If only……

Singapore’s Sail Group, which already owns South Africa’s Chrometco and the Black Chrome mine, is throwing around a possible investment of $5-billion in South Africa’s chrome industry, including hints of a new charge chrome smelter and a major mining expansion program. The only thing holding it back –really the ONLY thing—according to William Yang, CEO of Sail, is South Africa’s Dept. of Mineral Resources.

I suppose he forgot about corruption, Eskom, Transnet and a host of other red flags.

Sinosteel eyes Zvishavane as second site for FeCr smelter in Zimbabwe

In addition to upgrading Zimasco’s ferrochrome smelter at Kwekwe, Sinosteel also plans to build a new ferrochrome smelter in Zvishavane.

Jefferies: EU Steel Imports: Resumption of Import Growth

Key Takeaway
Finished steel imports of both carbon and stainless increased in March, following lower readings in February. While carbon was up just 2% YoY, stainless increased a more worrying +37% YoY. With EU carbon steel prices holding onto Q1 gains, imports remaining uncompetitive and safeguard measures to be possibly announced in the next 4 weeks, we remain positive on Euro steelmakers MT, SSAB, TKA, VOE, and X (US) and reiterate a preference for carbon over stainless.
Carbon Steel Imports Increase Following Soft February Reading. EU imports of finished carbon steel in March increased +8% on a daily-basis. Facing a difficult comp, finished imports were up just +2% YoY, leading to a deceleration of the YTD increase (+9% vs +12% through February). Import pressure by product was broad-based with MoM increases seen in HRC (+21%), CRC (+11%), plate (+7%), coated (+5%) and rebar (+4%). A subdued MoM increase in rebar masks the trend of substantial YoY increases (+173% YoY and +126% YTD). Imports of semi-finished steel notably declined by 16% MoM and 5% YoY, leaving total carbon imports just +1% MoM and flat YoY though still +10% YTD. Once again, we highlight a disparate trend seen in the EU vs US where Russian and Turkish imports were +135% and +76% in Q1 in Europe and -10% and -59% into the US in the same period. China continues to play a decreasingly important role in EU imports with the Q1 average of 201kt per month down 78% from its peak in October 2015.
Stainless Imports Reach New Monthly Record. Imports of finished stainless into Europe in March climbed +18% MoM (daily-basis) to 170kt, a monthly record (data available on a monthly basis from 2012 onwards). This +35% YoY reading drove the YTD reading higher to +11%. This data corroborates recent commentary from domestic steelmakers (most notably OUT1V) that a surge in stainless imports through spring has led to a marked drop in spot prices, particularly for June deliveries. With a nominal increase MoM of 40kt (not day adjusted), the increase was nearly solely driven by two factors: China (+21kt) and the US (+13kt). While Chinese volumes remain volatile MoM, +121% MoM and +61% YoY but -22% YTD, the increase from the US actually stands out as more of a surprise. While imports from the US hit a record 23kt in March (13% of total), these are likely to be less detrimental to domestic pricing given that 2 of 3 US producers* also have sizable European operations.

*Not including the Tsingshan JV given no upstream production in the US

Carbon Steel Import Arb Widens but Remains Uneconomic. The discount for imported HRC offers into northern European ports has widened to €35/t, from €10/t in mid-March and just €5/t in late January. However, even following the discount expansion, import offers remain uneconomic and should fail to incentivise new orders. This is especially true given current extended lead times and the uncertainty on the form and timing of safeguard quotas/tariffs.
Potential Safeguard Measures Looming. Above and beyond uneconomic import arbs, the potential for EU safeguard measures has also created caution for buyers looking to procure import material. We believe that announcement and implementation of safeguard quotas/duties will help to stymie redirected volumes (see Russia and Turkey comment above) though will take several more months for evidence of this to bear out in the data. Recent commentary from steelmakers pegs the expected announcement of safeguard measures in late May or early June.
Coverage Implications. Across our Euro coverage, SZG (Hold) and SSAB (Buy) have max exposure to HRC; SZG and VOE (Buy) max exposure to plate; TKA (Buy) and VOE max exposure to galv; and OUT1V (Buy) and APAM (Buy) max exposure to Euro stainless.

Renova sold 51% of Transalloys to Israeli and Swiss investors

Transalloys now says Renova divested 51% of its interest in Transalloys to Israeli and Swiss investors. And, by doing this it avoided any US restrictions on importing silicomanganese to the US. This is the same system used earlier by Swiss engineering firm Sulver did to avoid the restrictions. It would be interesting to see who the new investors are and if they have any interest in existing manganese operations. Also, will be new investors have any management control over the sales or the plant or be just passive investors, i.e., large passive investors.

As a result, Transalloys was free to bid on all the second-half 2018 silicomanganese RFQs; previous to the stock sales, Minerais was able to meet all contract commitments with existing stocks.

No restrictions on US imports of Transalloys SiMn

Viktor Vekselberg reduced his share holding in Transalloys below 50%. As a result there are no prohibitions on importing silicomanganese to the US. In a statement, the company wrote:” After the many speculations we witnessed in the press recently, we would like to formally reassure our trade partners and customers that Afro Minerals Trading AG and Transalloys Pty Ltd are not subject to US sanctions as A result of the US Department of the Treasury, Office of Foreign Assets Control’s April 6, 2018, addition of Viktor Vekselberg and the Joint-StocK Company Renova Group of Companies (JSC Renova Group) to its list of Specially Designated National and Blocked Persons (SDNs) or otherwise. Neither JSC Renova Group, Viktor Vekselberg nor any other SDNs own, individually or in the aggregate, directly or indirectly, 50%or more of Afro Minerals Trading AG or Transalloys Pty Ltd. Accordingly, neither company is a blocked person or subject to US sanctions.”

Glencore under investigation in the UK

The UK’s Serious Fraud Office is planning to seek formal approval to investigate Glencore’s ties with Dan Gertler over dealing in the Congo. Already the UN sanctioned Gertler for his “opaque and corrupt mining and oil deals” in the Congo. Needless to say Glencore’s stock is tanking

Teroerde and Klein leave Telf and ERG

Mark Teroerde has resigned from Telf and will be moving to the US to start his own company. Also Udo Klein has left ERG.

Afarak buys magnesite mine in Serbia

Afarak will purchase Magnohrom, a refractory material company with ore mines and production facilities in Kraljevo, Serbia. Following the completion of the wo-year sintered magnesite test project at the Magnohrom plant, Afarak has acquired the operation and the mining rights for various magnesite mines with confirmed reserves of over 4-million mt for E1-million.

Guy Konsbruck, CEO of Afarak said, “The acquisition of Magnohrom allows Afarak to supply the growing refractory material industry.  Afarak will be investing in upgrading the technology and equipment at the mines and processing units.”

Zimalloys wants out of deal with Balasore

Balasore Alloys and Zimalloys are battling over the fate of the Zimbabwe’s ferrochrome smelter. After India’s Balasore agreed to buy the plant earlier this year for $90-million, the receiver for Zimalloys said Balasore NEVER paid for the shares and appealed to Zimbabwe’s courts to terminate the deal.

Balasore, however, countered that Zimalloys NEVER met the conditions of the sale, including regulatory approvals, getting export licences for chrome more and finalizing ownership claims. Therefore, the company didn’t have to ante up the money. Now the matter is going to the country’s High Court for a final decision.

ZCE FeSi price falls

Just when everyone was getting excited about Asian ferrosilicon prices, China’s ZCE September ferrosilicon contract today dropped rmb 134 to rmb 6,784 per mt on 229,244 contracts changing hands.