadline to comply has now
changed to August this year.
Magufuli said in a television
broadcast in May that he wants
Tanzanians to have a greater
share in mining in their country.
The government is targeting a
10% mining share of GDP in the
next decade. Currently, mining
contributes around 5% of GDP.
Latin America
Ana Paula Camargo
Economic growth slows down
The United
Nations
Economic
Commission for
Latin America
and the Caribbean (Eclac) has
slightly reduced its growth
estimate for the region in 2017.
The regions gross domestic
product (GDP) is now expected
to expand by 1.10% this year
compared with 2016, it said at
the end of April. In December
last year, the organisation
predicted a 1.30% increase.
As in previous years, in 2017
the growth dynamics will vary
between countries and
sub-regions, according to Eclac.
The economies of South
America, specialising in the
production of primary goods
especially oil, mineral and food
will record an average increase
of 0.60%. This represents a slight
downward revision to the 0.90%
projects last December. This
years growth dynamic
contemplates a rise in external
demand for these countries and
in the prices for basic products,
which will be higher on average
in 2017 than they were in 2016.
Whereas Brazil, an iron
ore-rich country, will see its GDP
By listing these companies
on the stock exchange, we will
be able to monitor how much
[revenue] they actually get,
Magufuli said in a television
programme aired on local
stations, according to local
news reports.
With Tanzania being a major
gold-producing country in
Africa, miners that will be
affected include companies
such as AngloGold Ashanti
and Acacia Mining.
One observer noted that the
compulsory listing of mining
companies will definitely see
Tanzania benefiting more
directly from mining activities.
They suggested, for example,
that the country would have
Keep up with all our
correspondents at
www.metalbulletin.com
grow by 0.40% year-on-year in
2017, the Eclac figures show.
But the general forecast for
South Americas economic
performance is negatively
impacted by the poor scenario in
Venezuela. Eclacs estimates
indicate that the Venezuelan
economy will contract by 7.20%
in 2017. In December last year,
the organisation predicted a
4.70% reduction in Venezuelas
GDP.
Meanwhile, for Central
American economies the growth
rate is forecast at 3.60% this year,
compared with the 3.70% rise
estimated in December 2016.
This is explained primarily by
the resilience seen in domestic
demand, which is expected to be
the principal motor of growth
this year, along with a good
expansion forecast for these
economies main trading
partner, the USA, according to
the organisation.
Mexico, which has recently
emerged as the most dynamic
economy in Latin America,
overtaking Brazil as regions
largest steel consumer, is
predicted to report a GDP
growth of 1.90% year-on-year
in 2017.
gained more directly in the
recent sale of the Kabanga
Nickel Project by Barrick Gold
had it been listed on the Dar es
Salaam Stock Exchange.
The mandatory listing of
companies will also lead to
greater economic growth
because Tanzanians will be
able to own shares in
participating companies, and
therefore have ownership in
the mining of minerals from
their countrys soil. The listing
should also provide the desired
transparency that Magufuli
spoke about.
Last year, international
telecommunications
companies were also forced to
list on the local bourse.
June 2017 | Metal Bulletin Magazine | 19
Profile

5N PLUS

20 | Metal Bulletin Magazine | June 2017

Arjang Roshan
Good business is
about people and
team chemistry
As a major international producer of speciality metal and chemical
products, 5N Plus was not immune to the slump in minor metal
markets a couple of years ago. James Heywood asks Arjang Roshan,
the companys ceo appointed in 2016, about company recovery, his
approach to leadership, and the outlook for the business now

When Arjang (AJ) Roshan took
over as president and ceo of 5N
Plus, he had a tough task ahead of
him. The companys share price
was languishing at all-time lows at
the end of 2015, shortly before his
appointment, and the metal prices
to which the company was
exposed were also at multi-year
lows, further hurting the
companys bottom line.
Nevertheless, when approached to
join the stressed company, he
jumped at the opportunity, feeling
that the company was undervalued
and would present an interesting
challenge.
An American national with
much of his life spent on the east
coast and mid-west regions,
Roshan began his career as an
engineer with Ford Motor
Company some 25 years ago,
before moving to Bosch in 1995
and later joining Degussa. He
never felt entirely satisfied as an
engineer and wanted to do more
with people
Ford was my first job after
college, and I loved working with
cars. I liked engineering, but Im
not your typical engineer Im
more extroverted and like more
interaction with people as it helps
me learn, he recalls.
After Ford, he worked for Bosch
as a project manager and three
years later, when Degussa, active
in precious metals, wanted to

June 2017 | Metal Bulletin Magazine | 21

Profile

expand in North America, Roshan

took over the responsibility to
develop certain markets for them.
When I was with Degussa, I was
part of their catalyst business
which was eventually carved-out
and sold to OMG, he explains.
OMG subsequently sold that
business to Umicore.

Umicore years
I had a very good mentor at
Umicore in the US. I had a boss
who early on taught me that the
greatest legacy a manager leaves
behind is the people in his or her
team you can develop a great
business and it can disappear but if
you develop the people in the
business, years later, you can look
back and derive pleasure from
seeing them thriving. You can really
feel part of their success story and
it is a fantastic feeling so my
motivation is not purely altruistic.
What followed was years of
night school as Roshan took his
MBA with Michigan State
University and an executive
education programme with the
University of Michigan. I was
going to school at night a lot
because I wanted to learn more
about leadership and how you
develop business and put the
infrastructure there to make it industry after all. I had a lot of
more sustainable... So now Ive got respect for them and knew they
a few degrees and have put a lot of were going through some tough
money into the education system! times and thought I could do
Roshan worked for Umicore for something about it. I have
18 years in various roles across experience with turnarounds and
North America, Europe and Asia, thought I could be of help in
before moving back home to the setting the company on the right
USA. He was in charge of path.
Asia-Pacific for Umicores He explains that companies go
Automotive Catalysts business through different cycles: Some
based in Shanghai and ran the start with an entrepreneur and
region, which gave him valuable eventually need an operator you
exposure to running a business in need different skills at different
that part of the world and within times in a companys life and
the precious metals industry. evolution. I think 5N Plus has a lot
After this assignment he was asked of the basic elements needed to
to move to Europe and was put in succeed and now we need to bring
charge of a global division based in it all together and selectively foster
5N PLUS

Belgium with activities in select certain elements more than

markets linked to minor metals.
When 5N Plus came knocking,
Roshan and his family had already
lived abroad for nearly a decade,
By that time wed been outside
the US for nearly ten years and my
wife simply wanted to come
home, he explains.
others.
5N Plus is using 5N Plus beckons Having been exposed to rare
advanced technology to Roshan says he was not actively earths during the market bubble,
go further downstream looking for a job when 5N Plus Roshan is keen to move the
into markets such as came to him, but he knew the company away from metal and
special semiconductor company: Wed collaborated and commodity exposure, which for
material for medical competed [through his time with him means moving further up- and
uses Umicore] this is an incestuous downstream and away from

22 | Metal Bulletin Magazine | June 2017

commodity-grade metal and
trading mentality which inherently
seeks volatility.
I learned early on that you have
to have a very good control over
your upstream materials and have
the capability to valorise them at
competitive conditions. On the
other hand, when you go
downstream you learn quickly that
you need to be able to create added
value which is compelling.
Trading for us is a tool. Some
competitors use it as their main
business model, but for us its not.
We utilize trading to reduce volatility
for example if we need to quickly
close a position we rely on trading
but its not our primary focus.
He says that there are traders
that masquerade as industrial
players, but actually have little
downstream activities, as trading
alone may not move sufficient
volumes and the ability to offer
products ends up giving them
additional access to liquidity.
A different approach
One of the key factors that sets 5N
Plus apart from other minor
metals companies, according to
Roshan, is that it began as a
downstream product business.
Most of our competitors started
upstream and moved downstream
to access liquidity. 5N Plus on the
other hand started downstream
with emphasis on increasing value
of its product business which
utilizes minor metals. During
much of our past only moderate
efforts have been made to move
upstream. he explains.
So, if you look at how much
metal the company purchases
which is quite a bit a few years
ago, virtually all of it was
commercial-grade purchases, and
when youre doing that you dont
have a lot of leverage. Therefore, it
is only natural for us to move
upstream and improve the terms
for the metals needed for our
downstream businesses, he adds.
Best not biggest
While Roshan does not regret the
move away from engineering
although he does involve himself in
the technical side of the business
he admits that he misses the
automotive industry, which he
We want to says taught him some good lessons
on the healthy interaction between
be the best of suppliers and customers.
breed in our One of the biggest things
industry automotive business taught me
was that good companies seek to
secure win-win outcomes when
dealing with their suppliers and
customers. Ive been on both sides
[supplier and customer] and have
watched companies go after
short-term gains and tried to
squeeze and play suppliers against
each other and saw what that
ultimately did to the quality of
their product, he says.
On the other side I saw
companies building sustainable
relationships within their supply
chain and saw what a benefit that
can create. Some of the most
successful companies in that space
have learned to manage margins
while balancing market share. That
was probably one of the best
experiences I took on board from
working in the automotive
industry, he recalls.
This experience is one of the
elements driving his desire for the
company to move away from
trying to be the biggest, and
focusing on being the best a
difficult concept to define: I felt
that in the past the company was
too focused on market share. Some
of my competitors want to be the
biggest good, they can now be
the biggest, we want to be the
best!
He explains that wanting to be
the best is relative, meaning if a
competitors market cap drops by
50% and 5N Plus drops by 10%,
there is something to be said: We
want to be the best of breed, maybe
thats the better term, we want to
be the best of breed in our industry.
He elaborates that 5N Plus does
not want to be a company that has
to count on metal prices going up:
There are some hard metrics like
providing adequate Return on
Capital Employed, but there are
also some soft metrics and that is
being the preferred supplier to my
customer, preferred customer to
my suppliers, and preferred employer.
Those are the things I view as
metrics as to whether we are moving
in the right direction or not.
The market share of 5N Plus for
certain products has been
diminishing over the past two
years. Roshan believes while some
of this is competitive pressure,
much of it is associated with the
companys plan to be more
selective as he explains: We do
not intend to defy gravity, if our
value proposition is no longer
viable in a certain sector we will be
honest with ourselves. Roshan
believes market share alone is not
an adequate measure: We intend
to balance market share with
margins to ensure adequate return
for our investors.
As with compatible sectors,
Roshan clearly expresses 5N Plus
preference: We like complexity,
anything that requires a heavy
dose of technology or high-tech
requirements thats our DNA.
Having been a downstream
company, we have a different
posture, we arent interested in
short-terms gains. We look at
more of the long-term perspective,
its about customer intimacy and
understanding customer roadmap
so that we can continue to be a
long-term value-added supplier.
He stresses: We understand
there will be shifts in market share
over time, those events are part of
the ebb and flow of the business,
and we do not measure ourselves
by the volumes of metal we move.
Were interested in being close to
our customers, being close to our
suppliers and forming strategic
relationships with both parties as
experience tells us this is the right
environment for delivering
bottom line results.
Roshan believes one of the keys
to success will be moving further
upstream to allow the company to
have more competitive access to
metals something that 5N Plus
has not traditionally done, while
also investing more in technology-
intensive downstream products.
On the downstream side we
want to get involved in products
that are more complex, with
higher entry barriers. On the
upstream side, its about
influencing the most expensive
items in our COGS [Cost of Goods
Sold], and that is metal.
Reinforcing relationships
One of the more difficult
challenges that faced the
June 2017 | Metal Bulletin Magazine | 23
Profile
company was damages done
during 2015 a difficult year for
the whole minor metals market a
time when 5N Plus opted for
renegotiation and in select cases
discontinuation of certain
contracts. While this happened
prior to Roshan joining the
company he viewed the issue as
one of his priorities to address:
When you end up in this situation
your best choice is to be
transparent about the past and
look for ways to amend the
relationship this is why I
emphasise more and more having
strategic relationships with our
suppliers and not every supplier is
going to be on that list. If you look
at some of the quarterly reports,
you will notice that we have gone
through a great deal of effort to
restructure our supply contracts in
a manner which protects the
interests of both parties.
He says that, a few years back,
some market participants
displayed irrational exuberance
and moved too quickly and
without consideration for the
fundamentals: If you look at the
enthusiasm around minor metals,
the speculative buying and how
fast people were signing contracts;
in hindsight, it was a recipe for
disappointment. This being said,
the answer is not to unilaterally
demand change. By 2016, 5N
Plus had engaged its supply base to
address these issues, Our focus
was to sit down with our suppliers
and work things out. We
recognised that the situation had
changed, there were new
realities this is what I mean when
I talk about collaborative efforts to
seek win-win versus looking for
the short-term gains.
We had to do what we had to do
in 2015 it was a difficult year. Im
not going to second guess the
previous management. All Im
going to say is that, on the supply
side, we have amicably resolved all
issues and we are now focusing on
the customer topics, he adds.
Home and work
Roshan commutes between his
home in Boston and office in
Montreal every couple of weeks,
often driving between the two and
sometimes taking advantage of the
24 | Metal Bulletin Magazine | June 2017
various ski slopes in the mountain
passes of Vermont and New
Hampshire.
In a given month Im in
Montreal for at least two weeks, I
travel to our global sites one week
and then I go home. I work out of a
home office one week a month, and
try to be home on the weekends as
much as I can as Ive got small kids,
its a mix between driving and
flying to Montreal You get tired
of all those security checks and
sitting in the tin can.
This gives him time to reflect on
the key building blocks of the
company, and how he wants to
position it moving forwards. The
diversity of the industry is what
keeps things interesting. There are
so many places to get involved,
anywhere from space to consumer
electronics, pigments, energy
generation, nutrition, medical
industry, security, chemicals and
so on. A few years ago, for all intent
and purpose this company was a
solar company now its much
more than that. You look at the
minor metals space and its linked
to a number of megatrends. So I
think a good company is one that
selectively picks its place and
doesnt shoot at everything that
moves.
He says that the company has
also engaged in commercial
hedging: We look to close some of
the metal position associated with
our products in a manner which
secures our product margins and
reduces our exposure to earnings
volatility we call this commercial
hedging. People that come from
the trading side think were crazy
because they see metal prices
being low and see upside, but if you
aim to address volatility with
tactics like commercial hedging
the time for it is when metal
notations are low and there is a
reception in the market place. At
the end of the day I do not believe
anyone in our industry can
completely eliminate volatility,
this being said, good companies
with long-term perspective of the
market seek to reduce it as best as
they can.
Building teams
For Roshan, the key element for
the success of his company will
When you come from people and what he
calls team chemistry. He believes
build a strong that HR can and should be used as
team, if you an advanced function in order to
are not around give the company a competitive
the next day, advantage.
Look, with enough money, you
the business can buy anything technology,
continues to you can even buy good people, but
move forward the thing you cannot buy is
chemistry. Thats when things
come together. There has been
many soccer teams with a bunch of
superstars but no success. In
almost every case what lacked was
team chemistry, and I think this is
the most under-represented,
under-appreciated element in
running a business, he stresses.
We tend to have certain cult of
personalities in our industry where
it can be all about one person, and I
dont want to be one of those. If we
are successful and are one of the
best of breed, five years from now,
it will be our management team
that have enabled that success.
This path to success is surely more
sustainable.
He says it also means stability:
When you build a strong team, if
you are not around the next day,
the business continues to move
forward which is important for a
publicly traded company. It sounds
like lip service, but in good companies
this is visible look at Apple. After
taking over from Steve Jobs, what
Tim Cook and his team have
achieved speaks for itself.
You tend to see good CEOs
spend 30-40% of their time on
talent development, nurturing and
coaching.
Clearly Roshans heart is in the
minor metals business which he
describes as infectious and he
will continue building 5N Plus into
what he hopes will be a very
strong company based on quality
of earnings, esprit de corps, and
high-performing teams.
He concludes: I find the
industry exhilarating, in addition
to its fertile learning grounds, for
me, perhaps the most enjoyable
part of my job is about building
strong teams. We have some very
good individuals in our company,
and I see my legacy to be helping
them reach their potential as they
seek to deliver outstanding results
as a team.
People moves
Hogg joins Liberty House
Peter Hogg has left British Steel,
where he was a director, to join the
speciality steel unit of Liberty House.
Hogg has become coo of the
companys electric arc furnace
steelworks and bar mill in
Rotherham, north-west England,
BOLIDEN
which Liberty House recently
purchased from Tata Steel UK.
Additional senior appointments by
Liberty House include Jon Bolton as
ceo of Libertys speciality steels unit,
moving from his role heading up
Libertys steel development unit and
Scottish-based steel plate business,
and Chris Kirby who joins the
speciality steel division as cfo.
Centaurus non-executive
GARMCO
director
Steve Parsons has joined Centaurus
Metals board as a non-executive
director. He was previously the
founding managing director of
Gryphon Minerals, which he listed
on the Australian Securities
Exchange and grew into an ASX-200
company.
Englehart reshuffles
management
NANOSTEEL
Shon Loth will lead Englehart
Commodities Trading Partners
metals and minerals division after the
commodities trader reshuffled its
senior management. Loth was
formerly head of BTG Pactuals
warehousing and metals trading arm
before it became Englehart CTP.
The companys head trader
Ricardo Leyman, who has also been
working as ceo, will remain as chief
trader but chairman Huw Jenkins
will now become ceo.
Interim ceo at Garmco
Gulf Aluminium Rolling Mill
(Garmco) has announced that
Mohamed Essa Ebrahim, the current
general manager of operations, has
become the acting chief executive
officer.
New chief information
LIBERTY HOUSE
officer at Metso
Vesa Erolainen has been appointed
Metsos chief information officer,
reporting to cfo Eeva Sipil. Metsos
previous cio, Pirkka Penttinen, is
leaving Metso on his own initiative.
OHegarty moves to
ADM Services
Diarmuid OHegarty has joined
LME Category 2 member ADM
Investor Services as compliance
Monica Quinteiro director. OHegarty, a former deputy
ceo of the London Metal Exchange,
replaces Charles Brimble.
OHegarty, who resigned from his
role as coo at the LME in August
2013 and left the exchange in
February 2014, has also been made
an honorary member of the LME, in
recognition of his contribution to the
development of the bourse over
more than 15 years.
Mohammed
Additions to Tata Board
Essa Ebrahim Tata Steels Board of Directors has
unanimously approved the
appointment of both Aman Mehta
and Deepak Kapoor as additional
(independent) directors. Mehta has
over 39 years of experience in various
positions with the HSBC Group,
from where he retired in January
2004 as ceo Asia Pacific. Kapoor is a
former chairman of PwC India.
NanoSteels new cfo
Rhonda Landers NanoSteel has announced that
Rhonda Landers has joined as chief
financial officer. Rhonda is an
accomplished executive with
expertise in financial operations and
M&A within high-growth,
innovation-led organisations, said
David Paratore, president and ceo of
NanoSteel. Her successful track
record in value creation will be
central to our strategy as we move to
commercialisation with our sheet
steel products and expand our
offerings in metal powders for 3D
printing.
Trafigura India hires
senior trader
Trafigura India has hired Amol
Mehra as senior trader and head of
trading for its Lykos platform. Based
in Mumbai, Mehra was until recently
running his start-up VedX
International where he primarily
Peter Hogg traded base metals for three years.
Clark resigns from
Wolf Minerals
Russell Clark has resigned as md of
tungsten miner Wolf Minerals and
cfo Richard Lucas has taken over on
an interim basis. Over the last three
and a half years Russell has
transformed Wolf from an Australia-
based project developer into a UK
producer through the construction of
theDrakelandsproject,Wolfchairman
John Hopkins said in a statement.
Chiles CAP names president
The Board of Directors at Chilean
long steel and iron ore producer
Compaa de Acero del Pacfico
(CAP) has named Fernando Reitich
as its new president. He replaces
Roberto de Andraca, who resigned
after 58 years with the company. The
Board also appointed Erick Weber as
the companys new general manager.
New gm at Boliden Rnnskr
Monica Quinteiro has been appointed
general manager of Boliden Rnnskr.
She joins Boliden from a position as
gm at LKAB in Svappavaara. The
former gm, ke Roos, has moved to a
new role within the business as
product manager for by-products,
with technical responsibility for both
existing by-products and the
development of new ones.
WireCo confirms
OLearys roles
WireCo WorldGroup has confirmed
the appointment of James OLeary as
ceo and executive chairman after he
served in both roles on an interim
basis after former ceo Chris Ayers
stepped down in January. OLeary
previously served as chairman and
ceo at Kaydon Corp.
Simon Heale retires as
chairman of KAZ Minerals
Simon Heale, the non-executive
chairman of KAZ Minerals, will retire
from the board at the end of 2017
after11years,includingfiveaschairman.
He will be replacedbycurrentceoOleg
Novachuk.Andrew Southam will
become deputy ceo and cfo with effect
from July 1, 2017 and will succeed
Novachuk as ceo from January 1, 2018.
June 2017 | Metal Bulletin Magazine | 25
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Top steelmakers in 2016

Top steelmakers
steel prices started to recover in the
first quarter of 2016 and really
began to pick up steam in the
second quarter, before backing off
slightly later in the year but never

