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March 2017 | Leading for over 100 years

Roland Junck on
a new dawn for
British Steel

Copper supply
Zinc demand
picks up long-term
Mini-mill technology
and strategy
Each year, the Montanwerke Brixlegg AG processes approx.
150,000 tons of copper containing secondary materials.
The recovered highly pure copper has a copper content of 99,99%.
This excellent quality and a wide range of application possiblities have
made the brand BRX well known worldwide.

More information about recycling and the production you can find under
18 18 Lead & zinc New orders
Cover story
Roland Junck
36 46
Zinc shines New plant orders
British Steel executive
A combination of tight The latest quarterly list
chairman Roland Junck
supply and improving and trends
is steering the long- BRITISH STEEL

demand fundamentals
product business towards Steel
has set the scene for
becoming a national
steel champion
rising zinc prices
Copper 42 Mini-mills revisited
Mini-mills are gaining in
Lead & zinc in India
26 The potential for demand popularity as steelmakers
growth in zinc and turn to EAF-based
Copper supply
lead in India is large, technology for increased
but what is driving zinc flexibility in iron unit
With copper supply
consumption and lead input and steel output
uncertainties looming
large, what is the market recycling?
outlook like for the red
metal in 2017?
Copper belts
The prospects for Africas
two largest copper
producing nations: the
Democratic Republic of
Congo and Zambia

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March 2017 | Metal Bulletin Magazine | 3

News and analysis Regulars 25 58
8 7 Innovations
New developments
Non-ferrous news Comment
review New realities in metals technology,
processes and products

A summary of key
developments in the
non-ferrous sector over 25 59
the past month People moves
New appointments End-user
around the global metals Advances and market
10 industry developments in
Steel news review
A round-up of important
developments in the iron 57 60
and steel sectors over the Supply chain services
News from service Events
past month
providers across the Forthcoming conferences
metals supply chain and exhibitions
12 Prices
Base metals and
steel analysis
Metal Bulletin Research
January averages
analyses the drivers of
the base metals, steel
and steel raw materials 8 57


Regional reviews
Correspondents in
Europe, North America, 58

Latin America, Asia, Africa

and the Middle East
discuss topical issues in
their regions

62 59
Can Trump make
US metals and steel
great again?


4 | Metal Bulletin Magazine | March 2017

C. Steinweg Group

Head Office:
Parmentierplein 1 3088 GN Rotterdam The Netherlands Phone: +31 (0)10 48.79.555 E-mail:

C. Steinweg Group, more than 100

own locations worldwide.
Base Metals, Ferro Alloys, Steel,
Minor Metals and Project Cargo.

Independent. Logistics. Since 1847.

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international political and the associated London EC4Y 8AX.

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British Steel executive chairman Roland Junck, explains manufacturing Thorsten Schier
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high-quality products in well-defined markets in a steel

prowess Dent, Kirk Maltais, Michael Cowden,
Nat Rudarakanchana, James

Lawrence, Mei Ling Toh, Chris Metal Bulletin is a part of

world in which he says a race to become the largest Kavanagh, Dom Yanchunas, Brad Euromoney Global Limited: 8
steelmaker has become far less relevant. MacAulay, Dalton Barker
Latin America steel editor:
Bouverie Street, London EC4Y 8AX.
Directors: John Botts (chairman),
As our copper market overview explains, supply-side Ana Paula Camargo Andrew Rashbass (ceo), Sir Patrick
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disruptions loom large over sentiment at present. A Danielle Assalve, Felipe Peroni Colin Jones (FD), Paul Zwillenberg,
complementary article about African copper mining Asia non-ferrous editor:
Shivani Singh
David Pritchard, Andrew Ballingal,
Tristan Hillgarth
reviews the importance of the DRC and Zambia in a Asia steel editor: Juan Weik
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transmitted, in any form whatsoever
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lead recycling in India highlight the opportunities and Newsdesk manager: Rod George
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written consent. Unauthorised and/
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March 2017 | Metal Bulletin Magazine | 7

Mecklenburg resumes
open-cast mining
The Afarak Group has restarted
open-cast mining operations at
its Mecklenburg chrome mine
in South Africa in response to
improved chrome market
conditions. Afarak has indicated
that work is currently underway
on increasing the high wall from
40 metres to 65 metres. The
company says the work will also

allow better access to
underground mining at
Mecklenburg, which has the
potential to produce 4.5 million Afarak Group has restarted open-cast mining operations at its Mecklenburg chrome mine
tonnes of chrome ore. The mine
is expected to reach full net loss of 662.5 million yuan approximately 8% by projects, the company said in a
production capacity of 30,000 ($96.25 million) in 2015. The progressively dropping up to statement. The move by Codelco
tonnes of chrome ore per month companys sales revenue in 80MW of power from its comes a year after Chile, which
by April, and it will continue for 2016 reached 8.51 billion yuan production circuit. The decision has over 50% of the worlds lithium
a period of six months. The total ($1.24 billion), up 9.7% from could result in a potential loss of reserves, announced the creation
open-cast is expected to yield 7.76 billion yuan ($1.13 billion) around 45,000 tonnes of of a new lithium and salt flat
just over 200,000 tonnes of in 2015. aluminium production for 2017. governance policy. Under the
chrome ore. policy, Chile determined that
Boyne Smelters Codelco seeks partner public-private partnerships to
Xiamen Tungsten explore lithium were welcomed,
cuts output to develop lithium but the countrys lithium would
returns to profit Boyne Smelters, an Australian projects not be subject to concessions
Xiamen Tungsten Co, Chinas aluminium smelter owned by Codelco has opened the process due to its strategic nature.
largest tungsten smelting and Rio Tinto, has said it is cutting to select partners to jointly
processing company, returned production and shedding jobs develop two lithium projects in OM Holdings begins
to profit in 2016 on the recovery due to ongoing higher power Chiles northern region of
of tungsten prices and improved prices. In response to elevated Atacama. Potential partners will FeMn production in
sales of battery materials. The electricity prices in Queensland be evaluated according to their Malaysia
company posted a net profit of over a sustained period, the previous experience in the OM Holdings has started
144 million yuan ($20.9 million) company is in the process of lithium industry and relevant producing high-carbon
for the full year in 2016, from a reducing production by capabilities to develop such ferro-manganese after the
successful hot commissioning of
a second manganese alloys
furnace at its Sarawak plant in
Malaysia. The new line follows
the start-up of silico-manganese
production from the same site in
December 2016.

BOAL sells extrusion

plant to E-MAX
BOAL Extrusion Group has
sold its Belgium aluminium
extrusion operation BOAL
Belgium NV to the Belgian
company E-MAX Group. The
plant, based in Morsele near
Kortrijk, close to the French
border, has two 1,600-tonne
(seven-inch) extrusion presses

and a thermal break machine

that enables two profiles to be
linked together using thermally
Rio Tinto is cutting production at Boyne Smelters, Australia, owing to increased power prices insulating material.

8 | Metal Bulletin Magazine | March 2017

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Progress at EGAs we have an opportunity with the

Guinea bauxite project favourable market conditions
meaning high zinc prices,
Emirates Global Aluminium relatively low TCs to really
(EGA) has announced that Jan de focus on extracting maximum
Nul, a Belgian marine contractor, valuefrom the remaining North
has completed a three-month American assets.
project for site infill and elevation Myra Falls in Canada was
of 50 hectares of land at Kamsar suspended in April 2015, along
on the Guinean coast for a rail with Campo Morado, which
loop and bulk materials handling was suspended in Q1 2015,
facilities. The work is part of a $1 and Middle Tennessee, which

billion investment in the was suspended in December
development of bauxite mining 2015.
and export facilities in the The European Commission has fined a number of car battery
Republic of Guinea. recyclers for taking part in a price-fixing cartel Rio Tinto awards Amrun
Last October EGA inaugurated
a container terminal facility at Bosil-Metal copper-lead-zinc total of 68 million ($72.7 contract to Sodexo
Kamsar Port in Guinea, which is mine in Serbia. With proven million) for taking part in a Rio Tinto has awarded a A$22
being used for the export of bulk reserves of 1.7 million tonnes of price-fixing cartel. The three million integrated services
bauxite samples and the import copper-lead-zinc ore, companies fined UK-based contract to facilities
of equipment for EGAs Kamsar Bosilegrad, where reserves Eco-Bat Technologies, management provider Sodexo,
construction project. In a could be expanded to 2.3-2.5 Belgium-based Campine SA, which includes an indigenous
second phase of the Guinea million tonnes, is targeted for France-based Recyclex SA employment target of 20%
project, EGA will build an commercial production in were found to have fixed within two years. Sodexo will
alumina refinery in the country. 2019. It is set to become prices for purchasing scrap supply camp management
Minecos third active mine in automotive batteries in a breach services to the Amrun bauxite
Lithium X buys Arizaro the former Yugoslavia. It owns of European Union (EU) project on the Cape York
Rudnik in Bosnia and Veliki antitrust rules. Peninsula in North Queensland.
lithium project Majdan, also in Serbia. According to the EC, the A letter of intent has also been
Lithium X has entered into a This is a limited test companies fixed the purchase signed with the company to
binding purchase and sale production. Subsequently, on prices of scrap lead-acid provide integrated facilities
agreement to acquire the the basis of the findings of that automotive batteries in management services at mine
Arizaro lithium brine project in we should be redesigning and Belgium, France, Germany and sites at Weipa in North
Argentinas Salta Province. The building a commercial the Netherlands between 2009 Queensland and Gove in the
project consists of 33,846 processing plant, a spokesman and 2012. Recylex said in an 8 Northern Territory.
hectares in 11 mining claims for the company said. February statement that it will
covering parts of the western examine the EC decision in Arconic sells over 60%
and eastern portions of the Salar Afarak switches to detail: All options, including an
de Arizaro, one of the districts appeal, will now be studied, it of Alcoa stake
largest known salt lakes. ferro-chrome at Mogale stated. On the same date, Arconic has offloaded more
Afarak has confirmed its Eco-Bat stated that it was than half of its remaining stake
Record for Antams decision to convert the second reviewing the decision and had in Alcoa Corp in order to
silico-manganese furnace at not yet determined whether it bolster [its] cash balance, the
ferro-nickel output Mogale Alloys to a ferro-chrome will appeal. Campine disagreed company said in a statement on
Ferro-nickel production at PT furnace, due to volatile with the EC decision and February 15. Arconic sold 23.4
Aneka Tambang (Antam) manganese ore prices over the planned to appeal in the General million of its shares in Alcoa
reached an all-time high of past few months. The Helsinki- Court of Luxembourg. Corp for approximately $890
20,293 tonnes of nickel- headquartered miner said in million.The share total equals
contained in 2016, up 18% from September 2016 that it was Potential restart for 64.3% of the 36.3 million shares
its output in 2015. Its ferro- switching one silico-manganese that the aluminium
nickel sales amounted to 20,888 furnace at its South African Myra Falls zinc mine manufacturer retained
tonnes in 2016, an increase of alloys-producing unit into a Nyrstar is considering following its split from Alcoa
12% year-on-year. The ferro-chrome furnace and that it restarting its idled and for-sale Corp in November.
company is targeting 24,100 was considering switching the Myra Falls zinc-copper mine in Ahead of the split, Arconic
tonnes of nickel contained in second. light of improved market said it would retain 19.9% of
ferro-nickel production in 2017. conditions, according to its ceo Alcoa Corps common stock to
EC fines recyclers over Hilmar Rode. We are give itself security that could be
Mineco starts tests at reviewing the restart of the monetised to strengthen its
price-fixing Myra Falls mine to capitalise on balance sheet, as well as to
Serbian mine The European Commission the favourable market reduce Alcoa Corps need to
Mineco Metals Group is (EC) has fined three lead car environment, Rode said. He raise debt, among other
starting test production at its battery recycling companies a continued: We do believe that benefits.

March 2017 | Metal Bulletin Magazine | 9

Liberty to buy Tatas CAP starts up
Speciality Steels galvanizing line in Peru
Liberty House has signed an Peruvian tube maker,
agreement with Tata Steel UK Tupemesa, a subsidiary of
to acquire its Speciality Steels Chile-based steel producer
business for a total Compaa de Acero del
consideration of 100 million Pacfico (CAP), successfully
($125 million). The sale follows commissioned a galvanizing
an extensive due diligence line in Lima in mid-January.
period after the parties entered The unit, with the capacity to
discussions in November 2016. produce 2,000 tonnes per
Speciality Steels has the month, required investments
capability to make around 1.1m worth $10 million, CAP said.
tonnes of liquid steel per year With this start-up, we reaffirm
from recycled scrap, melted in our constant and increasing
two electric arc furnaces in investment in the development
Rotherham. of Peru, CAP president

Roberto de Andraca said.
Ponta da Madeira Stocksbridge is among the Tata Steel Speciality Steel facilities
loads first ships that have been purchased by Liberty House
ThyssenKrupp to invest
Ponta da Madeira Maritime $32m in China
Terminal in So Lus (MA) production in September. The four geographical blocks: ThyssenKrupp has announced
loaded its first commercial rolling line was damaged when North America, headed by plans for a new plant to make
cargo produced at the S11D the electrical room containing Nicolas de Coignac; South automotive springs and
iron ore mine, in Cana dos the equipment that controlled America, led by Alexandre stabilisers in Pinghu, China,
Carajs, south-east of Par, it caught fire in January. Lyra; Europe and Africa, with with an investment of around
Brazil. A total of about 26,500 NSSMCs steelworks at Hubert Paris at the helm; and 30 million ($32 million).
tonnes were loaded, divided Kashima, Kimitsu and Nagoya the Middle East and Asia, led Construction work is scheduled
into three ships with capacity have increased production to by Edouard Guinotte. Vallourec to start this year, and from
between 73,000 and 380,000 make up for the lost capacity at previously organised its 2018 the plant will produce
tonnes. The ships had their the Oita works. business by market applications around 5 million springs and
capacity completed with (oil and gas, power generation, stabilisers per year.
Carajs IOCJ ore, from other Vallourec reshapes and industry and other). The new site in Pinghu will
mines from the North System. The transformation also be our third plant for springs
business creates two new departments: and stabilisers in the Peoples
French steel tube and pipe the Development and Republic of China, and will
September restart for producer, Vallourec has Innovation department (D&I), further expand our global
fire-damaged line announced a new responsible for innovation and production network, said
Nippon Steel & Sumitomo organisational strategy as a part product research and Karsten Kroos, ceo of business
Metal Corp (NSSMC) has said of its transformation plan. The development, and the area components technology at
it expects the fire-damaged reorganisation, which will take Technology and Industry ThyssenKrupp.
plate rolling line at its Oita effect in April, will see department (T&I), which will
works, Japan, to resume Vallourecs business split into develop Vallourecs industrial British Steel in profit
strategy and aim to improve its
cost base. in Q3
British Steel has said it ended
Delong may cut the October-December 2016
financial quarter in profit.
capacity in Hebei Having implemented the first
A Hebei-based subsidiary of stage of our turnaround plan,
Chinese steelmaker Delong returning the business to profit
Holdings may have to reduce and putting it on a sustainable
its steelmaking output amid footing, we are now well
de-capacity plans being pushed positioned to implement the
forward by the local next stage of the plan, British
government. Hebei, the biggest Steel executive chairman
steelmaking province in China, Roland Junck said.
is aiming to cut 17.14 million When we started on June 1

tpy of crude steel and 19.86 [last year, after Tata Steel
With 380,000 tonnes of capacity, Berge Neblina was one of the million tpy of ironmaking Europe divested the long
three vessels that received iron ore from the S11D mine capacity in 2017. products unit], the company

10 | Metal Bulletin Magazine | March 2017

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was an inward-looking getting 750,000 ($933,000).

production hub, and now we A figure of 400,000
have focused business units and ($498,000) will go to structural
our responsiveness to market steel fabricator Code Serve, and
conditions has increased, steel fabricator Express
Junck added. Reinforcements will get
The UK steelmaker, which 65,000 ($80,900).
produces more than 2.80
million tpy, said that it is Gerdau to develop
targeting a 20-25% year-on-
year improvement in turnover automotive products
by the end of its financial year Brazilian steel producer
on March 31, 2017. Gerdau will invest 1 million
Reais ($319,000) to establish a
Outokumpu sells US partnership with local
companies and research
steel plate mill institutes, aimed at developing
Outokumpu has sold its US advanced products, including
quarto plate mill in New Castle, more durable steel products

Indiana, to private equity firm with increased fatigue
DOrazio Capital Partners and MMK shipped a record 1,135,500 tonnes of galvanized steel to its resistance, for the automotive
the mills current management consumers in 2016 sector. Gerdau signed the
for $30.10 million. After more partnership with niobium
than 45 years of Nordic EC approves data maintained by SMS group, producer CBMM, research
ownership, we are pleased to ArcelorMittal and Big River Steels lead institute IPT and local
return this great facility to technology supplier. non-profit organisation Senai.
American ownership, said Cellino joint venture The automotive sector is
Michael Stateczny, president of The European Commission has responsible for around 19.80%
New Castle Stainless Plate, the approved the creation of
Steel Dynamics $28m of the Brazilian steel
newly formed corporate entity Steelcame, a joint venture expansion plan consumption, according to
representing the mill. between the French Steel Dynamics Inc. (SDI) is figures from the countrys steel
Stateczny led the acquisition distribution arm of investing $28 million in its institute, Ao Brasil.
team, which included five other ArcelorMittal and Italian steel Roanoke Bar Division, in the
members of the plants senior components producer Cellino. US state of Virginia, to increase SeAH Steel builds pipe
leadership. All six are now The commission approved the its rolling and rebar production
minority owners in the new tie-up after concluding that the capacity. The plan will be to mill in California
business and will continue in merger complied with upgrade and integrate a new State Pipe & Supply, the US
their management roles. European competition law. reheating furnace and finishing division of South Koreas SeAH
The commission has area within the facility, allowing Steel, is building a new
MMK ships record concluded that the merger rolling capacity to expand to spiral-welded steel pipe mill in
would not cause any problem more than 600,000 tpy from Rialto, California. Annual
volume of galv with competition given that the 500,000 tpy. Additionally, the production at the facility, called
OJSC Magnitogorsk Iron and companies are only active in the company expects rebar West Coast Spiral, will be
Steel Works (MMK) shipped same markets to a limited production to increase to more 100,000 tonnes of double-
1,135,500 tonnes of galvanized extent and several competitors than 200,000 tpy. submerged-arc welded tube.
steel to its consumers in 2016, will remain active in the Tube diameters will range from
the most in the companys markets concerned, the EC Welsh government 16 inches to 120 inches with
history. The previous record of said. wall thicknesses from 0.157 to
1,115,700 tonnes was achieved invests $3.5m in 1 inch. Outside diameters of
in 2014. During the past 15 Big River Steels domestic steel the water transmission pipe will
years, MMK has sustainably The regional government in be 16-56 inches, in lengths up
grown its galvanized steel production record Wales, UK, is providing around to 40 ft. The A252 pipe pile
output. It commissioned Big River Steel has established 2.82 million ($3.51 million) in produced will come in lengths
continuous hot-dip galvanizing a new production record in investments to four domestic up to 80 ft.
lines in 2002 and 2008 and in terms of tons of steel produced steel companies. Celsa Steel The new large-diameter pipe
2012 commissioned the second by a SMS group supplied UK, which produces heavy mill is another move by SeAH
stage of a cold-rolling unit. flat-rolled mini-mill during the steel sections, wire rod and bar Steel to expand its operations in
Currently, another continuous first full month of operation. through electric arc furnace the USA. In November 2016,
hot-dip galvanizing line with Having produced over 63,000 (EAF) production will receive the South Korean steelmaker
annual capacity of 360,000 tons of hot rolled steel in 1.60 million ($2.00 million). became a domestic producer of
tonnes is under construction January, Big River Steel topped Dyfed Steels, the largest OCTG when it acquired the
with launch scheduled for the previous first-month independent steel stockholder former OMK Tube mill in
July 2017. production record according to and processor in Wales, is Houston.

March 2017 | Metal Bulletin Magazine | 11

MBR analysis
Aluminium Lead
Vulnerable to Chinese capacity -cut news No fundamental case for fresh rallies yet
We have upgraded our LME LME cash price, $/t The upside break in LME lead LME cash price, $/t
cash price forecasts this month 2,000 prices to a high of $2,458.50/ 2,500
to reflect the resilience of the tonne in February quickly
speculative rally this year and stalled, and prices returned to
the fact that the market has 1,600 the $2,200-2,400/tonne 2,000
become, and is likely to trading range. The latest data
remain, bullish to continuing LME/MBR
from the ILZSG portrays a LME/MBR
efforts to control air pollution 1,200 balanced market overall in 1,500
May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16

May 15
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17f

Nov 16
Jan 17
Mar 17f
in China. Cost inflation from 2016, with an 11,000-tonne
raw materials has also become surplus. Exchange stocks rose
a factor. On the key issue of the some major producers have by a similar 19,900 tonnes, drawdown in exchange stocks,
Chinese supply cuts, we already upgraded their again indicative of a market we believe the lead price may
remain non-believers. The facilities to minimise pollution, erring on the side of struggle to push higher.
governments proposal to cut which may exempt them from oversupply, but essentially in Unfortunately for lead bulls
30% of capacity in certain the winter cull. We now expect balance. That benign though, LME stocks are flat
provinces during the winter the Q1 LME cash price to backdrop is at odds with the and SHFE stocks have been
needs to be re-worked. If, as we average $1,820/tonne a steep rally in lead prices last rising. The market also has to
suspect, authorities ultimately 3.4% increase from our year, which suggests the digest a pick-up in scrap
soften their stance and/or previous forecast of $1,760/ market was pricing in tighter supply brought out of the
down-size their capacity tonne. For the whole year, our fundamentals that did not woodwork by the high prices,
cutback target then prices will forecast has been raised to emerge. So without clear and the likelihood of mine
clearly be vulnerable to a $1,833/tonne, but remains evidence of tightness this restarts and production
sell-off. We understand that under review. year, such as a consistent increases.

