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

STEEL INDUSTRY NEWS

CORPORATE STEEL SECTOR NEWS


steelworker

Enough Aluminum Already
Fri 26th Aug 2016 05:16 GMT
That's bad news for Chalco, whose Ebitda margins already trailed rivals China Hongqiao and Henan Zhongfu Industry last year While China's promised cuts to its steel industry may turn out to be less than meets the eye, aluminum output actually has [see article]

Steel industry: Working towards progress - Financial ...
Thu 25th Aug 2016 21:12 GMT
The final step in a package of trade-offs with ArcelorMittal SA (Amsa) will be for the department of trade & industry (DTI) to designate locally made steel for state infrastructure projects. Amsa's deal with the competition commission to pay R1.5bn [see article]

Brazil's Vale expects Samarco to restart mid-2017
Thu 25th Aug 2016 17:04 GMT
RIO DE JANEIRO - Brazilian miner Vale expects Samarco, an iron-ore joint venture it owns with BHP Billiton, to restart operations in the middle of 2017, a company executive said on Thursday. Samarco's mine has been shut since November when a tailings dam [see article]

ArcelorMittal SA pricing parity policy likely to boost ...
Thu 25th Aug 2016 03:43 GMT
The South African government had launched an investigation in 2008 to determine ways to lower domestic steel prices after allegations by customers that Arcelor Mittal SA was charging high prices. The investigations also covered other steel firms [see article]

STEELMAKING RAW MATERIAL NEWS


Steelworkers Announce Tentative Agreement with Cliffs ...
Fri 26th Aug 2016 18:12 GMT
PITTSBURGH, Aug. 26, 2016 /PRNewswire-USNewswire/ -- The United Steelworkers (USW) today said that the union reached tentative agreement on a new contract with Cliffs Natural Resources on behalf of about 2,000 members of four local unions at the company's U.S. iron ore mines. Subject to a [see article]

Rio Tinto marks 50 years of iron ore - The Australian ...
Fri 26th Aug 2016 17:49 GMT
Top executives of the miner and several thousand of its customers and stakeholders gathered in Perth to mark half a century since the first shipment of iron ore left Western Australia bound for Japan. That cargo, carried by the Houn Maru vessel in [see article]

Iron ore market seen collapsing below last year's nadir ...
Fri 26th Aug 2016 06:57 GMT
The iron ore market is about to swoon, according to Westpac, which forecasts benchmark prices may sink below last year's nadir of $US38.30 a metric ton [see article]

Iron ore dips as China's steel capacity cuts gather pace ...
Thu 25th Aug 2016 22:02 GMT
Iron ore lost 0.7 per cent to $US61.10 overnight, according to The Steel Index, from $US61.50 yesterday. Chongqing Iron and Steel pointed to industrial overcapacity, a weak economy, rising labour costs and low steel prices for its decision, according [see article]

Strategic Minerals sees sharply higher iron ore revenues ...
Thu 25th Aug 2016 16:35 GMT
Underlying sales are on the rise in Cobre with a new large client commencing shipments in August.' picture of iron ore operation. Sales are on the rise at Cobre. Strategic Minerals (LON:SML) saw iron ore revenues pick up sharply in the three months to [see article]

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



SELECTED STEEL INDUSTRY MAPS


European BOF plants
European BOF plants

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




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 January 2016. 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 ~749 to ~799 million tonnes and global stelemaking capacity utilisation falling by ~1.6% in 2016.

In 2017 the global excess of world steel capacity is expected to be worse than in 2016, increasing to ~807 million tonnes.



Year
Production
million t
Capacity
million t
Capacity
Utilisation
2012
1560
2102
74.2%
2013
1650
2273
72.6%
2014
1670
2322
71.9%
2015
1622
2371
68.4%
2016
1608
2407
66.8%
2017
1615
2422
66.7%
Source: MCI analysis. Table last updated 24-Apr-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 1.6% (see table), MCI's consultants consider that world steel prices in 2016 will be ~$43/tonne below 2015 prices. For other products and / or for steel price forecasts through to 2020, please contact us.