2017 edition
getting back down to 2015 levels.
After a short pause, they began to
move up again starting in late-2016
and continued climbing until they
peaked this April. Although they
could continue to ease downward
As global steelmaking capacity continues to through the second half, John
Anton, director of steel analytics for
outpace demand, mills continue to jostle for the pricing and purchasing service
advantage through strategic innovations and of IHS Markit, says that he does not
believe that they will crash. In fact,
governmental interventions on international trade. they could find some upward
support by a combination of
Metal Bulletins correspondents around the world conventional anti-dumping trade
review developments in their regional steel sectors cases, the possibility of Section 232
tariffs and the Trump
in 2016 and the consider outlook for 2017 administrations Buy American
push for both the energy and
manufacturing sectors.
NORTH AMERICA According to the American Iron While he does not believe it is
and Steel Institute (AISI), following likely, Anton says that should the
Growth year expected a 0.5% decline in 2016, US raw steel Section 232 and the Buy American
Even though it seemed as if the production had increased by 34% order both of which are at the
North American steel market had year-on-year to the end of March, discretion of US president Donald
recently peaked, all indications now allowing domestic mill capacity Trump go through in their
are that 2017 will be another utilisation to inch up from the low strongest form, they would result in
growth year. 70% level to 74.1% as of mid-May. a tightening of the US steel market
While last year was very volatile, Lastest AISI data show that and possibly as much as a 20-30%
it was definitely better than 2015, adjusted year-to-date production to rise in product prices.
which was a dreadful year, says Amy the end of 20 May 2017 was Recently, despite the numerous
Bennett, principal consultant for 34,665,000 net tons, at a capability trade cases, US steel imports have
Metal Bulletin Research, who says utilisation rate of 74.3%. That was been rising and, especially given the
this turnaround was made possible up by 3.0% from the 33,644,000 strong US dollar and the fact that
by a number of production cutbacks net tons during the same period last US steel prices are generally higher
at several US integrated producers. year, when the capacity utilisation than those elsewhere in the world,
Not only did United States Steel rate was 72.1%. they could continue to do so. US
Corp. (which has fallen one place to Steel operating rates are steel imports reached a two-year
No. 24 in Metal Bulletins global top expected to remain fairly steady high in April. AISI points out that
steelmaker rankings this year) this year despite the ramping up of US steel imports were up by 23.5%
permanently close its blast furnace Big River Steel, which began year-on-year to the end of April,
at its Fairfield, Alabama, works late production in December, and following a 14.9% decline for the
in 2015, it also idled its Granite Commercial Metals Corps second full year in 2016.
City, Illinois, mill. While it restarted rebar mini-mill later this year in Volatile steel raw material prices
the finishing end at Granite City Durant, Oklahoma. According to have been, and continue to be, a big
early in 2017, the hot end of that Christopher Plummer, managing factor in the US steel market.
mill remains closed and US Steels director of Metal Strategies Inc, Plummer points out that after
plans to add an electric arc furnace while Acero Junction the former they more than doubled last year
(EAF) at Fairfield remain Wheeling Pittsburgh Mingo there has recently been a sharp
indefinitely on hold. Junction, Ohio, mill was reversal.
Also, late in 2015 AK Steel Corp. reopened this year, its hot end Underlying steel demand has
(which has fallen to No. 64 from No. remains closed, at least for the time been fairly steady. Bennett notes
62) idled its Ashland, Kentucky, being. that while automotive demand is
mill, and has no immediate plans to While there were also a number easing somewhat, energy and
restart it. ArcelorMittal SA (which of trade cases filed in 2015 and construction demand is picking up,
remains No. 1) had idled one of its 2016 and even a few in 2017 although not booming. On the
two blast furnaces at its Indiana Bennett says it was largely because whole we are optimistic about
Harbor West works, but brought it of these production cutbacks, as 2017, she says.
back on-line earlier this year. opposed to the trade cases, that Myra Pinkham

