Category Archives: Carbon steel

Steel industry margins continue to improve

After suffering for some seven years through to 2015, the world’s steelmakers have had cause for cheer over the past couple of years. Following some heavy losses and write-downs, they finally appear to have emerged from the wreckage of the global financial crisis. An economic upswing has taken root in most regions of the world, Chinese steel output and export growth has slowed noticeably, and steel prices have enjoyed an upward swing in consequence.

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Innovation in steelmaking

In a previous article, we discussed how the real prices of commodities tend to fall in the long term (i.e. once adjusted for inflation).

While there are a number of factors contributing to this, perhaps the most important is that of technological advance.

A recent article in The Economist highlights this argument with regard to the steel industry. The article discusses the growing application of two different steelmaking techniques – Castrip and Belt Casting.

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ThyssenKrupp hesitates over Galmed re-opening given worsening outlook for Spain’s automotive industry

Following the sharp upturn in galvanized steel prices seen during the early months of this year, German steelmaker ThyssenKrupp announced back in April its intention to re-open its Galmed plant in Valencia, Spain by the end of this year (outbound link in Spanish). The facility, which can produce up to around 400,000 tonnes per year of hot-dipped galvanized steel (HDG) had previously been shuttered in late 2013.

And with Spanish car production up by around 11% during the first half of this year as well, the time seemed right to re-open a facility that previously shipped large quantities of HDG to Spain’s automotive factories.

But there are now thought to be doubts creeping in at ThyssenKrupp, which may opt to delay the re-opening of its Galmed plant until March 2017.

Continue reading ThyssenKrupp hesitates over Galmed re-opening given worsening outlook for Spain’s automotive industry

More trade protection on the way in Europe?

After having gone after imports of both hot-rolled coil (HRC) and cold-rolled coil (CRC) this year, will the European Commission soon be turning its attention to imports of galvanized steel? (primarily hot-dipped galvanized material (HDG))

In all likelihood yes but just how effective would any import restrictions be?

Let’s take a look at the case for implementing trade protection measures on these products and what effect they may have.

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What now for the UK automotive industry post-Brexit?

A month on from the UK’s referendum vote to leave the EU and the focus has quickly shifted onto how the relationship between the EU and the UK will be managed in the future, and indeed whether the UK may benefit or suffer from its decision to leave the EU.

One industry that has a particular interest in this changing landscape is the UK’s automotive industry. With around 80% of its output heading for international markets (more than 50% alone heads to other EU countries), and with the majority of components used by the industry imported, the UK’s automotive industry will be a keen observer of how the UK’s international trading relations develop over the coming years.

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2016 commodities outlook: From super cycle to super correction

Last year was once again rather disastrous for commodity prices. Average prices of the base metals traded on the LME all dropped massively, while average prices of oil, iron ore and steel also fell sharply. The general downward trend that has been in place since 2011 continued.

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Russian steelmakers benefit from rouble weakness

With commodity prices dropping sharply over the past 15-18 months, many economies have been hit hard. Oil-rich Saudi Arabia issued its first government bonds since 2007 earlier this year as it looked to cover a widening budget deficit caused by the collapse in oil prices, while commodity-dependent Brazil and Russia have entered outright recession this year.

It is the latter of these countries that is the focus of this article, and in particular Russia’s steelmakers. How have they coped with the significant falls in domestic GDP this year, of some 3.5-4%, as well as a sharply weakened currency and a large jump in inflation and interest rates?

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Prices down but profitability quietly creeps up in Europe’s steel industry

With prices of many commodities at multi-year lows, recent financial releases from some of Europe’s major steelmakers delivered a reminder that not everything is bad in the steel industry.

Following an improvement in profit margins last year, Europe’s steelmakers have continued their resurgence during the first half of 2015.

chart1

Why, when most stories surrounding the steel and commodity markets are overwhelmingly negative these days, might this be the case?

Continue reading Prices down but profitability quietly creeps up in Europe’s steel industry