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Top steelmakers 2021 edition

Jun 10, 2021 | 06:49 AM |


Alongside Fastmarkets’ annual global ranking of steelmakers by crude steel output in 2020, our correspondents around the world review developments in their regional steel sectors

The year 2020 will forever be remembered as the one in which the Covid-19 pandemic spread globally, impacting every area of life and business. The world’s steel industry was no exception, with many of the largest steelmakers seeing lower production levels over the year, resulting from the repercussions of national lockdowns and restrictions on international travel reducing steel demand and constraining many steelmakers’ output.

While the pandemic continues to have terrible consequences in some nations, others have seen significant recovery during 2021, reflected in the fortunes and resilience of their steel sectors.
Fastmarkets’ latest list of the world’s largest steelmaking companies, based on steel output in 2020, continues to provide an interesting annual snapshot of the evolving geographical pattern of global steel production. In addition to the table itself, in the pages that follow a team of six of our global steel writers have provided reviews of the big trends and developments in their major steelmaking regions as well as comments on the outlook.

ASIA

Steel output in Asia maintained its upward trend in 2020, with output of 1.35 billion tonnes in 2020, up by about 20 million tonnes from 1.33 billion tonnes, while global output dropped by about the same amount to 1.83 billion tonnes, according to World Steel Association (Worldsteel) data. All but one of the largest ten steelmaking companies are located in Asia.

China's output increased by 5.2% year on year to 1.05 billion tonnes in 2020, which was the first time that the nation’s crude steel output exceeded 1 billion tonnes. China's output alone accounted for 57.38% of crude steel production worldwide, up by 4.08 percentage points from its share of global output in 2019.
China's Baowu Iron and Steel remained the world's largest steelmaker in 2020, with its output rising by 1.26 million tonnes above its output in 2019 to 115.29 million tonnes.

Local financial media have reported that Baowu is talking with Shandong Iron and Steel (Shangang) about a potential merger, but neither of the two listed companies have released notices to confirm that. Shangang produced 31.11 million tonnes of crude steel in 2020, up by 3.54 million tonnes from 2019, moving its ranking in the Top Steelmakers table up by two spots to No.10.
Hesteel Group also climbed in ranking to become the world’s third largest steelmaker, up from fourth place in last year’s table, but its output of 42.38 million tonnes in 2020 was actually lower than the previous year by 2.28 million tonnes.

Jiangsu Shagang Group followed as the fourth biggest mill globally in 2020, with an output of 41.59 million tonnes. The steel group may become bigger than Hesteel in 2021 because it is negotiating the possibility of controlling Anyang Iron & Steel, which produced 11.20 million tonnes in 2020.

Another competitive new steel group will be Anshan Iron and Steel and Benxi Iron and Steel after they merge. Anshan Steel ranked No.6 in 2020 with output of 38.19 million tonnes and Benxi Steel ranked No.18 with output of 17.36 million tonnes.
China keeps pushing the merger and restructuring of steel mills to raise the industrial concentration ratio. Larger companies can leverage economies of scale and have a stronger pricing power for their purchases of steelmaking raw materials. They can also make energy efficiencies, supporting China’s aim to lower carbon emissions.

The largest ten steel producers in China produced 404.61 million tonnes of crude steel last year, accounting for about 38% of the total national output of 1.05 billion tonnes. That percentage is far lower than China’s target of 60-70%, so the nation’s steel industry is set to see more mergers taking place.

Apparent steel consumption in China increased by 9% year on year to 1.03 billion tonnes in 2020, according to China Iron & Steel Association (Cisa) data. Cisa expects that apparent consumption will rise slightly in 2021.

Other Asian producers

While steel production in China increased last year, output in other major Asian steelmaking nations dropped sharply in 2020.

For example, Japan produced 83.19 million tonnes last year, down by 16.2% from 99.28 million tonnes in 2019. The biggest steel producer in Japan, Nippon Steel, produced 37.65 million tonnes, down by 19.98% year on year. Its position in the table consequently dropped to No.7 from its slot at No.3 a year earlier. JFE Steel’s position also dropped, from No. 10 in 2019 to No. 13 in 2020.
India’s output was 99.57 million tonnes, down by 10.6% year on year. India has several steelmaking companies in the top 25 largest globally, including Tata Steel, SAIL and JSW.

