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Chinese Steel Exports in January and February fall 27% on year, traders eye modest rebound over Apr-May

China's customs data showed that China’s finished steel exports over January-February 2020 fell 27% year on year to 7.811 million tonnes, the lowest combined total for the two month period since 2013. The sharp fall is attributed to a plunge in overseas orders placed in November and December, when strong domestic demand pushed up Chinese steel prices and encouraged Chinese mills to focus on the home market.

Some market sources expected steel exports in March and April to improve noticeably from the level seen in February, when China was still largely in lockdown due to the coronavirus. Mills have stepped up efforts to export more in March and April in a bid to ease supply pressure in the domestic market, where inventories have been soaring. The recovery in domestic steel demand has remained slow in March after being almost frozen by the coronovirus outbreak in February. However, market sources did not expect exports in March or April to rebound to anywhere near 6 million tonnes.

Source : Strategic Research Institute
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ArcelorMittal Calls for Carbon Border Adjustment

ArcelorMittal has called for member states and MEPs to support the introduction of a carbon border adjustment, as part of the European Commission’s EUR 1 trillion Green Deal, aimed at making the bloc carbon neutral by 2050. In a manifesto ‘Creating a low carbon world, the case for a Carbon Border Adjustment’, ArcelorMittal set out its firm belief that a CBA should be one of the first Green Deal measures adopted by the new European Commission, as it will help to create the market conditions and protections needed for companies to make investments and transition to carbon neutrality without disruption. Currently within the EU, energy-intensive industries including steel producers pay a carbon cost under the EU Emissions Trading System. But this does not apply to steel producers from markets outside the EU who can sell steel with comparable or often significantly higher, carbon emissions, at a lower price. The result is that steel production is moving to non-EU countries where carbon emissions legislation is often less strict, undermining efforts to combat climate change. However, with a CBA, when steel comes into the EU, the carbon costs that European producers pay would be added to the imported steel, equalising the cost of carbon for every producer to create a fair market and, crucially, encouraging investment in lower-emissions steel production.

ArcelorMittal believes that a CBA can be applied in various ways, as long as it neutralizes the disparities in carbon costs between domestic products and imports, and incentivizes the transition to low carbon steel production. In the manifesto, ArcelorMittal highlights how the best-designed carbon border adjustment could work effectively:

Producers exporting to the EU should be charged the same marginal carbon emissions cost as European producers pay under the ETS. This should serve as a catalyst to other countries to introduce their own carbon schemes and invest in technologies to decarbonise.

The CBA should initially be applied to primary goods, rather than end products like household appliances and everyday tools. This is the most practical way to introduce the CBA.

To be effective, free allocation of ETS allowances, which are gradually being phased out by the European Commission, should be maintained in the first stage of the CBA, alongside compensation for high energy costs as an indirect result of the ETS. This is crucial to enabling European steel to stay competitive and ensure a smooth transition without disruption.

Source : Strategic Research Institute
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Bhutanese Ferrosilicon Producers Seek Extension of BIS Deadline

Kuensel Online reported that ferrosilicon producers in Pasakha Industrial Estate in Bhutan have been caught off guard as India’s Ministry of Steel made it mandatory for the steel manufacturers to produce Bureau of Indian Standards certification by April 22nd 2020. The industries had nine months’ time to produce certification as the announcement came on July 22, 2019. However, the industrial estates in Pasakha came to know about the notification only last month. As the certification procedure takes time, the Association of Bhutanese Industries has submitted a letter to the Bhutan Chamber of Commerce and Industry. The association’s general secretary Mr Jochu Thinley said the association had asked for a year’s time extension, until April 2021.

Ferrosilicon is the primary raw material for steel production. There are a total of nine ferrosilicon industries in the country, eight in Pasakha and one in Samdrupjongkhar. Bhutanese ferrosilicon industries produce about 10,000-12,000 tonnes of ferrosilicon in a month.

Source : Kuensel Online
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JSW Steel Crude Steel Production in February 2020 Surges by 5% YoY

JSW Steel Limited reported crude steel production at 1.320 million tonnes in February 2020 compared to 1.257 million tonnes in Feb 2019, recording a growth of 5%. Production of flat-rolled products and long rolled products was up by 7% yoy at 0.982 million tonnes as compared to 9.20 million in a year ago. It's long rolled stood flat at 0.308 million tonnes in February 2020.