June 2017 | Metal Bulletin Magazine | 27

Top steelmakers in 2016
Ranking Company Country of origin/ 2015 2016
2 016 2015* Main domicile Output Output
1
1 ArcelorMittal SA
Luxembourg
92,500 90,800
- 2 New Baowu Steel Group 1
China - 63,805
3
3 Nippon Steel & Sumitomo Japan 44,530 45,170
Metal Corp 42 44 Zenith Steel Group China 9,082 9,240
4 2 Hesteel Group Co Ltd 2
China 47,745 44,919
5 4 POSCO Korea (South) 42,199* 42,210
6 6 Jiangsu Shagang Group Co Ltd China 34,200 33,250
7 8 Anshan Iron & Steel (Group) Corp China 31,582 33,194
8 7 JFE Steel Japan 32,414 33,138
9 9 Shougang Group China 28,553 26,797
10 11 Tata Steel Ltd India 22,902* 24,185
11 12 Shandong Iron & Steel Group China 21,692 23,017
12 13 Hyundai Steel Co Korea (South) 20,455 20,436
13 14 Nucor Corp 3 United States 17,503* 19,307
14 15 Maanshan Iron & Steel Co Ltd China 18,820 18,630
15 16 ThyssenKrupp AG Germany 17,200 17,240
16 20 Jianlong Group China 15,141 16,500
17 19 Novolipetsk Steel (NLMK) Russia 15,855 16,440
18 25 SAIL - Steel Authority of India Ltd India 14,390 16,117
19 30 JSW - Jindal South West Steel Ltd India 12,560* 15,800
20 17 Gerdau SA Brazil 16,862 15,677
21 22 Valin Group China 14,874 15,482
22 24 China Steel Corp Taiwan 14,480 14,890
23 21 Benxi Iron & Steel (Group) China 14,991 14,402
Special Steel Co Ltd
24 23 United States Steel Corp United States 14,600 14,218
(US Steel Corp) 62 64 Minmetals Yingkou Medium China 5,680 5,776
25 27 Rizhao Steel Group China 13,999 13,856
26 29 Fangda Group China 13,214 13,677
27 28 Hebei Xinwuan Iron & China 13,461 13,669
Steel Group
28 26 Evraz plc Russia 14,351* 13,527
29 31 Magnitogorsk Iron & Steel Russia 12,236 12,544
Works - MMK
30 32 Baotou Iron and Steel China 11,863 12,303
(Group) Co Ltd
31 33 Severstal Russia 11,451 11,630
32 35 Liuzhou Iron & Steel Co China 10,827 11,051
33 39 Jinxi Iron & Steel Group Co Ltd China 9,768 11,050
34 34 Hebei Jingye Group China 11,317 11,013
35 36 Anyang Iron & Steel Group China 10,740 10,483
Co Ltd (AISCO)
36 42 Fujian Sansteel (Group) Co Ltd China 9,575 10,389
37 38 TISCO - Taiyuan Iron & Steel China 10,256 10,282
(Group) Co Ltd
38 37 Handan Zongheng Iron China 10,380 10,232
& Steel Group Co Ltd
28 | Metal Bulletin Magazine | June 2017
Ranking Company Country of origin/ 2015 2016
2 016 2015* Main domicile Output Output
39 40
40 41
Pingxiang Iron & Steel Co Ltd
Techint Group
(Ternium SA) 4
China 9,672 10,081
Luxembourg 9,600 9,764
41 45 Panzhihua Iron & Steel Group China 8,968 9,267
43 46 Erdemir Turkey 8,930 9,185
44 48 Nanjing Iron & Steel United China 8,590 9,009
Co Ltd (NISCO)
45 55 Steel Dynamics Inc 5 United States 7,737* 8,621
46 47 Xinyu Iron & Steel Co Ltd China 8,644 8,570
47 53 CITIC Pacific China 7,612 8,404
48 52 Metinvest Holding LLC Ukraine 7,669 8,393
49 54 SSAB AB Sweden 7,593 7,988
50 50 voestalpine Group Austria 7,740 7,470
51 60 Esfahans Mobarakeh Steel Co Iran 6,978 7,460
52 57 Shaanxi Iron & Steel (Group) China 7,466 7,303
Co Ltd
53 56 Kobe Steel Ltd Japan 7,520 7,259
54 59 Celsa Group Spain 7,078 6,942
55 49 Tangshan Guofeng Iron & Steel China 8,292 6,898
56 61 Salzgitter AG Germany 6,652 6,804
57 58 Riva Forni Elettrici Italy 7,460 6,320
58 73 Jiangsu Binxin Special Steel China 4,483 6,058
Material Co Ltd
59 92 Tangshan Donghai Iron & China 3,301 5,901
Steel Group Co Ltd
60= 66 Tsingshan Holding Group China 5,380 5,800
60= 69 Ilva SpA Italy 4,700 5,800
Plate Co Ltd
63 51 Jiuquan Iron & Steel (Group) China 7,685 5,500
Co Ltd (JISCO)
64 62 AK Steel Corp 6 United States 6,431 5,490
65 65 Saudi Iron Steel Co (Hadeed) Saudi Arabia 5,229* 5,461
66 77 BlueScope Steel Ltd 7 Australia 4,215 5,430
67 95 Essar Steel Ltd India 3,250 5,220
68 70 Lingyuan Iron & Steel China 4,638 4,880
(Group) Co Ltd
69 71 Jindal Steel & Power Ltd India 4,520 4,800
70 72 Metalloinvest Holding Co Russia 4,501 4,662
71 74 Ahmsa - Altos Hornos de Mexico 4,460 4,650
Mexico SA de CV
72 75 Quzhou Yuanli Metal Co Ltd China 4,387 4,392
73 76 Mechel OAO (Mechel) Russia 4,321 4,252
74 84 Rashtriya Ispat Nigam Ltd, India 3,640 4,175
Visakhapatnam Steel Plant
(Vizag Steel)
75 80 Zaporizhstal Integrated Iron Ukraine 3,979 3,891
& Steel Works JSC
 Ranking Company Country of origin/ 2015 2016
2 016 2015* Main domicile Output Output
76 67 CSN - Companhia Siderurgica Brazil 5,200 3,800
Nacional
77 93 Ezz Steel Co Egypt 3,281 3,700
78 91 Delong Holdings Ltd China 3,306 3,686
79 89 Henan Jiyuan Iron & Steel China 3,405 3,603
Group Co Ltd
80 82 Nisshin Steel Co Ltd Japan 3,790 3,600
81 88 Khouzestan Steel Co (KSC) Iran 3,441 3,590
82 96 Shandong Shiheng Special China 3,138 3,541
Steel Group Co Ltd
83 86 Tianjin Rockcheck Steel Group China 3,553 3,507
Co Ltd
84 79 Shanxi Jincheng Steel Holding China 4,000 3,502
(Group) Co Ltd
85 83 Hebei Qianjin Steel Group Co Ltd China 3,651 3,495
86 133 Hebei Tianzhu Iron & Steel China 1,839 3,490
(Group) Co Ltd
87 81 Xinxing Ductile Iron Pipes Co China 3,833 3,475
88 87 Commercial Metals Co 8
United States 3,482 3,453
89 90 Dongkuk Steel Mill Co Ltd Korea (South) 3,322 3,287
90 94 Shandong Taishan Iron China 3,260 3,283
& Steel Co Ltd
91 100 Diler Group Turkey 3,000 3,200
92 99 Emirates Steel United Arab Emirates 3,006 3,149
Industries PJSC
93 68 Usiminas - Usinas Siderurgicas Brazil 5,007 3,143
de Minas Gerais SA
94 119 Industrias CH SA de CV Mexico 2,449 3,080
95 98 Tangshan Ganglu Iron & Steel China 3,068 3,066
Co Ltd
96 109 Sichuan Tranvic Group Co Ltd China 2,663 3,023
97 111 Hebei Wenfeng Iron and China 2,616 3,005
Steel Co Ltd
98 112 Yancheng Lianxin Iron & Steel China 2,582 2,977
Co Ltd
99 101 Acciaieria Arvedi SpA Italy 2,988 2,947
100 78 Icdas Celik Enerji Tersane ve Turkey 2,940* 2,940
Ulasim San AS 9
101 102 Deacero SA de CV 10
Mexico 2,873 2,873
102 116 Changshu Longteng Special China 2,519 2,870
Steel Co Ltd
103 113 T ineck elezrny as Czech Republic 2,528 2,859
104 103 Weifang Special Steel Group China 2,801 2,805
Co Ltd
105 107 Lengshuijiang Iron & Steel China 2,750 2,796
Group Co
106 104 Shanxi Zhongyang Iron and China 2,797 2,777
Steel Co Ltd
107 124 ESCO - Esfahan Steel Co Iran 2,287 2,750
108 105 OAO TMK Russia 2,782 2,738
Ranking Company Country of origin/ 2015 2016
2 016 2015* Main domicile Output Output
109 114 Zhuhai Yueyufeng Iron & Steel China 2,521 2,564
Co Ltd
110 110 Qatar Steel Co Qatar 2,619 2,544
111 123 Acerinox SA Spain 2,320 2,475
112 106 Saarstahl AG Germany 2,779 2,451
113 122 Outokumpu Oyj 11 Finland 2,381 2,444
114 117 Xingtai Iron & Steel Co Ltd China 2,512 2,414
115 128 Shanxi Jianbang Group China 2,171 2,394
116 126 Feralpi Group Italy 2,223 2,390
117 125 Badische Stahlwerke GmbH Germany 2,243 2,372
118 85 Chongqing Iron & Steel China 3,589 2,350
(Group) Co Ltd
119 130 Bazhou Xinli Iron & Steel Ltd China 2,128 2,336
120 121 AG der Dillinger Huttenwerke Germany 2,401 2,267
121 127 Tokyo Steel Manufacturing Japan 2,189 2,241
Co Ltd
122 118 Belorussian Steel Works (BMZ) Belarus 2,510 2,193
123 134 Colakoglu Metalurji AS Turkey 1,800 2,150
124 97 Dazhou Iron & Steel Co China 3,102 2,096
125 131 Jinding Heavy Industries Co Ltd China 2,095 2,007
All figures in thousand tonnes
1 Baowu is the result of the merger between Baosteel and Wuhan Iron & Steel
2 Listed as Hebei Iron & Steel Group Co Ltd in last years ranking
3 Nucor figure converted from reported figures in US tons to (metric) tonnes
4 Terniums figures are shipped steel
5 Steel Dynamics figure converted from reported figures in US tons to (metric) tonnes
6 AK Steel Corp figure represents volume of shipments rather than crude steel production
- converted from reported figures in US tons to (metric) tonnes
7 Bluescope figure for 2016 includes 100% of production from North Star Bluescope Steel (2015
figure includes 50% of production as Cargill previously owned 50% of the shares)
8 Commercial Metals Co figure converted from reported figures in US tons to (metric) tonnes
9 Icdas 2016 figure unavailable so figure for 2015 has been repeated
10 Deacero 2016 figure unavailable so figure for 2015 has been repeated
11 Outokumpu figure is for delivered tonnages rather than production
Ranking movement: Up Down Unchanged New entries this year
*Based on updated 2015 crude steel output
ISDonbass not included this year due to data being unavailable
June 2017 | Metal Bulletin Magazine | 29
Top steelmakers in 2016
CIS
Mixed fortunes
Ukraine
For Ukraine, 2017 started with
challenges, stemming from the
lingering conflict in the east of the
country that has had a dramatic
effect on the local steel industry.
The blockade of railroad that
connects areas controlled by the
Kiev-based central government and
pro-Russia separatists in the Donetsk
and Luhansk regions, which started
in late January, resulted in the
disruption of raw material supply to
the mills in both territories.
Consequently, some mills had to
reduce steel output, while others
were forced to stop production
completely.
In the list of idled mills today are
Alchevsk Metallurgical Plant
(AMK), specialising in slab and plate
production, as well as Dneprovskiy
Dzerzhinskiy Metallurgical Plant
(DMKD) producing billets and long
steel, both owned by Industrial
Union of Donbass (ISD). Ukrainian
pig iron producer Donetskstal
(DMZ) as well as Metinvests billet
and long steel mill Yenakiieve Iron &
Steel Works are also idled.
Other mills, including Metinvests
Ilyich Iron & Steel Works, Azovstal
Iron & Steel Works and
ArcelorMittal Kryvyi Rih, suffer
from the lack of raw materials
metallurgical coke in particular.
Over the first four months of
2017, the countrys crude steel
output dropped by 15% year-on-
year, to around 7 million tonnes,
according to national steelmakers
union Ukrmetallurgprom.
Meanwhile, rolled steel sea
shipments slumped 25% year-on-
year over that period, to 3.18 million
tonnes, according to Ukraines Sea
Trade Ports Administration.
In 2016, Ukraine produced 24.20
million tonnes of crude steel up by
6% year-on year while rolled steel
sea shipments totalled 11.26 million
tonnes up by 2.5% year-on-year.
Russia
Russian steelmakers managed to
maintain stable production levels in
2016 as they boosted exports, while
domestic steel demand was falling.
While the risk and the actual
introduction of anti-dumping duties
30 | Metal Bulletin Magazine | June 2017
might worry some Russian
steelmakers, skyrocketing export
prices rendered some comfort.
Russia produced 70.8 million
tonnes of crude steel last year, down
by 0.10%, according to the World
Steel Association (worldsteel). Steel
consumption in the country
dropped by 3.90% to 38.10 million
tonnes in 2016, while GDP fell very
slightly by 0.2%.
Meanwhile, the countrys
steelmakers boosted their flat steel
product exports by 12% in 2016 to
8.93 million tonnes, according to the
countrys Customs Service.
Semi-finished product exports went
up by 4% to 15.17 million tonnes,
according to the service.
CIS semi-finished and flat steel
exporters enjoyed two waves of
price spikes in 2016: one in
March-May, and the second starting
in September and continuing to the
end of the year.
Metal Bulletins assessment of
CIS export HRC prices grew by
96%, or by $242.50 per tonne on
average, in the course of 2016, to
$490-500 per tonne fob Black Sea at
the end of the year. The assessment
for CIS export billet went up by 56%,
or by $142.50, over the year to stand
at $390-400 per tonne fob Black Sea
at the end of 2016.
Meanwhile, the European
Commission introduced definitive
retroactive duties on CRC from
Russia, as well as China, in August
last year, which prompted the
Russian suppliers to divert their
trade flows elsewhere.
The Commission also started an
anti-dumping probe into imports of
HRC from five countries, including
Russia and Ukraine in July.
However, the body stepped back for
a while, deciding not to introduce
preliminary duties on the material
from the countries in early April.
2017
This year, worldsteel expects
Russian steel consumption to rise by
1.80% to 38.80 million tonnes, in
line with the growing economy. The
countrys GDP is expected to go up
by 1.50% this year, according to a
latest United Nations report.
The results of the first months of
the year are showing some promise.
The countrys crude steel
production went up by 4.10%
CIS semi- year-on-year in the first quarter of
2017 to 17.953 million tonnes,
finished and flat according to worldsteel. The
steel exporters production growth was, apparently,
enjoyed two supported by the higher output at
some of the end-users.
waves of price Output of steel pipes, hollow
spikes in 2016 sections and their fittings output in
the first four months of 2017 went
up by 7.50% year-on-year to 1.9
million tonnes, according to the
Russian statistics service (Rosstat).
Russias passenger car production
went up by 22.30% year-on-year to
423,000 units.
However, the construction sector,
the main steel user in the country,
appeared less comfortable. The
volumes of the housing introduced
to the market in January-February
2017 went down by 20% year-on-
year to 8.2 million sq metres,
according to Russias Agency for
Housing Mortgage Lending.
The growth in domestic demand,
if it takes place, is a mixed blessing
for the countrys steelmakers,
according to Russian investment
bank BCS analyst Kirill Chuyko:
The steel demand growth is caused
by the robustness of oil prices, which
also leads to the strengthening of the
rouble this, in its turn, results in
the lower exports revenue
denominated in roubles.
On other fronts, export prices
have continued generally to stick to
their high levels reached at the end of
2016. Also, market participants said
the non-introduction of the
preliminary anti-dumping duties on
the Russian and Ukrainian HRC by
the European Commission was a
good sign, and there was a hope
that the final duties will not be
introduced later this year.
Nadia Popova,
Vlada Novokreshchenova
EUROPE
Domestic versus imports
Stronger demand and higher prices
boosted European steelmakers over
the fourth quarter of 2016 and the
first three months of 2017.
However, concerns about under-
priced imports remain, while steel
prices have been softening as the
second half of 2017 approaches.
Crude steel production in the EU
fell by 2.34% to 162.29 million
tonnes in 2016, according to the
World Steel Association, as a
number of EU steelmakers lowered
their production output as a part of
efficiency and cost-saving measures,
following the price trough of late
2015 and early 2016.
EU steel prices rose sharply in the
fourth quarter of 2016 on the back
of a surge in iron ore, scrap and
coking coal prices, after China had
announced that it was limiting the
number of working days of coal
mines to 276 days a year, down from
330 days per year.
Metal Bulletins assessment for
Northern European domestic hot
rolled coil (HRC) rose by 90-100
(about $95-105) per tonne over the
month to 540-550 (about
$567-578) per tonne on 30
November.
ArcelorMittal, retaining its
position as the worlds largest
steelmaker in 2016, was at the
forefront of driving price increases
for both flat and long steel products.
The Luxembourg-headquartered
producer reported an operating
profit of 1.27 billion (about $1.35
billion) for its European operations
in 2016, up sharply from 171
million (about $181 million) in
2015.
Improved buying activity in the
first quarter of 2017 and limited
imports sustained the higher HRC
price levels, which reached a near
six-year peak of 560-580 ($605-
626) per tonne ex-works Northern
Europe on 22 March.
However, prices gradually
weakened on the news that the
European Commission (EC) had
declined to impose provisional
duties on hot rolled flat steel
products from Brazil, Iran, Russia,
Serbia and Ukraine on 10 April. A
decision on final duties is expected
to be announced by 6 October.
European steelmakers remain
critical of the speed at which the
ECs investigations are conducted,
and the level at which anti-dumping
(AD) duties are imposed on
under-priced imports.
According to regional steel
association Eurofer, steel demand in
Europe rose by 3.20% year-on-year
in 2016, while imports increased by
9% over the same period, preventing
domestic steelmakers from taking
advantage of the sectors growth. In
the second half of 2016, imports to
the EU hit an all-time- high market
share of 24%, Eurofer said.
In late 2016, the EC proposed
shorter investigation periods as well
as a new anti-dumping calculation
method to combat under-priced
steel imports from state-backed or
state-owned organisations. The
latter was a response to the
expiration of a provision in Chinas
2001 World Trade Organisation
(WTO) accession agreement on 11
December 2016, which meant other
countries could treat it as a
non-market economy. The WTO
set up a dispute panel in April after
China complained that the EU has
continued to consider the Asian
country as a non-market economy in
anti-dumping investigations.
Flat steel imports related to trade
cases opened by the EC totalled
478,800 tonnes in the first quarter
of 2017, according to regional steel
trade federation Eurometal. This
was down by 76.44% from over 2
million tonnes in January-March
2016, though producers argue more
can be done against under-priced
imports.
Meanwhile, asset sales and
consolidation look to further
reshape the European steel industry
this year. Indias Tata Steel 10th
among global steelmakers remains
in discussions with Germanys
ThyssenKrupp ranked 15th to
merge their European flat steel
operations. The Indian steelmaker is
edging towards a solution to ending
its participation in the British Steel
Pension Scheme a stumbling
block to any potential merger.
Troubled Italian steelmaker Ilva is
also expected to be sold this
summer, with ArcelorMittal and
Italian reroller Marcegaglias joint
bid considered the favourite by
analysts, ahead of the consortium
led by Indias JSW Steel 19th in
the ranking and Italys Arvedi,
which is placed at 99th.
The European steel exporters will
be awaiting the outcome of the
USAs Section 232 investigation
into whether steel imports pose a
threat to national security, after US
president Donald Trump signed a
memorandum on 20 April.
Concerns also remain over the
planned ambitious fourth phase of
the EUs Emissions Trading System,
which will run from 2021 to 2030.
Eurofer has said that the plan would
negatively affect investment in the
European steel industry. Market
participants will also be watching
the UKs Brexit negotiations with
the EU closely.
Despite these uncertainties, total
activity in EU steel-using sectors,
including construction and
automotive, is forecast to grow by
just over 2% per year in 2017
and 2018.
Viral Shah
ASIA
Welcome to Baowu
Of all the major developments in the
Asian steel industry last year,
arguably the most important one
has to be the merger between
Baosteel and Wuhan Iron & Steel
(Wugang) two of the biggest
steelmakers in China.
Talks about consolidation in the
Chinese steel industry had been
around for years, but rumours about
big mergers repeatedly failed to
materialise into real transactions.
This time, however, official
announcements about the potential
deal were made at the end of June
last year by both Baosteel and
Wugang and as soon as early
December, the companies were
holding an opening ceremony in
Shanghai. With 228,000 employees
and assets totalling 730 billion yuan
($106 billion), the new entity, called
Baowu Steel Group, was expecting
to generate an annual revenue of at
least 330 billion yuan ($48 billion), it
announced back then.
While talks about other mergers
among Chinese mills have yet to
become real most notably a
much-rumoured one between
North-eastern Chinas Anshan Iron
& Steel (Angang) and Benxi Iron &
Steel the emergence of Baowu
itself already sets a ground-breaking
division for the countrys industry.
Baowu has immediately become
the worlds second-largest
steelmaker, with an output of 63.80
million tonnes of crude steel in
Total activity 2016. If it is true that is still far away
in EU steel- from the 90.80 million tonnes
using sectors is produced by ArcelorMittal last year,
forecast to grow it is also true that number is much
larger than the 45.17 million tonnes
by just over 2% registered by Japans Nippon Steel
per year in 2017 & Sumitomo Metal Corp
June 2017 | Metal Bulletin Magazine | 31
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Top steelmakers in 2016
(NSSMC), which means Baowu will
be comfortably established in the
second position for the time being.
NSSMC, it is worth mentioning,
managed to beat Chinas Hebei Iron
& Steel Group (Hesteel) by just over
250,000 tonnes, one year after
seeing the Chinese rival take its No.2
spot in 2016s ranking. Because of
Baowu, however, the Japanese
steelmaker ranks third in this years
list.
Other Asian mills had mixed fates
in last years list of the worlds largest
steelmakers. Japans JFE Steel, for
instance, moved from the seventh to
the eighth place, displaced by
Chinas Angang because of a mere
difference of 55,600 tonnes
33.194 million tonnes against
33.138 million tonnes. Indias Tata
Steel, on its turn, saw its output
increase 1.28 million tonnes to
24.18 million tonnes last year,
moving from eleventh to tenth.
Two other Indian mills, Steel
Authority of India (SAIL) and Jindal
South West Steel (JSW), registered
even more remarkable results. SAIL
moved from No.25 to No.18 with
an increase of 1.72 million tonnes in
its output, while JSW saw a boost of
3.49 million tonnes last year, which
took it to No.19 from No.30 in the
ranking.
For now, the spotlight remains on
China and on the capacity cuts being
implemented on its steel industry as
part of the countrys supply-side
reform. In January 2016, the
Chinese government set out a target
to eliminate 100-150 million tpy of
crude steelmaking capacity over a
five-year period, with more than 65
million tpy achieved in 2016 and a
further 50 million tpy planned for
2017.
Capacity cuts coupled with other
mergers would bring a
much-needed relief to Chinas
fragmented steel industry, which
has been partially behind the pricing
pressure seen on the metal for the
past several years. In a conference at
the end of December, Gu Jianguo, a
vice- president at the China Iron &
Steel Assn (Cisa), noted the steel
industry concentration ratio was
still very low in the country, with the
top-ten biggest mills controlling
only around 30% of the market.
In that sense, the so-called
megamergers, like the one between
Baosteel and Wugang, would need
to continue taking place, Gu said.
The rest of the world will be surely
watching and hoping.
Juan Weik
LATIN AMERICA
Tough markets
In Latin America, 2016 was
considered one of the toughest years
if not the most difficult for the
steel industry.
The Brazilian steel sector went
through its worst ever crisis last
year, with local demand levels
reaching their lowest annual volume
since 2009s 18.80 million tonnes.
Apparent steel consumption
amounted to 18.20 million tonnes in
2016, down 14.40% compared with
2015, according to national steel
institute Ao Brasil.
Brazils political crisis, which
resulted in the impeachment of
president Dilma Rousseff at the end
of August 2016, has contributed to
worsening national economic
conditions, affecting the countrys
industrial sector.
In this scenario, crude steel
output in Brazil fell by 9.15%
year-on-year in 2016, to 30.21
million tonnes from 33.26 million
tonnes, Ao Brasil figures show.
Brazil-based companies present
in Metal Bulletins Top Steelmakers
list, such as Gerdau, Usiminas and
CSN, all cut production last year,
including the shutdown of some
steelmaking facilities. Long
steel-focused producer Gerdau,
ranked 20 in the MB list, saw its
global crude steel output drop to
15.68 million tonnes in 2016 from
16.86 million tonnes a year before.
Ranked 93 in the MB list,
flat-rolled steelmaker Usiminas
reported a crude steel production of
3.14 million tonnes last year, down
from 5 million tonnes in 2015. And
CSN, ranked 76 in the list, saw its
crude steel output plunge to 3.80
million tonnes from 5.20 million
tonnes in the same comparison.
In Mexico, meanwhile, apparent
steel consumption increased to
25.40 million tonnes in 2016 from
24.20 million tonnes in 2015,
according to figures published by
the World Steel Association. But
most of this increase in local demand
was met by imported goods.
Altos Hornos de Mxico
(Ahmsa), the best-ranked Mexican
steel mill in the Top Steelmaker list,
in position 71, saw its output slightly
rise to 4.65 million tonnes last year,
from 4.46 million tonnes in 2015, as
a result of the ramp-up process of an
expansion project. In terms of
financial results, however, the
company reported a net loss of 3.17
billion Mexican pesos ($101.70
million) in 2016, an improvement
from a net loss of 4.28 billion
Mexican pesos ($137.31 million) in
the previous year.
Mexican steel producers have
been severely affected by the
entrance of low-priced steel
imports, which forced them to
reduce output levels and diminish
sales prices in the domestic market.
2017
In April this year, the Mexican
government, in an attempt to
protect the national steel industry,
has extended, for a third time, a 15%
tariff imposed on imports of slab,
hot rolled coil, heavy plate, cold
rolled coil and wire rod.
The duty will be valid for a further
six-month period from 7 April
2017, according to the countrys
Economy Secretariat. The lack of
conditions for healthy competition
between steel industries of different
countries persists, making
necessary the renewal of the 15%
tariff against imports, the
Secretariat said at that time.
Ahmsa has welcomed the
measure, saying that the extension
of the 15% duty guarantees the
continuity of Ahmsas operations
and investments to supply
high-added value products.
In Brazil, meanwhile, local
steelmakers continue operating
amid a slower-than-expected
market recovery, with a rebound in
the Brazilian market expected to
start to be seen in the second half of
this year.
In Brazil At the end of April, Ao Brasil has
steelmakers reduced its forecast for steel sales in
2017, due to the weak performance
continue of the countrys economy. The
operating association now expects domestic
amid a slower- steel sales to reach 16.70 million
than-expected tonnes this year, down from its
previous prediction of 16.92 million
market tonnes, published in November
recovery 2016.
June 2017 | Metal Bulletin Magazine | 33
Top steelmakers in 2016
Gerdau, for instance, predicted in
early May a gradual recovery for
the Brazilian steel sector. The
biggest challenge [for Brazilian
steelmakers] is the revival of the long
steel market, Gerdau ceo Andr
Gerdau Johannpeter said. We used
to have an annual long steel demand
of 9.50-10 million tonnes, but
current levels are 6-6.50 million
tonnes.
Usiminas, meanwhile, announced
in mid-May that it will restart the
No. 1 blast furnace at its Ipatinga
works, in the countrys south-eastern
Minas Gerais state, in April 2018.
This move may be considered one
of the first signs of a positive
perspective for Brazils steel
industry. In May 2015, Usiminas
decided to temporarily halt
operations at the No. 1 blast furnace
at Ipatinga, as well as the No. 1 unit
at its Cubato works, in So Paulo
state, because of weak market
conditions.
Ana Paula Camargo
MIDDLE EAST
Production and protection
Middle East crude steel production
increased by 7.60% in 2016, with a
total output of 29.03 million tonnes
compared with 26.97 million tonnes
in 2015. The Middle East and North
Africa (Mena) region will continue
to see steel demand growth in the
years to come despite short-term
challenges, regional executives said
at the worldsteel 50th conference in
Dubai, UAE, on 11 October 2016.
Demand is always there in the
region. Potential has always been
there. Construction is always a
driver behind steel, Saeed
Ghumran Al-Romaithi, ceo of
Emirates Steel, said.
The steel producers in the region
continued to focus on encouraging
use of local products rather than
imports, and to look for ways to limit
imports and bring in new
regulations.
The import duties imposed on
rebar imported to the Gulf
Co-operation Council (GCC) region
must, and soon will be, increased to
at least 10% from the current 5%,
Naushad Ansari, ceo of Omans
Jindal Shadeed Iron & Steel said in
an interview on the sidelines of
Metal Bulletins 20th Middle East
34 | Metal Bulletin Magazine | June 2016
Iron & Steel Conference in Dubai
(MEIS 2016) on December 12-14
December 2016.
Rebar production capacity in the
GCC is much higher than [local]
demand. And while we have very
low import duties compared with
other countries in the world, our
production costs keep rising due to
increases in the prices for power and
natural gas, he said, adding: How
will producers survive and compete
with low-priced imports?
Saudi Arabian flat steel coater
Unicoil is focusing on the
standardisation and use of
high-quality coils, while highlighting
the disadvantages of low-quality
imported coated coils. The
company is working with the Saudi
Standards, Metrology and Quality
Organization (SASO) to establish
high standards.
GCC countries started a safeguard
investigation into coated flat carbon
steel in widths of 600 mm and
above, under import tariff codes
721070 and 721090, in June 2016,
after an application filed by Unicoil.
UAE
Crude steel production in the UAE
totalled 3.15 million tonnes in 2016,
up by 4.76% on an annual basis from
3.01 million tonnes in 2015.
In September 2016, rebar
industry participants in the UAE
met to discuss ways to promote the
use of locally produced rebar and to
stem the increasing volumes of
cheap imports, particularly those
from China and Turkey. They
formed the Magnet initiative.
Several Magnet meetings have been
held since then, with the focus to
reduce dependency on imports.
Members of Magnet include
Emirates Steel, Conares Steel, Jindal
Shadeed Iron and Steel, Hamriyah
Steel and Union Iron & Steel. In
May 2017, they noted that steel
producers in the UAE have enjoyed
an increased market share for locally
produced rebar recently, and expect
to see good demand for continuing
projects in the region, especially
those related to infrastructure
developments for the World Expo
2020 in Dubai.
Current market sentiment is
positive. We are here to encourage
the UAE infrastructure
development sector to use steel
The Middle East products made locally, especially
government sector projects, Saeed
and North Africa Ghumran Al-Romaithi, said.
(Mena) region The UAE applies 250 dirhams
will continue ($68) per tonne duty on scrap
to see steel exports from the UAE, and this
helped local producers source their
demand growth raw materials, according to
in the years to Emirates Steel.
come
Iran
Iran recorded the highest crude steel
output in the region, with 17.90
million tonnes, up by 10.83% from
16.15 million tonnes in 2015. The
country ranked as the 14th largest
steel producing nation in 2016 the
same rank it held in 2015.
In the last Iranian year (20 March
2015 to 21 March 2016), the
countrys apparent steel
consumption was assessed as 15-16
million tonnes, according to
estimates by market participants.
This was down by around 1-1.5
million tonnes year-on-year. The
problem is in the lack of investments
in steel-consuming sectors, a
producer told Metal Bulletin in
December 2016.
The World Bank expects growth
in gross domestic product (GDP) of
around 4% for Iran this year, with
increased activity in the oil & gas
sector contributing 2.60% of this
growth. The balance will come from
the services sector.
However, steel-intensive sectors
such as construction and
infrastructure are not expected to
show sizeable growth until later in
2017. The countrys government
plans to increase annual steel output
to 55 million tonnes by 2025, with
the largest portion of steelmaking
projects to be commissioned in the
next three years.
Saudi Arabia and Qatar
Saudi Arabia produced 5.46 million
tonnes of crude steel in 2016, a
4.44% increase compared with 5.23
million tonnes a year earlier,
according to worldsteel data.
Demand for rebar imports
remained weak in 2016, and so far in
2017, as local material was
sufficient.
Qatar produced 2.52 million
tonnes of crude steel in 2016, a drop
of 2.78% from 2.59 million tonnes a
year earlier.
Serife Durmus
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Turkish steel
Optimism grows for
Turkish steel
Turkeys unique geographical position in straddling markets
of the east and west, together with its prominent role as a
ferrous scrap importer, means the country always provides an
interesting window on international steel trade. Serife Durmus
and Cem Turken review Turkeys steel prospects
Turkish flat steel producers have
enjoyed strong demand in export
markets while continuing to look
for ways to support local
production in the face of imports
in 2016 and early 2017.
Production volumes have
increased during the first quarter
of 2017, while further increases in
output are forecast.
By contrast, long steel
producers struggled in export
markets in 2016 and are looking
for new destinations to replace
those lost in current markets. They
remain hopeful about 2017, with
expectations of better demand and
stronger prices.
36 | Metal Bulletin Magazine | June 2017
Meanwhile, other countries
protectionist moves against Turkeys
exports, the nations political
problems and those of surrounding
regions have been the main obstacles
for the nations steel industry.
FLAT PRODUCTS
Slab production in Turkey was
3,783,000 tonnes in January-April
2017, up by 26.23% from
2,997,000 tonnes in the first four
months of 2016. Flat steel
end-product consumption was
4.31 million tonnes in January-March
2017, up by 2.60% year-on-year.
Turkeys domestic hot rolled
coil (HRC) price, which was
$570-580/tonne ex-works on 20
May 2016, fell as low as $400-410
/tonne in August 2016, but had
recovered to $500-505/tonne by
mid-May 2017.
Import trade measures
Turkey has taken a number of steps
to protect its own markets from
imports. For example, the Turkish
Ministry of Economy started an
anti-dumping investigation into
steel plate imported from China,
the countrys Official Gazette
reported on 21 December 2016.
The countrys biggest steel
producer, Erdemir, made the
application for the investigation,
which relates to heavy steel plate
under 18 HS codes.
SHUTTERSTOCK
In June last year, the country set
a definitive anti-dumping duty of
23.40% for pre-painted galvanized
The automotive iron (PPGI), or colour coated coil,
industry is one imported from China. The
of the biggest products subject to duty are under
steel-consuming HS customs codes
sectors for Turkeys 7210.70.80.90.11 and
steelmakers 7210.70.80.90.19. Turkey started
the investigation in July 2015 and
had already set a temporary duty
of 30.10% for Chinese PPGI in
March last year.
Turkey also issued strict new
documentation regulations for
domestic and imported plate,
galvanized coil and painted steel
products in December 2016. The
rules include the certification of
hot rolled plate over 15 mm
thickness, galvanized coils and
sheets, galvanized slit coils over
500 mm wide, and pre-painted
slit coils.
Product certificates will be
required to include producer
company name and address, lot
number or moulding number,
international standard numbers,
or the code of customer technical
specifications, examination or
production lot test reports,
examination results of the product
to confirm they meet physical and
chemical standards of the product,
description code, date, and the
approval of an authorised person.
These requirements will apply
to locally produced steel as well as
imports, but will not apply to
products legally produced or in
free circulation from the European
Union.If products do not comply,
Turkeys Ministry of Science,
Industry & Technology will have
the right to remove the product
from the market.
Turkeys Ministry of Economy
is planning to change some other
regulations in its import regime to
protect the countrys steel sector
from harmful levels of imports.
Despite significant increases in the
countrys steelmaking capacity,
steel consumption will increase
only moderately in the next few
years. Thus overcapacity may
impact domestic production, the
Ministry has said.
Export trade measures
Thailand started an anti-dumping
investigation into imports of hot
rolled flat steel products of coil and
sheet from Brazil, Iran and Turkey
in January last year. The countrys
Department of Foreign Trade
(DFT) published its final
determination on 10 February
2017, announcing final dumping
margins of 6.88-38.23% to be
imposed on Turkey-origin HRC,
34.4% for Brazilian HRC, and
7.25-38.27% for Iranian HRC.
However, the Turkish Steel
Producers Association (TD),
as well as several senior figures in
the countrys steel sector, claimed
that the outcome included several
unfair determinations.
Morocco imposed an 11%
permanent anti-dumping duty on
HRC imports from Turkey in
August 2014. Turkey eventually
Turkeys flat called for a World Trade
Organization (WTO) panel
steel exports investigation in October last year.
have been The WTO Dispute Settlement
increasing, Body (DSB) is to investigate the
especially since matter, it said in February 2017.
Turkey said it had hoped the
early 2017, matter could have been resolved
thanks to strong without recourse to a WTO panel,
demand in but said it had to protect its rights
under an anti-dumping agreement
Europe signed by 100 member nations in
the 1990s.
Turkey is in talks with Ukraine
about setting up a free-trade deal,
but TD has said that such an
agreement will harm the Turkish
steel sector because Ukraine is the
10th biggest steel producer in the
world and exports about 83% of its
production. Turkey imported 2.35
million tonnes of steel from
Ukraine in 2016, becoming the
countrys second biggest export
destination after Egypt. Turkey
exported only 54,000 tonnes of
steel to Ukraine in 2016, the
association added.
Turkey signed a free-trade
agreement with South Korea in
2012, and then saw its steel
imports from that country
quintuple to reach 1.20 million
tonnes in 2016, TD said,
adding that the prospect of
free-trade talks with Japan was also
a cause for concern.
Automotive industry
The automotive industry is one of
the biggest steel-consuming
sectors for Turkeys steelmakers,
and as the country exports most of
its output to Europe, production
increased in 2016 thanks to strong
demand in that regions export
markets.
Turkey produced a record-
breaking 1,485,927 vehicles in
2016, 9.36% more than the
1,358,796 units produced in
2015, the Turkish Automotive
Manufacturers Association (OSD)
reported.
The countrys vehicle exports
increased by 15.01% to 1,141,382
vehicles, compared with 992,335
in 2015, according to OSD data. In
January-April 2017, Turkey
produced 573,239 vehicles, up by
22.14% from the 469,331 made in
the first four months of 2016.
Exports increased by 31.49%
year-on-year in January-April to
472,632 vehicles, compared with
359,442 vehicles exported in the
same period last year.
Turkish Steel Exporters
Association (CIB) chairman
Namik Ekinci believes that the
steel sector will have a better year
in 2017 due to improved sales in
the automotive and white goods
sectors. He believes that strong
domestic demand in the USA,
Europe, Japan and China will have
positive effects on Turkish flat steel
exports in 2017.
Steel export volumes
Turkeys flat steel exports have
been increasing, especially since
early 2017, thanks to strong
demand in Europe. Demand for
Turkish hot dipped galvanized coil
increased in Europe after the
European Commission (EC)
opened an anti-dumping case into
imports of such material from
China on 9 December.
Turkey exported 208,532
tonnes of coated flat steel products
in the first three months of the
year, more than triple the 62,046
tonnes in the corresponding
period in 2016. Principal export
destinations for the material were
the USA, with 63,275 tonnes, Iraq
with 16,271 tonnes, and Spain
with 15,611 tonnes.
Turkey exported 2,979,494
tonnes of flat steel products in
2016, an increase of 22.69%
compared with 2,428,503 million
tonnes in 2015. The country
exported 990,172 tonnes of flat
steel products in January-March
2017, up by 50.62% from the
657,378 tonnes exported in the
first quarter of 2016, according to
Turkish Statistical Institute
(TUIK).
Rising export volumes and
fluctuating prices will be the most
important factors affecting the
steel industry in 2017, Cem stn,
ceo of Turkeys Atakas Group,
told Metal Bulletin in an interview
in April.
New capacity
Turkeys Yildiz Demir elik, part
of Yildizlar Holding, ordered a 1.5
million tpy mill to produce cold
rolled, galvanized, annealed and
skin-passed coils from Danieli
June 2017 | Metal Bulletin Magazine | 37
 worldsecondinrebar export
world's eighth largest steel producer
the world's ninth biggest steel exporter