South Korea’s POSCO (No.5) reduced its output by 5.36% to 40.60 million tonnes in 2020 and Hyundai Steel (No.17) cut its output by an even higher rate of 10.12% to 19.07 million tonnes. Major mills’ steel production in South Korea decreased by 4.29 million tonnes to 67.12 million tonnes last year.

Jessica Zong

NORTH AMERICA

The year 2020 was an unprecedented, very volatile and unexpected year for US steelmakers, largely due the impact of the Covid-19 pandemic, but also given large merger and acquisition (M&A) deals. Cleveland-Cliffs Inc. acquired both AK Steel Corp. and some of the US operations of ArcelorMittal SA, and US Steel Corp. acquired Big River Steel.

“Actually, the year got off to a very good start,” Amy Bennett, principal consultant for Fastmarkets MB, pointed out. US steel mill operating rates were quite high during the first two months of the year, largely remaining over 82%, on the back of improving demand and rising prices for most steel products. “Everything was looking good,” she said, “And then Covid happened.”

But while steel production was down almost 16% overall in 2020, Becky E. Hites, president of Steel-Insights LLC, noted that it was not a homogenous decline, with steel production dropping almost 30% in the second quarter of the year as government construction programs dropped overnight and steel-consuming industries moved into “crisis management” mode.
That, Christopher Plummer, managing director of Metal Strategies Inc., observed, resulted in US steel capacity utilization plummeting to about 53% by mid-May before moving back up to slightly above 70% by the end of the year. It then continued its upward momentum this year, bouncing back to about 79% as of May 2021.

The pandemic, and the resultant shutting down of manufacturing – particularly US auto plants, which were completely shuttered from late March through much of May last year, resulted in much idling of steelmaking capacity, Philip Gibbs, KeyBanc Capital Markets’ senior metals and mining equity research analyst, observed. He said that he had never seen such a swift supply response in the US steel market, with about 15 to 16 million short tons of blast furnace capacity being very aggressively and very deliberately taken out of the market.

Many US electric-arc furnace (EAF) based flat-rolled steel mills, however, were able to maintain a 70% or better operating rate throughout 2020 with only four to six weeks of significant disruption, Hites noted.
Even after demand started to pick up in the second half of 2020, US integrated steelmakers were very slow to bring their production rates back up, John Anton, director of IHS Markit’s pricing and purchasing service, said, adding that at the end of 2020 the US was the only major steel producing country that did not equal or exceed December 2019 production levels, even with the demand recovery in the US being stronger than that in Europe.

Bennett observed that, even with the record-high steel prices in mid-2021, US mill operating rates have remained below where they had been in the first quarter of 2020. That is partly because some blast furnaces are not expected to come back online. Plummer noted that last year Cleveland-Cliffs permanently closed first the hot end and later the hot strip mill at the former AK Steel Dearborn facility, and US Steel permanently closed its Great Lakes mill.

Gibbs said that last year’s M&A activity was one reason why supply was withheld from the market for so long, noting that while Cleveland-Cliffs did not acquire ArcelorMittal USA assets until December, it was in talks to do so since mid-year when the steel industry was in dire shape. That was after acquiring AK Steel in mid-March, which Plummer noted had previously been struggling financially as it was a smaller player.

Plummer said that while Cliffs had been running well as an iron ore company, there were risks associated with selling to a small, finite group of integrated steel companies who were facing tremendous pressure from the EAF mills. “So, creatively, Cliffs decided to acquire as many integrated mills as it could so that they could keep them running and captively sell them iron ore,” he observed.
Anton pointed out that, as a consequence, the number of US steelmakers selling to US automakers has been further whittled down to include just two blast-furnace-based steel companies. “While some EAF steelmakers might say they are able to make exposed auto sheet as well, some automakers might say that only blast furnaces could do so,” he said.

Meanwhile, as part of its Best of Both strategy, in mid-January 2021 US Steel acquired the remaining 50.1% share of Big River Steel, which happened more quickly than many had expected and which many industry observers say reflects a change of mindset about the benefits of EAF mills.

