History of the Commercial Metals Company, USA

We have added a page on the history of CMC to our website knowledge base. See <a href="https://www.steelonthenet.com/kb/history-cmc.html">History of Commercial Metals Company</a>.<br>

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Chinese and other threats to European Rebar Producers

The following extract is from an ISSB discussion about future threats to European producers of steel rebar.

Deformed Rebar is a very important product for certain European long product producers. After Turkey and Ukraine, the other countries in the top five exporters list are the Southern European nations of Italy, Spain and Portugal. It may come as a surprise to learn that Algeria is the most important export market for each of these countries with Italy alone shipping around 1.2 million tonnes of rebar to the country each year. This important market accounts for about 76% of all tonnage exported from Italy and about two thirds of exports from Spain.

Southern European producers enjoy a fairly unique situation in Algeria as a 2005 agreement between Algeria and the EU permits free trade between the two regions and Algeria imposes an import duty on shipments from the dominant player in the market, Turkey. Despite this, however, there are indications that this beneficial situation may not carry on indefinitely.

In a situation familiar in other parts of the world, Chinese rebar producers have identified an opportunity in Algeria and Chinese exports of all HR bars to the country have increased from 131 tonnes in 2013 to 345,000 tonnes in 2015 and a further increase so far in 2016. This already seems to have had the effect of displacing Spanish and Portuguese tonnage as exports from Spain have fallen by 440,000 tonnes in the same period whilst shipments from Portugal were down 141,000 tonnes. The Italian producers seem to be more aggressive in defending their market share, however, with more modest declines.

The long-term threat may not actually be coming from China, however, as in the face of falling tax revenues from the collapse in the oil price, the Algerian government is looking to diversify its industry away from the oil and gas sector. In order to facilitate this, they are looking to invest in steel projects and are mandating that government sector end users prioritise locally produced products over imports. In addition, the government has imposed a two million tonne limit on rebar imports this year and has revoked some import licenses.

On the supply side, Tosyali Algerie has a 500,000 tonne a year rebar mill which started production in 2013 and has initiated an expansion to nearly double its steelmaking capacity, although a timeline for the project has not yet been announced. The old Arcelor Mittal plant, which passed into the government's hands in October has a 400,000 tonne per year rebar mill and it is looking to add another long products mill with a capacity of one million tonnes by 2017. Finally, a joint venture between the state owned steel company and Qatar Steel has been initiated which is expected to have a 750,000 tonne per year rebar mill up and running by the end of 2017.

So far this year Italian exports have increased by 6% and Portuguese exports grew by 21%, offset by a 34% decline in Spanish shipments but how long can European producers hang on to this vital market given the two-pronged assault from Chinese producers and the measures taking place to grow the rebar industry within Algeria itself? Given that combined, these three countries supply well over two million tonnes a year to Algeria, the loss of this market would likely have profound consequences for the rebar industry in Europe.

For further information on steel-related statistics and data, visit http://www.issb.co.uk

Rebar cost model

We have posted another cost model on the website. This is a January 2011 model of conversion costs from billet to rebar, based on scrap and billet costs today. To better understand cost structure for producing reinforcing bar, click steel rebar cost model.

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Steel price history - free graphs

Our website http://www.steelonthenet.com now shows several steel price charts online. To see the recent prices for ferrous scrap, pig iron, billet, slab, hot rolled coil or rebar, just visit http://www.steelonthenet.com/pricing_history.php.

All charts are shown with the compliments of international steel industry consultants MCI.

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Rebar steel futures contract

In a similar move to those planned by some of its international rivals, the Dubai Gold and Commodities Exchange (DGCX) launches its own rebar futures contract on October 29. Each contract is to be for 10 tonnes of reinforcing bar. Three delivery months are to be offered at launch: initially December 2007, January 2008 and February 2008. Additional delivery months and a weekly delivery cycle are to be added as market liquidity grows.

The reinforcing steel bar contract is the first of four contracts targeted at the steel supply chain that the DGCX plans to issue. The others are for stainless steel, for flat products and for freight.

The New York Mercantile Exchange is expected to launch its steel futures contract later this year. The LME aims to start trading its steel futures contracts in April.

For full report on the DGCX rebar contract, see http://www.arabianbusiness.com/498917-dgcx-launching-steel-futures-next-month

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Steel price forecast - European long products

Falling international scrap prices are expected to lead to a decline in transaction prices for EU long products in the coming months according to an assessment just published by MEPS.

Coupled with a slowdown in construction over the winter months, this trend is likely to lead to a sharp decline in rebar prices in Europe as the end of the year arrives. A price correction can then be expected in the beginning of 2008.

For original MEPS report, see http://www.meps.co.uk/medium-carbon-steel-price-forecast-eu6-07.htm.

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