Turk y Turkish Steel Exporters' Association

<;oban<;:eme Mevkii, Sanayi Cad. D1 Ticaret Kompleksi A Blok
P.K. 34197 Yenibosna/Bah<;:elievler/istanbul

Discover Phone: +90 212 454 00 00 Fax: +90 212 454 01 08

http:/ /www.cib.org.tr - cib@cib.org.tr

the potential - STEEL EXPORTERS' AsSOCIATION -

Turkish steel
last year. The order includes a
continuous pickling line coupled
with a five-stand tandem mill able
to produce 1.5 million tpy, a
vertical hot dip galvanizing line
with 400,000 tpy capacity, bell
annealing furnaces with 300,000
tpy capacity, and a 450,000 tpy
temper mill. The new plant is
coming on stream in stages during
2017, starting with the bell
annealing furnaces and ending
with the continuous pickling line
and tandem mill. In a second phase,
Yildiz Demir elik also plans to
invest in crude steel and flat steel
production, potentially in Romania
or Russia.
Turkeys Atakas Steel started
production of cold rolled coil
(CRC), hot-dip galvanized and
pre-painted galvanized steel, also
known as colour-coated coil, in
2016. All its production lines had
reached their full capacity by early
2017. The company also has a 1
million tpy pickling line and can
produce coil in gauges of 1.50-5
mm and widths of 600-1,550 mm.
The CRC lines have a capacity of
700,000 tpy and can produce coil
0.25-5 mm thick, and 600-1,550
mm wide coils. The hot-dip
galvanizing line has a capacity of
400,000 tpy, and can produce coil
0.25-3 mm thick, 600-1,550 mm
wide, and with zinc coating from
60 g/sq metre to 600 g/sq metre. It
also produces PPGI in gauges of
0.25-1.5 mm and widths of
700-1,530 mm. Paint can be
applied to one side or both, using
polyester, PVDF, plastisol or
polyurethane upper layers.
Phase 2 of the companys
investment will include a cleaning
line, and annealing and skin-pass
lines. The project is planned for
completion in the last quarter of
2017.
During a planned third phase of
investment, the companys port
construction will continue, for
which the opening is targeted for
the last quarter of this year. The
company also plans to invest in a
power station. How this will be
fuelled has not been revealed but,
since Atakas also deals in coal, it is
likely to be coal-fed.
Turkish flat steel re-roller and
coater Tezcan Galvaniz reached
full capacity at its new 1.2 million
tpy continuous pickling line in June
2016. The company also started
commercial production of
galvalume in December last year.
The galvalume line, located in
Kartepe, close to Istanbul, has a
capacity of 350,000 tpy, producing
0.30-3 mm galvalume coils.
Turkish steelmaker Tosyali Toyo
will start commercial production
soon, the companys chairman said
in April 2017. The mill started trial
production in December last year,
and has total capacity for 1.2
million tpy of CRC, tinplate,
hot-dip galvanized, and colour-
coated coil. The mill in Osmaniye,
southern Turkey, is 51%-owned by
Turkeys Tosyali Holding and
49%-owned by Japans Toyo
Kohan.
The Turkish Steel Producers
Association forecast for 2017 is 36
million tonnes of steel end-product
consumption and 35 million
tonnes of crude steel production.
LONG PRODUCTS
Turkish rebar and billet markets
were impacted in 2016 by political
and economic problems within the
country and by turmoil in
neighbouring nations, notably Syria.
Nevertheless, Turkish sources
were still optimistic about the
prospects for the market in 2017,
and prices were expected to
increase slightly because of
reduced competitive pressure
from Chinese mills.
On 15 July 2016, members of
the Turkish army attempted a
military coup but failed to take
control of the countrys
government. The effects of this
attempt were not seen
immediately but, when a state of
emergency was announced,
demand levels in the steel industry
went down sharply as market
participants avoided restocking.
The Turkish lira started to lose
ground soon afterwards. It was
trading at TRY1 to $0.3457 on 15
July. This fell to $0.3302 on 17 July,
and it had fallen further to $0.2831
by 31 December.
Nevertheless, the coup attempt
and the subsequent international
response gave time for relations
SHUTTERSTOCK
between Turkey and Russia to
recover, which had been tense
since November 2015 when
Long steel producers Turkish F-16 fighter jets shot down
are hopeful a Russian military aircraft, under
about 2017, with the countrys rules of engagement,
expectations of above the border with Syria, as
better demand and global and regional powers became
stronger prices embroiled in that countrys
internal upheavals.
Turkey and Russia resumed talks
on the planned Turkish Stream gas
pipeline in August last year and on
10 October they signed an
inter-governmental agreement to
restart the project. The Turkish
Stream pipeline will include the
construction of at least one
offshore strand, which will link
Russia and Turkey under the Black
Sea by the second half of 2019,
with the possible construction of
another line.
The first line will carry gas for
Turkish domestic consumers,
while the second is planned to
transport gas onward to Europe.
Changing export regions
In the first four months of the year,
Turkish steel exports rose to 6.9
million tonnes, around 4 million
tonnes of which was long steel
products, according to CIB.
January-April steel exports were
up 23.9% year-on-year, while the
value of the exports was also up, by
42.8% year-on-year, to $4 billion.
Turkish steel exporters looked
for different destinations for their
products as the demand in their
usual markets, like the Middle East
and North Africa, was sluggish.
They significantly increased exports
to East Asia, Southeast Asia and
Latin America over the period.
Turkey increased its exports into
East Asian and Southeast Asian
June 2017 | Metal Bulletin Magazine | 39
Turkish steel
countries by more than six-fold
year-on-year to 557,000 tonnes in
the first four months of the year,
while exports to Latin America
rose by 80% year-on-year to
538,000 tonnes. In the same
period, Turkish exporters shipped
2 million tonnes of steel products
into Europe, just over double
year-on-year.
The country also exported 1.60
million tonnes of steel products
into the Middle East, 953,000
tonnes to North America and
565,000 tonnes to North Africa in
the January-April period. The 6.90
million tonnes total for the period
included 2.30 million tonnes of
rebar, 1 million tonnes of HRC,
632,000 tonnes of steel pipes,
551,000 tonnes of wire rod and
517,000 tonnes of sections.
We continue [on from] the
increase we gained at the beginning
of the year, [breaking an] 11-year
record with 6.90 million tonnes of
exports in the first four months of
the year, CIB chairman Namik
Ekinci said. [Rising] steel export
prices in global markets
especially in China [have had a]
positive impact on the Turkish
steel industry. [And] we expect to
catch the record-breaking 2012
export figures if these conditions
last, he added.
However, Ekinci admitted there
had been a big drop in rebar
exports to more local export
destinations. We had serious
losses in rebar exports into Middle
East countries in the given period,
[with] the war in the area and
protectionist actions against our
exports [slowing] trading
activities, he said.
For instance, Turkish exports
into Egypt fell by 91.20% year-on-
year to 35,000 tonnes, while
exports to the UAE fell by 81.70%
year-on-year to 89,000 tonnes,
he explained. But we managed
to compensate with sales into
[East Asian and Southeast Asian]
countries, such as Singapore,
Hong Kong and Malaysia, he
added.
US trade measures
The US Commerce Department
set preliminary anti-dumping
duties of 5.29-7.07% on Turkish
rebar imports, in a widely
We forecast anticipated decision on
Wednesday 1 March. Habas and
an increase in Icdas received preliminary
Turkeys steel dumping margins of 5.29% and
production 7.07%, respectively, with a
in 2017, in preliminary margin of 6.20%
applying to all other Turkish
parallel with producers and exporters.
the countrys Two-and-a-half months later,
growing the US Commerce Department set
final anti-dumping margins on
economy rebar imports from Turkey and
Japan in a decision announced on
Tuesday 16 May. The US
Commerce Department set
anti-dumping rates of 6.94% on
Turkey the so-called all others
exporter rate compared with
6.20% in a preliminary ruling on 1
March. Habas and Icdas received
final rates of 5.39% and 8.17%,
respectively. Turkeys Habas also
received a big countervailing
margin, of 16.21%. All other
Turkish exporters face a
countervailing rate of 1.25%.
Outlook
Market participants remained
optimistic for 2017 with
expectations of increasing steel
production and lower pressure
from the Asian steel markets. We
forecast an increase in Turkeys
steel production in 2017, in
parallel with the countrys growing
economy, Veysel Yayan, TD
general secretary said.
The overcapacity in Asia will
remain a threat for Turkish
industry [because it creates] low
prices, but China will not be as
comfortable as it used to be with
the strong reactions from steel-
importing countries, Yayan said.
There have been political
problems all the time. But the
[over-arching] problem is that we
have more problems than usual
today, he added.
We expect that the chaos in
neighbouring countries will be
resolved and stability will be
re-established in 2017. This will
not happen in one day, but the
ending of the upheavals in the
region will lead to a very fast
recovery in the economy, Yayan
said. With a recovery in the
region, oil prices will rise and
delayed investments will get back
into action as a result. We expect
2017 to be a positive year, with a
strengthening steel industry,
he added.
The IB also expects better
market conditions in 2017, with
domestic demand being supported
by new projects and urban
transformation schemes. Turkeys
steel industry produced 31.5
million tonnes of steel products in
2016, ranking it as the ninth-
biggest steel-producing country
globally. It also ranked tenth
globally for exports, shipping 16.1
million tonnes. The country was
also the second-biggest rebar
exporter in the world in 2016,
according to the IB.
The Turkish steel industry
wants to maintain its position in
the steel industry in 2017 and aims
to increase its exports by 3%, IB
said. Our industry will have a
better year in 2017 with the news
that public investment will be
increased, some important projects
will start, [there will be] increasing
urban transformation and [there
will also be] better demand in the
white goods and automotive
sectors, Namik Ekinci said.
About 70% of the raw material
usage in Turkey is scrap. Scrap
prices were comparatively cheaper
than iron ore in 2016 and this
increased the industrys
competitiveness. A continuation of
this situation will positively affect
sales figures in 2017, he added.
The recovery in the US, EU,
Japanese and Chinese domestic
markets will also positively affect
our exports, especially in flat
products.
Relations between Asia and US
president Donald Trump are
another factor that will have
consequences for the Turkish
market, some market observers
believe. The main driver for the
Turkish steel industry will still be
Asia, a Turkish trader said.
I think relations between
Trump and Asia will determine the
future. I do not expect raw material
prices to weaken much in 2017.
The changes in the oil, iron ore and
coking coal prices will not be more
than 20%, [and this] will cause
better demand and [make it] a
better year, he said. Especially,
the USA will focus on its domestic
market and demand will improve,
he concluded.
June 2017 | Metal Bulletin Magazine | 41
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Iron ore
Turbulent times for
seaborne iron ore
Seaborne iron ore prices remained subdued throughout last
year before picking up in November. Duncan Moore looks at
the recent interplay between supply and demand, which has
caused much price volatility this year, and asks where next?
The ramping up of production at Vales S11D saw record iron ore production in Q1 2017
The past 12 months have been a turbulent
time for seaborne iron ore. Increased demand
has continued to come from China where
suggested slowdowns in the economy have
yet to be realised and if president Trump
makes good on his election manifesto in the
USA, with his ambitious plans for the
countrys infrastructure and a concentration
on US steel production potential demand
for steel and steelmaking raw materials could
rise further.
The supply side, however, has seen issues.
At the beginning of this year, cyclone Debbie
disrupted iron ore production in Australia
and its despatch from port. In China, some
Chinese steel mills are reported to have sold
low-grade iron ore from big stockpiles.
Global demand for steel is changing, as
Casper Burgering, senior sector economist
industrial & industrial metals, ABN AMRO
44 | Metal Bulletin Magazine | June 2017
VALE
Bank, explains: General sentiment on future
steel demand is weak because there is a lot of
ambiguity about the Chinese infrastructure/
building incentive programme. He says that:
This makes it hard to assess the effect on
future demand for steel. However, at this
stage construction activity and automotive
demand in China and Europe are doing well,
while the industrial manufacturing sector is
recovering globally. This is keeping steel
prices afloat and prevents prices from
decreasing more significantly.
At the same time, steel production in
China continues to increase (up by 5%
year-on-year in Q1 2017), despite
commitments from the Chinese government
to tackle overcapacity. Volumes of exported
steel from China have decreased since
mid-2016 (down by 26% year-on-year in Q1
2017), mainly as a result of higher
import-rates by the US and EU on cheap
Chinese (and also Russian) steel. In April, steel
exports decreased further by 29% year-on-
year, he added.
Steel demand impacts coking coal and iron
ore prices upstream. As Burgering reminds,
the price of iron ore is mainly dictated by
trends in China, with the country accounting
for two-thirds of total seaborne trade.
Price fluctuations
Iron ore prices began a sudden climb in
November last year, peaking at $80.83 per
tonne (index of spot market iron ore prices
delivered to China, normalised to Qingdao
and 62% Fe) on November 28 before
becoming volatile. They have since remained
volatile, reaching $94.86/tonne on February
21 the highest price in 30 months before
falling back to a low $60.15 on May 8. At the
time of writing, the price was still some way
above the $48.18 low point reached on June 2,
2016.
There is further potential for prices to fall
suggests Georgi Slavov, head of research,
Marex Spectron. There is strong demand for
iron ore, but it will weaken in the short- to
mid-term and this could lead to prices going
as low as $50/tonne.
Others believe that prices are now starting
to stabilise. Metal Bulletin Researchs (MBR)
research manager, Alistair Ramsay, says:
Prices have fallen so sharply theyve now
reached the point where there is some price
resistance. It seems as if the $60/tonne level is
something that buyers and sellers are both
convinced is an appropriate level and indeed a
realistic level for iron ore.
Im not as convinced as some that prices
can fall below $60. This is because there is
stronger demand in China than we foresaw.
Thats been partially inflated by seasonal
patterns, but theres still more demand than Index of spot market iron ore prices delivered to China,
expected, he added.
Despite the fluctuations in price for normalized to Qingdao and 62% Fe (US $ per tonne daily)
seaborne iron ore, the major mine operators 100

are continuing to push for higher output to the 90

market. Western Australias Port Hedland, 80

which is used by BHP Billiton and Fortescue 70
Metals Group, shipped 42.29 million tonnes 60
of iron ore in April, up from 37.69 million
tonnes a year earlier and also 8.2% higher than 50

39.09 million tonnes shipped in March, 40

16

16

16

16

16

16

16

16

16

16

16

16

16

17

17

17

17

17

17

17
r1

r1
t1

t1

ar

ar

ay

ay
according to data released by the Pilbara Ports

ay

Ap

Ap
Ju

Ju

Oc

Oc

De

De

Fe

Fe
Ja
No

No
Au

Au

Se

Se
Ju

Ju

M
M

08

25

12

27

16

04

20
01

16
13

29
09

27

03

20
07

22

08

22
10

25

11

28
23
Authority. Source: Metal Bulletin

The data also showed that Chinas intake of

ore from the port grew by 6.9% year-on-year
to 34.86 million tonnes last month. The country,
which is the Australian ports top destination,
received 32.61 million tonnes in April 2016.
Despite this increase, China Customs reported
that iron ore imports into the country as a
whole for April were down by 2% year-on-year.
Shipments to other countries from Port
Hedland also increased. South Korea received
3.42 million tonnes via that route, up by 25%
compared with 2.74 million tonnes in April
2016, while shipments to Japan more than
doubled to 2.27 million tonnes from 857,071
tonnes a year earlier. Taiwans share was
779,695 tonnes, up by 20.9% from 645,126
tonnes a year earlier. And shipments to
Indonesia rose by 47.9% to 548,136 tonnes,
from 370,635 tonnes in April 2016.
Not just China
Taking a view of the global market for iron ore
outside China, Burgering says: Signals from
the other third [of customers for seaborne iron
ore] are more favourable [than those from
China]. I assume a stable price trend in the
short-term. From end-users (construction,
automotive), the signals of business activity
are still good. We are waiting for concrete
measures in China to address overcapacity.
He says that he has seen some initiatives, but
the impact was quite limited.
I think the iron ore price will remain stable
in the short-term. China is primarily a
strategic buyer of iron ore and if the prices
remain relatively low, China will not hesitate
to buy more volumes. We think that iron ore
prices can recover during 2017. Although
China can certainly give some market jitters
going forward, we think that global iron ore
demand prospects will remain relatively
sound, Burgering adds.
Global iron ore demand is primarily being
met by material from Western Australia and
Brazil, although volumes from the latter have
been lower this year than in 2016. Figures
from Brazils foreign trade ministry, MDIC,
at the beginning of May show that exports of
iron ore to China fell by 14.84% year-on-year
in April. Total shipments to the country from
Brazil were 13.03 million tonnes in the
month, compared with 15.30 million tonnes a
year earlier.
Other countries have reduced imports of
iron ore from Brazil too. Exports to Japan
declined by 13.96% in April on an annual
basis, to 1.91 million tonnes from 2.22 million
tonnes. Shipments to European countries also
dropped, by 13.37% over the same period, to
4.08 million tonnes from 4.71 million tonnes.
Brazils total iron ore exports were down by
20.54% year-on-year in April, at 24.05 million
tonnes from 28.99 million tonnes, according
to the MDIC figures.
The lower exports from Brazil contrast
with the higher ones from Australia. Recent
trends in Chinese demand for steelmaking
raw materials suggest that overall growth in
supply could create a greater surplus in China.
In early May, sources at two Chinese mills told
Metal Bulletin that they were reselling
contracted seaborne iron ore, rather than
buying cargoes, amid ample supply in the
market.
Slavov suggests that the stockpiling began
in October and November of last year when
Chinese buyers began to hold on to low-grade
iron ore as there was an ample supply of
high-grade material, which was being readily
taken by steelmakers.
The impact of the availability of low-cost,
high-grade ore is recognised by Burgering,
too, in his assessment of the current market
and continuing over-supply. Given the
current low-price environment and the
expectation that China will remain dependent
on imports of high-quality iron ore from
Australia and Brazil, we think that during
May iron ore imports will recover again.
Domestic output is of relatively low-quality
and we think that China will remain
dependent on external deliveries, even when
domestic prices are low, he adds.
Steel margins are already thin and mills
need good-quality ore for the effectiveness it
brings to the steelmaking production process.
Despite the fact that iron ore stocks in China
are relatively high at this stage (the volume of
stocks in Chinese ports reached a record high
in mid-April), stocks are decreasing due to a
limited supply of iron ore from Australia [due
to the after-effects of cyclone Debbie].
Ramping up production
International miners are well aware of the
lower quality level of Chinese iron ore, and the
temporary shortfall of high-grade Australian
ore shipments, and are preparing to supply
greater quantities of iron ore onto the
seaborne market. Major players Vale, BHP
Billiton, Rio Tinto and Fortescue Metals
Group (FMG) are increasing their capacity.
Construction of Rio Tintos sixteenth iron
ore mine in Pilbara, Silvergrass, Western
Australia, has been ramping up since the
beginning of the year. Development of a new
deposit at West Angeles mine is now nearing
completion. The market for this increased
production would certainly appear to be the
Chinese market, given the comments by Rio
Tintos chief executive, Jean-Sbastien
Jacques, at the Bank of America Merrill Lynch
2017 Global Metals & Mining Conference in
Barcelona in May, where he said: We all
know growth rates have slowed down. But the
Chinese economy remains healthy The
Chinese government is taking real action
around pollution and the environment. We
think this is the right thing to do and will have
a positive impact on industry. The
restructuring of the steel industry in China
does not mean a reduction in output. We
believe it will increase demand for higher
grade iron ore, as older, more polluting blast
furnaces are taken off-line.
Speaking at the 20th Annual Global Iron
Ore and Steel Forecast Conference, in Perth,
Australia, in March 2017, Edgar Basto, asset
president Western Australia Iron Ore, BHP
Billiton, said: While Chinese steel
production growth is expected to moderate as
the rate of growth in the housing market eases
amidst escalating supply-side measures, we
continue to see upside given that steel stock
per capita in China still lags behind that in the
US and Europe. Chinas steel stock will need
to continue to grow for its continued
economic development.