Hites noted that last year’s consolidation added market discipline and increased mills’ ability to react more quickly when end-use markets for steel reacted to the pandemic.
Bennett said that she doubts that there will be any further consolidation, at least amongst the four largest US players – Cleveland Cliffs, US Steel, Nucor Corp. and Steel Dynamics Inc. – although there could be some slight movement in the production levels as Nucor and SDI’s new mills and expansions of existing facilities come online over the next year or two.

Plummer said that 2021 should be a very solid, if not a record, year for US steelmakers, especially if, as is expected, there is boost in infrastructure construction activity and a continued Buy America push.

Myra Pinkham

LATIN AMERICA

Latin American steel production and output are going through a recovery after a difficult year, but the rate of growth among the region’s different countries is unequal. Latin American steel consumption is expected to reach 64.8 million tonnes in 2021, a growth of 9.5% from the previous year.

The region’s steel consumption has been recovering from Covid-19 lows and is benefiting from demand that was repressed during most of 2020. “There is an excess liquidity, so many people who had projects are now doing it,” Alacero general director Francisco Leal said.

The construction industry, which is responsible for 47.2% of steel demand in the region according to Alacero data, is one of the main drivers of steel consumption this year – despite the sector’s slow recovery from Covid-19 lows.
Recovery is expected to continue as pre-pandemic levels are still a long way off. “Most sectors are resuming their output levels, and are struggling to supply the recovering demand,” Leal said.

In Brazil, output in the construction industry is expected to increase by 2.5% in 2021, according to figures released in late April by the Brazilian construction chamber, CBIC, but the figure was revised downwards from an earlier forecast of 4% growth.

In Mexico, activity in the construction sector in February was 16.5% lower than in the same month in 2020, but 0.5% higher than in the previous month, according to figures published in late April by the Mexican statistics agency Inegi. Other steel-consuming sectors, such as automotive and home appliances, have been recovering gradually but steadily.

Both countries are expected to report a strong growth in steel use this year. In Mexico, steel consumption is expected to reach 23.4 million tonnes, a growth of over 7% year-on-year, and the highest level of steel consumption forecasted in the region. If confirmed, Mexico will surpass Brazil, which is expected to consume 22.4 million tonnes in 2021, a growth of 5.8% year-on-year, according to a forecast from National Steel Institute Aço Brasil, which was released in February.

Steel production in the region has been increasing to meet the recovering demand. In the first quarter of 2021, finished steel output in Latin America is expected to reach 13.5 million tonnes – the highest level for the quarter since 2018.

One highlight is Argentina, where crude steel output increased by 42% from January to April, to 1.47 million tonnes, up from 1.03 million tonnes in the same period a year earlier, according to the Argentinian steel chamber. But the country will require economic reforms to continue growing after this year, according to Leal. “Despite showing a strong performance this year, the Argentinian steel sector could face stagnation in 2022,” he said.

In 2021, the region’s steel consumption will remain below 2019’s figure of 65.2 million tonnes, despite the ongoing recovery. Moreover, pre-pandemic levels will likely be seen again only in 2022, when steel use is expected to grow by 4.5% year-on-year, to 67.7 million tonnes.
“We are moving in a positive path, but in some countries a full recovery is not yet close,” Leal said. “The region has been showing an unequal performance since last year,” he added.

The recovery in Latin America also faces downside risks, especially as vaccines rollout is slower in the region than in developed economies. Many countries have seen a spike in Covid-19 infections, such as Brazil and Colombia, which pose a risk to the economy. “Colombia had an important recovery in steel demand this year, but the country’s outlook is becoming cloudy,” Leal said.

Last year, Latin American steel consumption dropped by 9.3%, to around 59.2 million tonnes, according to Alacero’s revised figures. The decrease occurred because most of the countries in the region were hit hard by the Covid-19 pandemic, with some imposing long lockdowns to contain the spread of the infection, such as in Chile and Argentina.

“Automotive and construction industries in Latin America were amongst the most affected by the pandemic and regional lockdowns,” Leal said. Some Latin American countries had fast recoveries, such as Brazil, which ended the year with a growth of 1.2% in steel consumption, at 21.2 million tonnes.

