Steel industry news and business information website.
sotn
This website is owned and operated by UK-based Metals Consulting International Ltd.
Our main business activity is steel industry capital investment appraisal.

WORLD STEEL INDUSTRY NEWS

steel pipe
We bring you steel tube industry news

Northwest Pipe Company (NWPX) Upgraded to Buy at Zacks ...
Sat 13th Feb 2016 21:02 GMT
According to Zacks, Northwest Pipe Company manufactures welded steel pipe in two business segments. In its Water Transmission business, they are a supplier of large diameter, high-pressure steel pipe used primarily for water transmission. In its [full report]
Walter Energy Announces Closing of Sale of Non-Core U.S. ...
Sat 13th Feb 2016 03:48 GMT
BIRMINGHAM, Ala., Feb. 12, 2016 /PRNewswire/ -- Walter Energy, Inc. (Walter Energy or the Company) today closed the previously-announced sale of certain U.S. non-core assets to Seminole Coal Resources, LLC, ERP Compliant Coke, LLC and ERP Environmental Fund, Inc. (Seminole) all [full report]

environment.jpg
Visit us for environmental news


Display above shows selected steel news reports only. For all of today's steel news (including the most recent news), visit our steel news page.



STEEL INDUSTRY HEALTH MONITOR

WORLD STEEL PRICES
hrc prices
$350/t
$1000/t
HRC price data
Current price: ~$375/t


STEEL CAPACITY EXCESS
world crude steel capacity excess
0 mt
700 mt
Global steel capacity data
Current excess: ~640 mt


IRON ORE PRICES
iron ore prices
$35/t
$155/t
Iron ore price data
Current price: ~$40/t


Charts above summarise the status of the industry worldwide as at February 2016. Steel price data is for hot rolled coil, with gauge indicating current export fob price in US $/metric tonne within a 10 year context. Current world steel capacity excess is shown at crude steel level in millions of metric tonnes. Iron ore price figures are for Chinese imported iron ore fines (62% Fe spot, CFR Tianjin port), in $ per metric tonne; gauge also shows the current iron ore price in the context of prices seen in the last 10 years.

Red zone on the gauges indicates a position of poor profitability and the danger of business collapse for steel makers and / or iron ore producers. Green zone is associated with strong industry profitability.

Verdict: With steel prices close to a 10 year low - reflecting a capacity excess of over 600 million tonnes of steel - the steel industry is at a crisis point. Upstream, the position is just as dire: with iron ore prices around $40/t, financial collapse of many higher-cost mines must be inevitable.




SELECTED IRON & STEEL COMPANY SHARE PRICES


ArcelorMittal SA (ADR)
Last 12 months

arcelormittal share price
Source:Google Finance, NYSE:MT. Currency:$
United States Steel Corp
Last 12 months

uss stock price
Source:Google Finance, NYSE:X. Currency:$

Vale SA (ADR)
Last 12 months

vale share price
Source:Google Finance, NYSE:VALE. Currency:$
Nucor Corporation
Last 12 months

nucor stock price
Source:Google Finance, NYSE:NUE. Currency:$

For related stock charts, visit Google Finance




STEEL INDUSTRY CONFERENCE INFORMATION


Steelonthenet.com conference advertisingConference Title: Global Iron Ore & Steel Forecast Conference
Venue: Hyatt Regency Hotel, Perth, Australia
Start: Tue, 08 Mar 2016
Finish: Wed, 09 Mar 2016
Organiser: Informa
Contact: Tel: +61 2 9080 4307

Description: The 19th Annual Global Iron Ore & Steel Forecast Conference & Exhibition will be held in Perth on the 8-9 March 2016. This event is renowned as one of the world's largest gatherings of senior iron ore and steel executives with thousands of industry personnel attending it over the years. It is recognised as the conference that delivers vital information on the status of the global iron ore and steel sectors [conference info]

For more steel industry events, visit our steel conferences page.