Copper Nickel
Red alert as supply disruptions take centre stage Volatility has picked up as uncertainty rises
Our Q1 LME copper price LME cash price, $/t Volatility has increased as the LME cash price, $/t
forecast remains $5,910/ 7,000 Indonesian and the Philippine 16,000
tonne and is well-placed ore supply situations are still 14,000
relative to the quarter-to-date evolving and the market is still 12,000
average, which is rising 5,000 trying to make sense of it all. A
through the low $5,800s as we degree of bullishness clearly
write. We had factored in LME/MBR re-emerged in February, as LME 8,000
supply disruptions inflating 3,000 prices returned briefly to the 6,000
May 15
Jul 15
Sep 15
Nov 15
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May 16
Jul 16
Sep 16
Nov 16
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Mar 17f
May 15
Jul 15
Sep 15
Nov 15
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Mar 16
May 16
Jul 16
Sep 16
Nov 16
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Mar 17f

prices for a while this quarter, $11,000/tonne level that is an

but as the days tick by and 18% gain in the space of just three
production losses mount in That assumes the major weeks from the January lows all this volatility in LME prices.
Chile due to the Escondida disruptions have passed by around $9,400/tonne. We are After all, actual ore and NPI
strike and in Indonesia due to then and that speculators increasingly of the view that, for prices have hardly budged. Over
the Grasberg export permit switch to profit-taking for a the short term at least, all the the medium term, nickel should
impasse, the resulting bullish while, at least until the next bullish news has been well priced work higher again, but not at the
sentiment is starting to move round of labour contract in. A retreat to consolidate for a speed of the past months gains
the short-term outlook renewals threatens to bring while back into a trading range given the still quite bearish
beyond our already-bullish other mines in North and between the high-$10,000s and structural themes overhanging
base case view and towards Latin America to a halt. the mid-$9,000s would not be a this market, such as surging
our high-case scenario for this This could be a theme that surprise. This would give the investment in Indonesian
quarter, of $6,100/tonne. defines 2017 and lays the market the chance to better ferro-nickel and NPI capacity,
We still expect to see a foundation for a supply- digest the recent ore supply resilient Chinese NPI supply,
pull-back in prices in Q2. demand deficit. developments that have caused and high stocks.

In this regular section, MBRs base metals team summarise their

in-depth reports to highlight key factors driving the markets and
short-term price forecasts. MBRs Base Metals Weekly Tracker service

12 | Metal Bulletin Magazine | March 2017

World leading market analysis

Tin Ask an analyst

Fight back after bearish over-reaction Where will the nickel supply-demand balance
LME tin prices surprised us LME cash price, $/t
by going sub-$19,000/tonne
fall in 2017?
for the first time since the The global refined nickel market whether Philippine ore will still
summer during February 20,000 returned to a welcome supply be competitive and in-demand
the only base metal to look deficit in 2016 after four with preferred Indonesian
so weak. The market is 15,000 consecutive years in surplus. material back in the market. But
spooked by the threat of During that time world we can still make some useful
higher exports from both 10,000
May 15 inventories had soared from 6-7 assumptions.
Jul 15
Sep 15
Nov 15
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17f
Indonesia and China this year. weeks of consumption to more In Indonesia, government
While we doubt Chinese than 16 weeks, which chased officials have said that they
exports will turn out to be a chart is starting to look more prices to 15-year lows. So the envisage exports reaching about
problem, we do expect to see constructive, exchange stocks re-emergence of deficit 5.2m tonnes of <1.7% nickel
more Indonesian metal this are no longer rising and we are conditions, and the promise of a annually. That is about 50,000
year. However, that is already forecasting a balanced global deficit this year too, heralded tonnes of contained nickel,
in our forecast and we still see market during Q1 2017 ahead the bottom of a lengthy bear allowing for moisture in the ore
a deficit market overall in of a return to a significant market and the start of what and processing losses.
2017. So, we feel that prices deficit in Q2. We maintain should become a multi-year
have overreacted on the the view that a break of upcycle for prices. A reduction in export
downside. Their recovery, $20,000/tonne is imminent, Then, in January, Indonesia volumes equivalent
which already appears to have which will put tin back in line announced it was easing its ore
got underway, will continue, with our Q1 base case price export ban. As the largest
to 140,000-150,000
in our view. The technical forecast. supplier of ore to Chinas NPI tonnes of contained
sector prior to the ban, that was nickel is possible
a bombshell.
Zinc But of course the Philippines
Chinas alterative ore supplier
In the Philippines, we
estimate from the governments
Still bullish, but less of a one-way bet after Indonesias exit from the hit-list of targeted mines that a
seaborne market in 2014 has reduction in export volumes
Preliminary ILZSG data for LME cash price, $/t been going in the opposite equivalent to 140,000-150,000
2016 published in February 3,000 direction. The government is tonnes of contained nickel is
gave us the chance to coming down hard on miners possible, again after moisture
re-evaluate zincs bull story in there and, through its and processing losses.
the context of fresh fundamental 2,000 controversial mining audit, has So even if we add 20,000 tpy
numbers. Generally, we were issued closure and suspension of contained nickel arriving in
underwhelmed. The refined LME/MBR
notices to many operators, China now from New Caledonia
zinc market was effectively 1,000 which should reduce ore and Guatemala, simplistically
May 15
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Mar 16
May 16
Jul 16
Sep 16
Nov 16
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Mar 17f

balanced in December, the exports to China. there is a clear net reduction in

2016 annual deficit was more So what is the biggest seaborne ore supply. Chinas
modest than previously highs beyond $3,000/tonne this development the partial NPI sector will still be squeezed,
expected and hidden stocks are year. Underlying sentiment still resumption of Indonesian ore the global refined nickel market
still buffering the market. seems bullish, but for our liking, supply, or the partial reduction should still record a meaningful
Although we are sceptical, more evidence of tightening in Philippine ore supply? And is deficit and the price recovery we
ILZSG data at least suggest that supply is probably needed to the outlook for a run of healthy have forecast is still justifiable.
Chinese mine output is surging. support the zinc bull markets global supply deficits now in So, beyond all the noise, we
Given all this, we cannot help efforts to move to the next level. peril? remain net bullish for nickel
but feel that last years big zinc With various mine restarts/ The first point to make is that overall.
rally priced in a more bullish ramp-ups set to start alleviating the situations in both countries
backdrop than this. So we are some of the concentrate market are still in flux and there are Analysis by Andy Cole,
not surprised that zinc is tightness, the zinc price outlook many unknowns not least Metal Bulletin Research
struggling to push on to new is less of a one-way bet this year.
Every month an MBR analyst answers a question raised by
Analysis by Andy Cole, base metals analyst and editor of MBRs Base readers. If you have a question for our analysts, please email:
Metals Weekly Market Tracker. Email:

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price movements and developments that impact the market conditions (tel: +44 (0)20 7779 8000) or access
and outlook for LME-traded base metals.

March 2017 | Metal Bulletin Magazine | 13

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Steel & Raw Materials Base Metals Scrap (ferrous & non-ferrous) Ferro Alloys & Minor Metals The All Metals Package
MBR analysis
Steel Steel raw materials
The calm before the storm? Scrap prices are no longer cheap
The rapid gains in finished steel 110 The sharp downturn in seaborne 120 Jan 2012 = 100
prices seen recently appear to be 100 coking coal prices has continued 100
losing momentum. During the 90 during the past month. Australian 80
past month, MBRs Global Flat 80
export prices have retreated by a 60
Products Price Index has actually further 15% (or roughly $25/ 40
fallen, while growth in long tonne in late February), to under
50Jan 12 20
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16

Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17

Jan 17
products has slowed to just 1.8%. $155/tonne fob. This is $130/
Though we detailed one month Global flat products index tonne below the first-quarter Asian import HMS No1 CFR
ago that the upside risks to flat Global long products index Jan 2012 = 100 contract prices settled between Fines 63.5% cfr main China ports ($/tonne)
products prices were likely to be Steel price index MBR Glencore and NSSMC in Australian hard coking spot fob price (metric)

limited this year, given a projected mid-December, when spot prices

slowdown in underlying developments in cold-rolled and were closer to $300/tonne fob. coal, has actually increased since
consumption and a starting point, coated markets), the trend is Based on MB Indices, Q4 saw Chinese coal prices peaked in
from 2016, of uncharacteristically different as demand has surged, spot prices averaging $66/tonne early December and have moved
elevated and profitable pricing, but only for local producers, fob higher than contract prices. up by about $20/tonne to $295/
mills seem increasingly thanks to effective dumping This leaves Japanese integrated tonne during the past month.
determined to protect their duties on external suppliers. mills, who were among the Coastal buyers using seaborne
fortunes. Indeed, after two While steel users, notably in lowest-cost steel producers in Q4 coal, however, will have seen little
consecutive weekly declines in construction applications if not so according to the MBR Global change, with the hot metal proxy
AMMs strip-mill price much the higher value Steel Cost Service, at a large down to $272/tonne, from
assessments for the US domestic manufacturing industries, may be disadvantage of more than $100/ $273/tonne a month ago.
market, Nucor was quick to increasingly keen to resist the tonne today. The link between hot metal
announce a new target to raise ambitious targets of steel As a result of rising costs, prices and ferrous scrap indices is
prices by $30/ton. producers, rising raw materials Japanese steel producers have a complicated one, but the last
Nucor has seen the margin or costs, especially of iron ore, are been increasing local and time this latter proxy fell below
spread between HRC and prime starting to impact margins. especially export prices for comparable scrap prices, such as
scrap (No. 1 busheling) recover Demand does not appear to be finished steel more dramatically the Turkish import price of
rapidly over the past year, just as slowing so much as we expected, than the Chinese. According to blended HMS (1&2), scrap prices
the spread between rebar and as efforts to replenish inventories, the Tex Report, the export quotes fell sharply. This happened in
obsolete scrap (shredded) has not least in China, are leading for hot-rolled coil, fob Japan, have early January, when Turkish
retreated rapidly. Market producers to raise production. increased by $30/tonne fob since prices peaked just over $280/
fundamentals for flat and long In recent weeks that the gains the end of last year, while Chinese tonne cfr before being slashed by
products in the USA have been in scrap prices have actually been prices have increased by just more than $60/tonne. Towards
quite different in recent years and more substantial. This is related to $10-15/tonne at the same time. the end of February, Turkish
the difference has resulted in seasonal changes in long products Chinese spot buyers, however, prices of north European origin
flat-rolled steel prices and related demand. With construction still have also been at a disadvantage, had moved back above $270/
raw materials (iron ore and coal/ forecast to trend upwards more at least among the majority (about tonne and in line with hot metal.
coke) rising strongly over the past rapidly than all other major 90%) who are not reliant on We doubt this time that scrap
year, just as bar prices and related sectors, so the outlook for long imported coal and have seen local prices will suffer another
raw materials (ferrous scrap and products pricing remains more prices fall just $20/tonne since short-term correction as demand
their supplements) have retreated. robust. However, we still believe the early December peak. for scrap is seasonally stronger
In the USA, apparent rebar flat-rolled producers will do well While coal prices continue to than it was in January. Moreover
consumption has been to preserve recent gains, contract, iron ore prices continue we doubt that hot metal prices
particularly depressed, just as particularly if key integrated to strengthen and to such an will become much more
imports have actually revived, producers decide to re-enter the extent lately that the gains are competitive, especially if Chinese
reigniting concerns for the market in the short term, clearly outweighing the authorities force local miners to
fortunes of local producers. For removing supply-side support. reductions associated with cut output from March.
flat products such as HRC, Chinese coal. We estimate that
especially on a gross basis Analysis by Alistair Ramsay, Chinas hot-metal proxy, Analysis by Alistair Ramsay,
(including downstream Metal Bulletin Research including iron ore and coking Metal Bulletin Research

For access to MBRs detailed product and regional price, supply and demand forecasts or for a free sample of MBRs Steel
or Steel Raw Materials Market Trackers:

In this section, MBRs steel and steel raw materials team summarise their in-depth reports to highlight key
factors driving the markets and short-term price forecasts. MBR is a leading independent supplier of product and
regional price, supply and demand forecasts for steel and raw materials. For free samples of MBRs reports, call
Harriet Hall (+44 (0)20 7779 8000) or access

March 2017 | Metal Bulletin Magazine | 15

Regional review
North America Europe
Myra Pinkham Richard Barrett
US steel backs president Trump Reinvigorating industrial strategy
Even though his environmental regulations. In a joint million manufacturing jobs
first month in Some analysts believe that a declaration were lost between 2008 and
office has been prosperous economy will issued on 16 2014, they stated. They also
more tumultuous emerge if people have a level of February, more reminded European
than many confidence that such policies are than 90 Commission president
people would have liked, there going to go forward. European trade and Jean-Claude Juncker that he
continues to be optimism that Philip K. Bell, SMAs manufacturing associations identified the reindustrialisation
president Trumps policies will president, termed current called on the European of Europe as one of his top
have positive implications for optimism as being cautious Commission for an ambitious priorities and confirmed the
the US steel industry. optimism. Steelmakers are EU industrial strategy. The objective of increasing the
In fact, about half of the very pragmatic people. And European Steel Association, share of industry in European
respondents to a recent poll while we see stock prices soaring Eurofer, and the European GDP to 20% by 2020.
conducted by Metal Bulletins to record levels, we also see Association of Metals, As we approach the
sister publication American capacity utilisation in the 70% Eurometaux, were among preparation of the next
Metal Market indicated that range. them. Multiannual Financial
they believed that the Trump Despite a flurry of executive The group called on the Framework, it is vital for the
Administrations policies would orders, it remains uncertain how Commission to reaffirm its European Commission to act
be the leading factor driving US many of the new commitment to reaching the and help the EU remain a
steel prices in 2017, exerting Administrations policies will go target of 20% of GDP from competitive global industrial
more influence than China (at through Congress and in what industry, with an ambitious power playing in a fairer world
16%), oil prices (14%), scrap timeframe. This includes plans and realistic timeline; adopt an market, the declaration said.
prices (12%) and auto sales (8%). to stimulate infrastructure action plan to tackle the They specifically identified
Tracy L. Porter, executive vp investment, a policy that would challenges that the industrial the Make in India strategy
of operations at Commercial bolster steel demand, which has sectors are facing, in the and Made in China 2025 as
Metals Co. says that under the been held back in the past by a framework of a sources of competition. The
new Administration domestic lack of consensus upon a communication that would recent US shift towards
steelmakers could also expect to funding mechanism. Even when include concrete steps and America First will inevitably
see higher duty margins passed, the question is when the milestones; and commit to have a strong impact on their
assessed in trade cases. industry will feel its impact implement this action plan in a industrial policy, the
President Trump is saying given the time it takes for timely manner and regularly declaration added.
what weve been saying for a projects to progress. Observers report on progress. Meanwhile, the UK has its
very long time [about trade]. say that the steel industry is yet Between 2000 and 2014, own industrial strategy to
Steelmakers may also benefit to feel any significant boost from the share of manufacturing in work on, given the
from the Administrations the FAST Act five-year highway total EU output fell from governments green paper on
stated goal to relax bill passed at the end of 2015. 18.8% to 15.3%, while 3.5 the subject issued in January.

Asia Insight, said Vietnamese and

Malaysian manufacturers were
Now, Asian countries are
expected to invest in other trade
Juan Weik expected to be among the
largest beneficiaries of the deal.
deals, such as the RCEP (Regional
Comprehensive Economic
Due to the significant gains Partnership) and the FTAAP
Goodbye to TPP that both Vietnam and Malaysia (FreeTradeAreaoftheAsia-Pacific).
President export access to major markets. were expected to achieve Biswas notes that the US
Trumps decision The lost export and growth through the TPP for improving withdrawal from TPP will
to withdraw the opportunities are material for market access for their particularly help to strengthen
USA from the Vietnam and Malaysia, which manufactured exports, the Chinas economic leadership
Trans-Pacific would have benefited from the outlook for future export position in the Asia Pacific, with
Partnership opening up of trade with the US, growth for both these countries Islam believing the Chinese-led
(TPP), a trade agreement and relatively large foreign has been significantly impacted One Belt One Road initiative
making up approximately 40% direct investment inflows over by the US decision to withdraw could be a good alternative.
of the worlds economy, was a the long-term, Moodys said in from the TPP. However, Moodys warned
blow to the Asia Pacific region. a report dated February 1. For Mahamoud Islam, senior Asia the benefits from these trade
Credit ratings agency Japan, the auto industry stood to economist at Euler Hermes, deals would be less as they
Moodys called it a lost gain from freer market access to said the TPP could have boosted would cover a smaller share of
opportunity, especially for the US, Canada and New Zealand. member countries gross global trade, overlap with
countries that would have Rajiv Biswas, Asia Pacific domestic product by more than existing arrangements and be
substantially expanded their chief economist for IHS Global $38 billion in the first two years. narrower in scope.

16 | Metal Bulletin Magazine | March 2017

Keep up with all our
correspondents at

Middle East Latin America

Serife Durmus Ana Paula Camargo
Middle Eastern steel markets cautious An optimistic start to the year
Steel prices kept no plans for a dumping case for The first month while finished steel shipments
increasing in the the time being, but import of 2017 has were unchanged at 1.21 million
Middle East in duties might be increased for all brought positive tonnes, according to Ao Brasil.
February, but the countries, he said. news for the Of this total, flat steel sales
buyers in the However, we maintain a Brazilian steel amounted to 739,000 tonnes,
region were mostly cautious as free-market economy, and if market in terms of output and up by 8.80%, while long steel
demand was not supportive. As [steel] prices increase in 2017, consumption volumes. Crude sales reached 473,000 tonnes,
raw material prices increased, we may not need to increase steel production increased by down by 10.80%.
local and imported steel prices duties, he added. 13.30% year-on-year in January, However, Brazil saw its steel
in the region also increased, but Namk Ekinci, chairman of to 2.83 million tonnes, while import volumes nearly double
the price hikes were faster than the Turkish Steel Exporters finished steel output rose by year-on-year in January, to
the demand increase in the region. Association, also warned that 10%, to 1.77 million tonnes, 209,000 tonnes from 105,000
Having started or finalised protectionist measures, are driven by increases in both flat tonnes. Imports of flat steel
several antidumping likely to backfire. Speaking at and long steel segments, surged to 142,000 tonnes from
investigations in 2016, the the Turkey-Egypt Business according to figures from 46,000 tonnes, while long steel
Middle Eastern countries were Forum, Ekinci said that national steel association imports increased to 41,000
also cautious about starting new anti-dumping measures and Ao Brasil. tonnes from 37,000 tonnes.
ones, as too much protectionism protectionism were most likely Flat steel production was up This growth was stimulated by a
would harm local production to damage local businesses in by 11.30% over the same period, more favourable currency
as well. Egypt that rely on imports from to 1.06 million tonnes, while exchange rate in Brazil, as well
The UAE is not planning to Turkey. Ekinci met with Egypts long steel output grew by 8.10%, as the difference between prices
start any anti-dumping trade & industry minister, Tareq to 719,000 tonnes. Apparent of domestic and imported
investigations into imports of Qabil, and highlighted the steel consumption in Brazil products.
Turkish steel, according to problems created by the increased year-on-year by That said, the competition in
Mohammed bin Abdulaziz Al anti-dumping investigations 7.90% in January to 1.40 million the national steel market is
Shehhi, undersecretary of the into rebar and wire rod imports tonnes. fierce, with players fighting for
UAEs economy ministry, from Turkey, Ukraine and But are these upswings a market share while trying to
although it was possible that it China. signal that the Brazilian steel improve their margins amid
would increase import duties Turkey imposed an additional industry is recovering? Figures higher input costs.
across the board. The UAE and 30% import duty on steel pipes for local sales and imports are Meanwhile, the export
the other Gulf countries have with a diameter larger than still forcing market participants market, which has been an
been seriously affected by 200mm in February. However, to be cautiously optimistic about escape valve for Brazilian mills,
imports from China. But there the increased duty will not be the short-term scenario. continues to be unattractive due
are many large construction applied universally with a Domestic steel sales in Brazil to the unfavourable currency
projects in the UAE, planned for number of countries and were stable year-on-year in rate and increasing trade policy
completion by 2020. We have territories being exempt. January, at 1.23 million tonnes, actions around the world.

Africa African Exploration and Mining

Finance Company, held in the
commodity prices have resulted
in an upswing in mining output,
Bianca Markram Central Energy Fund.
The South African mining
which bodes well for the
industry has been under severe Anglo Americans Mark
State seeks larger mining share stress for some time amid the Cutifani said as much during the
South Africas the Nation address, that the bill global commodity price slump. Mining Indaba four days before
government will would be presented to the cabinet Adding to mining companies Zumas speech, stating that
this year pursue and parliament later this year. woes operating inside the reports of the death of mining
greater state However, the details of the country has been high has been greatly exaggerated,
participation in Mining Company of South production costs, slow paraphrasing the famous quote
mining through new legislation, Africa Bill are as yet unstated. economic growth, costly by Mark Twain. He also noted
according to the countrys The idea of passing legislation industrial action by workers that the international
president, Jacob Zuma. to create a state-owned mining seeking ever-higher wages, as commodity environment has
The government is set to company was floated in 2014 by well as an uncertain operating improved, but tough and
create a standalone state-owned former minister of mineral environment while legislation uncertain times lie ahead.
mining company through what resources, Ngoako Ramatlhodi. continues to be amended. Mining companies, including
Zuma referred to as the Mining At present, the state has some Nonetheless, the countrys South Africas state-owned
Company of South Africa Bill. involvement in mining through president said in his address in ones, will have to step up their
The president said in his State of multiple vehicles, including the February that improving game to be successful.