“Brazil was an exception after a strong fourth quarter in 2020. It was the only country in the region to report a better performance last year, compared with 2019. Many of the region’s main countries reported two-digit drops in steel use,” Leal said.

Felipe Peroni

EUROPE

In the first half of 2020, both steel production and prices had dropped in response to a sharp decrease in steel consumption caused by Covid-19 lockdown measures across Europe. In the second half of 2020 and at the start of 2021 domestic prices have been rising, moving above the historical maximum of 2008 for some products, due to shortage of material caused by a combination of a slow restart of flat steel capacities, trade and safeguard barriers and the low stocks of distributors.

In the Spring of 2020, European steelmakers had to shut down equipment or substantially cut their capacity utilization in attempting to balance a sharp decrease in demand from end-consumer industries resulting from Covid-19 lockdown measures. In the second half of the year, however, both demand and steel prices started to recover. In the flat steel segment, distributors had also been traditionally running with relatively low stocks due to fairly stable steel prices, and after the stocks went even lower during lockdown it created additional demand and adjusted the imbalance in the market, boosting the price recovery.

In the full year of 2020, EU passenger car sales dropped by 23.69% year on year to 9.94 million units as a direct result of the Covid-19 pandemic, according to the data released by the European Automotive Manufacturers Association (ACEA). But during the first quarter of 2021, EU demand for new cars grew by 3.23% to reach 2.56 million units registered in total, according to ACEA.

European market participants, however, have been concerned that a shortage of semiconductors needed for car manufacture could put an end to a rise in car production in 2021.
ArcelorMittal had either stopped blast-furnace operations or reduced output at its plants in France, Germany, Italy and Spain. In addition, in October last year the company closed the hot area at its Krakow plant in Poland due to the dramatic effects of Covid-19.

Liberty Steel in Romania, Benelux and Italy, SSAB in Sweden and US Steel Kosice in Slovakia had also stopped furnaces and reduced flat steel output.
Other producers, such as Germany’s Thyssenkrupp and Salzgitter, as well as Voestalpine in Austria and Tata Steel in the Netherlands, had been working at reduced capacity utilization rates.

As demand for flat steel recovered faster than steelmaking capacities were brought back into operation, domestic prices for coil have started to rise and the upwards trend has been sustained since August 2020. For the full year 2020, apparent steel consumption plummeted by 11.1%, according to the European steel association Eurofer. Apparent steel demand is set to rebound by 11.7% in 2021 and to grow more moderately in 2022 – by 4.9%, Eurofer forecasted.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €1,082.50 ($1,314.80) per tonne on May 18, 2021, up by €672.50 per tonne from €410.00 per tonne on May 18, 2020. In March this year prices for hot-rolled coil in Northern Europe exceeded their previous historical high of €800-830 per tonne ex-works reached in June 2008.

As a result of the supply-demand imbalance persistent in the market in 2020 and into the start of 2021, lead times from domestic mills have increased. In May 2021, European flat steel producers have already sold out until the late third- to fourth-quarter for shipments of hot-rolled coil. For some downstream coil products some steelmakers have claimed to be sold out for the full year of 2021.

Access to overseas coil, particularly hot-rolled coil, has also been restricted owing to the effects of safeguard measures currently in place and uncertainty on whether these measures will remain in place after June 30. In addition, traditional non-EU suppliers have reportedly redirected volumes to the United States where they can achieve higher prices.

European safeguard measures were imposed for an initial period of three years and are scheduled to expire on June 30, 2021. On February 26, the European Commission started an investigation into the possible extension of the existing safeguard measures imposed on 26 steel product categories imported into the EU. The results of this have yet to be announced, but they are due to be made public by June 30 at the latest.

In addition, the European Commission is planning to set 4.70-7.30% definitive anti-dumping duties on hot-rolled coil from Turkey by July 13, 2021. The European authorities had opened the probe on Turkey in mid-May 2020. In January 2021, the Commission also started a review of existing anti-dumping measures on hot-rolled coil produced by Russia’s Severstal.

Long steel production has been recovering faster compared with the flat steel segment, mainly due to the fact that long products are mainly produced at electric arc furnaces, which take less time to restart compared with blast furnaces. The bigger scenario, however, has been similar to that for the flat steel market: prices started to increase in summer 2020, driven by strong demand and shortages caused by safeguard impact and the fast recovery of construction.