NORTH AMERICAN STEEL NEWS


Value Stock Steel Dynamics, Inc. (NASDAQ:STLD) - Enterprise ...
Fri 12th Feb 2016 19:41 GMT
Enterprise Leader - The latest company that has made a place in the list of Zacks value stocks is Steel Dynamics, Inc. . Value stocks investors look for stocks that are assumed trading at lower price levels as compared to company's fundamentals. Such stocks [industry news]

Why Did Analysts Cut United States Steel's Target ...
Thu 11th Feb 2016 18:47 GMT
Yahoo Finance UK - According to data compiled by Bloomberg, United States Steel has a consensus one-year price target of $9.11. Before the company's 4Q15 earnings were released, United States Steel's consensus one-year price target was $10.68. Some analysts have cut [industry news]

Weak Container Pricing Saps Textainer Group Holdings ...
Thu 11th Feb 2016 16:04 GMT
The shipping container leasing company was hit not only by decreased customer demand as trade growth slowed more than expected, but container prices plunged due to weak steel prices and muted demand for new containers. Neither trend is showing any [industry news]

For latest reports visit North American steel news.



OTHER REGIONAL STEEL NEWS

ASIA-PACIFIC STEEL NEWS


steelworker

Iron ore slips ahead of China's return amid tough steel ...
Fri 12th Feb 2016 05:03 GMT
Spot iron ore rallies to 11-week high before holiday. * Rio CEO says not taking full use of 360 mln T capacity. By Manolo Serapio Jr. MANILA, Feb 12 Iron ore futures and swaps in Singapore drifted lower this week in thin trading with China on Lunar New [see article]

Iron ore price holds steady - Business Spectator
Thu 11th Feb 2016 20:40 GMT
The iron ore price is holding steady, unaffected by the risk-off sentiment sweeping across global markets. Iron ore is trading at $US44.50 a tonne, unchanged from the previous session. In London trade, both Australian mining majors fell sharply after [see article]

MENA STEEL NEWS


ArcelorMittal foresees South African steel protection ...
Fri 12th Feb 2016 16:28 GMT
ArcelorMittal (MT +3.9%) says it expects South Africa to adopt tariffs as a safeguard against cheap imports before the end of March. MT's South African unit is among the country's steelmakers who have said they are struggling to compete with an [see article]

Liberia: Iron ore prices projected to drop in 2016 Report ...
Thu 11th Feb 2016 11:10 GMT
The Central Bank of Liberia (CBL) has projected the price of iron ore to average US$50 per metric ton during the first half of 2016, according to a CBL report. The report covering the bank's financial and economic activities between July and September [see article]

Islands in focus: Iron ore freighter hits reef near Batam ...
Sat 6th Feb 2016 08:10 GMT
BATAM: A Hong Kong-flagged Iranian MV Ocean carrier, sailing from Iran, hit a coral reef off Sambu Island, Batam, Riau Islands, early on Wednesday. The vessel, carrying a huge volume of iron ore, remains stranded as it awaits salvage. The local port [see article]

To see other steel sector news reports, check out our other steel industry news pages.



SELECTED STEEL INDUSTRY MAPS


European welded tube plants
European welded tube plants

For other steel location maps, visit our steel industry maps page.




Q&As

QUESTION AND ANSWER SECTION


Question: Explain the term 'LME'?
Answer: London Metal Exchange - leading non-ferrous metals market in the UK.

Question: Explain the term 'Hismelt'?
Answer: Direct ironmaking process, based on use of iron ore fines and non-coking coal for the production of hot metal.

Question: Explain the term 'decarburisation'?
Answer: The loss of carbon at the surface of steel. It is caused by exposure of the surface to oxidising conditions at high temperature.

For more definitions, visit our glossary of steel terms page.