March 2017 | Metal Bulletin Magazine | 17



18 | Metal Bulletin Magazine | March 2017

Roland Junck
Restoring pride
in British Steel
British Steel executive chairman Roland Junck, one-time ceo of
ArcelorMittal, is calling on his lifetime of international experience
in steel to restore pride in the British Steel brand, shape plans for
further recovery and growth, and turn the long-products business
into a national steel champion, he tells Richard Barrett
I dont like the word career, said of ArcelorMittal... but it still happened many years of steel experience,
British Steels executive chairman because of the circumstances. Junck later acted as an advisor to
Roland Junck. He has worked with It is about knowing your British Steel before his appointment
thousands of academically trained direction, but also having sufficient as executive chairman in July last
people during his work life. They flexibility to select opportunities. year. Since then, he has been
were all wishing to make a career, You must have the flexibility and working on a strategic plan with
he noted, but he says that a career is also the ability to sometimes say no. shareholders Greybull Capital, and
not something you can plan. Most people think that to make a British Steels management team
You must have a view of what career they just have always to say based in Scunthorpe, to stabilise the
you would like to do, so if there is a yes, and thats not true. If its long product businesses that were
junction where you have to make a something that is not aligned with bought from Tata Steel and to make
choice between two different paths your direction, you have to say no, product-specific plans for each of
but you cannot guarantee that he stressed. companys product units: rail, rod,
either will end up where you want I come to the end of my own construction and special profiles.
then very often it is a question of career, if I may say, he chuckles. It Underpinning all of this is the
the moment, of the circumstances. started with Luxembourg steelmaking process itself.
You cannot plan that. It happens, steelmaker Arbed in 1980. Junck Steelmaking has to work as a
he explained. was promoted to managing director business in its own right per se. It has
I prefer to say that I like to do of TrefilArbed Bissen in 1996. He to compete, said Junck. British
what I like. If you can do that then became senior vice-president of Steel sells semis, including billet and
you are probably better than if you Spains Aceralia two years later and slab. The companys blast furnaces
have to do things that you dont like. was subsequently appointed as in Scunthorpe are famously named
If you can combine that with your senior executive vice-president of after four queens. Junck says they
experience and an idea in your Arcelor when Aceralia, Arbed and will have to be more agile and
mind, then it works. He adds that Usinor merged in 2002. He became British Steels system will need to be
the probability to have made the the first ceo of ArcelorMittal in 2006.
It is a cultural more flexible in future. Two are in
career he has to date is very low. With seven years of experience at change as much operation, one is on standby and the
The probability to become the ceo zinc producer Nyrstar added to his as anything else fourth has retired. The company

March 2017 | Metal Bulletin Magazine | 19


produces more than 2.80 million of other initiatives to start to really improve and generate the
tonnes of steel each year. improve the financial situation, but results needed to fill the pipeline?
Returning to profitability has there was still a great deal of work to My main challenge
required getting back to basics do when British Steel relaunched on fundamentally was not only to
according to Junck. He notes that, 1 June last year upon completion of continue with a transformation
despite Tata Steels focus on flat the sale from Tata Steel. plan, but to create a sustainable
products now, it had started to Fundamentally, it was a business that is outward-looking
change its vision for the long question of where to go from there out of an inward-looking division. It
product part of the business during on. That needed cultural changes. It is a cultural change as much as
the year before the long product needed a different approach and a anything else.
assets now held by British Steel different structure. Because you can
were sold. He describes that change ask people to improve, but if they Achieving change
as a restructuring (or turnaround) dont know what good means, it is How is that change being made?
programme. It included cutting very difficult You might have Here it was a production hub
costs by closing a coke battery and a some benchmark figures from other where there was no business culture
plate mill and the launch of a number plants in the group, but how do you it had to be set up. That had to be

Key roles career
past history
ArcelorMittal that were growing, said Junck. Arcelor was from the smelting assets of Umicore and
Roland Junck was ArcelorMittals first ceo created to reduce the capacity for flat products, Zinifex. You have to be optimistic in zinc,
when the worlds still-largest steelmaking to optimise that, close all inland plants, and to but you have to be very optimistic to go into
company was formed in 2006. After three concentrate on the [long products] division mining, Junck asserted.
months, he resigned the post, but stayed on which was growing, he added. The rationale for forming the new
as an advisor for a year at Lakshmi Mittals After we grew long products significantly, company was that it would be number one in
request. It was fundamentally that you we also wanted to do that in flat products, zinc smelting and a base for further
cannot have two captains on a boat. After the including looking at other [flat rolled steel consolidation, independent from Chinas
three months, it was a question of integration product] companies. He said that made control of 45% of the global zinc smelting
and I was the only one who was able to do Lakshmi Mittal nervous because Arcelor was base.
that in bringing the two groups together, waking up to global growth potential. Junck says that when he joined the board
said Junck. Arcelor were minded to go for it with at the end of 2007, the companys prospects
Immediately after the merger, Lakshmi whichever partners globally were willing to actually did not look so good in prevailing
Mittal became company president while become part of Arcelors growth. market conditions and questions were being
Roland Junck became ceo. Junck and Mittal He [Lakshmi Mittal] decided that the asked about the best way forward. At the end
had different priorities in mind for the newly only way to stop that would be to make his of 2008, the board asked Junck whether he
merged global steelmaking company offer for Arcelor. It was a brilliant decision. could take over the role as ceo for three
immediately post-merger: It was clear that Junck also recalls that the European months. I took it over in February 2009, but
we had a lot of differences, but it was also Commission wanted to have a few steel it took me seven years!
clear that after one year I would in any case be champions and so Mittals successful bid for We changed completely. We integrated
deciding what I wanted to do next, said Arcelor was the right decision for him at upstream, he explained. It was known that
Junck. He says that personal relations that time. the volume of zinc ore mined is limited and
remained very good and that Mittal asked Juncks role pre-merger had actually been that a few big mines, like the Century mine
him who might be his successor as ceo. Junck to find suitable partners as a defence against one of Nyrstars suppliers would come to
was flattered that Mittal actually decided Mittals bid, which included well-documented the end of its life.
that it could only be himself. tie-up plans with Russias Severstal, So we decided to integrate into mining,
Junck originally came from Arbed in subsequently abandoned when the merger of but we also decided to do something else.
Luxembourg. Then I was taking over the Arcelor and Mittal Steel went ahead. Too much of our volume was in the hands of
Spanish steel industry (Aceralia) when it was Fundamentally his [Mittals] idea and our traders. So as soon as offtake agreements
privatised in the name of my mother idea was that two or three others would also stopped, we took them in-house. Owing to
company. So I was running Aceralia, but I grow like that to a similar size to become steel European requirements, the first one was
could see that it would be difficult to bring champions, Junck recalled. The enormous when Glencore and Xstrata wanted to merge
those two companies together because growth in Chinas steelmaking capacity and they had to give theirs up. But they also
Aceralia was of the same size as Arbed and it subsequently changed the global had to give up their shareholding in Nyrstar,
was much more profitable. steelmaking landscape. so we lost a relevant shareholder, said Junck.
He says the question then was whether to That left us vulnerable, he recalled. I
merge three steel companies, including Nyrstar was annoying [to traders], because I was the
Frances Usinor-Sacilor, which had already Juncks next role, at zinc smelter Nyrstar, biggest producer of zinc metal with our own
shown interest in Arbed. I was in favour of saw him broaden his experience into zinc zinc mining even if this cost of mining was
that because I thought that it was better, mining. You need to have money to high and was taking more and more
he recalled. integrate into mining upstream, said Junck, volume out of the market and taking it
Arcelor was thus created. I was in charge something that he oversaw at Nyrstar, which in-house. Junck decided to leave Nyrstar at
of long products and they were the only ones was a company created in October 2007 the end of 2014.

20 | Metal Bulletin Magazine | March 2017

set up by the organisation, by the that you have to cut costs, and you
structure, creating business units; understand what it means to be in
making sure they understand what the first quartile of your steel peer
a profit and loss is and the balance group, you still have to have the
sheet for each business unit, making creativity to find ways to do that;
sure they understand what the because realising what good means
vision and the strategy would be. It and realising that the gap exists is
starts by looking at strengths, not enough. Then you have to have
weaknesses and opportunities. the ideas and implement them.
Those were things which were not
always present, Junck explained. A crazy idea?
He says that the way to make Junck is well aware that in a world in
people buy in to such changes is to which China produces half of the

work them out together. Thats steel, some wonder how that can
what we actually did. So that our work out for British Steel. Some of
people can reach their own our competitors on the continent
conclusions as to which direction have said that its crazy not to let this British Steel will Junck says that when he looked
the future should lie. business die, but that is ridiculous build on its existing first at the new British Steel
He adds that the willingness of because the size per se in the world international supply before the deal was done on 1 June
people who had lived through the today is far less important than it of rails as railway he concluded that from the
loss-making years to embrace this ever was before, he stressed. networks modernise market or product perspective,
approach was high. It was a kind of I mean when the ArcelorMittal and expand there would be a raison dtre for the
relief to be able to work in a different deal was done, and the financial company. It is the main supplier
environment, where the total focus markets pushed it in that direction, for rails in the UK and in France, but
was on their business not an [the philosophy] was that big is also in the UK for the construction
average or an optimised figure but beautiful and the more market, right up to the big
on them, he stressed. This also consolidated you are the better your skyscrapers in London plus the
had significant support from the results, but that is very difficult to do special profiles for major customers
trade unions, because we shouldnt if China produces half of the steel, such as Caterpillar.
forget that the closure of some and especially if you have big swings The UK is the main but not the
assets and subsequent restructuring of overcapacity or investment, only market for British Steels
had resulted in a reduction of 1,200 he asserted. construction products. Rail is less
people in the workforce. He notes that, for western than 50% UK, with more business
It is about taking local countries, adding value to activities in France so its high-speed trains
responsibility for the direction of is more important. Steel remains a and railway networks: its an area
the business rather than depending conversion business you convert a where you have to go into much
on a centralised management basket of raw materials into finished more added value, the logistics,
structure of the past. It goes not products. But that is a more antique present the rail in the way that its
only through the organisation and view. What you should actually do needed, Junck summarised. So
the focus, but also the processes a is the net added value: the added there is a lot of down-the-value
capex process so How do I ensure value above the costs of your raw chain development that has to
that I have a process in place so that materials allows you to achieve the happen.
for the next budget I know exactly results, he explained. Just as for steel flat products for
what my capex should be over the He reminds that, for too long, the automotive sector, long
next 3-5 years? But for that you steel was working more on products developed for, and in
need to have a vision and you need production volumes and company partnership with, their end-users
to know where you want to go. size. In the beginning, you also had are becoming increasingly
Otherwise you cannot do that. some significant synergies through common. Even in construction
He notes that spirals can go up as procurement, but in this world that now, supplying a beam is not the
well as down and that divisions that is not the case anymore. Being point you have to work together,
are not the best performers in a group present with this same kind of if possible with the architect.
can get overlooked when scarce production in China, South Africa Because you want to be in the
resources like capex are allocated, or the UK doesnt really help you. It process to help design it, or at least
which means matters get worse. You increases the complexity, but it does contribute in such a way that you are
have a spiral which is either positive not really help you. helping towards designing the most
or negative. If you realise that and He says the question now is efficient building, the lightest
you know where you want to go and whether a small producer in its
We can really weight etc. Junck said.
what you have to do, there is no natural environment can still play a play a role in All this is what British Steel was
reason why you cannot turn it up. right role: And a right role means regional areas doing in the past, he recalled.
He adds that has certain being a sustainable business: being a that have been There was the privatisation, but
conditions linked to the wider business that produces something the other thing is what British Steel
world: Even if you know that you more than it invested: that it has paralysed by once was. When I was an engineer we
have to turn around and you know something left on the table. globalisation always looked at [the former]

March 2017 | Metal Bulletin Magazine | 21


also as an individual company to see

Personal career
Perception, truth
and lies what can be done within the
Junck has a very modern house in Switzerland. steelmaker before the formation of framework of the UKs industrial
I have a difficult situation, he says with a smile. ArcelorMittal: What means victory? What policy. The government set out plans
I have my home in Luxembourg. I am a means defeat? That is a question of the moment. on UK industrial strategy in a green
Luxembourger and am deeply European. I live Its true, said Junck. paper in January this year, including
in Zurich, and so I am neutral by nature. And as What I am saying by this is that you have to ten pillars on which strategy could
chairman of British Steel, I support Brexit as put things into more relative perspective. You rest.
much as I can! are never the winner forever. There is always As I call them, the ten pillars of
His Swiss home houses a collection of modern something different and you can see the same wisdom that the government has
art. I have been in China probably 50 times. thing in two different ways, he explained. issued, said Junck. To be honest,
Arcelor was trying to buy steel assets there and I Even photography can lie. There is nothing they are not very extraordinary
was running around a lot, he recalled. His visits so absolute and that is what I was always they are just what other countries
gave him the opportunity to further his and his interested in. When you do photography, you have been doing over the past 10 or
wifes interest in the work of contemporary change the distance, the angle, and you can look 15 years. So for us, redeveloping and
Chinese artists, to build a collection, and for him at things differently and show them completely creating jobs in the region, and
to meet some of the artists. differently to how other people perceive them. attracting other suppliers to the
Juncks own creative talents have found That is the reason I have always been fascinated region is pretty important.
photography as an outlet. Among a number of by that. British Steel has taken on over
exhibitions of his work, one referenced a poem He says that he cannot help himself from 350 employees since its launch in
by a Spanish poet. When I was running the taking pictures on his travels: I just see things. I June last year. We can really play a
Spanish steel industry after privatisation, I got have not the time to work them out, to prepare role in regional areas that have been
more in touch with Spanish culture, Junck them and show them, but I just see things. It paralysed by globalisation and by
recalled. The poet had said Nothing is true. becomes a training. Your neurons become getting embedded in the network of
Nothing is a lie. It all depends on the glass oriented like that. other activities of stakeholders,
through which you look at things, quoted Junck. He adds that Twitter has great power to alter institutions, government and
That is actually true. It is actually even more perceptions now. While an artist might aim to procurement another important
true now in the post-factual world! put particular emphasis on this or that, today part in the UK and then also being
Another remark which Junck took to heart you can do that with just one quote on Twitter. competitive in exports, Junck
was made to him by Severstal ceo Alexei The power of the new media has overtaken that stressed.
Mordashov when Arcelor had to unwind the possibility from [traditional] photography in a
deal Arcelor arranged with the Russian much stronger way, he concluded. Brexit effect
Exports have a relation to Brexit via
exchange rate impacts. For the time
British Steel and the fact that steel He sees sustainable advantage in being, we are more or less balanced in
intensity (per capita steel British Steel providing local demand: terms of dollar, euro and pound, and
consumption) was the highest in the That also means that we will become so in reality the only impact of the
UK: the car parks, the buildings, the more and more a part of the Brexit announcement [the
bridges were made from steel. They remaining industrial tissue that still referendum result] was on the
had done that, they had developed exists and for that reason, also, our exchange rate, said Junck.
that, they had been working interest in everything that the He says that he likes natural
advanced steps in order to do that government does in terms of I hedges. Our sales outside the UK
and we still have that image. dont call it re-industrialisation but allow us to bring in the euros and
He sees pride in the brand, at least making sure that we are linked dollars, which are the currencies for
Because we can revive that part of and connected to the other national our raw material prices. The raw
the metal that made it great, especially stakeholders, whether it is material price basket has been
when you look at our vision now, which universities for R&D, for example. changing, with coal going up and
is to be a national champion, and a Because for those added-value down, but fundamentally its neutral
regional developer and a competitive products you can only continue to for us, he explained. For rails, we
exporter that fits perfectly well. develop if you work on R&D. It is have our own rolling mill in France,
only by knowledge that you make so we are a key supplier for the
Embedded in industry such things move ahead. We are French railway and those are links
Junck also stresses the importance of reconnecting to that. which will remain.
British Steel being a partner of He adds that the strategy is aligned He is not worried about Brexit.
choice, recalling that many with UK government priorities. We Obviously everybody wants to have
reconnections had to be made: have to redevelop the regions in our free access to every market. I am also
Suppliers and customers were case mainly Teesside or Scunthorpe not against imports to the UK. But
waiting in case we went bust, but we which have been really paralysed we must be in a position as a local
didnt. When I look now at the by, I should say, a very liberal way to producer to defend our position.
number of reconnected businesses, look at its industry. Even when we had this spike in coal,
as suppliers or customers, it comes He says that British Steel works and so a strong increase in the costs of
down to confidence in us and to actively with the UK government as the raw materials basket, we had to
our brand. part of the countrys steel sector, but apply price increases [to company

22 | Metal Bulletin Magazine | March 2017

products] in the UK market. Despite a long time the surface and I want to invest things. For people like myself,
the fact that we did that, as the leader dimensional qualities that the entering steel is almost like entering a
for the first time again we were able to competition were able to deliver
capex where monastery. You enter the steel
increase our market share. were better, we are now getting back there is a return business, live and stay with it, which
He says that shows the strength of to that level. not just for it can become a very narrow
restoring a leadership role in a It fits with the overall company to be there just perspective, Junck observed.
national market, adding that the strategy. Tomorrow, delivering a He says that having a more
companys UK market share in tonne of steel, just rolling a beam, will to keep things business-oriented perspective from
construction had fallen to 30% in not be the main target. It will be how alive Greybull and answering questions
recent times. Generally you would you will work in the value chain with asked in different ways is an
expect that to be 50 or 60%. We are your suppliers, customers and the excellent thing. All the issues and the
back up to 45%, but that is something whole industry, Junck summarised. challenges have been discussed, he
we still need to work on, he added. I would call our product an says. My role is to make that work
We achieved that under the most engineering solution because, by the more understandable, and their role
difficult conditions in the market. nature of it, thats the case. That is is to look at things differently and
Even our competitors would expect a exactly where it will be, and with the generate new ideas for consideration
national leader to guide them: as they internet of things that will be a in a very constructive way, said Junck.
do it in their countries. So we are revolution. In the past, British Steel I have had very different
coming back to that situation. was in advance. Those genes are still shareholders from government to
We have started now with there somewhere. It just has to be private to tycoons. I like this one, and
looking more at partnership on adapted to the taste of the time to I do it, by the way, also because it is a
projects with customers or other the information revolution. precondition: if you have a positive
producers, with upstream or Discussions are still under way relationship with the shareholders,
downstream or sidestream, it doesnt with other UK steel industry and with the management, and with
matter any partner if it makes sense companies over access to the UKs me in between as the executive
and it adds more value. He reiterates commercial steel R&D centres: chairman, if that works together,
the importance of adding value: There is a common reflection in the then it works very well, he explained.
Otherwise you are still too UK steel sector, if I can put it like that, Junck says that Greybull are being
vulnerable to the swings of your raw to see which ones should be particularly helpful in the new
material basket. supporting whom. It is necessary. growth phase for British Steel. They
He points out that other Junck sees revitalising major rail bring with them an M&A logic. They
companies, such as Austrias networks, such as Indias, and are bringing expertise to the new
voestalpine a competing steel rail supplying rails and associated British Steel which you would usually
producer have done similar in a systems for high-speed, high-density find in a much bigger steel company.
very successful way. Our philosophy modern rail networks as great As one division or a production hub
is the same. It delivers more added opportunities for British Steel. before, nobody was ever asking
value by more co-operation, links There will be a revolution in you that.
and being embedded with other trains in the future, said Junck. He Junck wanted an overall plan and
economic actors. But having a also wants British Steel to supply structure in place, together with the
competitive steelmaking base. That some of the supporting direction of the company, in order to
is already what we do. infrastructure needed for them. We define the role of a ceo who can work
Junck says that fundamentally would also like to supply the in co-operation with the chairman,
British Steel has to be as competitive catenaries, the bridges we can shareholders and local management
and efficient as possible in the provide more than just the rails. In to make it work. Thats why I
upstream and dynamic in the other words a package plus wanted to take the time to find the
downstream. downstream along the value chain. right candidate, he said. Now I
It is a strategy he says can work think there is a lot of market
Capex well for a relatively small steel orientation that needs to be
Some capex was needed to take the producer in tonnage terms. I dont supported, so I needed someone who
plant in the direction British Steel is need to compete against a 100 understands steel, engineering
heading. Junck says that 40 million million tpy steel producer in a world products and what you can do and
has been committed for this year that needs solutions for the place how you should behave in the
already. But that is not the point. where I am, and I need to be market, Junck concluded.
The point is what is the recurring competitive, and then I can make Just a few days after his interview
capex? There again there will be a my money. with Metal Bulletin Magazine,
change in philosophy. I want to invest British Steel announced the
capex where there is a return not Greybull and a new ceo appointment of Peter Bernscher as
just for it to be there just to keep How close and continuous an the companys new ceo. He will take
things alive. That is a switch that will interest do shareholders Greybull up the role in early May,
be important, he stressed. Capital take in the business? Not in having clocked up 30 years of
Descalers for special profiles are an running the business, but in terms of experience in the steel industry in
example of a 2 million spend already understanding the business. You holding senior positions with
made. It is a question of quality. For need to have different views about voestalpine.