European buyers have been particularly concerned by the shortage of wire rod, while tight supply of rebar has been less dramatic.

Fastmarkets’ weekly price assessment for steel wire rod (mesh-quality), domestic, delivered Northern Europe, was €720-750 per tonne on May 12, 2021, up by €270-290 per tonne from €450-460 per tonne on May 20, 2020. And the corresponding weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was €720-740 per tonne on May 12, 2021, up by €255-265 per tonne from €465-475 per tonne on May 20, 2020.

European steel companies have been launching projects to develop and implement low-carbon steelmaking technologies. In addition, to preserve the region’s steel supply chain a firm majority in the European Parliament has approved a proposed Carbon Border Adjustment Mechanism.

Maria Tanatar

CIS
In 2020, during the challenging conditions of the Covid-19 pandemic, steel demand in the Commonwealth of Independent States (CIS) performed better than in many other regions globally. Moreover, suppliers managed to increase export sales.
Finished steel usage in the CIS was 58.2 million tonnes in 2020, according to World Steel Association (Worldsteel) data. That was almost unchanged from the figure for 2019, when it was 58.9 million tonnes.

Consumption in Russia, which generates around two-thirds of steel demand in the region, reduced by just 2.3% year on year, to 42.5 million tonnes. «Steel demand in Russia suffered less decline than other regions thanks to the government measures that supported construction activities,» the Worldsteel noted.
Despite relatively stable demand, steel suppliers have faced strong volatility in the market. «Lack of supply of steel combined with postponed demand created imbalances across global production chains and led to sharp price swings during the year,» said Grigory Fedorishin, president at NLMK, which is Russia’s largest steelmaker.

The average Fastmarkets’export price assessment for steel hot-rolled coil, which accounts for the largest proportion of exported finished steel products from the region, fob Black Sea, CIS, bottomed at $355 per tonne in May last year, down by more than 25% from $478.13 per tonne in January.

Meanwhile, fluctuation in the local Russian market was lower, owing to the stocking trading system in the domestic market, sources said. The average assessment for steel hot-rolled sheet, domestic, cpt Moscow, Russia, bottomed later, in June, reducing to 39,450 roubles per tonne, down by 3.5% from 40,875 roubles per tonne in January. In dollars, however, the average price in June was $554.19 per tonne, falling by 13.3% from $638.83 per tonne in January.

Steel mills that were ordered to shut down or significantly reduce operations in spring couldn’t keep up with the pace of end-users’ demand recovery Fedorishin said.These factors combined with elevated iron ore and scrap prices to draw steel quotations in certain regions to levels we haven’t seen for years.

In December, the average assessment for steel hot-rolled sheet, domestic, cpt Moscow, Russia, reached 55,312 roubles per tonne, up by more than 40% from its bottom in June. At the same time, the price assessment for steel hot-rolled coil, export, fob Black Sea, CIS reached $696.88 per tonne, almost doubling from May. Fast growth of export prices has supported an increase of foreign sales from Russia, which accounts for about 60% of CIS steel exports.

Exports from Russia increased by almost 16% year on year, to 25.96 million tonnes in 2020, according to the International Steel Statistics Bureau (ISSB). Meanwhile, steel exports from Ukraine, which contributes about 30% of CIS exports, reduced by 3%, to 12.7 million tonnes.

Traditionally, Russia is focused more on local sales, exporting about 40% of its steel output, according to the latest available data from Worldsteel. That is in contrast to Ukraine, which is an export-oriented country and ships about 75% of its output to other countries.

Output

Steel production in the CIS in 2020 was 102 million tonnes, up by 1.5% year on year, according to Worldsteel data. Russia is estimated to have produced 73.4 million tonnes in 2020, up by 2.6% on 2019. Meanwhile Ukraine produced 20.6 million tonnes in 2020, down by 1.1% compared with 2019.