June 2017 | Metal Bulletin Magazine | 45

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Iron ore
The BHP Billiton view on steel trade flows
is that China will export steel to feed part of
emerging Asias market demand. As a result, a
greater share of Chinese steel production will
be drawn from the countrys south-east coast,
which will support modest growth in global
demand for seaborne raw materials over the
next decade or so, he added.
In conclusion, Basto said: The growth of
seaborne iron ore supply is expected to
outpace total demand over this period.
Overall we believe we are well positioned, as
low-cost iron ore producers in established
locations are expected to lead this supply.
Fortescue Metals Groups confidence in the
demand for the iron ore it mines is reflected in
the news that its second seaborne iron ore carrier,
the FMG Grace, was delivered in February
and more are being built. In a press release
detailing the companys March quarterly
results, Fortescue said: Construction of the
remaining six vessels [for shipping seaborne
iron ore] continues on schedule with total
FY17 capital expenditure of $270 million and
$180 million in FY18.
Fortescue has reported shipments of 39.6
million tonnes of iron ore with cash production
costs of $13.06 per wet metric tonne (wmt) in
Q1 2017 a 12% improvement over the prior
comparable period of Q4 2016.
Vales record output
Despite the lower exports of iron ore from
Brazil described earlier, Vale achieved a
record of 86.2 million tonnes of iron ore
production in the first quarter of 2017, 11.2%
higher than the same period in 2016 due to
the ramp-up of the S11D and Itabiritos
projects in the Southeastern System in Brazil.
While many smaller mining operations are,
like Chinese ore producers, struggling to
make money as they are unable to produce
iron ore at sufficiently low cost to be
competitive, a relative newcomer to the
market, Roy Hill, is looking to challenge the
dominance of the established suppliers.
Based in Western Australia, it loaded its
first shipment of ore for export on December
10, 2015 and has since loaded multiple
shipments to key markets in Japan, Korea,
China and Taiwan, reaching the 30 million
tonne milestone at the end of
February 2017. The company has also
reported that over the initial 18-year life of the
high-grade project, 4,957 million tonnes (dry)
of material will be moved, equating to an
average yearly mining rate of about 270
million tpy (dry), to produce around 69
million tpy (wet) of run-of-mine ore feed for
the processing plant. This, the company
states, will make Roy Hill one of the largest
mining operations in the Pilbara area of
Western Australia.
48 | Metal Bulletin Magazine | June 2017
While big miners are planning to increase
production and ship much of their output to
China, the countrys domestic producers are
continuing with iron ore production
themselves, despite steelmakers preference
for higher grade imported material. Slavov
estimates that about 75% of Chinese iron ore
production is losing money. However, they
can continue to produce iron ore at a loss
because many of the mines and mills are
integrated. While they are [effectively] losing
money mining the ore, they are still in profit
with the finished steel that is produced from
that mined ore.
Asked how recent price fluctuations have
impacted on domestic Chinese production,
Ramsay says: The latest price fall has had a
direct impact on Chinese iron ore production.
When you look at all the other [material]
producers in China, they had an unusually
strong month in April. If you look at crude
steel, iron production, coal production and
coke production, Aprils figures were
significantly higher than in March. The only
exception was iron ore. It could be an early
indicator that prices around $60 are starting
to cause problems.
He added that steelmakers have not put
prices up as much as MBR thought they
would and that is because iron ore prices have
been so low that they have not needed to put
their prices up by much to remain profitable.
Chinese domestic iron ore production was
discussed at the 20th Annual Global Iron Ore
and Steel Forecast Conference, in March, by
Kellie Parker, Rio Tintos managing director
for planning integration and assets. During
her speech, she said: We are also seeing a
restructure within Chinas steel industry that
is being driven by the governments
commitment to reducing pollution and
improving steel mill profitability. This is
resulting in the shutdown of smaller, less
efficient, more polluting blast furnaces. With
production expected to then refocus on the
newest and largest blast furnaces. Additional
capacity in Brazil and Australia [to feed these
blast furnaces] is already reflected in iron ore
prices, so the potential reboot in Chinese iron
ore production is the main source of
uncertainty and therefore the likely factor that
will result in price volatility.
What effects, if any, increased Chinese iron
ore production may have on the market for
seaborne iron ore remains to be seen, since
there is still surplus material available to
steelmakers. Ramsay says: The local [iron ore
production] market will never be able to cope
with the demand in China. Potentially, if
China does take steps to reduce its
environmental impact, and in doing so makes
more use of scrap, that will affect the demand
for iron ore, but that would be the only
scenario that would see imports reduced.
However, that is very unlikely.
Australian view
The Australian government does not appear
to view either increased domestic ore
production in China or a potential move
towards more scrap use in steelmaking there
as issues for concern. The report Resources
and Energy Quarterly, published in March by
the Department of Industry, Innovation and
Science in Australia, states: Growing supply
[of iron ore to China], primarily from
Australia and Brazil, is expected to steadily
outpace demand growth over the rest of 2017.
The same report also acknowledges
stockpiling of ore in China. Chinas iron ore
port stocks have steadily risen in the
December and March quarters, to reach 130
million tonnes the highest level on record.
Yet the department takes a positive view on
the continuing export of iron ore from
Australia to China, stating: However,
anecdotes suggest that a large share of this
[Chinas stocks] comprises low-grade iron
ore, while demand for higher grade ore
remains strong the supply of high-grade
iron ore should increase and persistently high
rising stocks will eventually place downward
pressure on the price.
The report also analyses other markets:
Indias iron ore production is projected to
grow at an annual average of 2.8%, to reach
188 million tonnes in 2022.
However, the reports authors are
untroubled by this increase in Indian
domestic production as it continues: Indias
consumption of iron ore is projected to
outpace domestic production in 2019,
resulting in India becoming an increasingly
important source of global iron ore imports.
Indias iron ore imports are projected to grow
almost seven-fold over the next five years, to
reach 38 million tonnes by 2022,
underpinned by Indias rapidly growing
domestic steel industry.
Ultimately, the performance of seaborne
iron ore on the international market will be
dictated by demand for steel. Suggestions of a
slowdown in steel demand in China, the
largest consumer of steel, could have a large
part to play in the direction iron ore prices
take over the next 12 months, regardless of
surplus stocks and increased production by
mines globally.
Ramsay, however, is of the opinion that
suggestions of a slowdown in Chinese steel
demand may be misplaced. Chinese demand
is continuing to outperform expectations.
The second half of the year should be weaker
for seasonal reasons but it may not be as bad as
we have anticipated because it has been doing
better than expected in the first half.
Iron ore
Indian iron ore
Government policy has a significant influence over
Indias iron ore industry. Kunal Bose reviews the
sectors potential, scope and outlook
The Indian iron ore industry is a long
way off from the highs in production
and exports achieved before the
Supreme Court and the government
put strict operational restrictions on
mines, which started in 2011. The
curbs have been relaxed since then,
but not fully.
Much to the dismay of an iron ore
industry struggling to return to
normality, comes the news that the
steel ministry has before it a
proposal to end a free price-regime
for iron ore. Steel minister
Chaudhary Birender Singh took the
position that, for the benefit of
steelmakers, prices of iron ore
should be as competitive as
possible. The steel ministry is
awaiting a report from an expert
committee before it tells miners
whether to keep the ore within
recommended price bands or to
follow a cost-plus formula. Neither
will find favour with miners.
The (Narendra Modi)
government-sponsored policy
think-tank Niti Aayog (National
Institute for Transforming India),
which replaced the six-and-a-half-
decade-old Planning Commission in
January 2015, suggested control on
prices of the principal steelmaking
ingredient in October 2016, when it
also recommended another look at
the countrys steel policy. The idea
of regulating iron ore prices was floated
to test reaction. This has provoked a
strong reaction from merchant
miners, who slammed the suggestion
of ore price-control as being designed
to support steelmakers at the
expense of ore producers struggling
to recover from major dislocations
in production and export.
An enraged RK Sharma, director
general of the Federation of Indian
Mineral Industries (FIMI), says: If
at all the government is thinking of a
price cap, then it should ideally be on
steel, which impacts any number of
downstream industries and
individual consumers in urban and
rural centres. The argument that
steelmakers here need iron ore at as
competitive prices as possible to be
able to face competition from
imports is specious. Their
counterparts elsewhere are not to be
heard complaining about free
pricing of this feedstock and other
raw materials.
Sharma says after the Indian steel
industry got protection from
imports by way of safeguard duty,
minimum import price and
anti-dumping duty besides the
regular import duty, it should not
be asking for any more concessions.
Kishore Kumar, ceo of Vedanta-
owned Sesa Goa, which is Indias
largest private-sector producer of
iron ore, says that merchant miners
are at all times Price takers and not
price givers. Why introduce any
price control when the best
reference point for price discovery
here is global iron ore price indexes
run by [price reporting] agencies?
The countrys new steel policy
wants steel production capacity to
be raised to 300 million tpy by 2030
from the present 126 million tpy. To
support use of that kind of capacity,
Indian iron ore production is to be
raised to 480 million tonnes from an
estimated 180 million tonnes in
2016-17.
Exploration implications
The deposits discovered so far, rich
local entrepreneurial talent and the
government allowing 100% foreign
direct investment in the mining
sector should make it possible for
the country to scale up iron ore
production in a big way, provided
the policy environment remains
supportive. Anil Agarwal, chairman
of Vedanta Resources, believes that
Indias iron ore resource, discovered
and still hidden under the earth, puts
it in a position to produce at the
level of Brazil and Australia.
Regretful of the major under-
utilisation of all resources of the
country, including iron ore, Agarwal
says that India is annually spending
less than $50 million in greenfield
minerals exploration compared
with over $2 billion in countries
such as Canada.
Our iron ore resource base was
up from 22.108 billion tonnes in
2000 to 31.323 billion tonnes in
2013. This is despite our exploration
having been historically restricted to
shallow depths and high grades.
Deeper drilling and lower cut-offs of
SHUTTERSTOCK
mineable ore will lift our resource
base further, says Kumar.
Indian iron ore Sharma says that, based on global
exports are climbing empirical evidence: The greater the
demand, driven either by exports or
domestic use, the more intense
exploration will be, leading to
discovery of new deposits. This has
happened in Australia, Brazil and
India. You see between 2000 and
2013, Indian extraction of iron ore
amounted to 2.041 billion tonnes,
when the resource base got
expanded by 9.215 billion tonnes.
The phenomenal increase in
resource in all the three countries
resulted from strong export
demand, mainly from China.
Ahead of imposition of high export
duty on lump ore and fines and
court-ordered large-scale
suspension of mining in India, there
were years when exports would
claim more than half the countrys
production of ore.
Resource nationalism
Succumbing to intense pressure
from the steel lobby that iron ore
exports should be stopped in order
to preserve the resource for local
value addition in future, the
government started charging export
duty at increasingly higher rates
from March 2011. This
undesirable indulgence in resource
nationalism coupled with mining
restrictions saw our iron ore exports
collapsing from a record high of
117.37 million tonnes in 2009-10 to
4.50 million tonnes in 2015-16 (see
table). Expectedly, ore production
during this period also took a hard
knock of 62.65 million tonnes to
155.90 million tonnes. Stocks at
mine heads are now around
June 2017 | Metal Bulletin Magazine | 49
27 28 29 1 47
Co
OBALT
Ni
NICKEL
Cu
COPPER
LME Ag
SILVER

50 79 30 13 82
Sn
N
Au
GOLD
Zn
ZINC
Al
ALUMINIUM
Pb
LEAD

The essential element

of successful price risk
management
SETTING THE GLOBAL STANDARD

The London Metal Exchange has been helping metal producers and
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Iron ore
145 million tonnes; mainly fines
causing environmental hazard and
big losses to producer groups, says
Sharma.
Disruptions of mining on account
of a near elimination of exports
caused mine job losses for
thousands. Unfortunately it took the
government a long time to realise
the futility of burdening iron ore
with export duty of 30% when the
local demand for the mineral was
growing at a slow pace. Not only was
the economy of areas around mines
damaged iron ore bearing states
also suffered a big loss of revenue as
royalty income shrank. A country
perennially in trade deficit, India
could ill afford the major foreign
exchange income loss from much
lower ore exports.
Policy reversal
Unnerved by the diminished state of
the iron ore industry, New Delhi
finally, on 29 February 2016,
announced that export duty on ore
fines with iron content below 58% is
reduced from 10% to nil while the
levy on lumps with iron content less
than 58% is made nil from 30%.
Because of this, and also helped by
mine operations progressively
returning to normal under the watchful
eye of the government, iron ore exports
in the 11 months up to February
2017 were 25.22 million tonnes
against 4.5 million tonnes in 2015-16
(April to March). Improvement in
local supplies has also led to falling
imports. Ore production in 2016-17
was up 24.10 million tonnes to 180
million tonnes the largest annual
production figure since output topped
200 million tonnes in 2010-11.
The countrys new mineral
exploration policy announced in
June 2016, which opened up
exploration of mineral assets to
private domestic and foreign groups
and thereby ended the monopoly of
government-owned agencies the
Geological Survey of India and the
Mineral Exploration Corporation,
should see acceleration in the
discovery of new mineral deposits,
including iron ore.
At the same time, government
agencies will have to speed up the
process of making new blocks of
deposits auction-ready and sell these
to the highest bidders. Kumar says:
In our country, it takes anything
Indian iron ore production
and exports*
Year Export Production
2009-10 117.37 218.55
2010-11 97.66 207.15
2011-12 61.74 168.58
2012-13 18.37 136.61
2013-14 14.41 152.43
2014-15 6.12 128.91
2015-16 4.50 155.90
*Million tonnes. Source: Indian Bureau of Mines
(for production); other agencies (for exports)
between three and five years to open
mines after going through the
lengthy process of securing a large
number of state and central level
clearances. Land acquisition and
the resettlement of people to be
displaced in order to open new
mines also remain a major challenge.
An industry suggestion that is
receiving the attention of the
government is that it should make
arrangements for auctions to be held
at least six months ahead of all the
iron ore leases that on court order
are to expire by March 2020.
Restarting closed mines is a
time-consuming and expensive
process as recent experience in Goa
and Karnataka has shown.
Production caps
In the meantime, mines in Goa
and Karnataka are highly under-
using their capacity, says Kumar,
because of the Supreme Court-
ordered cap in production. The
court has said that Goa can produce
20 million tpy of ore and Karnataka
30 million tpy.
However, an expert committee
appointed by the court says the cap
for Goa should first be revised to 30
million tpy, and then to 37 million
tpy, once a road corridor now
under construction for transfer of
ore from mines to port without
causing disturbances to the
environment and inconveniences to
the local community is ready.
For Karnataka, the committee
says the cap should come for
revision in two phases: first to 40
million tpy and then to 50 million
tpy. The respective state
governments are keen to raise their
ore production limits. Before court
intervention back in 2011, Goa and
Karnataka had produced double the
capped amount.
Captive mines
Indian steelmakers are keen seekers
of iron ore deposits for captive use.
Mine ownership is sought for
long-term raw material security of
supply.
Tata Steel and the government-
owned Steel Authority of India
Limited continue to secure full
supplies from mines that they own.
As they are expanding steelmaking
capacity, they have made known
their intention to get more deposits.
Some smaller steel producers,
such as Usha Martin, also have
captive iron ore mines. So strong is
the desire of some steelmakers to
own mines that at recent auctions
held in the southern state of
Karnataka, one leading steel group
paid premiums at levels of more
than double the base (pre-set
minimum bid) price to acquire
deposits.
FIMIs Sharma does not
understand Indian steelmakers
strategy: Why should Indian
steelmakers be expending energy in
mining when the challenge they face
is to produce metal at costs that will
automatically discourage imports?
They must also in alliance with
leading foreign groups start making
those varieties of steel for which we
remain import-dependent.
Sesa Goas Kumar says:
Steelmaking is a highly capital
intensive pursuit which ideally does
not leave room for dabbling in
captive mining. It will be wise for
Indian steel groups to buy ore from
merchant miners like their peers
abroad and concentrate on
steelmaking.
Not long in the past, however,
some parts of the Indian iron ore
industry itself have attracted court
and government actions on grounds
that have included allegations of
acquiring mining leases in a
non-transparent way, violation of
forest and environmental norms,
and extracting ore in areas adjacent
to leasehold lands. With the
Ministry of Mines launching a
mining surveillance system using
space technology and remote
sensing imagery, any such
transgressions will become even
easier to monitor.
The author is a specialist writer based
in Kolkata
June 2017 | Metal Bulletin Magazine | 51
Steel technology
A big picture
Steel technology depends on understanding and
controlling multiple points of detail, many of which are
interdependent. Richard Barrett sketches out a big picture
of how todays technology is connecting production
fundamentals with commercial imperatives in
competitive global steel markets
A first-time visitor to a major
conference and exhibition of steel
technology can become easily
overwhelmed by the breadth and
depth of their content. At the
biggest, hundreds of stands and/or
hundreds of technical papers jostle
for attention.
Similarly, our quarterly new
orders list spans dozens of
investments in plant along the full
length of the steel supply chain:
from raw materials, melting and
casting, on through hot and cold
rolling, or forging, to processing
lines, and back around the loop by
means of production- or
post-consumer scrap. Their size in
terms of value ranges from
hundreds of thousands of dollars to
tens or hundreds of millions.
At steel technology events,
ranges of equipment that at one end
of the spectrum are concerned with
the microscopic size, orientation
and boundaries of the grain
structure within steel, but at the
other are designed to handle
multi-tonne coils of strip or rod, are
on display.
Every aspect of plant
performance is factored into the
design of the many process steps
and variables it encompasses, and
the means of its improvement
through new or enhanced
technologies is analysed.
Sometimes it is helpful then to
zoom out to consider the big
picture and think about the basic,
or fundamental, factors on which
steel technologies rest.
52 | Metal Bulletin Magazine | June 2017
Monitoring and control
At any given stage of the
steelmaking process, plant
operators have a number of
fundamental parameters to
monitor and depending on
exactly which step control to a
lesser or greater extent.
Chemical composition is one.
Exactly what relative volumes and
type of scrap are being charged to
an EAF, for example. Or what are
the desired percentages of each
element in a ladle full of molten
steel after treatment at a ladle
refining station?
Temperature is another. At what
temperature is the steel ready to be
cast and how rapid does the rate of
cooling need to be in the caster to
achieve the right size and speed of
casting for slab, billet or bloom? As
strip emerges from a hot rolling
mill, how rapidly does it need to be
cooled in order to achieve the right
strength and formability when it is
coiled?
Pressure is a third. How much
force needs to be applied at each
stand in a rolling mill, for example,
to achieve the right dimensions and
Every aspect internal structure of the hot rolled
of plant steel that it produces? And, for a
performance cold rolling mill, how much to
achieve the right surface quality,
is factored temper and finish?
into the design The means by which such
of the many fundamentals are measured and
process steps applied, singly or in combination,
are the stuff of steel technology. In
and variables it turn, they determine factors like
encompasses transformer or motor ratings, crane
loadings, ladle volumes, furnace
capacities, pump flow rates,
tundish dimensions, gearbox sizes,
roughing and finishing stand
numbers/configurations, off-gas
and dust handling, cooling bed
lengths, water-spray nozzle layouts
and coiler speeds. The civil
engineering design work needed to
accommodate all of the above must
match the overall design.
How accurately and consistently
the fundamental factors can be
controlled, and the ranges over
which they can be varied, directly
influence the type of steel that can
be produced, how quickly it can be
made, in what volumes, and
particularly importantly for
different types of application to
what level of quality.
It is a simple commercial fact that
output needs to satisfy all customer
specifications to avoid rejects, but
at the same time by as small a
margin as feasible to minimise
production costs. Expectations
vary by market sector, but also, to
some degree at least in a globalised
industry, by regional requirements.
At any given time and site, the
technological priorities of any given
steel plant also depend on the costs
and availability of inputs raw
materials, energy, cooling water
and the overall costs of their
consumption for conversion into
steel semis and finished products.
Local labour costs and the levels of
environmental protection
demanded must be added to the
equation.
High-tech at Big River Steel
Big River Steel (BRS) officially opened its
new steelmaking plant on a 567 hectare
green-field site in Osceola, Arkansas,
USA, in March this year. With the new
plant supplied by SMS group, BRS will
produce grades for pipelines, silicon steels
for electrical sheets, and advanced
high-strength steels for the automotive
industry in the USA.
SMS group supplied the mechanical
equipment as well as electrical and
automation systems and process
know-how required for the steel mill
complex, which has seen a quick ramp-up
in hot rolled strip production.
The mill will produce 1.65 million stpy
of steel in its first phase and production is
planned to more than double through
expansion steps. The steelworks was
commissioned in December 2016
together with the CSP plant. An
SMS GROUP
SMS GROUP
CSP continuous caster
Superimpose on all this the
vagaries of any given steel market,
in terms of local demand levels,
political decision-making, and
associated national or international
economics and trade, to
understand a growing demand for
plants with greater flexibility to
respond to prevailing market
trends.
Digital world
Major plantmakers understand all
of these factors. Their mission is to
develop technologies that improve
productivity, and/or or that deliver
new or expanded ranges of
products at a price their
customers can afford but also
naturally at a cost at which they can
turn enough profit themselves to
reinvest in further R&D to stay
ahead of competitors.
They also recognise that some
smaller mills, notably in developing
countries, producing standard
RH-TOP facility is due to follow in June
this year. After expansion, the steelworks
will have two EAFs and two twin-ladle
furnaces.
The CSP plant comprises caster,
tunnel furnace, rolling mill, laminar
cooling system and downcoiler. The
maximum strip width is 1,930 mm. The
hot strip produced will be processed to
high-quality cold strip on an adjoining
combined pickling line/tandem cold mill.
Hot-dip galvanized cold strip is
produced on a continuous process route
via an annealing and galvanizing line,
together with an in-line skin-pass mill.
An off-line skin-pass mill stand installed
downstream from the batch annealing
furnace has a very high rolling force. BRS
SMS GROUP
is able to produce sizes ranging from
914-1,880 mm wide and 1.4-0.28 mm
thick. Twin-ladle furnace (LF) in operation
SMS GROUP
CSP hot rolling mill Coiler
commodity-grade steels such as metal production feature section
for rebar, are actually looking for next month.) The competition to
the most economical solutions with make sense of the best way to
limited bells and whistles on their extract value through the use of the
equipment. latest IT hardware and software has
Not so many decades ago, the become intense.
instruments of plant control were At the plant operational level, 3D
analogue and dominantly the simulation has become a useful tool
domain of mechanical and both to train new operators during
electrical engineers. The term plant construction and to model
mechatronics gained currency. how changes to existing plants can
Today, digital automation and to be managed to achieve
some degree robotics are to the fore improvements. Effective means of
and the data associated with them debottlenecking can also be
are becoming ever more integrated planned and trialled before the
with setting key performance targets, expense of installing new systems.
production scheduling and overall When the capabilities of existing
business management software. plants need to be extended,
Big data, Industry 4.0, and the plantmakers stand ready to offer
Internet of Things are already customised solutions based on the
beginning to sound like clich many dozens of technological
terms, but the potential they offer if packages they have developed and
successfully harnessed to advantage continue to design.
is enormous, and much of it As steel technology coverage in
remains to be unlocked. (Those will MB Magazine has stressed in
form the topic of our software for recent years, major plantmakers
June 2017 | Metal Bulletin Magazine | 53
Leading partner
in the world of metals

Plug & Work: automation pretested by simulation

Plug & Work: Thats the tried-and-tested method we apply
to run your systems thoroughly through their paces and
optimize them even before commissioning.
What you gain: Installing pre-tested automation systems
ensures rapid run-up curves for new plants as well as
revamps. Even more, shorter assembly times give you a
faster return on investment.
SMS group is a global, leading partner for the metal
industry. As a family-owned business headquartered in
Germany, quality and innovation is in our DNA. We are
committed to the success of our customers and strive
to add value along the entire value chain of the global
metal industry.