March 2017 | Metal Bulletin Magazine | 23

AS ONE We are stronger

Two powerful companies in the metals industry have forged

together. Mitsubishi-Hitachi Metals Machinery and Siemens VAI
Metals Technologies have united to become the new global
force in metals technologies.
Creating the future of metals as one.
People moves

LMEs ceo retires Kontola has a long career with the 12th president and ceo since
Outotec in various leadership the company was established in
London Metal Exchanges ceo, positions. He is currently leading 1873.
Garry Jones, has retired from all the beneficiation business line in
positions within the Hong Kong the Minerals Processing business Westgate joins Levmet
Exchanges and Clearing Limited unit and, prior to that, he was
(HKEX) group, including his head of Outotecs Americas Leon Westgate has joined Levmet
positions at the LME and LME region. as a senior metals and bulk analyst
Clear, where he was the executive where he will lead the companys
director. In a statement issued by NLMK Europe Strip analytics team. Westgate, who
HKEX about Joness retirement, was ranked the top base metals

it is noted that he will serve as an Garry Jones gets ceo analyst in Metal Bulletins
advisor to the LME until the end NLMK has appointed Renaud third-quarter 2016 Apex ranking,
of the year. Moretti ceo of NLMK Europe with 98.44% accuracy during the
Matthew Chamberlain, the Strip, promoting him from his period, has over 13 years
LMEs coo, has been appointed previous role as coo within the experience in base and precious
interim ceo of the LME, while same business unit. metal markets, including physical
Andrew Dodsworth, the LMEs The division was previously base metals finance and trading.
head of market operations, will managed by Ben de Vos, who is

take up the position of interim now ceo of NLMK International, Fortescue appoints
coo. which manages Russian parent
company NLMK Groups new cfo
international operations. Fortescue Metals Group has
Liberty House gets Wilde named Elizabeth Gaines, a
Liberty House has appointed Mel Jacques member of its board, as its new
Wilde, the former chairman of the Vandermeiren
New ceo for Antwerp cfo. Gaines will continue on the
International Steel Trade Port Authority board as an executive director and
Association, as its new business Jacques Vandermeiren has been will relinquish other corporate
development director. made ceo and president of the non-executive director positions
Over the past year, Liberty Executive Committee of Antwerp prior to commencing as
House has acquired UK steel Port Authority. Previously, he was Fortescues cfo.
assets in Wales, Scotland, Kent ceo and president of the
and the West Midlands. The Executive Committee of the Promotion at Ovako
company recently reached an network operator Elia, where he
for Ericsson

agreement to purchase Rio held various management

Tintos aluminium smelter in the positions since joining the Phetra Ericsson, currently HR
Scottish Highlands and Tata business in 2001. manager for Ovakos Hllefors
Steels speciality steel division in Phetra Ericsson business unit, has been appointed
South Yorkshire. Pandir resigns from as the new executive vp HR,
Communication & Safety-
Erdemir Health-Environment for the
Global marketing Ali Aydin Pandir has resigned as Group.
manager for Sintavia ceo of Turkeys biggest steel- Phetra Ericsson has been at
Sintavia, LLC, a supplier of metal producing group, Erdemir. He Ovako since 2011 and has 16
additive manufacturing services, had held the role since November years of experience in human
has announced that Carolyn Allan 2013. He was also chairman of the resources and leadership, as well
has joined the firm as global board of directors. His positions as operational experience,
marketing manager. Allan is have been taken over by mer including as acting site manager at
expected to continue the firms Muzaffer Baktir, a mining Ovako in Hllefors since the
recent success in providing engineer, who was previously summer of 2016.
additive manufacturing services executive vp of marketing at
and end-to-end development Turkeys Ziraat Bank. Trafigura appoints copper
capabilities to Fortune 500
companies globally. concentrates traders
Atlas Copco names Lorenzo Konialidis and Ross
president and ceo Ridgway have been jointly
Outotecs new president Mats Rahmstrm has been appointed to the roles of co-heads
of Minerals Processing appointed president and ceo of of copper concentrates trading at
Kimmo Kontola has been Atlas Copco AB by the companys Trafigura. The pair step into the
appointed president of the Board of Directors. He has taken role vacated by Maha Daoudi,
Minerals Processing business unit over the roles from Ronnie Leten who left the company for personal
at Outotec and a member of the who is leaving the business after reasons last year according to a
Executive Board of Outotec. eight years. Rahmstrm will be company spokesperson.

March 2017 | Metal Bulletin Magazine | 25


reached the point where prices

bottomed out. The situation
came about due to lots of copper
supply, including new production,
especially in Peru, and this in
combination with a limited
Chinese demand created a perfect
storm for low metal prices, he

Limited supply?
For the rally to continue we need
to see lower supply from strike
action and export restrictions out
of Indonesia. If these do not
materialise copper will be at risk
of a 10-15% correction, said
Hanson (see panel opposite). The
focus will primarily be on the
supply side given the number of
labour contracts which are up for
renegotiation, he added.
Alongside industrial action
currently taking place in Chile at
Escondida (see panel on p29),

negotiations are also on the
horizon for other Chilean mines.
Freeport-owned Grasbergs

Copper supply
labour contract expires in
mid-September, and the labour
contract at Collahuasi, where
ownership is split between Anglo
American and Glencore, expires

in mid-October. How willing
workers will be to actually strike
will largely depend on the
outcome of the current stand-off
at Escondida between Union
No.1 members and BHP Billiton.
Underlining the potential
Copper supply uncertainties are looming large. impact of industrial action,
Duncan Moore looks at the market outlook for research by JP Morgan suggests
negotiations regarding labour
the red metal in 2017 contracts could involve 13%, or
2.8 million tonnes, of copper
production this year, compared
Copper prices hit a multi-year low commodities, got hurt by with 9%, or 1.9 million tonnes, of
of $4,310.5/tonne (LME Daily devaluation fears in China and the production in 2016. To put these
Official cash price) on 15 January collapse in global oil prices which figures into perspective, a 25-day
2016. Brief signs of recovery led to a rout in stock markets, strike in 2006 by workers at the
followed, and on 18 March last recalls Ole Hanson, head of Escondida copper mine resulted
year the price peaked at $5,070/ commodity strategy, Saxo Bank. in a 22% year-on-year decrease in
tonne, before dropping again to He says that the current upsurge production. JP Morgan has now
oscillate in the range around is the result of Chinese demand, estimated that should Union No.1
$4,500-$5,000/tonne. A rally both real and as a hedge against a members hold a prolonged strike
late last year saw the price peak weaker yuan, together with at BHP Billitons copper mine
again at $5,910/tonne on 11 Donald Trumps infrastructure roughly 75,000 tonnes could be
November. Volatility has pledge working to keep The worlds largest removed from Escondidas
continued into 2017. prices high. copper mine, first-quarter production
Many analysts cite Chinese INTL FCStone Financials Escondida in Chile, estimates this year.
copper demand as being the main Edward Meir points out that where a strike has Metal Bulletin Researchs Andy
cause of fluctuations last year. 2016 was the fifth year of a bear helped to push Cole estimates that the impact of
Copper, as well as other market for commodities and it copper prices higher an extended strike at Escondida

26 | Metal Bulletin Magazine | March 2017

and industrial action at other Copper cash LME daily official $ per tonne in the first half of 2019, Ero
locations later in the year could 7,000
Copper Corp ceo David Strang
affect about 2.5 million tpy of told Metal Bulletin in January.
capacity. On top of that, there is 6,000 With the commissioning of
capacity originally suspended in 5,000
Vermelhos we expect production
2015 due to low prices, power to be in excess of 50,000 tonnes of
issues in central Africa and the 4,000
copper in concentrate annually
ever-present battle against 3,000 thereafter, he added.

04 Jan 16
20 Jan 16
05 Feb 16
23 Feb 16
10 Mar 16
30 Mar 16
15 Apr 16
04 May 16
20 May 16
08 Jun 16
24 Jun 16
12 Jul 16
28 Jul 16
15 Aug 16
01 Sep 16
19 Sep 16
05 Oct 16
21 Oct 16
08 Nov 16
24 Nov 16
12 Dec 16
30 Dec 16
18 Jan 17
03 Feb 17
22 Feb 17
declining ore grades. Supply will Meanwhile, in Vancouver,
struggle this year and, historically, British Columbia-based First
Source: LME, MB
headlines about supply Quantum Minerals copper
disruptions get speculators production grew significantly in
buying. Weve seen that already, year-on-year, or by 815,000 2016, with continued gains
as copper prices burst through tonnes, in the first 10 months of anticipated through to 2019. First
$6,000 on the back of the 2016, with much of that growth Quantum produced 539,458
Escondida strike and force attributed to a 43% (590,000- tonnes of the red metal in 2016,
majeure. A lot of that strike- tonne) gain in Peruvian mine up 31.2% from 411,025 tonnes
related speculative froth may well output, which stemmed from new the previous year. Its fourth-
be blown off once the strike ends, and expanded capacity that has quarter production increased
but therell be another one not far come online over the past 26.1% year-on-year to 146,101
off. Itll create a volatile market, two years. tonnes.
but one with an upward bias. Brazils Minerao Caraba is First Quantums Kansanshi
expected to produce nearly mine (Africas largest copper

New production 17,000 tonnes of copper in mine) and its Sentinel mine in
While industrial action is taking concentrate in 2017 as it resumes Zambia both saw increased
place in Chile there are plenty of production under the new Saxo Banks Ole output in 2016 too, producing a
other sources of copper that will majority shareholder, Ero Copper Hanson: The focus combined 392,872 tonnes of
be looking to fill the void created Corp. We forecast production to will primarily be on copper. The company is also
in the supply chain. International increase annually with an the supply side given currently expanding the
Copper Study Group (ICSG) improvement in grades mined the number of labour Kansanshi Mine. First Quantums
figures show that global mine and with the commissioning of contracts which are copper production is forecast to
production actually rose 5% the Vermelhos underground mine up for renegotiation rise to 570,000 tonnes in 2017,

Indonesian minerals export ban

Freeport-McMoRans Grasberg copper IUPK), commitment to completion of and stability agreement are negotiated.
mine has been unable to export copper smelter construction in five years and The COW would remain in effect until it
concentrate since the middle of January payment of export duties to be is replaced by a mutually satisfactory
2017. A ban on mineral ore exports by determined by the Ministry of Finance. alternative.
Indonesias Ministry of Energy and In addition, the new regulations require Indonesias Ministry of Energy and
Mineral Resources was part of a wide foreign IUPK holders to divest 51% to Mineral Resources has recommended
range of mining laws first introduced in Indonesian interests no later than the that PT-FI be given a year-long permit to
2009, designed to keep revenue and tenth year of production. Export licences export over 1.1 million tonnes of copper
income from the mining sector in the are valid for one-year periods, subject to concentrates in a statement released on
country. Until recently, however, the review every six months, depending on Friday 17 February. However, Freeport-
US-based miner had been granted smelter construction progress. McMoRan reaffirmed its need for
temporary permits to allow its exports to Following the issuance of the January guarantees over its Indonesian
continue. regulations, PT-FI advised the investments in response to the
PT Freeport Indonesia (PT-FI), which Indonesian government that it was recommendation.
is Freeport-McMoRans Indonesian prepared to convert its COW to an IUPK, The permit was granted conditional
subsidiary, had a licence to export copper subject to obtaining an investment upon PT-FIs acceptance of an IUPK. As
concentrate under a six-month permit stability agreement providing equivalent previously reported, PT-FI will only
which expired on January 11. The rights with the same level of legal and convert its COW to an IUPK if it is
following day, the Indonesian fiscal certainty enumerated under its accompanied by an investment stability
government issued new rules stipulating COW. In addition, PT-FI advised the agreement with the same level of fiscal
the terms under which companies would government that it is committed to and legal certainty enumerated in the
be allowed to export minerals. commencing construction of a new COW. PTFI will continue to protect its
The new regulations permit the export smelter following approval of the rights under the COW while working
of copper concentrate until January 2022, extension of its long-term operating with the Government on a mutually
subject to various conditions, including rights. PT-FI requested that concentrate satisfactory replacement, a PT-FI
conversion from a contract of work exports be permitted without the spokesman said in a statement issued on
(COW) to a special operating licence (an imposition of a duty while the new licence 17 February.

March 2017 | Metal Bulletin Magazine | 27


and to 600,000 tonnes and copper might increase by 4.1% to imports in December, indicating
605,000 tonnes, respectively,in 10.50 million tonnes. For 2017, a solid close to a strong year for
the two subsequent years due to the forecasts suggest reported Chinas copper market. Barclays
mine expansion. demand in China might be 10.75 analysts estimated that Chinas
Yet more new copper sources million tonnes, up 2.4% compared imports of the metal in December
could be forthcoming from other with 2016. This suggests that 2016 rose by 7.9% year-on-year.
African locations. Alecto Minerals while there is still a strong The large year-on-year gain
plc, an Africa-focused gold and demand for copper in China it is occurred despite a drop in scrap
copper exploration and beginning to weaken. imports and net imports of
development company, has raised Aurubis also addressed refined copper, as Chinas copper
1 million/$1.25 million (before potentially weaker demand concentrate imports (on a gross

expenses) through the issue of growth in its Copper Mail tonnage basis) rose by 28%
convertible loan notes, which it (January 2017). It noted that year-on-year. In the coming year,
will use to recommence China is facing considerable FCStones Edward we expect the trends that drove
operations at the Mowana Copper challenges in 2017. These arise Meir: A limited 2016 to continue, although
Mine in Botswana. In a report from the balancing act between Chinese demand growth rates should moderate as
published on January 17, Alecto maintaining the growth targets created a perfect Chinas copper demand slows,
Minerals said: The mine has a established in the five-year plan storm for low metal their report concluded.
mineral resource inventory of (at least 6.5% for the years until prices
683,000 tonnes copper in the 2020) and the structural reforms Prices remain high
Measured and Indicated necessary to secure growth. The refined copper market will
categories (JORC-code The Aurubis report noted be in deficit this year and stay
compliant) with an additional International Copper Study close to balance at worst in
945,000 tonnes Cu in the Inferred Group data that showed, for the 2018-2019, says MBRs Andy
category. The companys plan is period January-September 2016, Cole. He continues: But mine
to bring the mine back into there was actually a global supply growth has peaked and will
production in Q1 2017. production deficit of 84,000 slow. This should be the precursor
tonnes of refined copper. For that to a concentrate supply crunch
Demand growth period, demand increased by coming around 2020. Markets are
China global leadership in copper 565,000 tonnes compared with forward-looking and prices will
demand looks set to continue the previous year a 3% boost. start factoring this in early. So,
through 2017, albeit with less China evidently played a key role although there will be plenty of
growth. Customs data released on in this development though, at volatility on the way, we forecast a
13 January show Chinas imports 276,730 tonnes, the countrys generally upwards trend in

of unwrought copper and copper imports of refined copper in copper prices over the coming
fabricated products totalled 4.95 November were 23% lower than years.
million tonnes in 2016, up 2.9% their level in November 2015. MBRs Andy Cole: His opinion on the direction of
compared with the previous year. In late January 2017, Barclays Historically, copper prices is echoed by
Chinese demand is still Research Instant Insights noted headlines about Edward Meir: We think prices
reasonably good and will continue that there had been a recovery in supply disruptions get will likely move higher heading
to be so for the first half of the year Chinas net refined copper speculators buying into the strike and then retreat
continuing to be up around 3%, slightly once the action itself
notes Edward Meir. Demand for starts, [which is] typical of these
copper has had a good run in Miners strike in Chile situations.
China thanks to the boom in real BHP Billiton, which owns 57.5% of the Escondida copper How high prices will go through
estate. There was a huge demand mine in Chile, rejected worker demands for a 7% rise in wages 2017 will largely depend on how
for iron and steel because of that and a 25-million-peso end-of-conflict bonus, according to committed to industrial action
and base metals have been Union No.1 the largest mining union at the mine. That is miners are, not only at Escondida
piggybacking on that demand. By what prompted a strike that began on 9 February, as but also at other mines where
the second part of the year, the government-mediated negotiations between the company labour contracts are due for
market will cool, he predicts. and workers failed to bring the parties any closer to an renewal, in tandem with the
Meirs forecast is similar to the agreement. Indonesia governments desire to
outlook put forward in November According to Union No.1, which represents the majority of control its countrys mineral
2016 by the International Escondidas workers, the company explained that workers exports.
Wrought Copper Council must adjust to the market in order to keep competitive with At the time of writing (February
(IWCC), when it published a low costs. The union says the company has maintained its 22), the LME Daily Official cash
report showing its latest six tough position, limiting itself only to declare its willingness to price for copper stood at
monthly review of the copper discuss all the issues, but maintaining its intentions over $5,976/tonne, as the strike by
market and its finalised forecasts wages and benefits. members of Union No.1 entered
for copper supply and demand. It The union had said it is prepared for a tough and long its third week and Freeport-
stated that: For China, in 2016 strike one that could last as long as or even longer than the McMoRan had not yet reached an
the IWCC forecasts that reported 25-day strike effected in 2006. agreement with the Indonesian
(or real) demand for refined government.

28 | Metal Bulletin Magazine | March 2017

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copper miner with a minority stake in
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been fully consulted on the proposed
Jonathan Barnes outlines the contribution that the Gecamines has interests in the
Kambove, Kipushi and Kolwezi
two largest producers of copper in Africa, the DRC and copper mines, a copper smelter in
Lubumbashi and a hydro-met plant
Zambia, are making to the continents output now in Shituri. Other major operations
include Eurasian Resources Group
African mined copper output is Zambia at a time when copper Frontier Mine, and Sicomines, which
dominated by the copper belt that prices were falling steeply and there is a joint venture between
runs through the southern part of the were fears of oversupply in the Gecamines, China Railway
Democratic Republic of Congo concentrates market. Construction Corporation and
(DRC) and the northern reaches of The recent sharp recovery in Sinohydro Corporation.
Zambia. The copper belts of DRC copper prices, if sustained, may pave
and Zambia hold the worlds second the way for mining to recommence at Exciting prospect
largest reserves of copper deposits Katanga, perhaps sooner rather than A new and exciting prospect is
approximately one-third of the scale later, and especially if problematic Ivanhoe Mines US$2.5 billion
of Chilean reserves according to labour contract negotiations in Chile Kamoa project, of which it owns 95%
Metorex. Reserve grades can be as result in strike action in H1 2017. with a 5% stake held by the DRC
high as 5%, which compares very Glencore has purchased the government. It is reputed to be
favourably against a global average of remaining 31% stake in Mutanda Africas largest high-grade discovery
0.7-0.8%. The region also holds Mining and a 10.25% stake in and the worlds largest undeveloped
considerable reserves of cobalt Katanga Mining for US$922 million high-grade copper deposit. Kamoa
perhaps as much as one-third of the and US$38 million, respectively, requires US$1.4 billion to be
worlds proven reserves. from Fleurette Properties. Glencore commissioned and is expected to
DRC and Zambia typically now owns 100% of Mutanda Mining produce 300,000 tpy when fully
produce 85% of total African mined and 86.33% of Katanga Mining. developed.
copper output, with smaller Mutanda is the largest copper mine It is expected to produce
contributions from Eritrea, South in the DRC, with production of concentrate with an exceptional 56%
Africa, Botswana, Morocco and 162,300 tonnes in the first three copper content and an extremely low
Namibia. DRCs copper mine quarters of 2016. arsenic content of 0.02%. Power
production averaged 400,000- supply is a big challenge in the area of
500,000 tpy between 1970 and Changing hands the deposit, but Ivanhoe in addition
1988, but dropped to less than One of the largest copper mines is to its 30-year mining licence has
50,000 tpy during 1992-2001, Tenke Fungurume Mining in the secured a deal with DRCs power
owing to regional conflict. south-east of DRC. It comprises utility SNEL to refurbish two
Since then production has been on open pit mining, leaching and SXEW hydroelectric plants to provide
a steady upward trajectory and may operations in addition to producing power to the project. Currently
well exceed 1 million tonnes for the cobalt hydroxide. Following the power supply in the region is met by
first time in 2017. According to the completion of its second-phase imports from Zambia, but this can
local Chamber of Mines, total mined expansion, its production capacity is prove unreliable even at the best of
copper production (concentrates and now 195,000 tpy. In 2015 it sold 467 times. Vedanta Resources, which
electrowon) in DRC, fell by 14% million pounds of copper cathode operates mines and a smelter in
year-on-year to 466,250 tonnes in (from ore graded 4.0%) and 35 Zambia, recently stated that The
H1 2016, compared with 990,000 million pounds of cobalt. Zambian power situation is
tonnes in 2015. For 2016 as a whole, The mine had long been operated challenging, but improving and that
the latest projections imply only a by Freeport McMoran (56%), Power tariffs are being increased.
1.7% fall to 978,414 tonnes. Lundin Mining (24%) and Low water levels periodically affect
This performance is remarkable, Gecamines (20%), but Freeport hydropower production at dams in
considering that output from chose to sell this asset (its 70% stake in Zambia.
Glencores Katanga mine was TF Holdings Limited which owns Mining royalties in DRC are set at
suspended in September 2015, 80% of Tenke Fungurume) to China the competitive rate of 2%, with a
initially for a period of 18 months. It Molybdenum for $2.65 billion in corporate tax rate of 30%. Despite a
is, as yet, unclear if the mine will cash and a consideration of up to high and unfavourable score in the
restart in Q1 2017 as intended, or US$120 million, depending on the World Banks ease of doing business
whether its restart will be further subsequent movement in copper and index, copper production and
delayed. Glencore announced this cobalt prices. The deal was exploration in the country are set to
voluntary production cutback completed on 16 November 2016. increase more rapidly over the next
together with the Mopani mine in Gecamines, the state-owned few years.