KPIs

KEY PERFORMANCE INDICATORS



Plant or Equipment
KPI Item
KPI Value
Electric arc furnace
CO2 prodn
0.24 t/t
Blast furnace
Campaign
12.5 years
Hot strip mill
Op time
300 days/yr
Electric arc furnace
Electrodes
1.9 kg/t
Reheat furnace
Fuel use
1.7 GJ/t

For more KPI data, please visit our online store.




CAPEX

STEEL INDUSTRY CAPITAL INVESTMENT COSTS



INTEGRATED SLAB PLANT

BOF-cc-slab
All cost estimates are in 2016 US dollars.
For further info visit our steel capex page.

Capital costs describe investment for an integrated slab plant with continuous casting, typically with coke, sinter etc. Representative investments include:

  • CSA slab mill investment in Sepetiba, Brazil
  • CSN investment in Itaguai, Brazil
  • CVRD-Baosteel joint venture in Vitoria, Espirito Santo in Brazil
  • Sinosteel Corporation's investment in Jharkand, India

Average cost: $4300m
Average capacity: 4210 kt
Sample size: 12
Average cost/tonne: $1050/t


INTEGRATED HOT STRIP MILL

BOF-cc-hsm
All cost estimates are in 2016 US dollars.
For further info visit our steel capex page.

Chart describes investments in ore-based integrated steel plants with hot strip production and sometimes other additional downstream rolling capability. Typical examples include:

  • Wuhan Iron & Steel investment in Fangchengang Port in China
  • ArcelorMittal investment in Karnataka, India
  • Tata Steel joint venture with VSC & Vicem for investment in Vung Ang in Vietnam

Average cost: $7560m
Average capacity: 6660 kt
Sample size: 16
Average cost/tonne: $1200/t

Notes
Analyses above were last updated in November 2015. For further item-specific capital investment data covering sinter, coke, DRI, blast furnaces, BOF plants, EAFs, induction furnaces, slab casting, billet and bloom casting, plate, hot rolled coil, cold rolled coil, hot dip galvanised sheet, tin plate, organic coated sheet, heavy sections, steel bar, wire rod, drawn wire, welded tube, seamless tube, pellets, washed coal, lime, PCI, air separation, power plant etc see our steel capex database page.




STEEL INDUSTRY EMPLOYMENT BENCHMARKS



steel industry employment benchmarks

Chart above shows year 2015 employment levels at 114 different steel firms around the world - companies that make flat, long and/or tubular carbon steel products. An average steel producer with a production capacity of ~3 mt steel/year typically thus has ~4000 employees. If your steel company employs more than this, please call us - our technical experts can assist with steel plant productivity improvement.

To discuss the interpretation of this chart and/or further information (including employment benchmarks for specialty steel production) please email us at the address shown at the foot of the page.




INDUSTRY FORECASTS FOR 2016+

Table below shows global crude steel production volumes and capacity figures - as assessed by World Steel Association and by the OECD - and resulting calculation of steelmaking capacity utilisation. The overall picture for 2016 as compared to 2015 is that the global capacity surplus will get worse, with excess global capacity increasing from ~638 to ~667 million tonnes and global stelemaking capacity utilisation falling by ~0.7% in 2016.



Year
Production
million t
Capacity
million t
Capacity
Utilisation
2012
1560
2100
74.3%
2013
1650
2160
76.4%
2014
1670
2240
74.6%
2015
1642
2280
72.0%
2016
1653
2320
71.3%
Source: MCI analysis. Table last updated 15-Nov-15.

Graph below shows the relationship between steel prices and the global level of capacity utilisation - and indicates (both for HRC and for rebar) that prices fall ~$27/tonne per 1% drop in capacity utilisation.



world steel price levels

On the basis of the anticipated fall in 2016 of world capacity utilisation from 2015 levels of approx 0.7% (see table), MCI's consultants consider that world steel prices in 2016 will be ~$20/tonne below 2015 prices. For other products and / or for 2017+ forecasts, please contact us.