Japan’s Sumitomo to buy stake in monopile producer EEW
Japanese trading house Sumitomo plans to buy a stake in Germany-based monopile steel slab producer EEW, aiming to strengthen its investment in offshore wind power generation projects in Europe.
Sumitomo is planning to close the deal by the end of the year, according to the company on 19 August. The investment amount and size of the stake was undisclosed.
Demand for monopile, large diameter steel pipes used for the foundations of bottom-fixed offshore wind power generation projects, is expected to exceed 1mn t/yr by 2026 from 650,000 t/yr in 2023 in Europe, according to Sumitomo. Monopile demand in Europe is forecast to reach around 400 unit/yr by 2026, with an ordinary single monopile weighing 2,500t.
EEW produced 2,200 monopiles over the past 15 years, it said, mostly for European wind farms.
"Monopile supply is already tight", according to a Sumitomo representative who spoke to Argus, following an expansion of wind power generation projects in Europe.
Sumitomo is expanding its involvement in European wind power generation projects partly with an aim of buying steel materials manufactured with fewer greenhouse gas emissions, according to the firm. "The supply source of the green steel components includes the Japanese steel producers," the representative added, although further details were undisclosed.
Fellow Japanese steel producer JFE has sold 200,000 t/yr of steel product called JGreeX since 2023, with its impact of GHG emissions reduction certified by Japanese classification society Class NK.
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Massive Canadian rail disruptions move closer
Massive Canadian rail disruptions move closer
Washington, 19 August (Argus) — A Canadian rail workers union and two major Canadian railroads moved closer to a disruptive nationwide strike on 22 August, with the union issuing on Sunday a 3-day strike notice to Canadian Pacific Kansas City (CPKC) and fellow railroad Canadian National (CN) telling the union it will lock employees out that same day. A strike by workers from the Teamsters Canada Rail Conference would cause widespread disruptions to commodity deliveries across North America. The major carriers last week began to embargo shipments of hazardous materials between the US and Canada. Canadian National expects to issue new embargoes today. Its shutdown plan began last Monday. "Unfortunately, we have no choice but to keep moving forward with this plan which means that by Thursday morning, no goods will be moving on the railroad," the railroad said. CPKC similarly began to implement shutdown plans last week. Tomorrow it will begin embargoing all shipments originating in Canada and all US shipments headed to Canada. Contracts between the Teamsters and each railroad expired at the end of last year. Employees have continued to work under those agreements but that is nearing an end as the parties remain far apart on many issues including pay and work hours. The union and railroads' strategies differ. The Teamsters so far have only issued a strike notice at one carrier. Contract negotiations are occurring separately with each railroad. "The only reason we served strike notice at [Canadian Pacific Kansas City] is because the company was set to cancel our expired collective agreements," the union said. "This would have created a situation where our members had no rights or protections at work." The union claimed CPKC is pressuring it for concession that would make it " harder for workers to predict when they might be called for work, creating a fatigue-related safety risk." The union also said the carrier was trying to change work rules related to being held away from home, and undermining Canada Labour Code provisions. CPKC in turn told the Teamsters it will lock out employees on 22 August unless the two parties are able to come to either a negotiated agreement or agree to binding arbitration. The Teamsters said late Sunday that, at that time, it did not intend to issue a strike against Canadian National. But Canadian National said it will lock employees out "unless an agreement or binding arbitration is achieved" before before 12:01am ET on 22 August. "Despite negotiations over the weekend, no meaningful progress has occurred, and the parties remain very far apart," Canadian National said. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Sims investor floats NorthAm asset sale to SA
Sims investor floats NorthAm asset sale to SA
Pittsburgh, 19 August (Argus) — A major shareholder of global metals recycler Sims is backing the sale of the company's North America business to SA Recycling. Australian investment firm Allan Gray, a 19pc shareholder of Sims, told Argus that Sims may not be able to capitalize on more favorable long-term market conditions for its North America Metal (NAM) business, given their "institutionalized management style." "As a large shareholder of Sims we see enormous upside but have concerns over the current ownership structure of NAM in being able to extract this," Allan Gray chief investment officer Simon Mawhinney told Argus . "So yes, absolutely, we are in favor of NAM falling under the SA Recycling umbrella and being managed by SA for the long term." Sims owns a 50pc stake in SA Recycling — short for Sims Adams Recycling — but does not manage the company. While Allan Gray would prefer that Sims turn NAM into a more profitable business so that it could capture 100pc of the upside, Sims would retain a 50pc stake in NAM if it sold to SA Recycling, allowing stockholders to benefit from NAM's "likely prosperous future," Mawhinney said. He added that a larger focus on improving margins rather than emphasizing higher scrap volumes could enhance NAM's performance. SA Recycling reported A$125mn ($82mn) earnings before tax in the second half of 2023, while Sims' NAM division posted an A$8.8mn ($5.8mn) loss before taxes during that period. During its February earnings call, Sims said that it planned to rely more heavily on supplying steelmakers in the US domestic market . The NAM unit sold about two-thirds of its volumes in the export market in the second half of last year. The Australian company also noted that its NAM business sourced about one-third of its supply as unprocessed scrap. More than three-quarters of SA Recycling's supply is unprocessed, allowing its network of metal shredders to add value. Sims reports its fiscal year earnings later today. Sims announced the sale of its UK business last week to Unimetals Group for $249mn. That deal includes 28 total sites, including three port facilities and four shredders. "We are committed to finalizing the transaction with Unimetals," Sims said. "In line with our strategy this supports our focus on the growth opportunities in the NAM and [Australia and New Zealand] regions. We are not focused on any further transactions at the moment." SA Recycling chief executive George Adams declined to comment. By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia reshuffles cabinet, names new energy minister
Indonesia reshuffles cabinet, names new energy minister
Singapore, 19 August (Argus) — Outgoing Indonesian president Joko Widodo has reshuffled the cabinet and replaced the country's energy minister today, just weeks before he is due to leave office. Bahlil Lahadalia will replace Arifin Tasrif as the minister of energy and mineral resources. Bahlil was previously Indonesia's minister of investment. Joko will remain in office until October, after which current defence minister Prabowo Subianto will take over. Prabowo claimed victory in the country's presidential elections in February. His running mate was Gibran Rakabuming Raka, Joko's son. It remains to be seen whether the change will affect the country's energy policy, but Bahlil said he would continue with the steps that Arifin has taken to increase oil lifting. Indonesia has so far remained firmly focused on fossil fuels, despite its net zero by 2060 target. The country is targeting oil production of 1mn b/d and gas production of 12bn ft³/d (123.6bn m³/yr) by 2030, and the energy and mineral resources ministry ESDM has in recent weeks announced strategies to achieve these ambitious targets . Some of these strategies involve increasing production from existing fields by reactivating 1,000-1,500 idle wells, increasing the recovery rate from existing wells, and accelerating new projects. But Prabowo in the run-up to the elections stated that he aims to reduce Indonesia's fossil fuel dependency , and for Indonesian state-owned utility PLN to increase the proportion of renewable energy in its power supply. Indonesia banned nickel exports from 1 January 2020 and bauxite exports from 2023, leading to a boom in its downstream processing industry . The country has since emerged as the world's top processed nickel supplier, adding an estimated 1.17mn t of production during 2021-23 , according to Australian bank Macquarie's research arm. The export ban has also led to an increase in Chinese investment in Indonesia's nickel sector, with the increasing concentration of Chinese-backed Indonesian supply emerging as a key challenge as the US and EU look to reduce their dependence on other countries for critical raw materials. But the increase in supply has pressured prices. French mining group Eramet and Germany-based global chemicals producer BASF announced in June that they are no longer pursuing investment in a nickel-cobalt refining complex in Weda Bay, Indonesia because of the downturn in prices. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Slew of US mill outages to have mixed impacts
Slew of US mill outages to have mixed impacts
Houston, 16 August (Argus) — Upcoming US steel mill outages — primarily at electric arc furnace mill (EAFs) — through the year-end are expected to be more pronounced on the scrap market, as sagging flat and long products demand is expected to help mute any direct impacts on the steel market. Argus tracked a total of 35 flat and long product mill outages planned for between August-November, which are estimated to result in a loss of about 1.5mn short tons (st) of steel production — 87pc of which is EAF-produced. Flat mill outages are estimated to be at a minimum of 923,725 between September and November, with the bulk of the maintenance outages — 50pc — in October. Of the total figure, an estimated 87,100st are at plate mills. Nearly 600,000st of long product production — including rebar, wire rod, merchant bar and special bar quality steel — are expected to be off line between August