30 | Metal Bulletin Magazine | March 2017

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DRC politics are difficult. The

government and the main opposition
Recent trends in African copper production
DRC Zambia
parties have recently reached an 900 Kt Cu 900 Kt Cu
agreement on a deal that will see
President Joseph Kabila leave power 750 750

after the next election. Kabila was due 600 600

to have left power after the end of his
450 450
second term in December. The end
of his mandate on 19 December 300 300

brought protests, deaths and arrests 150 150

across cities in DRC after two days of
violence. However, in a concession, 0 0












the vote for a new election will not Mine Concs Mine EW Refined Mine Concs Mine EW Smelter Refinery

now take place until the end of 2017. Source: ICSG Historical; 2016 Forecasts Bloomsbury Minerals Economics

Zambia resurgent shareholder. At the same time, the prices in the range US$4,500-
Zambian copper mine production Konkola Copper Mines (including 6,000/t; and royalties of 6% at
reached a historical peak of 769,000 the Nchanga, Konkola, Nampundwe copper prices above US$6,000/t.
tonnes in 1969, before the industry and part of the Nkana assets) were It was hoped that this was to mark
was nationalised in 1973 under sold to Anglo American, but these A New Beginning in the
Zambia Consolidated Copper Mines. assets were subsequently returned to relationship between government
After this the industry went into a the government in 2002 and later and the mining industry as partners
serious and steady decline, with sold again to Vedanta of India in 2004 in the countrys development,
production reaching a low of (now Vedanta Resources). despite a corporate tax rate of 35%
250,000 tonnes in 2000. Since then According to the US Geological before royalties. A World Bank study
production has witnessed a fast Survey, Zambia has proven copper has shown that for every one job
recovery after re-privatisation, with reserves of some 20 million tonnes. created in the mining industry a
annual output exceeding 500,000 That is worth US$95 billion at further five jobs are created in the
tonnes by 2007 and 763,000 tonnes current market prices. Mine local economy. However, just when it
by 2013. expansion projects planned for 2017 looked as though a more stable policy
After dipping slightly in include the Mopani Copper Mine was about to be pursued, the
2014-2015, production is expected synclinorium project, NFC Africa Zambian Finance Minister Felix
to reach 764,000 tonnes in 2016, Minings south-east ore body, Mutati proposed an import duty of
with a further increase to 850,000 Konkola Copper Mines Nchanga 7.5% on copper concentrate
tpy predicted by the Zambia upper ore body and Lubanube imported from DRC in his 11
Chamber of Mines. Mine production Copper Mines Phase II expansion. November budget speech, designed
in the first nine months of 2016 The problem is that Zambias to boost government revenues, with
reached 576,000 tonnes, up by 8% overall effective tax rate is still among the tax due to come into effect with
from the previous year. However, the highest in the world. The most little warning from 1 January 2017.
because the price of copper had fallen recent change in the mineral royalty The Zambian Chamber of Mines
further in 2016 than in 2015, it was tax in 2016, albeit a positive one, was successfully lobbied against the
actually worth US$3.2 billion, or the eighth change in the countrys imposition of this duty. The smelters
20%, less to the Zambian economy. mining tax in the last eight years, that would have been most affected
Furthermore, 99,000 tonnes of this making Zambias mining tax regime had the duty been applied were
production came from a single new one of the least stable in the world, Eurasian Resources Groups
source First Quantum Minerals according to the Zambian Chamber Chambishi smelter and Vedanta
Sentinel mine in the north-western of Mines. Resources Konkola division.
province. The worst excesses were seen in The growing shortfall between
The mining industry, and 2015 when government revised the Zambian smelter production and
especially the copper industry, is mining royalty tax to rise from 6% to refined production is explained by
critical to Zambias economy. Recent 20% for open pit mines. This sharly rising exports of anode and
studies have shown that 86% of the provoked an immediate reaction blister to feed Chinas rapidly
foreign direct investment into from Barrick Gold Corporation, expanding smelting and refining
Zambia was due to the mining which intimated a potential industry.
industry. Furthermore, 80% of the shutdown of its Lumwana asset in The African copper industry
countrys export earnings come from Solwezi. In July 2016, the continues to face a series of challenges
the mining industry, as well as over government of Zambia introduced a and opportunities. Given Chinas
25% of all tax receipts. new Mineral Royalty Tax based on a and Asias insatiable appetite for the
The re-privatisation of the mining sliding scale of between 4% and 6% red metal, the world certainly needs
industry began in 2000 when the depending on the copper price: African copper.
Mopani Copper Mines (incorporating royalties of 4% are applied if the
the Nana and Mufulira assets) were copper price is less than US$4,500/t; The author is a senior UK analyst of
sold to Glencore as the major 5% royalties are charged at copper global copper markets

34 | Metal Bulletin Magazine | March 2017

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Lead & zinc

Zinc shines
deficit this year of plus or minus
about a quarter million tonnes,
although it will probably be slightly
lower than it had been in 2016. He
says that supply tightness should
continue to be a key factor
The zinc market is likely to remain the star performer influencing the global zinc market,
much as it had been last year.
amongst base metals this year, and possibly into This is because recent mine
production cuts were so drastic,
2018, thanks to a combination of tight supply and particularly with the permanent
improving demand fundamentals in both China and closure of two big mines the
MMG Century Mine in Australia
elsewhere, writes Myra Pinkham and the Vedanta Lisheen Mine in
Ireland late in 2015, due to
exhausted resources as well as
Glencore idling about 500,000
tonnes of mining capacity. White
observes that a total of 800,000 tpy
of zinc mine production capacity
was taken out of the market in
2015, which was the highest
amount of capacity that had ever
been taken out in one year. Most of
that capacity was either
permanently lost or has not yet
been reopened or brought back to
full capacity and Im not sure when
it will be brought back on-stream,
he says.
Also, despite the rising zinc
pricing environment, with LME
prices going from a trough of
$1,520/tonne in January 2016 to

over $2,800/tonne by
mid-February 2017, there have not
been a lot of new mines starting up
While 2017 should be a good year Stephen Wilkinson, executive The growing use yet, with most of the mines that
for most base metals, the outlook is director of the International Zinc of zinc coating have started up being fairly small
particularly positive for zinc, says Association (IZA). to protect steel operations, according to KC
Kash Kamal, senior research Michael Widmer, metals from corrosion in Chang, a senior economist for IHS
analyst with Sucden Financial Ltd. strategist for Bank of America construction and Markits pricing and purchasing
It is possible, however, that zinc Merrill Lynch (BAML) says he infrastructure service, explaining that the miners
prices could begin to soften believes the market will stay in projects is boosting remain cautious about the cost of
somewhat around mid-year should deficit for the next two or three demand doing so.
the current hints of tightness begin years. Robin Bhar, head of metals Rather, miners are watching the
to disappear, if investor confidence research for Socit Gnrale has a current supply-demand conditions
begins to fade, if Chinese growth similar opinion and predicts that closley. They want to be confident
starts to ease and if discipline the deficit should further that consumption primarily
among zinc producers begins to incentivise demand and result in galvanized steel demand trends
slip, says Andrew Cole, principal modest price increases for the next will sustain higher zinc prices
base metals analyst with Metal few years. before they are willing to invest in
Bulletin Research. Nevertheless, he According to the International higher cost operations.
is predicting that LME zinc prices Lead & Zinc Study Groups Steve Hardcastle, Sucden
will average somewhere between February monthly bulletin, the Financials head of client liaison,
$2,225 and $3,050/tonne this global zinc markets balance of agrees, maintaining that because of
year, up from $2,093/tonne in supply and demand fell into a the high cost of investment, zinc
2016 and $1,939/tonne in 2015. 286,000 tonne deficit last year after prices would need to get back to
Metals analysts are in experiencing a 189,000 tonne $3,000-$3,500/tonne and to hold
agreement that zinc prices will surplus in 2015. Paul White, there, which he says is likely due to
continue to go up. The only ILZSGs director of market strong investment activity and
question is how high they will go research and statistics, says that the expectations of a greater rate of
over what time period, observes market will remain in a fairly hefty inventory drawdown, before there

36 | Metal Bulletin Magazine | March 2017

is likely to be any significant Zinc settlement LME daily official $/tonne Demand grows
investment in sizable mines. 3,500
Meanwhile global zinc demand
growth has been escalating. Kamal
Inventories 3,000 notes that with business sentiment
Inventories have been drawn down improving as it has, global zinc
a bit, responding to market prices. 2,500 demand will probably see about
Chang says this is definitely true as 2-3% year-on- year improvement
far as visible inventories, which 2,000 this year. This follows a 3.6%
started 2016 at 700,000 tonnes and increase in global refined zinc usage
are expected to go down to 500,000
to 13.949 million tonnes in 2016
tonnes in 2017. Widmer, however, 1,000
and a 2.0% decline to 13.462

01 Oct 15
22 Oct 15
12 Nov 15
03 Dec 15
24 Dec 15
19 Jan 16
09 Feb 16
01 Mar 16
22 Mar 16
14 Apr 16
06 May 16
27 May 16
20 Jun 16
11 Jul 16
01 Aug 16
22 Aug 16
13 Sep 16
04 Oct 16
25 Oct 16
15 Nov 16
06 Dec 16
29 Dec 16
20 Jan 17
23 Feb 17
notes that visible inventories have million tonnes in 2015, based on
been declining for the past three the latest ILZSG data. This, Kamal
years. Source: LME, Metal Bulletin
says, comes on the back of
It is, however, uncertain what is infrastructure stimulus
happening with invisible the restart of Red River Resources programmes both in China and
inventories, although it is assumed Thalanga project in Queensland, Europe and improved sentiment in
that they were, and could continue Australia; and higher output from the USA that the policies of the new
to be, somewhat sizable given that, Vedantas Hindustan Zinc Trump administration, including
according to MBRs Cole, at least to Rampura Agucha Mine in India plans for greater infrastructure
this point, there has not been a real and the Antamina Mine in Peru. investment, will support greater
shortage of metal to mirror the Kamal says that the capacity galvanized steel consumption.
shortage of concentrate. If the idled by Glencore is not likely to be Galvanized steel accounts for about
refined market starts to feel restarted until late this year at the 55% of global zinc use, BAMLs
shortages of metal this year and earliest, with that restart likely to be Widmer estimates.
we may be seeing that in the decline done in a staggered fashion over a The renewable energy and
in exchange stocks and the pickup period of nine to fifteen months, infrastructure stimulus
in premiums lately then that depending on how high zinc programmes of a number of
should maintain support for the prices go. countries have been a plus for
zinc bull story, he says. But we are The tightness is now filtering galvanized steel, including
still wary that the structural down to the metals side. With galvanized rebar, production.
tightness has already been priced in concentrates being in such tight Wilkinson says the global
after the big outperformance by supply, it is affecting treatment galvanized rebar market, led by the
zinc prices last year. charges, observes Sucdens Steve USA and Canada, is primed for
Despite the reluctance for Hardcastle, who notes that because rapid growth as more
miners to make new investments, of that it has been increasingly municipalities recognise the need
ILZSGs recent New Mine and difficult for China to import zinc for better corrosion protection. He
Smelter Projects report observes concentrates to be used in its says the American Galvanizers
that there was a net addition of smelters. Wilkinson says that not Association predicts that the
78,000 tonnes of global zinc mine only are Chinese treatment charges galvanized rebar market could
capacity in 2016, with the most at record lows, but the shortage of quadruple in size over the next few
important openings being Nevsun concentrates is having an impact on years with production growing to
Resources 85,000 tpy Bisha zinc metal production worldwide. about 400,000 stpy in the USA
copper-zinc mine in Eritrea, East There were no zinc smelters alone.
Africa, and the 58,000 tpy expansion closed and just limited capacity China will continue to be a
of Trafigura Groups Aguas Tenidas cutbacks last year. But that is major force for increased zinc
operation in Huelva, Spain. already starting to change now that demand, Wilkinson says, noting
White says that the Bisha Mine concentrate stocks are being drawn that China has been consuming
project had been on the backburner down, Cole says, observing that more zinc than had been previously
for a while, so that capacity was there are reports that certain anticipated. Not only is China using
widely expected. As a result, global Chinese smelters, including more galvanized steel in autos than
zinc mine production inched up Zhuzhou Smelter Group, have in the past, but its manufacturers
slightly to 13.225 million tonnes begun to make cutbacks. Also, are using more zinc die castings in
last year, up from 13.202 million Korea Zinc, the worlds third some of their consumer goods.
tonnes in 2015. largest producer of metal, Also Chinese authorities are
MBRs Cole estimates that there announced early in February that it becoming more aware of the value
could be a 14% about 627,100 would be reducing its annual of using more galvanized steel in
tonne global zinc mine China will refined zinc production by 50,000 their buildings and infrastructure
production increase this year with continue to be a tonnes, which is a 7.7% year-on- projects to make them last,
the restart and ramp up of Nyrstar major force for year decline. Other smelters may Wilkinson notes.
NVs Middle Tennessee mine, follow suit in the very short-term, With the Chinese economy being
which is expected to reach its full increased zinc which will likely strengthen the fairly weak at the beginning of 2016,
50,000 tpy capacity by November; demand conviction of the zinc bulls, Cole says. there had been a lot of fear at the

March 2017 | Metal Bulletin Magazine | 37

Jiangsu Shunchi Tungsten &
Molybdenum Products Co., Ltd.
Moly Chemical products/scrap/metal bar;
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38 | Metal Bulletin Magazine | March 2017

Lead & zinc

time that there would be a hard Global refined zinc supply-demand balance it rebounds depends upon the
landing there, Bhar says. However, impact of the Trump
after Chinas government launched (000 tonnes) administrations policies, including
an infrastructure stimulus 2015 2016 2017f infrastructure investment, trade
programme at the end of the first Year Year Year policies, tax reform and the easing of
quarter of last year, it raised the China 5,860 6,086 6,281 regulations, he says.
countrys economic growth to 6-7%, Americas 1,779 1,707 1,756 In general, market observers
which was double what it had been in Europe 2,472 2,418 2,394 indicate that just one month into the
2015. Others 3,541 3,316 3,364 new administration it is too early to
That, Bhar says, lifted Chinese Production 13,651 13,527 13,795 quantify its likely impact. There is
demand for galvanized steel for both % change y-on-y 1.2% -0.9% 2.0% hope that there will be a significant
its building and construction and its increase in infrastructure
automotive sectors. ILZSG reports China 6,191 6,710 7,022 investment, Bhar says. But that
that Chinese refined zinc metal USA 931 809 819 isnt likely to happen until late 2017
usage increased by 8.6% to 6.724 Europe 2,413 2,452 2,482 at the very earliest, and more likely
million tonnes in 2016. Others 3,928 3,905 3,893 not until 2018 or 2019. Also, he
MBR projects that Chinas refined Consumption 13,463 13,875 14,215 says, there should be a net positive
zinc growth rate could slow to 4.6% % change y-on-y -2.0% 3.1% 2.5% amount of zinc use in the US auto
this year. This, Cole says, is largely sector this year, despite the increase
due to signs of lower, but still Balance 188 -348 -420 in aluminium use in an effort to meet
comfortably positive, infrastructure % of consumption 1.4% 2.5% 3.0% the new, more stringent
spending. He notes that short-term fuel-efficiency standards. This, Bhar
interest rates for commercial banks Reported stocks 1,465 1,298 878 says, is because North American
were raised by the Peoples Bank of % change y-on-y -6.4% -11.4% -32.4% auto output hit another record last
China right after the Chinese Lunar Weeks consumption 5.7 4.9 3.2 year with about 17.5 million units
New Year holiday. That could Source: ILZSG, WBMS, Metal Bulletin Research produced with nearly 62% of those
suggest that the authorities are vehicles being light trucks, which are
preparing to take more concerted of more, larger vehicles being larger vehicles and therefore use
efforts to rein in credit growth going produced on both sides of the larger volumes of galvanized steel.
forward. Atlantic. In addition, while down 1.5% in
While it is consumption in the Chang observes that with Europe 2016, US zinc die casting demand,
construction sector that most and the USA being mature which accounts for about 25% of all
industry observers say has had the economies, they are not growing as US zinc consumption, is expected to
greatest impact upon Chinese zinc quickly as China. Of the two, Europe be up about 2.5% this year thanks, in
consumption, the Chinese is seeing the least growth in zinc part, to increases in housing starts,
automotive market has been doing demand even with policymakers according to Daniel Twarog,
very well as wealthier Chinese looking to stimulate demand there. president of the North American
households move from e-bikes to According to ILZSGs White, Diecasting Association.
autos. Already at near record levels, Europes zinc metal usage actually Demand in Asia outside of China,
IHS Markits Chang says Chinese eased 0.3% to 2.405 million tonnes especially India, is also seen as being
auto output could move up slightly last year and is expected to either on an upswing. Last year refined zinc
to about 26.2 million vehicles remain flat or improve just slightly usage increased 14.4% to 723,000
this year. this year. tonnes, according to ILZSG. IZAs
Bhar says that auto sales will That, Bhar says, is because there Wilkinson says that it could continue
probably rise about 5% this year, continues to be a bit of uncertainty in to see double-digit growth in coming
which would be a much slower Europe with expectations of only years.
growth rate than seen last year when, about 1-1.5% GDP growth despite This is one of the best times to be
helped by a governmental tax cap on the fact that its automotive sector has in the zinc market, Wilkinson
smallengine cars that is expected to seen some recovery from its low maintains. It is a sustainable market
be lifted this year, they increased by point a few years ago. Also, while the and will likely continue to grow in
13%. But, he says, should the tax cap building and construction market both existing markets and such new
be extended, another double-digit has strengthened in some portions of applications as fertilizers. He admits
auto sales increase could be possible. the region, particularly in Germany that the aluminium industry is
While it is possible that and the UK, it remains weaker in spending a lot of money to increase
automotive growth in the UK and others, such as in France and Italy. its automotive share, helped by new
the USA could slow, Kamal says that White says that US refined zinc fuel efficiency standards. But
is off of a very high level and will usage saw a 12.4% decline to advanced high strength steel is also
remain quite robust, with a lot of that 816,000 tonnes last year, but he very lightweight, Wilkinson points
coming from steel, including expects that it will rebound this year out. I think the zinc market has
galvanized steel. Aluminium use due to increased demand for never looked better.
hasnt really taken off other than for galvanized sheet there in the
high-end vehicles, he asserts. construction, automotive and white The author is a specialist writer based
Meanwhile there is a growing trend goods sectors this year. How much in New York.

March 2017 | Metal Bulletin Magazine | 39



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Lead & zinc

Lead & zinc

galvanizing conference in New
Delhi that his ministry was
engaged in discussion with the
railways and other ministries to
ensure zinc coating of at least the
minimum thickness required for

drivers in India
steel for use in corrosion-prone
regions, and in particular in areas
where corrosion could cause
Some observers have
interpreted Singhs
The potential for demand growth in zinc and lead in announcement as a step towards
compulsory galvanization of
India is large. Kunal Bose highlights drivers for zinc fish plates and bolts. Sunil
consumption, and recycling of lead, in the country Duggal, ceo of Hindustan Zinc
a subsidiary of London-
headquartered Vedanta
Resources says: Galvanization
will significantly enhance the
useful life of fish plates and bolts
lending to track security. Not
only will track maintenance work
become easier for the railways,
but on life-cycle cost basis,
galvanization of fish plates and
bolts remains the best option for
the railways.
An official of, the Steel
Authority of India Limited
owned, Bhilai steel plant, which
remains the principal supplier of
rails to Indian Railways, says that
it has not heard anything from
the government as yet about
galvanizing rails.