NLMK, which occupies position No.20 place in the Top Steelmakers table, up one position from its rank in last year’s edition, increased steel output by nearly 2% to 15.83 million tonnes.
Despite the volatility and uncertainty, we have managed to grow our shipments by 3% year on year to 17.5 million tonnes,Fedorishin said. NLMK’s Lipetsk site, the key production asset, has been running at full capacity throughout 2020.

In the first quarter 2021, we expect steel production at NLMK’s Lipetsk site to reach 3.5 million tonnes, and for the full year 2021 we plan to achieve a 14.2 million tonne target, which is almost 2 million tonnes more than in 2020, he added.

In Ukraine, the second largest steel-producing country in the region, steel output was 20.6 million tonnes in 2020, slightly down from 20.8 million tonnes a year before.

Metinvest, the largest national steel producer in Ukraine, increased steel output by 9.1% in 2020, to 8.27 million tonnes, placing it at No.51 in Fastmarkets' global Top Steelmakers ranking.

Meanwhile, Zaporizhstal Integrated Iron & Steel Works JSC, which is part-owned by Metinvest, reduced its steel output by 5.5% to 3.78 million tonnes. Metinvest also acts as Zaporizhstal’s trading agent.

Outlook

In 2021, steel consumption in the CIS is expected to increase by 3.4%, to 60.2 million tonnes, followed by another 3.2% growth in 2022, when usage is expected to reach 62.1 million tonnes, Worldsteel said.

The expected growth is mainly related to expected market improvements in Russia, where finished steel products demand is expected to be 43.8 million tonnes in 2021, which would be up by 3% year on year. In 2022, a further increase is expected by 3%, to 45.1 million tonnes.

The National Projects initiatives [in Russia] are expected to support a moderate recovery of steel demand in 2021-2022, Worldsteel noted.

MIDDLE EAST

Middle East crude steel production increased by 2.67% in 2020, thanks to increasing production in Iran, according to World Steel Association (Worldsteel) data.

Iran, Qatar, United Arab Emirates and Saudi Arabia produced a total of 40,475,000 tonnes of crude steel in 2020, a 2.67% increase compared with the total of 39,685,000 tonnes produced by those countries in 2019.

However, while Iran saw a 13.4% increase in its production, the other three nations saw double-digit percentage falls in theirs (Qatar -52.4%, UAE -18.2%, Saudi Arabia -5.1%).

Iran produced 29,030,000 tonnes of crude steel in 2020, Saudi Arabia produced 7,775,000 tonnes in that year, and the UAE produced 2,722,000 tonnes, while Qatar produced 1,218,000 tonnes, according to the Worldsteel statistics.

GCC

The main reason for reduced production was decreasing demand in the second quarter of 2020 because of the Covid-19 pandemic.

Some mills in the UAE import billet for producing rebar, but Emirates Steel produces long products at its DRI-based steelworks. There are no hot-rolled coil producers in the country at present. Emirates Steel took the No.118 spot in the Top Steelmakers table.

The UAE imports billet mainly from Oman, which is a member of the Gulf Co-operation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), and the product is delivered via land. But most of the GCC countries closed their land borders in April 2020 as a precaution against the pandemic and all deliveries were made by sea. This added $5-7 per tonne to the freight cost. The borders were re-opened in late-December, with some restrictions still continuing.

Qatar’s decrease in steel output was influenced by diplomatic conflict with Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, which started in June 2017, but diplomatic relations were restored in January 2021.

GCC countries have limited import duties, but the GCC Bureau of Technical Secretariat for Anti Injurious Practices in International Trade (GCC-TSAIP) plans to set definitive safeguard duties for a number of steel products for a period of three years, it stated in a document on May 7, 2021.
The safeguard duties are proposed to be set at 16% in the first year, and gradually decreased in the following years, to 15.2% in the second year and to 14.44% in the third year.

A wide range of products is under investigation, including types of: flat hot-rolled coil and sheet; cold-rolled flat steel coil and sheet; metallic coated steel; organic coated steel; reinforced steel bar and wire rod; circular, square and rectangular sticks and rods; sections; angles and shapes; welded and seamless pipes and tubes including items for transporting water, gas and oil; tubes and pipes; and other metal-coated steel products.

