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Emilio Giacomazzi, sales director at Cogne Acciai Speciali in Italy, said the European stainless market should rebound this year to close to pre-COVID levels, from 1.05 million tonnes of finished long products in 2021 to around 1.2 million tonnes.
With a stainless steel production capacity of over 200,000 tonnes/year in northern Italy, CAS is one of Europe’s leading manufacturers of stainless steel and nickel alloy long products, providing melting, casting, rolling, forging and machining services.The company sold 180,000 tonnes of stainless long products in 2021.
“In the wake of the COVID-19 pandemic, we have recorded a surge in demand for stainless steel [although] the market has been at a standstill since May due to high inventories and seasonal factors, but overall demand is good,” Giacomazzi told S&P June 23 Global Commodities Insights.
“Raw material prices have risen, but like most of our competitors, we have managed to shift costs into our final products,” he added, noting that the company’s long-term contract flexibility also partly covers high energy and nickel prices.
The three-month nickel contract on the London Metal Exchange hit a high of $48,078/t on March 7 following Russia’s invasion of Ukraine, but has since retreated to $24,449/t on June 22, down 15.7 percent since early 2022 % although still well above the average of $19,406.38/t in the second half of 2021.
“We have very good order book volumes through the first quarter of 2023 and we see demand continuing to be driven by the automotive industry, even with new engine regulations, but also from the aerospace, oil and gas, medical and food industries,” Giacomazzi said.
In late May, CAS’s board agreed to sell 70 percent of the company’s shares to Taiwan-listed industrial group Walsin Lihwa Corporation.The deal, which still needs approval from antitrust authorities, will make it the world’s third-largest producer of stainless long products with a production capacity of 700,000-800,000 t/y.
Giacomazzi said the deal is expected to close this year and the two companies are currently finalizing documents to be presented to the Italian government.
Giacomazzi also said that the company plans to invest 110 million euros in expanding production capacity by at least 50,000 tons per year and environmental upgrades during 2022-2024, with additional products likely to be exported to Asian markets.
“Demand in China has slowed, but we expect demand to pick up as COVID lockdowns ease, so we expect some of the new production to go to Asia,” Giacomazzi said.
“We are also very bullish on the U.S. market, especially aerospace and the CPI [chemical and process industries], and we have ambitions to further expand our business in North America,” he said.
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Post time: Jul-19-2022