Curse of corrosion
It is estimated that corrosion
claims about 4-5% of Indias
annual GDP. The country has a
coastline of 7,517 km where
corrosion remains particularly

acute. At Singhs initiative,

inter-ministerial discussion on
the mandatory use of zinc-coated
For Indian Railways, 2016 was a the causes of train derailment. There is scope for a steel in all kinds of construction
bad year for train accidents. Last Indian Railways has tracks higher percentage in coastal areas and nationally in
year saw eight of them claim at running over 115,000 km. The of vehicles made house building, bridges,
least 150 lives and leave many task of checking whether some of and sold in India to highways and automobiles has
more badly injured. The New the fishplates and bolts have lost have galvanized made sufficient progress for the
Year started on a sad note too, the strength to hold rails together steel bodies drafting of a cabinet note. What
with a train accident at because of corrosion is a large India is planning do is to emulate
Vizianagaram in the coastal state one, to say the least. developed countries.
of Andhra Pradesh on 21 January, A site inspection carried out by Developed countries have
causing the death of 41 the commissioner of railway been mandating the use of
passengers and serious injuries to safety at Kanpur, where last galvanized steel instead of black
70 others. years most disastrous train steel in many structures, from
Inquiries conducted by the accident took place, revealed that bridges to airports, for the long
wholly government-owned nearly 10-km stretch of the life and safety of all public
railways confirmed that corroded tracks was badly corroded. structures. Galvanized rebar
and thus weakened fishplates and Steel minister Birender Singh withstands chloride concentration
bolts joining the rails are among said at the recent international four to five times more than black

42 | Metal Bulletin Magazine | March 2017

steel rebar, thereby significantly
slowing the rate of corrosion,
says Duggal.
The zinc intensity of Indian
steel will rise if Singh is able to
prevail upon the government to
make use of galvanized steel in
specific areas. Indias use of zinc
per tonne of steel is now 7.8 kg,
compared with 12 kg in the USA
and 10.2 kg in South Korea, says
Duggal. He would like the
government in India to keep the
practices in the Gulf, where a
certain minimum thickness of
zinc is specified as the model
when steel galvanizing is
ordered. Duggal recommends
hot dip galvanizing since it gives
a good bonding between steel
and zinc with minimum
thickness of the latter.
Hot dip galvanized steel
clearly costs more than the
equivalent uncoated product,
But HDG steel is free of

maintenance cost even in

punishing environments, unlike
black steel which needs periodic
application of corrosion-resistant India has over are galvanized. I will say 80-90% Hindustan Zinc, which
coatings such as paints and powder. 100,000 km of railway of cars in the country are not produced 758,938 tonnes of
On a life-cycle-cost basis, HDG track to monitor for made from galvanized steel. refined zinc during the year
steel is a clear winner, says an and ideally protect Galvanised steel is, however, ended March 2016, meets
official of Indian Lead & Zinc against corrosion used for making cars that are around 85% of the countrys zinc
Development Association. exported from India. For our demand. To meet the balance
For the government, a major kind of weather and especially for demand, India imports zinc from
concern is that the countrys use in coastal zones, the bottom a number of countries. But the
automobile industry, which has a of cars should be galvanized to major quantities come from
share of over 7% of GDP, has fend off corrosion. South Korea and Japan. This is
often remained indifferent to Explaining the reason why cars because under the
using galvanized steel. Giving mostly are not galvanized in comprehensive economic
vent to his frustration, Singh India, an official of the Federation partnership agreements, zinc
says: As ants can kill an elephant, of Automotive Dealers coming to India from the two Far
corrosion-prone non-galvanized Associations says: India is a Eastern countries has the benefit
steel will do damage to the car highly price-sensitive market and of nil import duty, says Duggal.
body after some years on the the use of galvanized steel will Indian zinc demand is growing
road. In agreement, Tata Steel jack up prices of small- to at an annual rate of 3%, according
chief technology officer Vinay medium-size cars quite a bit. to Duggal. But the annual
Mahashabde says that while cars Demand growth is mostly in demand growth could rise to 7%
made from galvanized steel have these categories and carmakers if the government finally
a life of up to 20 years, Here in will be chary of raising prices on mandates compulsory
India rust appears on car surfaces zincs account unless mandated galvanizing of steel for use in
in three to four years, which by the government. certain areas such as automobile
forces owners to go for expensive While no estimates are and building construction.
repainting. available as to how much zinc Incremental demand on the
Industry officials claim that will be needed if India decides to expected government edict will
India has built capacity to meet go for the rust-proofing of have to be largely met by
more than 90% of the countrys fishplates and bolts, the imports. Hindustan Zinc has
automotive steel requirements. International Zinc Association maintained the guidance that
What, however, remains unsaid (IZA) says use of galvanized steel expansion of zinc-lead mined
is what percentage of that steel is to make cars will create an metal production capacity will
hot dip galvanized. Duggal says: additional demand for at least rise from 1 million to 1.2 million
Hardly any cars on Indian roads 150,000 tpyof zinc. tpy by 2019-20. Even after

March 2017 | Metal Bulletin Magazine | 43

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Lead & zinc

that expansion, the gap between

demand and domestic supply Recycling lead
will grow. Spurred by the rapid growth of the recyclers manage to do without installing any
automobile, telecom and renewable energy pollution control equipment worth the
Other markets industries all users of lead batteries name, says Mullay. Low costs also enable
In India, 75% of zinc is used for Indian lead demand is rising at an annual rate unauthorised recyclers to pay higher prices
galvanizing, against the global of 11-12%. The supply of primary lead by the for used batteries than registered units. This
average of 58%. The two other sole Indian producer, Hindustan Zinc, is has resulted in many in the organised sector
promising areas where zinc will around 155,000 tpy. The government is nursing varying degrees of unused capacity,
see increasingly greater use are putting increasingly stringent restrictions on says Mullay.
die casting and zinc oxide, says the import of used lead acid batteries, so Exide Industries is a recycler of used lead of
Duggal. Deficiency of zinc is battery manufacturers depend heavily on significant size. The company, which through
among the most common metal recycled from local used batteries. its extensive countrywide network of dealers
micronutrient insufficiencies in India imports both primary lead and procures used batteries, owns two
crops in most countries, including remelted lead from used batteries for high-technology smelters close to Bangalore
India, resulting in substantial purification and refining. Estimates by the and Pune cities. The combined capacity of the
losses in yield and also government and India Lead Zinc smelters is 150,000 tpy. Exide also supplies
contributing to human health Development Association (ILZDA) of the old batteries to authorised third-party
problems. An official of the amount of recycled lead from used batteries smelters in different parts of the country for
Indian Council of Agricultural procured from within the country making lead ingots on a conversion cost basis.
Research says zinc is an significantly differ. Exide managing director Gautam Chatterjee
important component of various The government figure for recycled lead says: We are hopeful of building a new
enzymes that drive metabolic supply is around 600,000 tonnes. However, smelter at Haldia in West Bengal with capacity
reactions in crops. Hindustan L Pughazenthy, executive director of ILZDA, of 30,000 tpy. The smelter, for which the
Zinc sees an opportunity for says that: user industries must be using state government has promised 25 acres of
promoting the use of zinc fertiliser nothing less than 1 million tonnes of land, will be next to Exides battery plant.
in the country. The company is secondary lead. He says the difference can be A Confederation of Indian Industry
seeking guidance from IZA for accounted for by a significant portion of lead spokesperson says: to the extent battery
development of new applications recycling being done by any number of small makers in the organised sector actively
for zinc in the country, including unauthorised units across the country. These participate in recovery of old batteries using
fertiliser, says an official. often work without suitable protective gear their extensive countrywide dealer network
In pursuit of value addition, when breaking open used lead-acid batteries and smelting, there will be a dent in unlawful
the company has recently and with scant regard for local environmental and environment-damaging lead recovery by
launched a die-casting alloy using damage. the unregistered recyclers. He says battery
primary zinc and pure According to Pughazenthy, an unceasing makers in the organised sector with no lead
aluminium. The downstream campaigner for stamping out the recovery smelters should diligently follow
unit, with a capacity of 36,000 environmentally damaging recycling of lead the government-prescribed battery handling
tpy, is located next to the in backyard smelters, the country has about management rules requiring near total
companys lead-zinc smelter at 600 registered smelters and they have a 60% recovery of old batteries when new ones are
Chanderiya in Rajasthan, giving share of recycled lead production. He sold to be sent only to registered
it considerable advantage of estimates that as many as 1,500 unauthorised environment-friendly smelters.
logistics. Indias present backyard units have managed to stay in the If the 2001 rules are followed to the letter,
requirement for the alloy, which lead recycling business, producing around then most of the unregistered smelters
finds use in auto components, 400,000 tonnes of secondary lead every year. should wither away as they will not be able to
domestic appliances, sanitary- Pollution control laws in India are as procure sufficient numbers of old batteries.
ware and defence items, is stringent as in most developed countries. The Nevertheless, some will still survive because
estimated at 70,000 tpy. Half the problem is their lax enforcement in the case the small battery makers and battery
countrys demand for the alloy is of unauthorised battery breaking units and re-conditioners have a fairly large share of the
met by imports. smelters, says environmental activist Sahana battery market. Old batteries coming back to
The current manufacturers of Mullay. these units can end up with unregistered
the product, all in the small-scale Not only have informal recyclers managed backyard lead recyclers.
sector, buy zinc from Hindustan to carry on their business flouting the In the hope of improving the vigilance over
Zinc. We are now ramping up Batteries (Management & Handling) Rules the secondary sector, New Delhi transferred
capacity. Once we are in full (BMHR) enacted by the central government the responsibility of monitoring the
production, imports of the alloy in 2001, their operational cost is much lower collection of used batteries and registration of
will not be needed, says Duggal. than registered recyclers. recyclers from the Ministry of Environment
The company has also started Unlike every unit of Gravita India or of andForests at the centre to pollution control
producing toning alloy. It is used Exide Industries, Indias largest automotive boards in the states through an amendment
in a steel galvanizing bath for the and industrial battery maker, where very high of BMHR in 2010. Unfortunately, the
precise control of aluminium. levels of environment and safety standards unauthorised lead recyclers are thriving, not
are maintained at all stages from breaking of just surviving, thanks to poor policing by
The author is a specialist writer batteries to lead smelting, the unauthorised state-level agencies.
based in Kolkata

March 2017 | Metal Bulletin Magazine | 45

New orders

New plant orders

Our regular review of new orders placed for both new and upgraded plant
Trends highlighted about orders placed with some more of a rarity as large parts of
Our quarterly new plant orders plantmakers, the fact that the list global steel and metal industries
section provides interesting includes many orders placed with deal with overcapacity. The trends
insights into the present scope, the worlds largest international now are to make the most of
scale and location of capital plantmakers and other specialist existing equipment to maximise
investment in metallurgical plant, suppliers means that it gives a productivity while minimising
from mines to mills and processing strong indicator for where growth operating costs, create plants that
lines. in output or the pattern of are as flexible as possible in terms
Every project listed says production is changing. of delivering a diversity of semis
something about the priorities and The latest list which follows and products in response to volatile
outlook of the customer ordering gives plenty of examples of current demand, and to automate as much
it. The nature and quantity of trends. Unsurprisingly, China as possible. Another trend is to
projects listed in any one country claims the largest number of integrate as many potential
hint at anticipated domestic orders, but Vietnam and the USA benefits of Industry 4.0 as possible
product demand as well as the also have half-a-dozen orders each. in order to benchmark performance,
geographical export markets Order number alone is a crude predict maintenance, maximise
within viable reach of that nation. measure of activity, of course, as an product quality and integrate
Although not every significant individual order can be for production software systems with
order placed can be listed, given something as small as a shear or as business software for management
the confidentiality requirements large as a turnkey mini-mill. strategy and scheduling to gain as
some clients have of their suppliers, Although there are some on the clear a view of complete operations
and the unavailability of details list, bigger orders have become as possible.

Customer Supplier Order details Start-up

MMG Outotec Continuous paste backfill plant for Dugald River zinc mine in Northwest Queensland February 2018
Bhler Edelstahl Primetals Technologies Flat rolling block automation and drives modernisation at Kapfenberg plant for special steels, producing flat bars Mid-2017
43-205 mm wide and 4.5-86 mm thick. RollMaster to handle pass schedule management
GPH Ispat Primetals Technologies Complete mini-mill for 815,000 tpy of long products and 130-180 mm dia billets. Includes 80 t EAF Quantum, Early 2018
80 t ladle furnace, 3-strand continuous billet caster and a bar and section mill. 1st installation worldwide of
WinLink Flex for near continuous rolling of 2 strands on 640,000 tpy bar and section mill
ArcelorMittal Lige Primetals Technologies Three SIAS surface inspection systems for two continuous galvanizing lines and a continuous pickling line H1 2017
Advanced Metallurgical Group Outotec Lithium beneficiation plant for Mibra mine site. Plant to produce 90,000 tpy of lithium concentrate H1 2018
Alcomet SMS group 6-high CVCplus cold rolling mill for aluminium strip up to 2.2 metres wide and down to 0.15 mm thick
Compania Siderurgica Primetals Technologies Replacement 100 t LD (BOF) converter No. 2 system in Talcahuano works, which produces long products November 2017
Huachipato (CAP Acero) with Vapor Industrial SA and wire rod
Baoshan Iron & Steel Danieli Medium bar mill revamp and peeling machine Q4 2017 (revamp); Q1 2018 (peeling)
Foshan Chengde Stainless Steel Fives New 500,000 tpy cold annealing and pickling line for 200, 300 and 400 series stainless steels (includes 2-Hi By end 2017
in-line skin-pass).
Henan Mingtai Al. SMS group 6-high cold rolling mill for wide Al strip up to 2,650 mm. Mill to roll alloys from AA1xxx to 8xxx. Includes CVCplus
Industrial Co., Ltd roll shifting technology and inductive roll barrel heating system.

46 | Metal Bulletin Magazine | March 2017

Customer Supplier Order details Start-up
Huaigang Special Steel Co. Ltd Danieli 2-roll straightening line Q1 2018
Jiangsu Dingsheng Aluminium Primetals Technologies 60 sets of air bearing shapemeters, ISV spraybars, magnescale transducers and four packages of spare Oct 2016 Feb 2019
parts for part of Dingshengs foil rolling mill expansion project taking place on 3 sites
Jiangyin Xingcheng SMS group Modernisation of 1m tpy SBQ mill No. 1. Includes installation of 3-roll precision sizing mill (PSM) type 450/4 for rolling
Special Steel Works 40-130 mm bar
Ningbo Powerway Alloy Material Danieli Coil to bar high speed chain track drawing line, X-Cu Alloy (CTDM) Q4 2017
Sichuan ChangCheng Danieli 300,000 tpy garret line Q4 2017
Special Steel
Shandong Iron & Steel Danieli Hot plate leveller and cold plate leveller Q4 2018
(Rizhao Steel)
Shandong Laigang Primetals ERT-EBROS endless rolling billet welding system for bar. Yongfengs 1.2m tpy mill produces 12-50 mm dia reinforcement Q2 2017
Yongfeng Steel Technologies steel from 150 x 150 mm square billet
Shanghai Meishan Iron & Steel Danieli Baosteel Meishan 1422HSM RBL system revamp Q3 2017
Shougang Jingtang Danieli DUE (Danieli Universal Endless caster and mill for production of 2.1m tpy of HR strip (thickness from 0.8 to 12.7 mm

Q2 2018
United Iron & Steel in a wide range of steels)
Western Superconducting SMS group High-speed 63/80 MN two-column push-down open-die forging press with two integrated 25 t rail-bound End-2017
Technologies manipulators and an 8 t mobile loading and unloading manipulator for titanium alloys
Yongxing Special Stainless Steel Danieli 200 kW HiGrind billet grinder for about 40,000 tpy of 150, 180 and 220 mm square billets up to 7 metres long Q1 2017
EZDK Danieli QTB quenching tempering of bars system for bar mill No. 2 in Alexandria. To quench 3 x 10 mm rebar at 12.9 m/s and
12 mm rebar at 9 m/s
ArcelorMittal Danieli Entry section revamp of existing pickling line in Fos-sur-Mer Summer 2017
Vallourec St. Saulve Danieli Round bloom caster upgrade with a new 325 mm round section (extends original range of 180-310 mm dia) February 2017
SSAB Europe Primetals Technologies Hardware and software to modernise the cooling section automation for HR strip mill in Raahe April 2018
SSAB SMS group Modernisation of entry section of continuous pickling line at Hmeenlinna, including X-Pro laser welder and End-2018
tension leveler for 1.5-6.5 mm thick, 650-1,650 mm wide strip
ArcelorMittal Hamburg Danieli Centro Turnkey supply of 175 tph walking beam furnace for 16.5 metre special steel billets, with ultra-low NOx burner
Combustion technology, for wire rod mill.
Salzgitter Flachstahl Primetals Technologies Level 2 process optimisation system for a twin RH degassing plant and its two downstream treatment stations April 2017
APL Apollo Fives Two OTO hollow shape universal forming mills for square and rectangular tubes (20 x 20 mm 120 x 120 mm) at
120 m/min (max)
Nuclear Fuel Complex Danieli W+K Quarto cold pilger mill to roll stainless steel tubes (10-35 mm OD; 0.4-5 mm wall thickness)
Orissa Metaliks Primetals Technologies 3-strand continuous billet caster to produce 384,000 tpy of (100 mm cross section) carbon steel billet for rebar production Q4 2016
(Concast (India))
Ryker Base Private Ltd SMS group Contirod CR-3500 line with a capacity for 35 tph of cast and rolled 8 mm dia copper wire rod Q1 2018
SAIL (Bokaro Steel Plant) SMS group 130 t twin ladle furnace Summer 2018
PT Gunung Raja Paksi SMS group 500,000 tpy light section mill for rolling products including equal & unequal angles, channels, H-beams, squares and 2018
hexagonal bars, starting from 12-metre-long 150 or 200 mm square billets or 300 x 250 mm beam blanks prepared in
a 100 tph walking beam reheat furnace
Pittini Group Danieli Two-strand wire rod mill with six-strand caster for 150-160 mm square billets with Q3 integrated automation and Mid-2018
intelligence system for Acciaierie di Verona

March 2017 | Metal Bulletin Magazine | 47







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48 | Metal Bulletin Magazine | March 2017

New orders

Customer Supplier Order details Start-up

Nucor-JFE Steel Mexico SMS group 400,000 tpy HDG line for deep-drawing grades and high-strength steel for the automotive sector. Can coat HR & CR H2 2019
strip. Width: 800-1,880 mm. Thickness: 0.4-2.6 mm. Zinc coating at up to 180 m/min. Also to produce galvannealed
Tenaris Tamsa Danieli Olivotto Ferr RHF for bright annealing 24,000 tpy of carbon steel tubes (15-120 mm dia, 3-16 m long) in Veracruz January 2018
AARTI Strips (P) Danieli Nano-mill ( 200,000 tpy) for rebar and future wire rod Q2 2018
Tata Steel IJmuiden Primetals Technologies 2.7 million tpy continuous caster for slab to be delivered on a process turnkey basis. Slab width: 900-2,150 mm. March 2019
Thickness: 180-305 mm. Steel grades include carbon, peritectic, structural and HSLA
Moon Iron & Steel (Misco) SMS group Complete mini-mill for 1.2m tpy of billet, 1.1m tpy of which for rolling into 8-40 mm rebar. 140 t AC EAF, 2018
140 t ladle furnace, 5-strand continuous billet caster. CMT continuous mill technology
OceanaGold (Philippines) Outotec Continuous paste backfill plant for the Didipio gold mine Q2 2017
Evraz NTMK Paul Wurth Technology for 2.5m tpy BF No. 7, including parallel hopper Bell Less Top charging system, hearth refractory lining 2018
with ceramic cup and two sets of fully hydraulic tapping machinery
Evraz NTMK Primetals Technologies Automation, electrical equipment and instrumentation for new 2.5m tpy blast furnace No. 7. Basic automation End-2017
(level 1) and the process optimization (level 2) will be installed as a virtualized automation system
OJSC Ural Foil Danieli Fata Hunter Revamp of aluminium foil mill in Mikhailovsk, Sverdlovsk H2 2017
OMK Danieli Automation Manufacturing Execution System for Vyksa steelworks pipemaking and railway wheel rolling facilities February 2017
Vyksa Steelworks Danieli Threading finishing line (7-in) Q4 2018
Maaden Gold Outotec Modular flotation cPlant for modernisation of Al Amar gold processing facilities
Boliden Metso Corp Surface crushing station for Aitik copper mine. Includes two primary gyratory crushers, two rock breakers, two apron
feeders, chutes, conveyors and spare & wear parts.


X-Pro laser welder with fibre laser to be integrated by SMS group into SSABs new entry section for a continuous pickling line

March 2017 | Metal Bulletin Magazine | 49

New orders


Primetals slab caster Danieli coil coating line

Customer Supplier Order details Start-up

SuperAlloy Industrial (SAI) SMS group (Hertwich) 40,000 tpy compact remelt plant for aluminium billets (max 305 mm dia; max 7,000 mm length) for internal September 2017
Tung Ho Steel Danieli EWR/K-welding line to join (12 metre long, 150 mm square) billets for endless welding rolling into rebar products Autumn 2017
at Taoyuans 600,000 tpy Rolling Mill No. 1
Tibet Julong Copper Metso Corp Mineral processing equipment for Qulong copper mine including 6 crushers, 8 semi-autogenous grinding mills and 2018
8 ball mills, 8 stirred mills, 4 vertical plate pressure filters and 16 vibrating screens for 300,000 tpd of ore
Diler Demir Celik Danieli Bell annealing furnaces Q3 2017
Ilyich Iron & Steel Works Primetals Technologies 2 strand slab caster, 150 t twin position ladle furnace, alloying station and dedusting system for capacity increase
of Mariupol (MMKI) by 2.5m tpy to 4m tpy of slabs in thickness of 170 and 250 mm. Width: 900-1,550 mm. Carbon, low-alloy and alloy grades
Atlas Tube SMS group Modernisation of 16-in ERW tube line in Blytheville, Arkansas. Includes new sizing section using uniform rigidity
design (URD). Will enable rolling of structural tubes up to 18-in OD plus square and rectangular hollow sections
Gerdau California (Rancho) SMS group FTP Revamping & Secondary Fumes Package Q3 2016
NLMK USA Tenova Walking beam furnace (395 st/h) with material handling facilities for 60-in hot strip mill
Nucor Primetals Technologies Upgrade of Cofield, NC, plate mills drives and control system with Siemens drives, automation and May 2017
HMI, a WinCC software system, and level 2 automation system to control the mills side trimmer, cold shear and shipment
preparation areas
Nucor Danieli New cold shear for Jackson plant Q3 2017
Steel Dynamics Danieli Fata Hunter New cleaning section and post-treatment coating machine to revamp galvanizing line No. 1 for CR sheet up to Early 2017
1,950 mm wide and 5 mm thick at up to 137 m/min
Hoa Sen Group SMS group 6-high twin-stand 400,000 tpy reversing cold mill (CCM) to include CVCplus and X-Pact electrical and automation
(Esmech Equipment jv) technology. For low-carbon steel strip; 1,250 mm max. width; 0.11 mm min. gauge; coils up to 27 t
Tay Nam Tenova New pickling line with acid regeneration plant Q1 2018
Nam Kim Steel SMS group Third reversing cold mill for 650-1,250 mm wide strip to minimum of 0.11 mm from max entry thickness of 4 mm.
(Esmech Equipment jv) Max. rolling speed of 1,400 m/min
SSSC Tenova Upgrade of colour coating line Q1 2018
Ton Dong A Danieli Fata Hunter Triple-coat continuous coil coating line for 120,000 tpy of HDG steel coils (up to 1,250 mm wide and up to 1.20 mm thick) Q1 2018
Tung Ho Steel Danieli New water treatment plant for 600,000 tpy long product rolling mill also supplied by Danieli End-2017 for plant & mill
Vina Kyoei Primetals Technologies Upgrade with Morgan intelligent pinch roll and Morgan laying head with SR Series pipe for wire rod, to extend laying Early 2017
head pipe life and improve laying pattern