SMS group GmbH

Eduard-Schloemann-Strasse 4 Phone: +49 211 881-0
40237 Dsseldorf, Germany Fax: +49 211 881-4902
automation@sms-group.com www.sms-group.com
Steel technology
have also become keenly aware that
their own emphasis has needed to
shift from the turnkey plant
contracts of the boom years of
major capacity expansion to
multiple modernisations and
revamps, often deploying
technologies specifically designed
for retrofitting within the large fleet
of existing plants to suit an era of
steelmaking overcapacity.
Steelmakers strategies
The money for capital investment
in steel technology and the
day-to-day responsibility for its
successful application lies in the
hands of steelmakers themselves.
Some prefer to go-it-alone to a
significant degree, seeing their own
skills in running a plant to best
commercial advantage as core and
something that the less they reveal
to others the greater will be their
commercial advantage.
Sometimes, detailed analysis of
their own workflows and
operational practices can achieve
quantifiable savings by finding new
ways to make the best use of their
existing equipment or to identify
relatively small amounts of capital
expenditure that can buy
additional technology to reduce or
eliminate time- and hence
cost-wasting steps or routines.
Others, perhaps less experienced
steelmakers, value the on-going
support of their technology
providers. Others still a small but
important minority are willing to
incentivise their plant suppliers by
linking payments to plant
performance and availability.
Whatever their strategy, their
plants will age. Plant and in
particular key plant component
condition monitoring is already
widely in use. Remote condition
monitoring is a service that
technology suppliers are keen to
provide as a service throughout a
plants lifetime. A seamless
connection with their own
maintenance teams and spare part
departments is of genuine value to
steelmakers that prefer to
outsource or simply do not have
ready access to repair or
replacement engineers. It is also
prized by plantmakers keen to
foster long-term relationships with
their global clients. If a sufficient
Operations will quantity of plants within a group of
similar design can be monitored,
learn more as there is also the opportunity for
the smart mill benchmarking to enable shared
melts and rolls best practice.
more tons Continuous in-line digital-
camera-based monitoring of
product surface quality has become
a well established technology and a
tool that can be used to adjust
process settings to reduce or
eliminate flaws or occasionally to
alert operators to the need for
urgent upstream repairs.
The latest machine-vision
technology also fits into a broader
Smart Factory concept, whereby
highly automated, self-monitoring
plants learn from their own production plants form one of the
performance and adjust their own
operating parameters to achieve
consistency or improvements.
Joined-up thinking
David Stickler, ceo of Big River
Steel, Arkansas, USA one of the
newest high-tech steel plants to
have started up recently has
stressed that the business is as
much about technology as
steelmaking. We embrace the use
of automation and technology, he
told MB Magazine in our cover
profile interview for the April 2017
issue. He added: Years ago, the
steel industry was 80% brawn and
20% brains. Today, at Big River
Steel, were 90% brains and 10%
brawn.
He explained that the companys
operations will learn more as the
smart mill melts and rolls more
tons. The goal is to combine big
data, software and the latest
equipment to create a steel mill
capable of optimising production
with minimal manual intervention.
Speaking about the capabilities
of steel and metallurgical plant
technology in a cover profile
interview with MB Magazine
published in July last year, SMS
group supervisory board chairman
Heinrich Weiss head of the
Germany-headquartered
international plantmaking business
which supplied much of the
equipment for Big River Steel (see
box) said: Now that we have the
complete process in hand and
digitisation has become more
important, we have a base to make
a network for a full production line
in a steel plant not only to
automate a rolling mill or a casting
machine, but make complete
production by networking
together all of the machines. This is
the future.
In a cover profile interview with
MB Magazine published last
December, Danieli chairman and
ceo Gianpietro Benedetti stressed
the new era in which the global
steel industry now operates, and
outlined the strategy which the
Italy-headquartered international
plantmaker is applying in response
to it.
Digital technologies that
connect business operations with
key concepts. Practically, in our
opinion, digitalisation means that
you start inputting your orders and
you start to follow your scrap or
iron ore from the site at which you
are purchasing it, so that you
effectively have travelling stocks: a
train can be storage, Benedetti
said, as one example.
After the raw material arrives
and the process is started, it then
needs to be optimised to match
your orders, to produce the right
quality, and to reduce changes.
There have to be enough sensors
along the line to be able to eliminate
volatility in the process. You need
to be 99.9% sure that if you want to
produce 30 tonnes of a certain
product to a certain tolerance, you
can do that. You will follow your
finished product into the
customer, said Benedetti.
Automation of production
stages like scrap handling and
blending is another example of
digitalisation, within the process
itself, which Benedetti identified.
Making connections between
what were once islands of
production equipment, while
harmonising and optimising
business with production processes
upstream and downstream are
steps that some steelmakers are
already taking. Benedetti said that
the development and exploitation
of digital technologies will be
really a high-speed evolution.
The next issue of MB Magazine
will look in more detail at examples
of the progress being made in
software (and associated hardware)
for metal production to date.
June 2017 | Metal Bulletin Magazine | 55
Steel technology
US steelmakers
widen range
Myra Pinkham highlights how American steelmakers
are embracing new technology to develop an increasing
range of grades of innovative finished products
Innovation continues to be a big
focus for the US steel industry,
which is not surprising given both
the challenges and the
opportunities that the industry
is facing.
The demand for high-strength
automotive steels continues to
drive advances in both process and
product, Ronald Ashburn,
executive director of the
Association for Iron & Steel
Technology (AIST) says, explaining
that with US steelmakers
collectively operating at or below
75% of capacity, the pressure is on
for them to move product
portfolios up the value chain,
necessitating investment in
research and development.
We dont have much choice but
to invest in technological
innovations given external threats,
such as imported steel and
competing materials, and
structural limitations of older,
so-called legacy, assets, which
werent designed with the future in
mind, says Carlo Travaglini,
director of technology for Tampa,
Florida-based Gerdau Long Steel
North America. We have to invest
to be more productive.
At the same time in this
traditionally conservative market,
there continues to be some
resistance to making changes, he
points out. This is both because
they tend to be very capital
intensive and because it tends to be
tricky justifying moves that could
increase production capacity at this
56 | Metal Bulletin Magazine | June 2017
AK STEEL
The new hot dip time when many steelmakers have
galvanizing line that assets that are underutilised.
AK Steel has installed Because of this we arent carpet
at its Dearborn Works bombing. We are selecting the
projects with the best returns.
Technological changes are aimed
at finding ways to make steel more
efficiently with less energy
consumption and doing so at a
lower cost in an effort to be more
competitive, observes Jody Hall,
vice-president, automotive at the
Steel Market Development
Institute (SMDI) of the American
Iron and Steel Institute.
The beauty of this phase of the
evolution of technology is that we
can probably access cheaper
solutions that are very flexible, even
in existing installations, Travaglini
says.
To do this, steelmakers are
working more closely with their
customers to understand what their
current and future needs are and
how they can help to meet those
needs, Meghan Cox, a
spokeswoman for Pittsburgh-based
United States Steel says: But the
process of doing so has been
changing.
She explains that while in the
past such requests came from
customers, particularly original
equipment manufacturers, now
steelmakers are looking to lead the
way by developing new materials
even before customers ask for
them. This, she says, comes after
collaborating with them to
determine what their current and
future needs are and how to best
service them.
The automotive market
One big push aimed especially at
the automotive market has been in
the development of high-strength,
advanced high-strength steel
(AHSS) and ultra-high-strength
steels. This, Hall says, includes
continued work on third-
generation AHSS that are not just
very high-strength, but have more
ductility and formability so an
OEM could design and stamp
parts with complex geometries to
enable them to function better in a
vehicle. And when you do that
with room temperature stamping,
you can do it more cost-effectively
than with other manufacturing
methods.
Ashburn says that an important
development in the evolution of
these advanced steels has been the
use of sophisticated modelling
techniques to predict how parts will
behave during manufacturing and
subsequent application. These
steels are complex and their
microstructures can change with
temperature and applied force.
Through advanced deformation
modelling, we continue to evolve
the dynamic properties of steel to
identify ideal component geometry
for improved manufacturing
efficiency, he says, maintaining
that because of this the industry has
SMDI

entered into a new frontier for

AHSS solutions.
This comes as the SMDI has just
completed the four-year, $8 million
Integrated Computational
Materials Engineering (ICME) for
Third-Generation Advanced
High-Strength Steel project funded
by the US Department of Energy,
aimed at developing third-
generation AHSS supported by
computer-simulated materials
modelling. Hall says that the
project resulted in the development
and predicted mass reduction and
crash performance of two grades of
third-generation AHSS, one of
which has 1,200 MPa tensile
strength with 30% elongation and
the other a tensile strength of 1,500
MPa with 20% elongation.
One company that had a key role
in the ICME project as well as
making inroads in its proprietary
research is AK Steel Corporation,
Middletown, Ohio, which not only
has increased the number of its new
technology projects four-fold over
the last three years, but a bigger
percentage of those projects are
market-leading versus market-
following projects. Eric Petersen,
the companys vice-president of
research and innovation, notes that
this has been supported by its new
Middletown, Ohio, research and
The Steel Market innovation centre, which was
Development officially opened in April.
Institute is looking New innovations include the
at ways of using introduction of several
high-strength high-elongation, high-strength
cold-formed steel in steels, many of which fall into its
construction projects NEXMET family of products. This
includes its NEXMET 440EX,
which Petersen says allows OEMs
to increase the strength of exposed
automotive panels, therefore
enabling them to lighten the weight
of those panels, without affecting
the distinctness of image, or surface
quality, that consumers desire. He
says that this steel grade, while not
an AHSS, is about 20% higher
strength than other steels that are
currently used for exposed
automotive applications.
AK Steel also delivered the first
samples of its NEXMET 1000 and
NEXMET 1200, which Petersen
says is a next-generation AHSS, to
customers in April. He says that
even though NEXMET 1200 has
1,200 MPa tensile strength, double
the strength of that of dual-phase
600 MPa steels, it still outperforms
it when it comes to formability. It
provides an outstanding
opportunity for automakers to
lightweight components by
about 30%.
NanoSteel NXG 1200, which
AK Steel developed in partnership
with NanoSteel Co., is a third-
generation AHSS with 1,200 MPa
tensile strength and over 50%
elongation, which Petersen says is
an unheard of combination of
strength and formability. AK Steel
delivered its first NanoSteel
product to automotive customers
last year. Basically, it gives you the
strength of a rail with formability
that is even better than something
that would go into a quarter panel
or a fender, he explains, adding,
Automotive designers never had
anything like this in their toolbox
before, enabling them to consider
new component geometries
and shapes.
As the NEXMET steel grades
could be incorporated into existing
vehicle designs, Petersen says they
are likely to find their way into
automobiles quickly.
AK Steel is not alone in such
advanced steel grade innovation.
Ashburn notes that in November
ArcelorMittal, which has invested
in its Calvert, Alabama, mill to
enable it to make third-generation,
cold-stamping AHSS products,
announced additions to its AHSS
portfolio. Also Nucor is on the

June 2017 | Metal Bulletin Magazine | 57

Steel technology
hunt with plans for its speciality
cold mill in Arkansas and other
recent special bar quality (SBQ )
enhancements at its bar mills, he
observes.
New product innovations
Other SBQ producers have also had
notable new product innovations.
For example, TimkenSteel
Corporation, Canton, Ohio,
commercialised its Ultrapremium
SBQ steel, which Ray Fryan, its
AK STEEL
vice-president of technology and
quality, believes to be the cleanest,
most consistent air-melt product
on the market and a more
cost-competitive option for
producers of gear systems versus
more expensive vacuum-melted
grades. Fryan says that one
customer is already actively using
this new steel while about a dozen
others are engaged in active trials.
He attributes the anticipated
success of Ultrapremium to not
only the companys production
process and the control of it, but the
ability to verify the results of that
process helped by the availability of
new, high-end scanning electron
microscopes, a mini-version of big
data processing and access to
analytics that are able to convert
that data into a form that is
meaningful for component
designers.
Luis Colembergue,
vice-president of sales and
technology, says that Gerdau
Special Steel North America has
also made significant strides in
sustainable steel cleanliness
through enhanced melt practice
developments and strict process
controls at its new continuous
caster in Monroe, Michigan. This,
he says, includes the development
of clean steel practices to reduce the
size and frequency of inclusions in
its bearing quality steel.
In addition, he says that the
company is also seeing more
interest its Mecamax product,
which he says offers customers
enhanced machinability, and has
completed several trials with
positive feedback for its Nanocem
high-temperature carburising
technology.
Alberto Voltolina, vice-president
of sales for Danieli Corporation
North America, says another
58 | Metal Bulletin Magazine | June 2017
AK Steel will be example of a recent bar innovation
developing new is the companys Rotoforge
types of AHSS at technology, which is capable of
it newly opened producing forging-quality heavy
research and SBQ sections using a rolling mill.
innovation centre in This, he says, is something that was
Middletown, Ohio impossible in the past and which is
very advantageous given that it
could produce 80 to 100 tph of steel
as opposed to 10 to 30 tph for
forged products. He says it also
allows for faster changing from
alloy to alloy versus a forged
product, which is very
advantageous for SBQ.
Another thing that a lot of bar
producers are doing is adding more
vertical capabilities, says David
Anderson, SMDIs senior director
of automotive long product
programmes. After they roll the
billet into a final product, they are
taking it further into the processing
value chain by doing heat treating,
quench and tempering, grinding,
straightening or cutting so they
could ship it directly to the
customer. This, Anderson says,
allows them to have more quality
control throughout the process
while being an opportunity to
provide their customers with a
value-added product.
The beauty of Beyond automotive
Other steel end markets than just
this phase of the automotive industry are also
the evolution benefiting from technological
of technology advances. For example, AK Steels
is that we Petersen says that technologies
related to electric steels are focused
can probably on increasing the energy efficiency
access cheaper of transformers for the electric grid
solutions that as well as on moves to develop
next-generation motors and the
are very flexible, further electrification of hybrid and
even in existing electric vehicles. AK Steels
installations Thermax 17 and Thermax 22 steels
were developed to handle the
higher temperatures and higher
levels of corrosiveness in recent
smaller engines.
He says AK Steel has recently
been awarded a $1.8 million grant
to work with the US Department of
Energy on a three-year project for
its Next Generation Electric
Machines programme to develop a
new high-alloy, non-oriented
electrical steel to provide a greater
than 30% boost in the energy
efficiency of motors for industrial
and automotive applications,
including for hybrid and electric
vehicles.
It is too soon to know what the
not so quiet revolution in the
electrification and autonomous
vehicle technologies will mean to
steelmakers, Fryan says. We are
watching this with great interest
and want to be in a position to
participate.
He says TimkenSteel has also
been researching high-strength,
high-toughness steels that are also
highly corrosion resistant to be
used for sour service applications in
the oil and natural gas sector.
Robert Wills, SMDIs
vice-president for construction
market development, says that
SMDI has been investigating ways
to possibly repurpose some
high-strength automotive steels or
automotive steel production
processes, such as stamping, for the
construction sector. He says that to
date very little cold-formed steel is
stamped, but that there is no reason
that certain construction products,
such as headers, doors and
windows could not be stamped.
Also, it could be beneficial to use
certain high-strength steels to allow
metal roofs to be stronger and even
more hail resistant. It would be Coated steel products
unlikely that this would apply to the have benefited from
newest AHSS steels, Wills admits, innovation
but rather certain high-strength
steels that were developed 10-15
years ago but that have not yet
made their way into construction
applications.
Wills says SMDI has also
continued to make headway in the
steel press brake tub girder
technology for short-span bridges
(under 100 feet in length) as a
quicker, more cost-effective
alternative to precast concrete
bridges. He says that steel press
brake tub girder bridges cost about
25% less than a concrete bridge and
could be installed in a few days
versus a few months. Several
demonstration bridges have been
erected with more planned later
this year.

New mills, new technology

New greenfield steel mills also
incorporate the newest
technologies. In fact, EAF-based
Big River Steel LLC, which is
ramping up production in Osceola,
Arkansas, has described itself as a
technology company that just
happens to make steel, as well as
being a Flex MillTM.
Since our inception we have
NUCOR

been focused on combining the best

of integrated and mini-mills,
providing us with the flexibility to micro-mills, including the one it is chemistry sampling of molten
make products that before only building in Durant, Oklahoma, metals being a prime example,
integrated mills could tackle but including its endless continuous Ashburn says, adding that they are
with the benefits of a more nimble casting technology and its good at completing steps in a
mini-mill, says Mark Bula, its chief capability to produce spooled rebar. process. For example, Nucor-
commercial officer, adding that this Danielis Voltolina says that Yamato Steel (USA) recently
has been made possible by its other companies could recreate ordered two Danieli Telerobot Labs
technology package, which some of the benefits of such a Q-Robots for its Blytheville,
includes an RH degasser. micro-mill without building a Arkansas, ladle furnaces.
He says Big River is also whole new mill by just adding such And now were seeing an
partnering with its equipment equipment as a welding machine evolution of machines being able to
supplier, SMS group, to develop a and a spooler line, which allows the manage an entire process via
smart mill that will learn as it production of five-tonne compact artificial intelligence making the
produces steel. The combination coils, at their existing mills. person-less meltshop almost a
and connectivity of software, data AISTs Ashburn observes that reality, Ashburn concludes.
and equipment will allow the mill to the US steel industry is also Looking forward steel
identify and correct production continuing to see advanced innovation will continue to be
issues, so a chemistry out of range in technologies, including the critical, including collaborative
the ladle metallurgical furnace can utilisation of a variety of sensors, precompetitive innovations,
be brought into range by the mill robotics and event-prediction SMDIs Hall says. Gerdaus
adjusting through the caster or the analytics within the typical steel Colembergue agrees, noting as steel
rolling mill all with little manual plant environment. industry requirements get more
intervention, Bula explains. Robots have been and will and more difficult to achieve, there
Similarly, there are technological continue to be deployed in all will be the need for new
advancements at Commercial hazardous areas and for repetitive technologies and the development
Companys (CMC) new rebar tasks with temperature and of new grades of steel.

June 2017 | Metal Bulletin Magazine | 59

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60 | Metal Bulletin Magazine | June 2017
New orders

New plant orders

Our regular review of new plant orders announced for new and upgraded
plants, expansions, modernisations and revamps
Customer Supplier Order details Start-up
AUSTRALIA
BlueScope Steel, NSW Aumund Group Rotary discharge machine to automatically reclaim coke from underneath a 50,000 t stockpile built on top of a
discharging gullet.
Amec Foster Wheeler Outotec 15 MW semi-autogenous grinding mill. Q1 2018
Civmec JV for Gruyere Gold
BAHRAIN
Alba SMS group Homogenizing furnace.
Alba Outotec Anode rodding shop plus bath and butts material recycling facility for aluminium smelter expansion to 1.5m tpy By Jan 2019
of aluminium (from 971,000 tpy).
BELARUS
Miorskij Metalloprokatnyi SMS group Tinplate production complex. Initial capacity, 150,000 tpy (with provision to increase to 240,000 tpy). Plant includes: H2 2018
Zavod (MMPZ-group), Miory reversing cold mill, electrolytic cleaning line, batch-annealing plant, combined double-reducing and skin-pass mill,
electrolytic tinning line and two packaging lines (one for sheet packs, one for coil). Can also produce non-coated
sheet in commercial (CQ) and drawing quality (DQ) grades.
BOLIVIA
Las Lomas Danieli 200,000 tpy Nano-mill. Q1 2018
BRAZIL
ArcelorMittal, Brazil Aumund Group Drag chain conveyor (Louise TKF). Q3 2017
ArcelorMittal Monlevade SMS group BFA repair.
BULGARIA
Silva Mash Danieli New Danieli W + K ERW 45/2.5-150 mill for round, rectangular, square, semi-oval and elliptical high-quality and
high-strength tubes for high-end automotive and furniture components. Outside dia from 10-45 mm and wall
thickness from 0.5 to 2.5 mm.
CHINA
Baosteel Schade Lagertechnik Six combined stacker-reclaimers to stack 3,600 tph of ore and reclaim up to 1,200 tph. Outer rail span of 56 metres. 2017/18
(Aumund Group)
Baosteel Primetals Technologies Modernisation of continuous slab caster No. 3 in steelworks No. 1, Shanghai. Machine head and strand guide Q1 2018
replacement to produce high-quality slab for demanding applications and increase max. slab thickness to 357 mm
(in addition to 250 mm and 300 mm). Slab width range: 1,200-2,300 mm. Very low to high-carbon steels,
micro and low-alloyed, peritectic and HSLA grades, structural steels, pipes and sheet steels.
Baosteel Zhanjiang Iron & Steel SMS group New coiler to coil high-strength grades and thick strip for Zhanjiang hot strip mill (including tube and pipe steels End-2017
of strength classes X100 and X120, or ultra-high-strength strip of 1,200 N/mm).
Hebei Jingye Group Danieli EWR/K-welding system for rolling mill No. 5 in Pingshan. To weld 12 m long, 165 mm square billets for a mill Late-summer 2017
productivity of 220 tph, for continuous production of rebars 10-40 mm dia.
Henan Mingtai Al. Danieli New Danieli Frhling high-speed trimming line at up to 1,500 metres/min. Max. parameters for input strip Mid-2018
Industrial Co. Ltd width: 2,650 mm wide; 2.5 mm thick; 28 t weight. CNC-trimming shear with 8 knife heads for up to 3 finished
strips. Two recoliers.
Henan Zhongfu Industrial Danieli 2,300 mm x 0.1-0.8mm aluminium strip and foil edge trimming line. Q4 2017
Pangang Group Sichuan Danieli 45MN steel extrusion line. Q4 2018
ChangCheng Special Steel
Shandong Iraeta Heavy Industry, SMS group New RAW 2500/1250-16000/3000 seamless ring rolling machine for ring diameters up to 16 metres and heights End-2017
Zhangqiu works up to 3 metres (e.g. for wind turbine tower flanges or pressure vessels). Rolls from blanks up to 200 t.