and November. There are numerous other outages heard at specialty steel or ductile pipe mills which were not included in Argus ' current analysis. Shutdowns to curb scrap demand Demand for ferrous scrap in the US market may be dented in the coming months by the cumulative impact of the downtime. The outages are expected to greatly reduce mills' scrap buying programs and could weigh on prices, even as flat-rolled steelmakers attempt to establish a price floor on hot-rolled coil (HRC) markets. Impacts from scheduled shutdowns could also be compounded by recent weakness in the ferrous scrap export market. Market participants' opinions remained mixed on September scrap pricing, but many have noted sentiment has begun to sway, with prices likely now more exposed to more downside than initially anticipated following the August trade. Collection rates will be key in determining whether scrap prices retreat, as inbound flows through the summer have been spotty and supply-side factors have been one of the primary drivers behind price recent stability. US domestic scrap prices have largely been stagnant the last two months following a steady decline in prices during the early part of the year. Argus -assessed national average #1 busheling prices delivered consumer stood at $373/gross ton (gt) in August, the lowest figure since January 2023. Average prime scrap prices fell by $43/gt month in September 2023 on the month, before rebounding in November during a similar period of mass mill outages . Tepid demand keeping steel impacts at bay The upcoming outages at flat and long steel mills in the US and Canada are expected to have less of an impact on the spot market this year than in 2023 amid sluggish demand in steel-consuming sectors year to date. The fourth-quarter total flat-rolled outages will be less than the 1.04-1.09mn st of estimated outages recorded in the same three-month period of 2023, of which 80,300st were plate. These outages — combined with tight inventories — eventually raised lead times and prices. Many flat steel service centers this year have reported reduced customer consumption forecasts for the rest of 2024, with some down by 10pc or more. Construction — a primary consumer of rebar — has remained relatively stagnant in the US since January. While some projects funded by the Infrastructure Investment and Jobs Act (IIJA) and CHIPS Act entering construction phases have been reflected in spending, high interest rates and uncertainty around November's general election have kept the wave of demand originally expected — as well as seasonal demand — largely at bay. About $2.15bn in total construction spend was reported in June by the US Census Bureau, up from $2.12bn in January and $2bn in June 2023. Non-residential construction spend rose slightly to $1.208bn from $1.206bn in January and rose from $1.15bn in June 2023. Long steelmaker CMC in its quarterly earnings reported lowered rebar shipments of 520,000st in the quarter ended 31 May, from 539,000st in the prior-year quarter. Steelmaker Nucor reported shipping 2mn st of bars in the second quarter, down from 2.1mn st in the same quarter last year. The heavy equipment industry has also reported worsening steel demand. Manufacturer CNH Industrial cut second-half 2024 agricultural equipment production by 25pc compared to the same period last year, while cutting production of its construction equipment by 20pc. By Rye Druzin, Brad MacAulay, James Marshall and Marialuisa Rincon Steel outages August-November st Month Company Mill location Product Estimated duration Estimated production impact August Evraz Pueblo Long 14 days 42,192 Gerdau Monroe Long 17 days 35,910 Nucor Sedalia Long 7 days 8,630 Nucor Jewett Long 14 days 11,507 September Cleveland-Cliffs Coatesville Flat 5 days 10,959 Cleveland-Cliffs Riverdale Flat 21 days 40,273 CMC Durant Long 14 days 14,575 Evraz Regina Flat 14 days 46,027 Gerdau Ft Smith Long 14 days 21,096 Liberty Peoria Long 14 days 26,849 Nucor Crawfordsville Flat 14 days 95,890 Nucor Decatur Flat 7 days 46,027 Nucor Gallatin Flat 7 days 53,698 Nucor Jewett Long 14 days 11,507 Nucor Kanakakee Long 7 days 16,877 Nucor Plymouth Long 28 days 75,945 Nucor Seattle Long 7 days 14,959 SSAB Iowa Flat 21-28 days 76,118-101,490 Stelco Hamilton Flat 3 days 21,370 October Arkansas Steel Newport Long 21 days 17,260 Big River Steel Osceola Flat 10 days 90,411 Gerdau Midlothian Long 28 days 115,068 Gerdau Charlotte Long 14 days 17,260 Gerdau Jackson Long 14 days 23,014 JSW Mingo Junction Flat 7 days 31,701 Nucor Berkeley Flat 7 days 65,953 Nucor Norfolk Long 14 days 37,973 Nucor Hickman Flat 4 days 28,997 SDI Butler Flat 4 days 35,068 SDI Columbia City Long 5-6 days 37,369 SDI Sinton Flat 4 days 32,877 Tenaris Koppel Long 35 days 57,534 US Steel Mon Valley Flat 19 days 150,959 November NSBS Delta Flat 7 days 62,329 SDI Columbus Flat 4 days 35,068 Total Flat 923,725 Long 585,525 Total 1,509,250 Outages are based on market feedback and confirmation where possible.Tonnage counts are calculated as (nameplate capacity/365)length of the outage.The total outage tonnage count is based on the minimum number of days at mills with multiple lengths listed. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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