Global Slag News

South Africa: Evraz Highveld Steel and Vanadium has temporarily ceased steel production at its steelworks, citing working capital constraints and reduced domestic demand mainly owing to a 'significant' increase in steel imports from China.

Evraz said in a statement that it was currently communicating with its employees and it intends to resume production once adequate funding has been secured and steel trading conditions have improved to ensure the company's sustained future financial viability.

The decision to halt production at the company's iron-making division was brought about by delayed debtors payments, inadequate cash to procure the required raw materials to continue with manufacturing operations, difficulties experienced with access to funding and a continued inability to pay major creditors on time. The company added that the feeding of raw materials into the iron-making kilns had been halted to enable the furnaces to be safely drained and switched out, ready for a future start-up.

"The steel plant will be stopped and made safe once all the hot metal has been processed. The two mills will continue operating until all the available stocks have been rolled into saleable products, whereafter these operations will also be safely stopped. The plant and equipment will, for the moment, be placed on care and maintenance and prepared for future start up," said Evraz in a statement.

South Africa's largest steel producer ArcelorMittal South Africa (AMSA) had also recently spoken out about the difficult conditions facing local steel producers. AMSA CEO Paul O'Flaherty recently confirmed that the industry was seeking greater protection from steel imports through the implementation of a 10% ad valorem duty on such imports. Further, the sector had also called for regulations stipulating that locally-produced steel be used in public infrastructure projects.

South Africa: Steel maker Evraz Highveld Steel and Vanadium has reported a 21% drop in steel production for the second quarter of 2015, which ended on 30 June 2015, due to weak domestic demand and a surge of cheap Chinese imports, according to Business Day.

Evraz, which is currently in business rescue, said that hot steel production declined to 119,027t in the second quarter of 2015 from 150,510t in the first quarter of 2015. Hot steel output was 38% lower year-on-year. Vanadium slag output fell by 18% in the second quarter to 1.47Mt, mainly due to lower demand and excess supply.

"The domestic market remains under pressure as a result of poor demand further exacerbated by a surge of low price imports from China," said Evraz. During the first quarter of 2015, which ended on 31 March 2015, 488,000t of steel was imported, amounting to almost half of what was imported during all of 2014.

India: According to Reuters, KHD Humboldt Wedag International AG has signed a US$60.2m contract for equipment and services for eight slag grinding units in India.

India: According to local media, Sunvik Steels plans to expand its integrated steel plant in Jodidevarahalli, Tumakuru, Karnataka. The estimated cost of the project is US$86.8m.

The existing plant has three 100t/day direct reduced iron (DRI) kilns, a 12t/hr induction furnace based steel melting shop, a 100t/day roller mill, a 10MW captive power plant, a 2000bricks/day fly-ash brick plant and one 15t/day slag crusher and beneficiation plant. The proposed expansion will see the plant consist of one 200t/day DRI kiln, a 500t/day induction furnace based steel melting shop, a 500t/day roller mill, 5MW and 10MW captive power plants, a 300t/day blast furnace, two 100t/day tunnel kilns, a 2000t/day iron ore pelletisation and beneficiation, a 6000bricks/day fly-ash brick plant, a 100t/day fly-ash beneficiation plant and a 30t/day slag crusher and beneficiation plant. The project is waiting for environmental clearance.

South Africa: According to Business Day Live, the resources of South Africa's Evraz Highveld Steel & Vanadium, which produces steel and slag, 'are almost depleted,' citing one of the group's business rescue practitioners (BRPs). This means possible liquidation, despite the government having said that it would 'do everything in its power' to ensure that the company remained operational.

The BRPs have until the middle of July 2015 to find a strategic investor to rescue it before Industrial Development Corporation (IDC) emergency funding of up to US$20.3m runs out. "Current trading conditions are extremely difficult. With conditions the way they are, it is going to be tough to rescue the company. Working capital is the number one priority," said BRP Piers Marsden of Matuson Associates. "Fundamentally, market conditions have worsened during the business rescue." He added that there were likely to be continuing operational losses at Evraz Highveld.

Marsden said that the BRPs had drawn US$4.06m of the US$20.3m pledged by the IDC. Seven potential bidders have been lined up, including four multinational groups and three potential black economic empowerment entities. Marsden said that the costs of proceeding to preferred bidder status would be US$10m, for an entity whose estimated US$2.44bn replacement cost has now been written down to only US$122m. The practitioners have not yet issued any retrenchment notices at the company. "We are engaging with unions to try and find solutions," said Marsden.