June 2017 | Metal Bulletin Magazine | 61

New orders

Customer Supplier Order details Start-up

Shandong Iron & Steel, Rizhao SMS group Continuous single-strand caster for 1.5m tpy of ultra-wide slabs (3.25 m (max.) x 15 cm thick). Structural, Caster by end-2018
micro- and low-alloy grades. Over 45% peritectic grades. 1.3m tpy Steckel/plate mill for product 4-50 mm thick Mill in 2019
and 1,650-3,250 mm wide.
Shandong Luzhong Steel CMI Industry Two acid regeneration plants using fluidised bed technology to recover and recycle 17,000 litres/hour of hydrochloric June 2017
Logistics acid used for pickling hot-rolled strip.
Yantai Taihai SMS group Ring rolling mill 5000.
Yonggang, Zhangjiagang SMS group New SMS Concast four-strand, 540,000 tpy, SBQ billet caster to expand product range. For 150 mm and 220 mm End-2017
square billets.
Zhejiang Wanliyang SMS group Fully automatic closed-die forging, type MP 2500. Press force, 25 MN. To forge up to 5 million parts per year June 2018
Transmission (mainly gear wheels).
Zhengzhou Mingtai SMS group 125 MN extrusion press for profiles up to 900 mm wide. 60 MN, 8,000 tpy, seamless tube press Spring 2019
Transportation New Materials (up to 400 mm dia). For new works built in Xingyang.

Zhongwang (Yingkou) SMS group Aluminium HSM.

High-refinement
Zhongwang (Yingkou) SMS group Cold rolling mill (Aluminium CRM 1-4).
High-refinement
Zhongwang Liaoyang SMS group Cold rolling mill.
CZECH REPUBLIC
VH (T ineck elezrny) Primetals Technologies Modernisation of special section rolling mill in Dobr. Capacity increase from 8,000 to 12,000 tpy. Increased square Q4 2017
billet size up to 150 mm. Includes retrofitting existing roughing stand with new automatic bar manipulation systems
at both entry and exit side, so bars can be automatically rotated and moved between rolling passes.
FRANCE
Industeel France (ArcelorMittal) Danieli Revamping of plate mill at Le Creusot for high surface quality, by revamping primary and secondary descalers
and applying DanHYD technology package. Includes new pump room and hydraulic valves, redesigned ramps
and nozzles, and new electro-mechanical lifting system for top header. Also dedicated automation system.
GERMANY
ArcelorMittal Bremen SMS group New HD spray system with air-mist cooling for two-strand continuous slab caster. End-2017
ArcelorMittal Ruhrort Danieli New 7th strand for existing CCM. Q1 2018
Bhler Edelstahl SMS group Open die forging press.
Georgsmarienhtte Primetals Technologies Modernisation of six-strand continuous square bloom caster (240 x 240 mm and 165 x 165 mm) to improve Summer 2017
product quality, increase productivity and availability, and allow greater flexibility in use of the production facilities.
Trimet SMS group Hertwich Engineering continuous homogenising unit. New 30,000 tpy heat treatment plant comprising September 2017
storage conveyor, continuous homogenising furnace and cooler. For billet from 145 to 450 mm dia and
7,700 mm long.
INDIA
Hindalco Industries (Aditya Birla) SMS group CR 3500 CONTIROD plant to cast and roll 35 tph of copper wire rod in Dahej, State of Gujarat. Q3 2017
JSW Steel Limited Danieli HDG line (450,000 tpy) at cold rolling mill No. 1 (Toranagallu). Q3 2019
JSW Steel Limited SMS group JSW BF3 Iron BF Upgrade.
Ratnamani Metals & Tubes Ltd. Danieli 45 MN extrusion plant and 15 MN expansion press + vertical expander press. Q4 2018
Vedanta Limited SMS group Contirod CR 3500.
IRAN
Mobarakeh Steel Complex Tenova Walking beam reheating furnaces revamping at HRM (production: 300 tph). Side trimmers revamping H2 2018 and H2 2019
on existing inspection line 3&4.
NICICO Outotec Two sulphuric acid plants for the Sarcheshmeh and Khatoon Abad copper smelters in Kerman province. Mid-2018
ITALY
Acciaierie Valbruna Tenova EAF modernization, new TDR digital regulation and new KT burner system. H2 2017
Acciaierie Venete, Padua Danieli Danieli four-roll drawing/rolling block for new SBQ mill to produce bars with high dimensional tolerances of 1/8 DIN.
Output: SBQ round bars from 18 to 82.5 mm and future production of flats and hexagons from 30-60 mm.
A new 80 tph reheating furnace will bring to rolling temperature round blooms from 200, 220 and 240 mm.

62 | Metal Bulletin Magazine | June 2017

Customer Supplier Order details Start-up
LUXEMBOURG
ArcelorMittal Belval Danieli New gear motors and FC5 drives. Q2 2018
& Differdange
MEXICO
ArcelorMittal SMS group TOP charging system.
Met-Mex Penoles, Torreon Outotec Zinc production technology, including proprietary pure jarosite process, feed pre-treatment system for the
roasting process, mercury removal process and OTOVENT quench scrubber for off-gas treatment.
TA2000 SMS group 350,000 tpy SBQ mill.
Tyasa Primetals Technologies Production management solution (level 3) for existing steelmaking plant, billet caster and new Castrip-based Early 2018
coil production line in Ixtaczoquitlan. Integrates the business level with the automation level by translating sales
orders for coils received from SAP into production orders, including routing information and process instructions
for the production units to allow product-specific set-up.
PAKISTAN
International Steels SMS group Full-line supply of a twin-stand CCM (Compact Cold Mill) in 4-high design. Will double cold strip capacity to Summer 2018
900,000 tpy. To roll C-steel strip up to 1,250 mm wide and final gauge down to 0.15 mm.
PERU
Southern Copper Corp Outotec Concentrate filtration plant for the Toquepala concentrator expansion (by 100,000 tpy of copper). H2 2017
(Grupo Mexico)
PHILIPPINES
Steel Asia Manufacturing SMS group 500,000 tpy light section mill.
ROMANIA
ALRO SA (Vimetco Group) Danieli Danieli Fata Hunter 18 MN aluminium plate stretcher and cold rolling mill No. 2 modernisation. Stretcher Q2 2018
to process very thin aluminium plates with high surface quality in alloys 1xxx to 7xxx. Modernisation to improve
sheet gauge and flatness tolerances, increase productivity and mill reliability. (Includes slab homogenizing
furnaces and plate ageing furnace.)
ArcelorMittal Galati Danieli Cooling stack for 180t converter. Q1 2018
RUSSIA
Abinsk Electric Steel Danieli Second coil compactor. Q1 2018
Works (OOO AEMK)
MMK SMS group Modernisation of No. 6 continuous slab caster and heavy-plate mill. Upgrade both plants X-Pact electrical End-2017
and automation systems. Will expand slab thickness range to 350 mm. Cast width unchanged at 2,700 mm.
NLMK Russia Tenova Walking beam reheating furnace at HR flats shop (320 tph with carbon steel, 190 tph with silicon steel). H2 2019
OMK Steel (United Danieli Pipe heat treating facility. Q4 2018
Metallurgical Company)
Severstal Paul Wurth Technology for modernisation of 4m tpy BF No. 5 at Cherepovets. Includes new, parallel-hopper design 2018-2020
(SMS group) Bell Less Top charging system with 80 cu metre hopper, gas cleaning plant and 4 INBA slag granulation plants.
TMK Seversky SMS group Water treatment plant.
JSC Ural Steel (Metalloinvest) Danieli Danieli Centro Met to revamp the vacuum degasser in Novotroitsk. To increase the productivity of its existing End 2017
twin-tank, twin-cover VD, from 1.1 to 1.8 Mtpy of special steels, including rail and wheel grades.
Vyksa Steel Works Danieli 7in finishing/quality assurance line. Q4 2018

SLOVENIA
Impol SMS group New Hertwich melting furnace and charging equipment for a melting rate of 6-8 tph as part of new casting May 2018
plant for aluminium rolling ingots.
SPAIN
Sidenor Special Steels SMS group Modernisation of round bar mill in Basauri. Includes: replacement of reversing 3-high stand by a six-stand September 2017
continuous roughing mill with compact stands in V-H arrangement. New crank shear and two further compact
stands in V-H arrangement, to be installed in front of existing continuous finishing stands. Further crank shear
for delivery side of the bar mill new modular walking-beam furnace.
TURKEY
Tatmetal SMS group Continuous pickling line/regeneration.

June 2017 | Metal Bulletin Magazine | 63

New orders

Customer Supplier Order details Start-up

UAE
Emirates Global Aluminium SMS group Additional Hertwich Engineering batch homogenising furnace to heat treat billet (125-406 mm dia and End-2017
5,000-8,000 mm long) and bring total batch furnace numbers to 5 at Jebel Ali and 2 at Al Taweelah.
Union Iron & Steel Primetals Technologies ERT-EBROS (billet welding) endless rolling technology for existing bar rolling mill in Abu Dhabi. Designed for Late-2017
production capacity of 420,000 tpy. Will increase existing capacity for rolling 130 x 130 and 150 x 150 mm billet
into ribbed steel rod (8-40 mm dia) for reinforcement.
USA
Arconic Tenova Refurbishment of an aluminum annealing furnace. H2 2017
Charter Steel Tenova EAF modernisation, Consteel and auxiliary equipment supply. H2 2018
Gerdau Cartersville, Georgia Primetals Technologies Modification of continuous caster to provide capability to produce an additional (larger) beam blank format End-2017
to roll into bigger finished products for construction.
Hydro Aluminium, SMS group Hertwich Engineering 55 t batch homogenising furnace and a further saw for extrusion billets up to 7.7 m long
Commerce, Texas and 178-406 mm dia.
Nucor Hickman Andritz Turnkey production lines for new 650,000 stpy cold rolling complex. Push pickling line (max.speed 200 m/min) H2 2018
for hot-rolled coil, multi-roll leveller and 4-high skin pass mill. Cold rolling mill with S6-high technology and
4-high temper rolling mill (max.speed 800 m/min). For 3rd gen. AHSS, HSLA, electrical steels and grades up to 2,000 MPa.
Nucor Marion SMS group 120 stph walking beam reheating furnace for billet.
Nucor Marion Danieli Mill upgrade. Q4 2018
Nucor Texas Danieli New convertible stands. Stands No. 14 and No. 16. Q3 2018
Nucor Yamato Steel Danieli Technological packages - Q-robot melt (LF1 + LF2). Q4 2017
Steel Dynamics SMS group New reheating furnace and finishing equipment to expand merchant bar mill at Roanoke, Virginia, from End-2017
500,000 to more than 600,000 tpy. To process 140 tph of billet to be rolled into light sections and rebar from
12.7-35.8 mm, plus corresponding round bars. Product bundle length, 6-18.3 metres, weighing 1-5 t.
UACJ Automotive Whitehall SMS group HybrEx 25 MN extrusion press. End-2017
Industries, Ludington,
Michigan
VIETNAM
Hoa Phat Steel Danieli Revamp 3-strand billet CCM. Supply 600,000 tpy bar & wire mill. Q2-Q4 2018
Hoa Sen Group SMS group Esmech Equipment to supply twin-stand CCM reversing cold mill in Vingh City, Nghe An Province.

End-2017
Designed for rolling low carbon steel at a nominal annual capacity of 350,000 tpy. Minimum final gauge, 0.11 mm.
My Viet Industries SMS group Twin-stand, 6-high, 400,000 tpy, reversing compact cold mill (CCM) and a push-pull pickling line from Autumn 2017
Esmech Equipment. For low-carbon steel strip width up to 1,250 mm and min. final gauges of 0.15 mm min.
SSE Steel Danieli Revamp 3-strand billet CCM. Q4 2017

64 | Metal Bulletin Magazine | June 2017

Supplychainservices
Harsco signs ten-year mill
services contract in Egypt
Harsco Corporations Metals &
Minerals division has signed a new,
10-year mill services contract with
Egyptian Steel. Valued at
approximately $60 million in
projected revenues over its duration,
Alleghany Capital invests in W&W|AFCO Steel
Alleghany Capital Corporation has
acquired a majority interest in
WWSC Holdings, LLC, one of the
largest structural steel fabrication
and erection companies in North
America. Headquartered in
Oklahoma City, Oklahoma,
W&W|AFCO provides fabricated
steel through six state-of-the-art
facilities for use in large construction
projects primarily in North
America, including commercial,
industrial, and public structures, as
well as stadiums and bridges.
Aggrekos solar-diesel power deal in Eritrea
Aggreko has signed a 10-year deal
to provide solar-diesel hybrid
power to Canadian mining
company Nevsun for use in its
Bisha mine in Eritrea. Aggreko, a
Glasgow, Scotland-based supplier
of power generation equipment
and of temperature control
equipment, will supply 22 MW of
diesel and 7.5 MW of solar-
generated power for Nevsuns
copper and zinc operations.
the contract is for the provision of
mill services at Egyptian Steels Al
Ain Al Sokhna plant a new
steelmaking facility under
construction in support of Egyptian
Steels market expansion.
We have now reached an
inflection point in our companys
evolution where the logical next step
is to join forces with a strong
financial partner to pursue the
significant growth opportunities
ahead. I am very proud of the culture
of integrity and excellence that we
have built since 1945 and we could
not have found a better partner than
Alleghany Capital, which embraces
the same values and long-term
perspective as W&W|AFCO, said
Rick Cooper president and chief
Our mobile, modular power
enables us to make a massive
difference to the communities and
industries we serve, and our
solar-diesel hybrid offering is an
example of an innovation that brings
cost-effective, reliable, uninterrupted
power with additional fuel
flexibility to customers, said
Aggrekos ceo, Chris Weston.
Aggrekos solar-diesel hybrid
power package combines
Under the agreement, from
January 2018, Harsco will provide
slag management, scrap
management and material handling
services at the plant, with future plans
to design and operate on-site metal
recovery and briquetting plants.
The contract strengthens the
Harsco divisions role in the African
and Middle East steel markets, where
Harsco has been providing services
since 1994. This contract addition
in the Harsco portfolio is in line with
our growth strategy in this
strategically important region, said
Harsco president and ceo Nick
Grasberger. Our Metals & Minerals
business is growing again and
capturing new sites.
EGYPTIAN STEEL
Commenting on the agreement,
Egyptian Steel Group ceo and
chairman Ahmed Abou Hashima
said: We are raising the benchmark
Egyptian Steel has of the steel industry and becoming a
signed a $60 million leading player in Egypt and the MENA
service contract with region. This new contract will help us
Harsco for work at in utilising state-of-art, eco-friendly
its Al Ain Al Sokhna technologies to deliver organisational
plant excellence in a safe environment.
executive officer of the steel
fabricator.
Udi Toledano, chairman of
Alleghany Capital, added that the
transaction would not impact the
day-to-day operations of
W&W|AFCO, with Cooper and
W&W|AFCOs management team
continuing to lead the company.
We are ready to support the
companys next stage of growth and
ensure that it is well-positioned to
capitalise on future opportunities,
Toledano said.
cost-effectiveness and renewable
energy with the reliability of
diesel-generated power to provide
uninterrupted power. The hybrid
programme was developed at
NEVSUN
Aggrekos manufacturing and
Nevsun will be using technology centre in Dumbarton,
solar-diesel hybrid Scotland. The diesel generators are
generators, supplied monitored by using Aggreko
by Scottish business Remote Monitoring telemetry to
Aggreko, at its Bisha ensure optimum operational and
mine in Eritrea fuel efficiencies.
May 2017 | Metal Bulletin Magazine | 65
Innovations
ArcelorMittal develops TL-5 rated
steel median safety barrier
ArcelorMittal Global Research
and Development, working in
cooperation with US safety barrier
manufacturer Gregory Industries,
has developed a new, proprietary
high-containment steel central
median safety barrier. It is the first
Methods for Assessing Safety
Hardware (MASH) Test Level-5
(TL-5) rated steel central median
safety barrier developed for the US
market.
In the early 2000s,
ArcelorMittal worked with
European safety barrier
manufacturers to design higher
performance safety barriers as a
result of new regulations that
promoted safety performance
instead of specifying set barrier
configurations, said Rich
ABB Ability Smart Sensor
ABBs Ability Smart Sensor
condition monitoring technology,
which is now available in Europe,
and will soon be released in the
USA, will allow low voltage (LV)
motors to be converted into
intelligent, connected machines.
Smart Sensor is a remote
condition monitoring solution that
enables users to check the status of
LV motors from a smartphone or
dedicated web portal. The
compact sensor, the size of a
smartphone, can be attached to
motors to pick up operating and
performance data. The data are
transmitted to the cloud and
processed to produce useful
information on motor health and
performance. This information is
supplied to the user in an easy-to-
understand format. The solution
enables predictive analytics that
can boost uptime while reducing
energy consumption.
The ABB Ability Smart Sensor
has been successfully trialled with
many of our customers around the
world. This solution is truly a
quantum leap for millions of LV
66 | Metal Bulletin Magazine | June 2017
Clausius, projects manager, Global
R&D, East Chicago. This work
proved to be quite successful and
led to safer roads and increased
steel sales in Europe. In 2008, I
was asked to determine if the same
approach could be done in the US.
Clausius added that Gregory
Industries was particularly
interested in ArcelorMittals
capabilities and in developing a
new proprietary barrier for the US
market.
For a TL-5 barrier design to be
approved in the USA, it has to pass
three MASH full-scale crash tests.
The tests include a mid-size car,
quad-cab pickup truck, and a fully
loaded tractor trailer. In all three
tests, the vehicles must be
contained (they cannot go through
motors, said Otto Preiss,
managing director of ABBs
Motors and Generators business
unit. It enables plant operators to
do effective maintenance planning
for motors, assess the efficiency of
their operation and prevent costly
downtime. We are confident that
this solution will not only
transform maintenance
approaches, but also create added
operational value for our
customers.
It is estimated that predictive
maintenance based on data from
retrofitted on installed motors.
ABB
ABBs Ability Smart
Sensor allows users
to check the status of
low-voltage motors
from a smartphone
or dedicated web
portal
or over the barrier), be safely
redirected, not roll-over, have no
excessive intrusion into the
passenger compartment, and must
have reasonable deceleration rates.
Before using real vehicles and
barriers, computer modelling was
used to simulate crashes. Barrier
design was optimised by using the
results. In the actual crash tests,
the barrier successfully contained
and redirected the car, pickup
truck and tractor trailer. We
applied for patents and expect to
receive approval from the US
Federal Highway Administration
in early 2017, said Clausius. As
soon as the barrier is approved,
Gregory Industries will begin
marketing and manufacturing the
barrier with ArcelorMittal steel.
the solution can help to reduce
downtime by up to 70%, extend
motor lifetime by as much as 30%
and cut energy consumption by up
to 10%. The sensor units can be
factory-fitted on new motors or
They are available for both ABB
and other manufacturers motors.
The sensors in the first release
are CE certified and compatible
with safe-area induction motors
for direct on-line S1 duty, ABB
IEC sizes 160-450 and ABB
NEMA sizes 140-449.
Initial monitoring capabilities
will cover bearing health,
vibration, surface temperature,
speed, supply frequency, and
number of starts. Later releases
will expand that range. Energy
consumption monitoring is
expected to be added during Q3
2017. An update will be provided
to bring this function to already
installed sensor units. The first
systems will utilise a smartphone
app to transfer data. A gateway
unit for automated data uploading
will become available later in 2017.
End user
ArcelorMittal launches website
for construction industry
ArcelorMittal has launched a
website to serve as a steel reference
for architects, engineers and
building owners. The site
(constructalia.arcelormittal.com)
includes more than 500 steel
construction case studies. It also
has many features and services to
give decision-makers in the
construction business comprehensive
information about the use of
structural and aesthetic steels.
Aeromet expands relationship with Boeing
Aeromet International has been
awarded an extension to its existing
long-term agreements covering the
supply of cast aluminium and
magnesium parts for Boeings 737,
767 and 777 aeroplanes. Aeromet
has also secured a new contract to
supply parts for the 777X, Boeings
next-generation plane due to enter
service in 2020.
The 777X contract is for parts
made using A20X, Aeromets
proprietary high-strength
aluminium casting alloy, which was
developed and patented by the
UK-based company.
This agreement builds upon
Aeromets 17-year relationship
with Boeing and is a natural
Kobe expands plants for forged aluminium products
Kobe Aluminium Automotive
Products (KAAP) plans to further
expand its production facilities to
meet the rising demand in North
America for its aluminium forged
automotive suspension products.
Established in 2003 as a joint
venture by Kobe Steel, Mitsui &
Company and Toyota Tsusho
Corporation to produce aluminium
forged suspension products in the
USA, KAAP began production in
2005. The companys first expansion
began at its Bowling Green,
Kentucky, plant in November 2015
with the installation of a melting
and casting line and two forging
As one of the leading steel
companies in the construction
sector, we set out to ensure that the
many different decision-makers
involved in major construction
projects can find the information
and products they need via the
website, said Marta Dziarnowska,
digitalisation in construction
director at ArcelorMittal.
Via the website, the steelmaker
provides free building information
Boeings latest commercial aircraft, the 777X, will use parts
made from Aeromets proprietary aluminium alloy, A20X
extension of a partnership that has
seen the companys operational,
engineering and quality teams
presses. Once that phase of capital
investment is completed, KAAP
will have three melting and casting
lines and eight forging presses.
KAAP has now announced plans
for an additional expansion
programme, which will see it invest
about US$53 million on the
installation of an additional melting
and casting line and two more
forging presses. Start-up is to begin
in stages from autumn 2018, with
completion scheduled for early
2019. When completed, production
capacity will increase to 970,000
pieces per month, and employees
are anticipated to total 600.
modelling (BIM) objects and
computer-aided design (CAD)
files of its product range in
universal dwg and dfx formats, so
that they can be easily
incorporated into architectural
and structural designs at the early
project stages.
Users can access free pre-design
tools to support engineers and
architects in the blueprint and
calculation stage of projects. The
programs cover various steel
design aspects and composite
structures with different
standards, as well as special
solutions in accordance with
the European design codes
(Eurocodes).
collaborate on projects that have
developed innovative solutions for
complex parts, said Simon
Holliday, Aeromets managing
director.
Boeing and the UK aerospace
industry have a long, mutually
beneficial history, said Sir Michael
Arthur, president, Boeing Europe
and managing director of Boeing
UK and Ireland. In the past year,
we have expanded our outreach to
BOEING
local suppliers to better prepare
them to compete and win Boeing
work, he added, noting that
Aeromets recent contract award is
another example of successful
business between Boeing and
UK companies.
In addition to the expansion of its
North American joint venture,
Kobe Steel is further developing its
automotive collaborations with the
KOBE STEEL
announcement of plans to increase
the heat treatment equipment and
KAAP is continuing surface treatment equipment at its
to expand in Moka Plant in Moka, Tochigi
North America Prefecture, Japan, to meet growing
to meet demand demand for automotive aluminium
for aluminium panel material in the country. Total
forged automotive investment is projected to reach
suspension products about 20 billion yen ($175.6
million) and construction is
anticipated to begin within the
current fiscal year (ending March
2018).
June 2017 | Metal Bulletin Magazine | 67
Events For full details of Metal Bulletin Events
www.metalbulletin.com/events