March 2017 | Metal Bulletin Magazine | 51


Mini-mills revisited
In some countries, the mini-mill concept is being played a role in a perfect storm,
he recalls.
revisited and rejuvenated with modern levels of EAF advantages
automation and control. Myra Pinkham reviews EAF technology itself has many
advantages, Nicholas Sowar,
mini-mill history and present progress from partner with Deloitte & Touche
technology and business perspectives says, including emission control,
outstanding metallurgical control,
higher temperature attainment,
Well before the mini-mill era consumption of less specific energy
bloomed in the 1960s, steelmakers to produce steel, high flexibility and
were using electric arc furnaces an ability to be started and stopped
(EAFs) in small-batch-oriented quickly. Mini-mills can also be sited
production for specialised steels and relatively close to the markets for
high-end niche alloys. While there their products.
were many different steelmaking Paolo Burin, executive
technologies in the early 1950s, the vice-president of sales for the
two main ones today are basic steelmaking department of Danieli
oxygen furnace (BOF) converters, C. SpA, says that the EAF is a
used by integrated steelmakers, and perfect recycling machine since it
the EAF used by steel mini-mills. runs with scrap as well as other iron
There really was a big units. While the EAF was originally

transformation in the global iron and just seen as a means to melt scrap, he
steel industry over the second half of notes that over the years it has
the 20th century, says Philip K. become increasingly flexible,
Bell, president of the Washington- accepting feedstock such as direct
based Steel Manufacturers reduced iron (DRI), hot briquetted
Association (SMA) a trade iron (HBI), pig iron and hot metal
association that represents US EAF at its Crawfordsville, Indiana, works. Steadily increasing where available, based on local, and
steelmakers when over time a This, according to Emling, was a flows of scrap possibly varying, market conditions.
group of companies in North turning point, enabling EAF are one driver for He adds that this, in addition to
America, Europe and Asia made technology to be used for flat-rolled growth in EAF-based the use of higher grades of scrap and
moves to build a new steel industry, steel. He says that EAF and caster steelmaking the ability to control the presence of
often referred to as the mini-mill developments over the years have elements such as nitrogen and
steel industry, by using EAFs and allowed more sophisticated grades sulphur through downstream or
ferrous scrap as their means of to be made for critical applications. secondary metallurgical treatment
production. These developments include of the steel, including by vacuum
Italy in particular saw sidewall injection of oxygen, carbon degassers, also allows the cleanliness
entrepreneurial family businesses and lime and the increased use of of the steel produced to be similar to
build steelmaking and rolling plants chemical, or non-electrical, energy. that produced with a BOF.
based on electric steelmaking. In the Emling says this has allowed Ronald E. Ashburn, executive
USA, the steel mini-mill concept tap-to-tap times to be reduced to 30 director for the Association for Iron
took off in the 1960s as large minutes from 45-60 minutes 15 & Steel Technology (AIST) agrees:
quantities of steel scrap began to years ago. Ancillary equipment, While at one time the term mini-mill
enter the US market, with Nucor such as ladle furnaces, has helped to was a handy way to help identify a
really starting the ball rolling, says make the EAF more efficient. class of scaled-down facilities
William H. Emling, vice-president Emling notes that the trend for designed to annually produce, at
of the steelmaking and casting EAF steelmaking in the USA is most, a few hundred thousand tons
division of SMS USA, Pittsburgh. different from other areas of the of carbon merchant products for a
He points out that, at least at first, world. In the United States there is specific geographic region, today
production was limited to more entrepreneurial movement these facilities that we call mini-mills
long-products such as rebar and and they have had an opportunity to have scaled up on capacity, and
wire rod. move in certain directions that some process innovation has empowered
However, using the new compact other countries didnt, he says. them to compete with integrated
strip production (CSP) technology The low cost power, the producers on quality and grades.
developed by SMS, in 1989 Nucor infrastructure available and the He adds that although todays
commissioned a thin-slab mini-mill support of the government all mini-mill operators do not have

52 | Metal Bulletin Magazine | March 2017

capital tied up in coke ovens, blast Crude steel production by process for 2015
furnaces and ancillary equipment
OBC EF OHF Other Total OBC EF OHF Other
needed to support them, they have
thousand tonnes % total production
invested heavily in other production
European Union (28) 100 619 65 497 166 115 60.6 39.4
areas and will continue to do so.
Other Europe 12 809 23 368 36 178 35.4 64.6
C.I.S. 67 054 26 959 6 853 641 101 507 66.1 26.6 6.8 0.6
Business philosophy
North America 41 524 69 421 110 945 37.4 62.6
While the technology is key to the
South America 29 886 13 479 534 43 899 68.1 30.7 1.2
mini-mill concept, the concept of
Africa 5 138 8 562 5 13 705 37.5 62.5
the mini-mill is more closely tied to a
Middle East 2 407 27 022 29 429 8.2 91.8
business strategy and management
Asia 937 714 173 024 882 1 111 621 84.4 15.6 0.1
philosophy than it is to technology,
Oceania 4 380 1 337 5 717 76.6 23.4
Ted Lyon, managing director for
World 1 201 531 408 670 6 853 2 062 1 619 116 74.2 25.2 0.4 0.1
iron and steel at Hatch Associates,
OBC oxygen blown converter, EF electric furnace, OHF open hearth furnace Source: World Steel Association
Pittsburgh, says. He reminds that
the definition of conventional
mini-mills, at least as they were looms large in the global share of technologies. With a greater
originally conceived, were steelmaking routes. Plummer notes availability of scrap becoming
EAF-based facilities that generally that while China produced an available and the focus upon the
produced less than 1 million tpy of estimated 790.1 million tonnes of environmental impact, he says the
steel and exploited local conditions steel last year, Chinas EAF steel tendency has been at least partly to
as far as possible in terms of production has fallen from a peak of substitute old BOF plants with EAF
good-quality scrap, cheap and stable 71 million tonnes (10% of its output), facilities. And considering the speed
power sources and a local market to to about 47.7 million tonnes (6%) that China is looking to make these
distribute their finished products. last year, largely due to the sharp changes, Id assume that we will see
SMAs Bell agrees, noting that declines in iron ore and metallurgical at least some additional EAFs there
most of the new, largely US-based, coal prices helping to make BF steel within a few years, he says.
mini-mills were non-union and production more cost effective. However, John Anton, director of
emphasised autonomy on the shop China also had to build up its steel steel analytics for the pricing and
floor and co-operation between industry very quickly, notes James purchasing service of IHS Markit,
management, which he says Moss, a partner with Pittsburgh- says that calls on electricity production
incentivises its workers to make based First River Consulting: It in China and the fact that a lot of its
high-quality steel safely, sustainably needed a large steel industry to electricity is coal generated might
and efficiently. In fact, he says that support its large population. not see as positive an environmental
US mini-mill workers are the most Because of this, and that they had impact as has been seen elsewhere.
productive in the world, producing little if any domestic scrap, they
steel for as little as 0.9-0.5 went with the high-volume Growth outside China
man-hours per ton. technology, which is the BF and Outside China, on average 30-40%
BOF, building 600-700 million of all steel is produced by EAF
Balance changes tonnes of BF capacity in just about steelmakers. That percentage is
About 24.5% of all steel produced 10 years. This, he says, dwarfed its growing, First Rivers Moss observes,
worldwide is being made via EAFs, EAF steelmaking. although that rate of growth varies
according to Christopher Plummer, But this situation should be by region according to factors
managing director of Metal Strategies, overcome when the production including the availability of scrap,
West Chester, Pennsylvania, who capacity of China resets to a sustainable alternative iron units and electricity.
notes that while this is up from about value and scrap becomes more In developed economies, such as
10% in 1960, it is actually down available, Emling says, especially Western Europe and the United
from a peak of just under 34% in the given that some Chinese producers States, there is a higher percentage
mid-1990s. seem to be setting themselves up for EAF steel production because mature
In the USA, however, Plummer future conversion to EAFs by economies have a much larger scrap
notes that while actual EAF output installing EAFs beside their integrated reservoir and more mature scrap
volumes have been fairly flat, the plants. He says that he believes it will collection, processing and
EAF share of total US steel be awhile at least 10 years before distribution capabilities, Hatchs
production has increased from 47% there is an acceleration of the EAF Lyon points out. Developing countries
in 2000 to 66.8% in 2016. This industry there. are likely to follow suit in future.
reflects in part the number of US Burin observes that the Chinese European EAF share of total steel
blast furnaces that have been closed government has launched a output stands at about 45%,
or temporarily idled. I see the US programme to reduce the number of although Danielis Burin notes that
EAF share continuing to increase, integrated steel plants, closing that share is expected to reach about
eventually reaching about 70% of obsolete plants and replacing them 60% by 2020. Charles Bradford,
the domestic market, Plummer says. with mills located outside the major president and analyst with Bradford
The dominance of integrated cities that have new, more Research, New York, notes that
steelmaking in China and India environmentally friendly while Europe has the necessary

March 2017 | Metal Bulletin Magazine | 53

International Copper
13-15 March 2017 | Steigenberger Grandhotel, Leipzig, Germany

Speakers include:
Roland Harings, CEO, Panos Lolos, Commercial Director, Halcor, Greece
MKM Mansfelder Kupfer und Messing, Germany
Alexander Dehnelt, Member of the Management Board,
Robert Morris, Vice President Marketing, Diehl Metall Stiftung & Co, Germany
Vale Base Metals, Canada
Leonardo Botti, Global Head of Product Management
Benedikt Zeumer, Partner, McKinsey & Co, Germany & Marketing, Power Conversion, Product Group Solar,
ABB, Italy
James Jian Wu, Managing Director & Head of Global
Metal Physical Trading, Mercuria (China) Metal Max Brandt, Head of Sales, Marketing and R&D,
Resources Co Ltd, China MKM Mansfelder Kupfer und Messing, Germany
Nicholas Snowdon, Metals Analyst, Global Research, William Berry, SVP and President SCR & International,
Standard Chartered Bank, UK Southwire, USA
Michael Widmer, Metals Strategist, Rudolf van Rooyen, Business Development Manager,
Bank of America Merrill Lynch, UK TMS International, South Africa
William Adams, Head of Research, FastMarkets, UK Monica di Cosimo, Co-founder and Partners,
Cu2 Consulting, Italy
Robin Bhar, Head of Metals Research,
Societe Generale Corp & Investment Banking, UK Stefan Eitel, Director of Metals & Mining,
KfW IPEX-Bank, Germany
Carlos Risopatron, Director of Economics and
Environment, International Copper Study Group,

Easy ways to register

+44 20 7779 7222

scrap availability, its EAF share is We are never satisfied. We are

being suppressed by very high constantly trying to reinvent how we
electricity costs. First Rivers Moss do things. That is a culture that is
says he believes that, pushed by tough, and uncomfortable, for many
strict environmental regulations, companies to duplicate.
European steelmakers are going to
have to increase their use of EAFs. Micro-mills too
Turkeys EAF industry has grown The concept behind micro-mills is to
through imports of scrap, while the meet, through a small-sized facility,
Middle East has a high percentage of the needs to produce a range of steel
DRI-fed EAF steelmaking. The products for a certain regional market.


EAF share of the Middle Easts By using certain technological
steelmaking is about 92%. advances, they have been able to do
this in a way that they did not need to
New capacity penalize their cost of production.
In the USA, EAF steelmakers already of its caster design, and hot strip mill Big River Steel is an It is more the high speed of the
have garnered a 66.8% market share capabilities to produce thicker gauge example of the latest casting unit than the EAF melting
and the percentage is set to climb material, but also being able to make developments in unit that makes the difference with
further. Two new greenfield EAF very thin gauge products. The mini-mill technology the micro-mill, Danielis Burin
steel mills are coming online. The plants RH degasser allows it to and business strategy points out. It is the way it casts and
new Big River Steel mill in Osceola, produce large quantities ultra-low how the casting line connects with
Arkansas, which is in ramp-up mode carbon steels. the rolling line that is beneficial.
after starting up in December, The EAF combined with the RH For CMC, Hatchs Lyons says the
recently reported that in January degasser makes us much more akin choice of building micro-mills is
its first full month of operation it to an integrated mill, Mark Bula, more an individual business decision
produced over 63,000 short tons of Big Rivers chief commercial officer, to fit the products that it sells, using a
hot rolled steel. It is also expected to says. Our capabilities, including the Back to the Future business case,
begin producing cold rolled and cleanliness of the steel, the carbon building a steel mill of the right size
galvanized steel by April this year. levels and the nitrogen levels, are all to meet specific local market
Irving, Texas, based Commercial closer to that of an integrated mill requirements in a region that could
Metals Co. (CMC) is building its than that of a traditional mini-mill, be economically met by a mill of a
second rebar micro-mill in Durant, he says, adding that this is something certain size. He adds that he does
Oklahoma, looking to duplicate the that has made some in the steel not believe that the concept of a
success of its first micro-mill in market believe that the company micro-mill is restricted to rebar or
Mesa, Arizona. The Durant could eat into what has been long-products.
micro-mill, which is expected to traditionally integrated steel Deloittes Sowar agrees, noting
come online this autumn, will not product capabilities. A greener that Nucors Castrip process, which
only be producing straight-length steelmaking process is important to involves the direct casting of molten
rebar, but will be the only US steel automakers and other OEMs in how steel into near final shape and
mill to make spooled rebar. they purchase steel, he explains. thickness without further hot- or
Big River has the ability to avoid cold-rolling, is also a micro-mill
Big River Steel using scrap altogether by using technology, allowing an entire mill
Big River is described as a flex mill. 100% virgin iron, although Bula says to be built in a sixth of the space of a
That, Emling says, could be a trend he is not sure it would actually do traditional mini-mill and at a tenth
that future mills will follow because that given the added expense. But of the cost of a traditional integrated
going forward steel mills need to be in some grades, such as high-end mill. Nucor currently operates two
more flexible because of global electrical steels or advanced Castrip plants in Crawfordsville,
economic trends. high-strength steels, we might use a Indiana, and Blytheville, Arkansas.
Emling observes that Big River much higher mix of scrap substitute I foresee further growth in in the
Steel is able to use the SIS sidewall products. Bula says that Big River is percentage of worldwide EAF
oxygen injection/burner system also the first generation of what will production, Emling says, going
that SMS has developed, which has eventually become known as a smart hand in hand with advances in raw
been shown to increase its chemical mill, with data collection that he says material charging practices,
energy efficiency while reducing is second to none. preheating and waste gas recovery,
operational cost by up to 70%, which While others, both in the USA and environmental control
should allow it to make steel faster and elsewhere, may use such processes and strategies.
than mini-mills with older technologies in future mills, Bula I believe the future is very bright
technology. He says that the says he is not sure that they will for EAF steel production both
company should also be able to replicate the companys domestically and elsewhere in the
make cleaner steels because of its entrepreneurial style as well, which world, with the only thing that could
raw material flexibility, that it can includes a push to deconstruct to slow its rate of growth being low iron
make wider product because of its reconstruct a difficult business ore or metallurgical coal prices,
ability to cast thicker slabs, because philosophy for many companies. Bell concludes.

March 2017 | Metal Bulletin Magazine | 55

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56 | Metal Bulletin Magazine | March 2017

Takraf acquires FMC Technologies Bank of China
Tenova Takraf, of Germany, has Australia. The business unit is
joins Bolero
acquired the assets of FMC
Technologies Material Handling
being integrated into Takrafs
USA business, located in Denver,
for export
Systems (FMC MHS) business Colorado, and will retain its office Bank of China (BoC) has
unit based in Lansdale, presence in Lansdale. become the first of the Big Four
Pennsylvania, USA. The move This acquisition brings with it banks in China to offer
sees Tenova Takraf strengthen its a number of advantages that we exporters the benefits of using
position as a global supplier of seek to leverage. We identified a the Bolero electronic trade
equipment and systems for open need to add to our equipment document platform. The
pit mining and bulk material portfolio and this opportunity electronic transfer service has
handling. enables us to realise our strategic been introduced in response to
FMC MHS offers expertise in goals to strengthen our requests from BoCs customers
engineering, procuring, and position in the lighter material for the use of Boleros
construction assistance of handling business and reinforce ePresentation solutions and
complete material handling our growth strategy, said Frank electronic documents, such as
systems for its customers. It also Hubrich, ceo of Takraf, FMC bills of lading and documentary
provides a line of proprietary MHSs product portfolio is credits.
equipment for rotary drying and complementary to Takrafs and BoC has also announced that
cooling of various materials. The now enables the company to it will offer its customers
company markets on a global provide a range of equipment Boleros Multi-Bank Trade
scale with installations catering also to smaller volumes Finance (MBTF) solution,
worldwide, including the USA, and integrated in-plant conveyor enabling corporates increased
Canada, Chile, China, India and solutions. visibility and control in relation
to applications for letters of
credit or bank guarantees. The
GE develops 3D printer financing MBTF solution is claimed to
reduce working capital
GE has announced that its GE ability to access strategic and requirements and minimise risk
Additive business will collaborate flexible financing solutions to while allowing for far greater
with GE Capital to sell and finance acquire 3D printing technology. price arbitrage than
metal additive machines. The Our dual expertise both in conventional methods. These

businesses state that the move will manufacturing and in equipment moves follow the success of
mean manufacturing companies finance, allows us to create BoCs 2013 adoption of the
will have more ways to access 3D competitive financial solutions By working together, Bolero platform for import-
printing technology. GE Capital is that support our customers GE Additive and related electronic presentation
developing a range of customised strategic business goals, said GE Capital aim to of documents.
financial solutions for its Trevor Schauenberg, president make 3D printing Ross Wilkinson, head of
customers. These solutions will and ceo of GE Capital Industrial technology available Global Accounts for Bolero,
allow GE Additive customers the Finance. to a wider market said: We are very excited to
have the first of the Big Four
banks in China offering Bolero
Decmil secures $90 million of Rio Tinto contracts ePresentation in support of
increased export activity
Decmil has been awarded outside China, given that this is
contracts valued at $90 million currently a very strong trend in
for mine infrastructure at Rio global business. The fact that
Tintos Nammuldi and more of Bank of Chinas
Silvergrass iron ore mines in overseas customers are
Pilbara and Amrun bauxite requesting our platform for
project in north Queensland, their export transactions is a
sure sign that we are at the heart

The Amrun bauxite of world trade. As more
project contract is for the Chinese banks expand their
construction of heavy mining covers the design, construction Rio Tintos Nammuldi involvement in global trade,
equipment workshops, refuelling and commissioning of new central mine in Bolero will be there to support
and wash stations, workshops facilities at the existing Pilbara is one of the them, bringing their customers
and welding bays, waste transfer Nammuldi central mine services sites covered by a gains in speed, ease-of-handling
stations and administration and also at the Silvergrass mine contract awarded to and security.
buildings. The additional work services area. Decmil

March 2017 | Metal Bulletin Magazine | 57

USAMP team develops Solidflex released
by thyssenkrupp
third-generation advanced Packaging Steel
high-strength steels
A team led by the United States MPa tensile strength and 19% tensile
Automotive Materials Partnership elongation, which exceeded the
(USAMP) is nearing completion of a strength target and was close to the
multi-year project to develop an ductility target for the DoEs

integrated computational materials exceptional-strength/high-ductility
engineering (ICME) model for steel.
third-generation advanced These results enabled the
high-strength steels (3GAHSS). development and calibration of a Thyssenkrupp Packaging Steel
When complete, the ICME model is functional ICME model for 3GAHSS, has developed Solidflex in
expected to aid the development of which integrates material and forming response to the specific needs
3GAHSS alloys for use in models. The project used DoE of the food and drink packaging
lightweighting automotive vehicle National Laboratories to produce, industry
components and assemblies. test and characterise the alloys. It also
By engaging experts with a wide developed 3D representative volume Stability and resilience are the
range of scientific and engineering elements of the microstructures and main requirements of packaging
backgrounds, the USAMP team has a newly developed 3GAHSS ICME steel. In addition to having good
successfully produced small-volume model for steel alloys. stackability and resistance to
heats (or sample casts) of two Now the project team is validating breakage, state-of-the-art
3GAHSS alloys with mechanical the 3GAHSS ICME model through packaging also requires high
properties close to those targeted by forming trials, working to improve degrees of formability and
the US Department of Energy (DoE). model accuracy, and preparing its precisely adjusted properties
The first of the alloys, a medium final report. The team expects the for example, to make opening
manganese 3GAHSS alloy, achieved delivered models to aid the steel the can easier for the end user.
1,200 MPa ultimate tensile strength industry in developing 3GAHSS At the same time, the material
and 37% tensile elongation, alloys that could be used in needs to be used as efficiently
exceeding DoE targets for a manufacturing lightweight steel as possible. To meet these
high-strength/exceptional-ductility components to meet automotive demands thyssenkrupp
steel. The second 3GAHSS alloy, a mass savings, performance and safety Packaging Steel has created
3% manganese steel, achieved 1,538 requirements. Solidflex.
Solidflex is the latest example
of our constant search for
Spectroport portable arc/spark OES metals analyser advantages for our customers. In
further processing, Solidflex also
Spectro Analytical Instruments has For data management with the increases process reliability and
introduced its new Spectroport Spectroport, advanced tools verify, product quality. The greater
portable arc/spark optical emission record and document complete material efficiency also helps
spectrometry (OES) metals testing results and the data can be reduce costs and thus provides
analyser, which is claimed to deliver delivered to a wide variety of our customers with a
advanced OES technology in a unit devices via WebApp and PC competitive advantage, said

that is as easy to use as a handheld connections from WLAN/LAN to Peter Biele, ceo of thyssenkrupp
analyser. USB. The Spark Analyzer Pro Packaging Steel.
The company states that the software enables users to quickly By increasing the hardness,
Spectroport delivers many of the and easily define different testing we can make available a
advantages of its flagship mobile modes, sample identification fields, packaging steel [Solidflex] that
Spectrotest OES analyser in a and more. Preset applets perform has a tensile strength of 700 MPa
smaller, lighter unit featuring much of the work and eliminate Spectro Analytical instead of the previous 580 and
point-and-shoot performance. most errors, while simplified, Instruments new this with not just an equivalent,
The Spectroport accurately predefined operator views are said Spectroport metals but rather with an extended
analyses elements such as carbon, to exclude unnecessary selections. analyser is smaller elongation of between 5 and
sulphur, phosphorus and boron Users are, instead, presented with and lighter than the 10%, said Burkhard Kaup,
with its new optical system, clear choices for tasks such as pass/ companys flagship manager of Material Technology
covering a wide range of elemental fail sorting and grade identification, Spectrotest OES at thyssenkrupp Packaging Steel.
wavelengths. via dedicated toolbar buttons. analyser

58 | Metal Bulletin Magazine | March 2017

End user
koda inaugurates new press line Barnshaws shapes
koda has opened its new PXL II
tubes for viaduct
servo press line for aluminium body Polands planned S5 Expressway
parts at its main plant in Mlad viaduct has been designed to
Boleslav in the Czech Republic. offer a direct route across Poland
Construction work on the 11,600 from north to south around
square metre facility began in 2015, Wroclaw, the countrys fourth-
with an investment of 86.4 million largest city.
($91.67 million). The projects lead contractor,
The new press line is an Mostostal Kielce, tasked
important investment in the growth Barnshaws Polska with
of koda and the future of Mlad supplying 17 precision-curved
Boleslav plant, said Michael steel tubes to enable its
Oeljeklaus, koda board member for construction. Mostostal Kielce
Production and Logistics. The press requested the 813 mm diameter

is one of the most modern of its kind tubes, in varying wall thicknesses
in central Europe. In addition to its of 70 mm and 50 mm, be bent to
exemplary energy efficiency, thanks directly in the press lines 14 Future models of a 200 m radius. The difficulty of
to decentralised servomotors, it also servomotors. The conversion energy cars made in kodas bending such large-diameter
enables a particularly flexible from the PXL II press line can be Mlad Boleslav plant tubes led Barnshaws Polska to
production process. flexibly adjusted and regulated as will be built with enlist the help of the companys
Conventional mechanical press required. In addition, the energy aluminium body UK Coseley plant to service the
drives use the energy accumulated in released during pressing can be parts produced on its order. Barnshaws UK, which can
a flywheel, but the new PXL II press partially recovered. Compared with new PXL II press line deliver curved sections up to
line is based on innovative servo conventional systems, the new press 35 m in length with the capacity
technology. The energy needed to line is said to consume up to 15% less to bend tubes and pipes up to
produce the press parts is generated energy in continuous operation. 1,524 mm outside diameter, was
able to shape the tubes
accordingly for delivery to
Fairphone focuses on material supply Mostostal Kielce.