Furthermore, Saudi Arabia increased import duties on several steel products by 5-7% effective from June 20 last year. They encompassed steel billet, hot-rolled flat steel, cold-rolled flat steel, coated flat steel, narrow strip, section and angle, bar, rebar, sections and alloy flat steel.

Iran

Iran managed to increase its steel output despite the effects of the Covid-19 pandemic in the region and stricter sanctions placed on the nation by other countries. By January 10, 2020, The US Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed new sanctions on 17 Iranian metal producers and mining companies – as well as other foreign entities. The US initially imposed sanctions against Iran's metal sector in May 2019.

In June 2020, The US Treasury Department designated 121 tankers, container ships and other vessels owned or tied to Iranian shipper Islamic Republic of Iran Shipping Lines (IRISL) for additional secondary sanctions.

Iran announced new restrictions on exports of long steel products from the country, limiting the volumes that may be sold to foreign customers to 25% of production in May 2021. As a consequence, the country’s long steel exports are expected to be limited in 2021. But local demand is strong, so production is unlikely to decrease, sources believe.

In the previous Iranian year, which ended on March 19, 2021, the country produced 16.8 million tonnes of billet and bloom. Of this figure, 4.83 million tonnes were exported, showing a 24% year-on-year increase, according to a report from the Iranian Steel Producers Association.
Long steel output for the year was 10.2 million tonnes, with exports accounting for 2.65 million tonnes, up by 26% year-on-year.

Egypt

Egypt produced 8,229,000 tonnes of crude steel in 2020, 13.39% more than the 7,257,000 tonnes produced in 2019. The country’s steel output grew by only 0.5% in the first six months of 2020, but output kept growing in the last half of the year because of globally strong demand.

Current demand for long steel products is limited in the country, but it is expected to improve because the government eased a construction ban, which was initially imposed in May 2020, further by May 1, 2021.

Construction permits were issued in 27 cities for a period of two months in Egypt starting May 1, and will then be available in all cities across Egypt from July 1, 2021. Egypt’s Ministry of Trade and Industry reduced safeguard duties on imports of steel billet, wire rod and rebar with effect from April 12, 2021. This may increase imports provided demand increases significantly, Egyptian sources told Fastmarkets.

The safeguard duty on steel billet is now $46 per tonne, or 10% of the cif price. It had been $60 per tonne, or 13% of the cif price, since October 2020. For steel rebar and wire rod, the safeguard duty was $85 per tonne, or 17% of the cif price. Egypt imposed definitive safeguard duties in October 2019.

Investments

Saudi Arabia’s Sabic is considering expansion plans, CEO Salah Ahmed Al Ansari said during a keynote panel at Fastmarkets’ Middle East Iron & Steel virtual conference on December 15, 2020.

“We are talking about shipbuilding, automotive and military. They are differentiated sectors and they are capital sensitive. We need to ensure demand is sustainable,” Al Ansari said. “We are evaluating lots of new options. Plate mill, bloom, all those sectors are being evaluated,” he said.

In August 2020, the UAE’s Conares Steel announced that it will build a tube and pipe mill in Dubai. Conares Steel currently produces 500,000 tonnes per year of rebar, 250,000 tpy of tube and pipe, and 75,000 tonnes per year of pre-painted galvanized iron (color-coated coil) at its production facilities in Jebel Ali, Dubai. The new mill will be in mainland Dubai.
Egyptian long steel producer El Marakby Steel will add a total of 400,000 tonnes per year to its steel rebar and wire rod production capacity, the company announced in July 2020. El Marakby Steel currently has the capacity to produce 240,000 tpy of rebar and started billet production at its unit in Egypt’s 6th October City in August 2016.

Emirates Steel will add hot-rolled coil to its product portfolio, it said on February 28, 2021. This will add to its current suite of products, which includes rebar, wire rod, heavy section and sheet pile. The move will increase Emirates Steel’s steelmaking capacity to more than 5 million tonnes per year. Its current capacity is 3.5 million tpy.

Also in the UAE, the state-owned General Holding Corporation (Senaat) has offered Arkan Building Materials the opportunity to combine Senaat’s subsidiary Emirates Steel with Arkan, Arkan Building Materials said on May 9, 2021. Arkan Building Materials owns companies in the construction-related sectors, including cement and concrete products, in the UAE.
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