12th Asian Stainless Steel Conference North American Ferro-alloys 5th Asian Nickel Conference
14 15 June 2017 Conference 27 - 28 September 2017
Hong Kong 7 - 8 September 2017 Manila, Philippines
A key event focused on market Chicago, USA The biggest Asian event for the global
fundamentals and end user In 2016, more than 150 delegates from nickel industry, the 2016 conference
applications, attracting major companies across the industry welcomed more than 100 delegates
companies in the region. spectrum, including raw material from over 70 companies from around
metalbulletin.com/events buyers from major steel producers in the globe.
the region, attended the inaugural metalbulletin.com/events
AMM & WSD Steel Survival
SHUTTERSTOCK

event dedicated to the North American

Strategies XXXII ferro-alloys industry. Aluexpo 2017
26 - 28 June 2017 amm.com/events 5 7 October 2017
New York, USA Hong Kong Istanbul, Turkey
In partnership with World Steel 11th International Steel Tube & Pipe In addition to aluminium products,
Dynamics, this event brings together Forum Aluexpo also includes machinery,
executives from over 700 companies for 12 - 13 September 2017 equipment, raw materials and
in-depth debate and networking Abu Dhabi, United Arab Emirates consumables manufactured by
opportunities. Speakers will analyse the global and domestic and international suppliers.
amm.com/events regional demand drivers for oil & gas aluexpo.com
and pipeline projects. Attendees will
Mining Cumbre also be given insight into Iranian steel 31st Stainless & its Alloys Conference
11 12 July 2017 tube and pipe projects and trade 25 - 26 October 2017
Santiago, Chile Pittsburgh, USA
SHUTTERSTOCK

Mining Cumbre allows mining
corporates seeking investment,
investors looking to strike deals and
government ministers the opportunity
to engage discussions about new
projects in Latin America.
miningcumbre.com
2a Excelencia Estratgica en la
Minera
29 - 30 August 2017
Chile
Launched in 2016, this event provides
the opportunity to hear first-hand
from the CEOs of the South American
mining industry and learn from their
experience.
metalbulletin.com/events
16th International Stainless and
Special Steels Conference
5 - 7 September 2017
Ljubljana, Slovenia
With three days of expert content and
two field trips for both flat and long
products planned for 2017, this
conference continues to be a prime
event for all those involved in the
stainless and special steel markets.
metalbulletin.com/events
feasibility.
metalbulletin.com/events
Chicago 22nd Galvanizing & Coil Coating
Conference
13 - 14 September 2017
Abu Dhabi, United Arab Emirates
An event focused specifically on the
commercial and technical aspects of
the coated flat steel market. This years
conference will include a workshop
with Unicoil and an optional field trip
to Al Ghurair Iron & Steel LLC, the steel
cold rolling and galvanising complex in
the UAE.
metalbulletin.com/events
Automotive Supply Chain Conference
18 -19 September 2017
Dearborn, Michigan, USA
With more than 85 companies in
attendance, including OEMs and
manufacturers of steel, aluminium
and various composite materials, this
is the best opportunity to network with
the entire automotive supply chain
from across North America and Mexico.
amm.com/events
32nd International Aluminium
Conference
25 - 27 September 2017
Manana, Bahrain
With more than 400 delegates in
attendance each year, this event is
essential for all those involved in the
global aluminium supply chain. Key
decision makers from over 240 companies
and 52 countries attended in 2016.
metalbulletin.com/events
More than 120 delegates from over 80
companies attend this conference
each year as it brings together the
North American stainless steel industry
to discuss market drivers that will
shape the industry in the year to come.
amm.com/events
21st Arab International Aluminium
Conference (ARABAL)
6 - 9 November 2017
Muscat,Oman
ARABAL has become an internationally
recognized event attended by a broad
spectrum of industry leaders, top
executives as well as key investors,
major suppliers and manufacturers
from over 150 global companies. This
years conference will focus on -
Driving strategic growth across the
global aluminium industry.
arabal.com
Metal-Expo 2017
14 - 17 November 2017
Moscow, Russia
Last years Metal-Expo saw over 500
companies, including steel producers,
tube and pipe manufacturers, and
steel product distributors, from 32
countries participate in the event.
metalbulletin.com/events

68 | Metal Bulletin Magazine | June 2017

Monthlyprices
April averages
Low High
Aluminium
Aluminium P1020A, in-warehouse premium
Rotterdam duty unpaid spot $/tonne 90.00 99.78
Aluminium P1020A, in-warehouse premium
Rotterdam duty paid spot $/tonne 145.71 159.29
Alumina
Index fob Australia 308.11
Antimony
MB free market
Regulus 99.65%, max Se 50ppm,
in warehouse,$/tonne 8,850.00 9,100.00
MMTA Standard grade II, $/tonne 8,775.00 9,037.50
Bismuth
MB free market
min. 99.99%,
tonne lots, in warehouse, $/lb 4.66 5.06
Cadmium
MB free market
min 99.95%, in warehouse, cents/lb 74.63 81.63
min 99.99%, in warehouse cents/lb 77.63 86.13
Cobalt
MB free market
High Grade, in warehouse, $/lb 27.08 28.44
Low Grade, in warehouse, $/lb 24.82 26.34
Copper
US High-grade cathode premium
indicator,
$/tonne 115.74 126.77
Germanium Dioxide
MB free market min 99.99%, $/kg 697.50 780.00
Rotterdam, $/kg 1,050.00 1,206.25
Gold
London $/troy oz Morning 1,267.15
$/troy oz Afternoon 1,265.63
/troy oz Morning 1,002.83
/troy oz Afternoon 1,001.23
$/troy oz Handy/Harman 1,266.88
Indium
MB free market
ingots, min 99.97%,
in warehouse, $/kg 190.00 223.75
Magnesium
MB free market
min 99.8%, $/tonne 2,200.00 2,300.00
China free market min 99.8% 2,230.00 2,247.50
Mercury
MB free market
min 99.99%, in warehouse, $/flask 1,100.00 1,337.50
Molybdenum
Free market in warehouse
Europe drummed molybdic
oxide $/lb Mo 8.79 8.91
US canned molybdic oxide $/lb Mo 8.95 9.15
Nickel
Free market in warehouse premium
Uncut cathodes 135.00 172.50
4x4 cathodes 257.50 305.00
Briquettes 180.00 215.00
US
Melting $/lb 0.19 0.25
Palladium
Morning $/troy oz 799.17
Afternoon $/troy oz 799.89
Platinum: per troy oz
Morning $/troy oz 961.17
Afternoon $/troy oz 959.89
For the latest prices see
www.metalbulletin.com/my-price-book
April 2017 April
Rhodium
Low High
Low High average
European free market $ $ $
min 99.9% in-warehouse, $/troy oz 973.06 1,073.06 Lead ($)
Cash 2,006.75 2,441.50 2,230.78
Selenium
3 months 2,021.00 2,444.50 2,230.44
MB free market
Settlement 2,007.00 2,442.00 2,231.31
min 99.5% in warehouse, $/lb 18.88 21.46
3 months seller 2,022.00 2,445.00 2,231.03
Silicon
Lead ()
MB free market, /tonne 1,900.00 1,980.00
Settlement 1,635.70 1,950.95 1,765.87
Silver
3 months seller 1,644.30 1,949.45 1,761.45
London
Zinc ($)
spot pence/troy oz 1,428.94
Cash 2,529.50 2,970.50 2,632.50
spot cents/troy oz 1,805.83
3 months 2,554.50 2,958.25 2,649.19
Handy/Harman cents/troy oz 1,803.34
Settlement 2,530.00 2,971.00 2,633.03
Tin 3 months seller 2,555.00 2,958.50 2,649.75
European free market
Aluminium ($)
Spot Premium 99.9%, $/tonne 318.75 366.25
Cash 1,700.50 1,961.00 1,930.61
Spot premium 99.85%, $/tonne 307.50 328.75
3 months 1,688.25 1,971.75 1,940.90
Kuala Lumpur (ex-smelter), $/tonne 19,875.26
Settlement 1,701.00 1,962.00 1,930.94
Titanium 3 months seller 1,688.50 1,972.00 1,941.31
Ferro-Titanium,
Aluminium Alloy ($)
70% (max 4.5% Al), d/d Europe, $/kg 4.59 5.01
Cash 1,540.00 1,715.00 1,682.22
Tungsten 3 months 1,560.00 1,725.00 1,691.11
European free market APT, $/mtu 207.50 216.25 Settlement 1,545.00 1,720.00 1,687.22
3 months seller 1,565.00 1,730.00 1,696.11
FOUNDRY INGOTS
Aluminium Nickel ($)
LM24, /tonne 1,592.50 1,642.50 Cash 9,180.00 11,042.50 9,664.86
LM6/LM25, /tonne 1,770.00 1,840.00 3 months 9,222.50 11,092.50 9,721.81
Aluminium Europe /tonne 1,813.33 1,886.67 Settlement 9,190.00 11,045.00 9,668.61
3 months seller 9,225.00 11,095.00 9,725.83
Phosphor Bronze
PB1 ex-works, /tonne 6,616.67 Nasaa ($)
Cash 1,695.00 1,945.00 1,784.26
Zinc Alloy
3 months 1,725.00 1,960.00 1,815.14
ZL3, /tonne 2,763.00
Settlement 1,700.00 1,950.00 1,785.53
LONDON METAL EXCHANGE 3 months seller 1,730.00 1,965.00 1,818.89
High, low and average April (18 days) Cobalt ($)
LME averages are mean of buyers and sellers except for Cash 32,750.00 56,250.00 55,319.58
settlement and 3 months sellers. 3 months 32,750.00 56,250.00 55,319.44
April 2017 April Settlement 33,000.00 56,500.00 55,555.83
Low High average 3 months seller 33,000.00 56,500.00 55,569.44
$ $ $ Molybdenum ($)
Copper Grade A ($) Cash 15,000.00 15,000.00 15,000.00
Cash 5,500.25 6,144.50 5,697.36 3 months 15,000.00 15,000.00 15,000.00
3 months 5,517.00 6,155.50 5,727.26 Settlement 15,250.00 15,250.00 15,250.00
Settlement 5,500.50 6,145.00 5,697.67 3 months seller 15,250.00 15,250.00 15,250.00
3 months seller 5,518.00 6,156.00 5,728.00 Steel Billet ($)
Copper Grade A () Cash 0.25 312.50 104.33
Settlement 4,358.03 4,954.94 4,508.65 3 months 0.25 312.50 104.33
3 months seller 4,370.49 4,922.04 4,521.58 Settlement 0.00 325.00 108.33
Tin ($) 3 months seller 0.00 325.00 108.33
Cash 18,757.50 21,295.00 19,981.94 LME Settlement Conversion Rates
3 months 18,755.00 21,212.50 19,951.11 $/ 1.26
Settlement 18,760.00 21,300.00 19,991.39 $/yen 110.33
3 months seller 18,760.00 21,225.00 19,960.00 $/ 1.07
Disclaimer
This Disclaimer is in addition to our Terms and Conditions as available on our website and shall not supersede or otherwise affect these Terms and Conditions. Prices and other
information contained in this publication have been obtained by us from various sources believed to be reliable. This information has not been independently verified by us.
Those prices and price indices that are evaluated or calculated by us represent an approximate evaluation of current levels based upon dealings (if any) that may have been
disclosed prior to publication to us. Such prices are collated through regular contact with producers, traders, dealers, brokers and purchasers although not all market segments
may be contacted prior to the evaluation, calculation, or publication of any specific price or index. Actual transaction prices will reflect quantities, grades and qualities, credit
terms, and many other parameters. The prices are in no sense comparable to the quoted prices of commodities in which a formal futures market exists.
Evaluations or calculations of prices and price indices by us are based upon certain market assumptions and evaluation methodologies, and may not conform to prices or
information available from third parties. There may be errors or defects in such assumptions or methodologies that cause resultant evaluations to be inappropriate for use. Your
use or reliance on any prices or other information published by us is at your sole risk. Neither we nor any of our providers of information make any representations or warran-
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incurred, suffered or arising as a result of use or reliance on the prices or other information contained in this publication, howsoever arising, including but not limited to any
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We are not an investment adviser, a financial adviser or a securities broker. The information published has been prepared solely for informational and educational purposes
and is not intended for trading purposes or to address your particular requirements. The information provided is not an offer to buy or sell or a solicitation of an offer to buy or
sell any security, commodity, financial product, instrument or other investment or to participate in any particular trading strategy. Such information is intended to be available
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actions should be solely based upon your own decisions and research and appropriate independent advice should be obtained from a suitably qualified independent adviser
before any such decision is made.
June 2017 | Metal Bulletin Magazine | 69
Chartist
Jim Lennon, managing director, Red Door Research, analyses latest ramifications of Chinas steel output

Chinese steel production at a new peak

The past year has seen some surprising Chinese monthly steel production, US and Chinese HRC steel prices
developments in Chinese steel. The demand and exports 1,200
pessimism that existed at the start of 2016 950 1,000
850
proved to be misplaced. Steel production 750 800

mt annualised
and consumption rose year-on-year in

$/tonne
650
600
550
2016, compared with expectations of big 450 400
350
falls at the start of the year. Sectors that 250 200

surprised on the upside in 2016 included 150

50
0

housing, autos and infrastructure (see May -50 -200

03
04
05
06

07
08
09

10

11
12
13
14
15
16

17

03
04
05
06

07
08
09

10

11
12
13
14
15
16

17
20

20
20

20
20

20
20

20
issue Chartist).

20

20
20

20
20

20
20

20
20

20
20

20
20

20
20

20
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20

20
20

20
Production Apparent consumption Net exports US premium USA China
What has been truly astounding is that in Source: Chinese Customs, WSD, NBS

the first four months of 2017, reported

crude steel production rose by just under 5%
y-on-y. Owing to exports falling 26% y-on-y
over the same period, Chinese apparent
steel consumption rose by over 10% y-on-y
in the first four months of the year. So far this
year, housing has remained stronger than
expected as a source for steel demand and a
slowdown in infrastructure spending is still
in the future.
In April alone, crude steel production rose
to a new all-time high of 886 million tpy
(annualised) and apparent demand also
reached a record high (see chart). Both these
developments seem to go against weakening
macro-data for April, but indications are
that May output could be even higher.
Following recent falls in raw material prices,
steel mill margins have improved and mills
continue to churn out steel without any sign
of major inventory build. Fears of a strong
macro-slowdown in China seems to be
overdone at least for the short term.
Recent forecasts from the World Steel
Association (worldsteel) for Chinese steel
demand were for flat demand in 2017
(following 1.3% growth in 2016) and a
decline of 2% in 2017. The latest numbers
suggest that 2017 could grow by 3-4%, even
assuming a significant slowdown in
steel-using sectors as the year progresses. As
the 2016/early-2017 fiscal and monetary
stimulus is slowly unwound through 2017, it
remains possible that 2018 will be a negative
year for Chinese steel growth, as suggested
by the worldsteel forecasts.
Until these latest numbers emerged, the
prevailing wisdom had been that the
absolute peak in Chinese steel demand was
achieved in 2013. On an annual basis this is
probably still true, but the second quarter of
2017 could surpass any previous quarters in
history.
While 2017 demand will be lower than in
2013, it is likely that crude steel production
could hit an annual high in 2017 as a whole
(exports will be higher than in 2013),
surpassing the 822 million tonnes achieved
in 2013.
Following crude steel capacity closures of
around 50 million tpy in 2016 (some say up
to 90 million tpy including scrap-based
induction furnaces, which were forced to
close in Q4 2016) and a further 50 million
tpy of closures this year, the degree of
over-capacity in the industry has been
markedly reduced. The Chinese
government looks likely easily to achieve its
target of closing 150 million tpy of capacity
between 2016 and 2020.
Nameplate crude steel capacity is
reported to be 1.1-1.2 billion tpy, but
effective (operated) capacity is now probably
around 950-975 million tpy and April 2017
effective capacity utilisation on this basis
was over 90%. This is not to say that
over-capacity no longer remains a challenge
for the global steel industry, but a year of
strong demand and significant closures has
certainly changed the picture to a more
positive one from a Chinese perspective.
The recent collapse in iron ore prices,
from over $90/t cfr to $60/t recently,
appears not to have been driven by a fall in
demand but rather by the perception that
demand had peaked (actually not yet
confirmed) and that supply growth for iron
ore would accelerate in the coming months.
Given the high degree of speculative activity
on the Dalian iron ore exchange, prices
appear to be driven more by sentiment now
than actual short-term supply/demand.
For global markets, the direction of
Chinese steel exports remains important. As
mentioned, exports of finished steel fell 26%
y-on-y in January to April and in April alone
were down 28.5% y-on-y. Exports peaked in
2015 at 112 million tonnes and fell to 109
million tonnes in 2016 the annualised rate
of exports so far in 2017 is only 82 million
tpy. For the year as a whole, exports may rise
from the current rate, but are still likely to be
lower year-on-year, supporting
non-Chinese production and steel prices to
an extent.
Globally, China is still the biggest
steel-exporting country by a significant
margin. Exports, at 109 million tonnes last
year, were well ahead of Japan, at 41 million
tonnes, and both Russia and South Korea at
31 million tonnes. Exports as a percentage
of steel production remain relatively low for
China, at 10-15% in 2016/17, while of the
top five exporting countries, Germany
exports over two-thirds of its steel
production, and South Korea and Russia
both export nearly half of their output.
Chinese steel exports are increasingly
being concentrated within Asia. Total
Chinese steel exports last year declined to
every region except Asia, led by double-digit
declines to North America, South America
and Europe. Exports to other Asian
countries by contrast rose by 5% y-on-y,
with nine of the top ten export destination
countries for Chinese steel being in the
region.
Chinas steel exports to the USA,
meanwhile, were a mere 1.2 million tonnes,
down by over 50% from 2015, mainly due to
large anti-dumping tariffs that have been
imposed on Chinese steel imports. Slowing
Chinese exports reflect better demand and
margins for domestic sales as well as the
result of growing protectionist measures
against imports from China.
As our chart shows, US steel consumers
have consistently paid substantial premiums
for steel compared with Chinese consumers.
From 2014 to 2016, on average US
hot-rolled coil steel prices were over 60%
more expensive than those paid by domestic
Chinese consumers. In April 2017 US prices
were 80% higher. How high would US
prices go if further protectionist measures
are applied?

70 | Metal Bulletin Magazine | June 2017

 Aluminium, whether in beverage cans, buildings,
cars or a thousand and one other objects, can be
recycled again and again infinitely. Into what?
Thats another story.

www.hydro.com