Social enterprise smartphone materials (tin, tantalum, tungsten,

manufacturer Fairphone is using its gold, cobalt, copper, gallium, indium,
development of new generations of nickel and rare earth metals) to focus
handsets to look even more closely at on. The phone maker believes these
the material supply chains providing metals currently offer it the most
components for its phones. The potential for successful interventions.
company was founded with the aim It has already set up traceable supply
of opening up the consumer electronics chains for tin, tantalum, tungsten and
supply chain, gaining a better gold four recognised conflict
understanding of how it works and minerals.
taking action to make improvements. Fairphone states: Transparent
Development of the Fairphone 2 sourcing from conflict regions
has seen the company work with doesnt address a wider range of
ethical advisory firm The Dragonfly human rights and environment
Initiative to assess 38 different concerns. Therefore, the plan for the
materials found in smartphones. A company is to now focus on further
range of criteria were used for the improving the four existing supply
evaluation from consumption by chains while evaluating the
the electronics industry, criticality for possibilities for making a positive
smartphone functionality and impact in the other six of the 10
current recycling rates, to mining- metals identified. BARNSHAWS

related social and environmental To create greater momentum to Barnshaws Polska used the
issues to determine which tackle the issues related to these large-diameter-capacity
materials supply chains are materials, Fairphone is currently of Barnshaws UK to bend
associated with the most significant pursuing opportunities to collaborate the 813 mm diameter tubes
issues and which offer the greatest with participants spanning the needed by Mostostal Kielce
opportunities for improvement. electronics industry, including major for the construction of the S5
Dragonflys results helped brands, suppliers and non-profit Expressway viaduct
Fairphone create a shortlist of 10 organisations.

March 2017 | Metal Bulletin Magazine | 59

Events For full details of Metal Bulletin Events

AMM & MBR 10th Steel Tube & Pipe 5th World DRI & Pellets Congress AMM & WSD Steel Survival
Conference 26 - 27 April 2017 Strategies XXXII
8 - 9 March 2017 Dubai, United Arab Emirates 26 - 28 June 2017
Houston, USA Focused on the role of DRI in New York, USA
Covering the North American steel tube steelmaking, tracking the markets In partnership with World Steel
and pipe industry, this year the from raw materials to finished Dynamics, this event brings together
conference will include an updated products and bringing cutting edge executives from over 700 companies for
format for the pipe distributors panel. technology updates, this event offers a in-depth debate and valuable SHUTTERSTOCK balance between commercial outlook networking opportunities.
and technical developments.
30th International Copper Conference
13 - 15 March 2017 16th International Stainless and
Leipzig, Germany Miami, Florida 21st Zinc & its Markets Seminar Special Steels Conference
The first international gathering in the 15 - 17 May 2017 5 - 7 September 2017
2017 copper industry calendar, this Krakow, Poland Ljubljana, Slovenia
conference gives the entire supply An established international With three days of expert content and
chain an opportunity to meet and conference for zinc executives from the two field trips for both flat and long
discuss industry strength and entire value chain, this years seminar products planned for 2017, this
direction. will include optional visits to two of conference continues to be a prime Polands major zinc plants ZGH event for all those involved in the
Boleslaw or Huta Cynku Miasteczko stainless and special steel markets.
23rd Bauxite & Alumina Conference Slaskie.
14 - 16 March 2017
Miami, USA North American Ferro-alloys

This event is the only one of its kind to 23rd International Iron Ore Symposium Conference
cover both metallurgical and 6 7 June 2017 7 - 8 September 2017
non-metallurgical markets. New Sofia, Bulgaria Prague, Czech Republic USA
regions, growing markets, key trading As the biggest European gathering of In 2016, more than 150 delegates from
and pricing concerns, and issues to international iron ore professionals, 114 companies across the industry
watch out for will be covered by this conference will be an essential spectrum, including 35 raw material
panels, presentations and extensive meeting place for the iron ore industry buyers from major steel producers in
Q&A discussions. in 2017. the region, attended the inaugural event dedicated to the North American
ferro-alloys industry.
18th Asian Ferroalloys Conference 12th Asian Stainless Steel Conference
22 - 23 March 2017 14 15 June 2017
Kowloon, Hong Kong Hong Kong Automotive Supply Chain Conference
Topics will include protectionism, A key event focused on market 20 - 21 September 2017
pricing, supply and demand, and the fundamentals and end user applications, USA
outlook for carbon and stainless steels. attracting major companies in the With more than 85 companies in region. attendance, including OEMs and manufacturers of steel, aluminium
9th World Lead Conference and various composite materials, this
29 - 30 March 2017 6th Copper Recycling Conference is the best opportunity to network with
Krakow, Poland 15 16 June 2017 the entire automotive supply chain
Over 100 industry professionals will Sofia, Bulgaria from across North America and Mexico.
gather to discuss the challenges and This event provides a unique High on the agenda will be the latest
opportunities for the lead market, opportunity for networking within the developments and challenges in
including how lead batteries can copper recycling industry, providing automotive lightweighting and OEM
increase effectiveness to compete business growth potentials and user preferences in automotive
against other systems. valuable access to new clients. In 2016, markets. 47 companies attended to discuss the
copper and electronic scrap generating,
5th International Nickel Conference processing and consuming industry.
24 - 25 April 2017
Lisbon, Portugal
The conference will be in the home city
of the International Nickel Study Group
(INSG) in 2017. The INSG is an
organisation with members
comprising producers, users and
traders of nickel from many countries.

60 | Metal Bulletin Magazine | March 2017

Monthlyprices For the latest prices see

January 2017 January

January averages
Low High
Low High average
European free market $ $ $
Low High
min 99.9% in-warehouse, $/troy oz 781.14 881.18 Lead ($)
Cash 2,006.75 2,389.50 2,236.25
Aluminium P1020A, in-warehouse premium Selenium
3 months 2,021.00 2,387.50 2,236.13
Rotterdam duty unpaid spot $/tonne 73.14 83.82 MB free market
Settlement 2,007.00 2,390.00 2,236.69
Aluminium P1020A, in-warehouse premium min 99.5% in-warehouse, $/lb 12.75 14.75
3 months seller 2,022.00 2,388.00 2,237.12
Rotterdam duty paid spot $/tonne 125.56 137.78 Silicon
Lead ()
Alumina MB free market, /tonne 1,847.50 1,912.50
Settlement 1,635.70 1,924.01 1,813.70
Index fob Australia 342.30 Silver
3 months seller 1,644.30 1,920.28 1,810.24
Antimony London
Zinc ($)
MB free market spot pence/troy oz 1,363.43
Cash 2,529.50 2,847.75 2,712.68
Regulus 99.65%, max Se 50ppm, spot cents/troy oz 1,680.76
$/tonne in-warehouse, 7,443.75 7,703.13 3 months 2,554.50 2,849.75 2,727.25
Handy & Harman, cents/troy oz 1,690.20
MMTA standard grade II, $/tonne 7,381.25 7,631.25 Settlement 2,530.00 2,848.00 2,713.00
Tin 3 months seller 2,555.00 2,850.00 2,727.74
Bismuth European free market
MB free market Aluminium ($)
Spot premium 99.9%, $/tonne 324.00 407.00
min. 99.99%, $/lb Cash 1,700.50 1,869.50 1,790.37
Spot premium 99.85%, $/tonne 292.00 332.00
tonne lots, in-warehouse 4.57 4.88 3 months 1,688.25 1,867.25 1,786.02
Kuala Lumpur (ex-smelter), $/tonne 20,753.25
Cadmium Settlement 1,701.00 1,870.00 1,790.79
Titanium 3 months seller 1,688.50 1,867.50 1,786.38
MB free market
min 99.95%, in-warehouse, cents/lb 65.00 70.00 Aluminium alloy ($)
70% (max 4.5% Al), d/d Europe, $/kg 3.25 3.61
min 99.99%, in-warehouse, cents/lb 68.00 76.75 Cash 1,540.00 1,605.00 1,578.10
Tungsten 3 months 1,560.00 1,620.00 1,594.05
European free market APT, $/mtu 190.75 199.13 Settlement 1,545.00 1,610.00 1,583.10
MB free market
High grade, in-warehouse, $/lb 15.59 16.39 3 months seller 1,565.00 1,625.00 1,599.05
Low grade, in-warehouse, $/lb 15.30 16.10 Aluminium Nickel ($)
Copper LM24, /tonne 1,452.50 1,508.75 Cash 9,377.50 10,445.00 9,980.71
US High-grade cathode premium LM6/LM25 /tonne 1,660.00 1,715.00 3 months 9,425.00 10,477.50 10,032.50
indicator Aluminium Europe, /tonne 1,635.00 1,712.50 Settlement 9,380.00 10,450.00 9,984.29
$/tonne 110.23 118.50 3 months seller 9,430.00 10,480.00 10,039.76
Phosphor bronze
Germanium Dioxide PB1 ex-works, /tonne 6,800.00 Nasaa ($)
MB free market min 99.99%, $/kg 640.00 740.00 Cash 1,715.50 1,782.50 1,748.12
Zinc alloy
Rotterdam $/kg 870.00 970.00 3 months 1,735.00 1,805.00 1,767.74
10 tonne lots ZL3 /tonne 2,669.00
Gold Settlement 1,716.00 1,785.00 1,752.19
London $/troy oz Morning 1,192.65 LONDON METAL EXCHANGE 3 months seller 1,740.00 1,810.00 1,772.62
$/troy oz Afternoon 1,192.62 High, low and average January (21 days) Cobalt ($)
/troy oz Morning 967.60 LME averages are mean of buyers and sellers except for Cash 32,750.00 37,000.00 34,738.10
/troy oz Afternoon 966.79 settlement and 3 months sellers. 3 months 32,750.00 37,000.00 34,723.81
$/troy oz Handy & Harman 1,192.10 January 2017 January Settlement 33,000.00 37,250.00 34,961.90
Indium Low High average 3 months seller 33,000.00 37,250.00 34,973.81
MB free market $ $ $ Molybdenum ($)
ingots, min 99.97%, Copper grade A ($) Cash 15,000.00 15,000.00 15,000.00
in-warehouse, $/kg 190.00 230.00 Cash 5,500.25 5,920.75 5,736.99 3 months 15,000.00 15,000.00 15,000.00
Magnesium 3 months 5,517.00 5,929.50 5,758.42 Settlement 15,250.00 15,250.00 15,250.00
MB free market Settlement 5,500.50 5,921.00 5,737.43 3 months seller 15,250.00 15,250.00 15,250.00
min 99.8%, $/tonne 2,150.00 2,300.00 3 months seller 5,518.00 5,930.00 5,759.21 Steel billet ($)
China free market min 99.8% 2,067.50 2,115.00 Copper grade A () Cash 312.50 312.50 312.50
Mercury Settlement 4,477.78 4,954.94 4,658.32 3 months 312.50 312.50 312.50
MB free market 3 months seller 4,482.17 4,867.27 4,661.14 Settlement 325.00 325.00 325.00
min 99.99%, in-warehouse, $/flask 1,050.00 1,275.00 Tin ($) 3 months seller 325.00 325.00 325.00
Molybdenum Cash 19,697.50 21,295.00 20,741.31 LME Settlement Conversion Rates
Free market in-warehouse 3 months 19,722.50 21,212.50 20,705.12 $/ 1.23
Europe drummed molybdic Settlement 19,700.00 21,300.00 20,749.76 $/yen 114.99
oxide $/lb Mo 7.22 7.36 3 months seller 19,725.00 21,225.00 20,718.33 $/ 1.06
US canned molybdic oxide $/lb Mo 7.19 7.43
Free market in-warehouse premium Disclaimer
This Disclaimer is in addition to our Terms and Conditions as available on our website and shall not supersede or otherwise affect these Terms and Conditions. Prices and other
Uncut cathodes 74.00 104.00
information contained in this publication have been obtained by us from various sources believed to be reliable. This information has not been independently verified by us.
4x4 cathodes 196.00 236.00 Those prices and price indices that are evaluated or calculated by us represent an approximate evaluation of current levels based upon dealings (if any) that may have been
Briquettes 112.00 177.00 disclosed prior to publication to us. Such prices are collated through regular contact with producers, traders, dealers, brokers and purchasers although not all market segments
may be contacted prior to the evaluation, calculation, or publication of any specific price or index. Actual transaction prices will reflect quantities, grades and qualities, credit
terms, and many other parameters. The prices are in no sense comparable to the quoted prices of commodities in which a formal futures market exists.
Melting $/lb 0.17 0.24
Evaluations or calculations of prices and price indices by us are based upon certain market assumptions and evaluation methodologies, and may not conform to prices or
Palladium information available from third parties. There may be errors or defects in such assumptions or methodologies that cause resultant evaluations to be inappropriate for use. Your
Morning $/troy oz 746.38 use or reliance on any prices or other information published by us is at your sole risk. Neither we nor any of our providers of information make any representations or warran-
ties, express or implied as to the accuracy, completeness or reliability of any advice, opinion, statement or other information forming any part of the published information or
Afternoon $/troy oz 748.38
its fitness or suitability for a particular purpose or use. Neither we, nor any of our officers, employees or representatives shall be liable to any person for any losses or damages
Platinum: per troy oz incurred, suffered or arising as a result of use or reliance on the prices or other information contained in this publication, howsoever arising, including but not limited to any
Morning $/troy oz 970.90 direct, indirect, consequential, punitive, incidental, special or similar damage, losses or expenses.
Afternoon $/troy oz 971.76 We are not an investment adviser, a financial adviser or a securities broker. The information published has been prepared solely for informational and educational purposes
and is not intended for trading purposes or to address your particular requirements. The information provided is not an offer to buy or sell or a solicitation of an offer to buy or
sell any security, commodity, financial product, instrument or other investment or to participate in any particular trading strategy. Such information is intended to be available
for your general information and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions. Your investment
actions should be solely based upon your own decisions and research and appropriate independent advice should be obtained from a suitably qualified independent adviser
before any such decision is made.

March 2017 | Metal Bulletin Magazine | 61

Jim Lennon, managing director, Red Door Research Limited ponders the USAs global impact in metals

Can Trump make US metals and steel great again?

The election of Donald Trump as US US and China share of global consumption Consumption of steel per capita
president has coincided with considerable 60% 700

positive momentum in equity and 50% 600

Crude steel: kg/person

% share of world
commodity markets in recent months. This 40% 500

has been due partly to positive expectations 30% 400

surrounding US domestic economic growth. 20%


The main factors driving this include 10%


expected US tax cuts, a rise in infrastructure 0%













spending and the return of manufacturing 0














Copper - USA Steel - USA Aluminium - China
activity by US companies from overseas Aluminium - USA Copper - China Steel - China China USA
back to the USA. Source: WBMS Source: worldsteel

The USA is the worlds largest economy

by a significant margin, accounting for 24% and over-state the China impact globally. by US companies). Any change in US trade
of global GDP (in nominal terms) compared China exports goods containing metals and policy (such as renegotiating NAFTA or
with the 15% share occupied by the worlds steel, while the USA and other developed applying import tariffs) that leads to
second largest economy, China. Make no economies import metal-containing goods. industries relocating back to the USA would,
mistake, changes in US economic policy still Estimates from the World Steel Association of course, boost US consumption. However,
have a global economic impact and that is and base metals researchers suggest that by it would also mostly be a zero-sum game as
why the worlds policy-makers are watching including indirect trade (metal content of far as total global consumption is concerned.
the Trump Administration closely. total imports and exports) , true Where gains in US consumption could
From an economic perspective it still consumption in the USA is 15-20% higher add to total usage is a major boost to
remains clear that when the US sneezes, the than reported, while Chinese true investment in infrastructure. This would
rest of the world catches a cold. However, consumption is 10-15% lower. However, have a strong US demand kicker, especially
Chinas emergence as a major economic even after allowing for this adjustment for as the Trump Administration is insisting on a
super-power, driven mainly by domestic the USA, its world share only rises by buy US steel policy for major projects.
economic policies, has reduced the absolute 1.0-1.5%, not enough to really alter the This is probably the area where there is
impact of changes in US growth on global conclusion that the US does not really some potential for stronger demand growth,
growth. matter for metals. particularly in steel. However, early in the
The data for the US metals industry The main reason for the long-run US Obama Administration, a similar plan to
reveal a very different picture than that of decline is well-known and is due to the significantly boost infrastructure spending
GDP of the USAs global impact. In 2016, changing structure of an economy as GDP fizzled out due to political opposition and
the US share of global steel and metals use per capita rises with growth moving from an major delays due to planning and
was between 6% and 9%, compared with economy dominated by infrastructure and environmental bottlenecks. The Trump
Chinas share of 45-50% (see chart). The US construction to one driven by consumption Administration is promising to greatly
share has always been highest in aluminium and services. This is particularly marked in simplify the approval process to fast-track
(due to a large aerospace industry and steel, where US per capita consumption new investment, but the jury is still out on
greater use of aluminium in the auto peaked in the early 1970s (at a higher level how successful this will be.
industry than elsewhere). It is significantly than Chinas recent peak!) and is now less So the answer to the question as to
lower in steel. than half that peak. whether Trump can make US metals and
As our charts show, the US share in global For base metals, such as copper and steel great again is a definite no since the
demand has been on its way down for a long aluminium, the declines in per capita glory days when the US dominated world
time. From a global perspective, the USA consumption started later than in steel, from consumption are long gone. Can the
was the dominant consumer up until the the late-1990s. This was due to the offsetting seemingly inexorable decline in the US share
mid-1980s and changes in the USA affected impact of new applications in copper and in global demand be arrested and even turn
global price determination. Over the past aluminium and also the greater proportional around? The answer is probably yes, but
15-20 years, the US impact on global use of metals in consumption-related partly at the expense of consumption in the
demand has been negligible and price applications than steel. Copper demand in rest of the world.
determination has been mostly driven by the USA took over in the 1990s due to a One thing that is already unusual about
China. The big exception, of course, was the boom in high-tech investment, but this the first year of the Trump presidency is that
US housing market collapse in the collapsed in the early-2000s. The 2000s also it almost uniquely appears to be a year of
late-2000s, which then triggered the global saw a collapse in US auto production as auto rising metals demand a good start.
financial crisis and a collapse in metals imports rose sharply. Almost every previous president has
demand and prices. The USA still matters in There is no question that US consumption presided over a slowdown in his first year of
macroeconomics, but it does not so much in of metals has fallen in part due to the office, in part as the monetary authorities
metals. relocation of manufacturing activity to other have had to offset the impact of
It does need to be noted that the reported countries (including to Mexico and China, in expansionary policies of the previous
metals usage numbers understate the US many cases to manufacturing units owned Administration in the year of the election.

62 | Metal Bulletin Magazine | March 2017

Iron & Steel Works
of the World
Directory 2017
The brand new edition of the
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ore miners

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Data compiled by:
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