Source : Strategic Research Institute
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Tariffs Blamed for New Layoffs at NLMK

WFMJ reported that NLMK USA says it continues to be hurt by tariffs and steel quotas, which will cause more layoffs at the Farrell plant. Executive Vice President James Banker said "To run this plant full, we need 140,000 to 160,000 tons per month of slabs. Domestically, we can get about 10,000 tons a month. Not nearly enough. So the company has to buy more material off-shore and pay the 25 percent Trump tariff.”

According to Banker, a quota system also cuts off the supply of slabs every quarter, and that forces layoffs at the plant. He said "So we're going to shut down our hot strip mill here, and the employees will get sent home, they will be laid off for two weeks."

NLMK has more than 800 employees in Mercer county, and Banker says it hopes to win back the tariff fees and return to normal operations.

Source : WFMJ
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Nucor Orders Slab Reheat Facilities and Heat-Treatment Lines for Plate Mill

Nucor Corporation has awarded SMS group a follow-up order for the supply of reheat and heat-treatment facilities. The new equipment will be part of the new plate mill being built in Brandenburg in Kentucky. It will produce slabs of 200 to 305 millimeters thickness and up to 3,150 millimeters width.
Under the new contract, SMS group will supply a wide range of equipment, including

A walking-beam furnace for the transfer of slabs from the SMS group casting machine to the rolling mill. The furnace will be designed for slab direct, hot and cold charging. Slabs of the maximal possible length of 15,240 millimeters will be charged in a single row - shorter ones in two or three rows. As a highlight, the walking beam furnace will be fitted with SMS-ZeroFlame burners, which are characterized by extra-low NOx emissions.

For ingot reheating, SMS group is going to supply bogie hearth furnaces. These furnaces will be able to reheat ingots of various sizes.

The combustion process in all the reheat furnaces will be controlled by the proven, advanced SMS-PROMETHEUS® Level 2 technology.

Further to these supplies, SMS group’s contract volume includes additional bogie hearth furnaces and a quenching facility, which Nucor will be using for a wide range of heat treatments – from low-temperature annealing through to normalizing. The connected quenching tank with water circulation will enable Nucor to precisely set the specific mechanical properties in heavy plate.

The new casting machine will become the largest slab caster in the world. The follow-up contract now received by SMS group is for all of the new plate mill’s slab and ingot reheat equipment, for a heat-treatment line for heavy plate of up to 356 millimeters thickness and for a continuous heat-treatment line with MultiFlex-Quench® technology for plate between 4.8 and 102 millimeters thickness and up to 4,267 millimeters width.

Commissioning of the plant is scheduled for 2022

Source : Strategic Research Institute
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MMK Allocated RUB 8.7 Billion for Environmental Measures in 2019

In 2019, Magnitogorsk Iron and Steel Works allocated more than RUB 8.7 billion for environmental protection, of which more than RUB 5.3 billion was spent on capital construction of new, and reconstruction of existing, environmental protection facilities. MMK allocated a further RUB 3.4 billion for on-going environmental protection measures including repairs and maintenance of environmental objects, reclamation, waste disposal, organisation of industrial ecological controls etc.

Total investments in environmental protection activities for 2015-2019 amounted to more than RUB 20 billion, while there has been a steady increase in the volume of investments, in 2019, they have increased by almost 2.5 times compared to 2015. By 2025, investments in the construction of environmental protection facilities will amount to RUB 38.1 billion, most of which (57%) will be directed to measures to reduce emissions of air pollutants.

MMK has developed and implemented a long-term environmental programme that covers all its production processes and is aimed at implementing the best available technologies. This programme allows for a reduction in the existing level of environmental impact and ensures the environmental safety of technological processes. In accordance with MMK's environmental programme, 80 technical measures aimed at reducing and preventing negative impacts on the environment were carried out in 2019. In 2020, MMK will continue to work on 8 further initiatives.

Among the most significant environmental measures of the MMK Environmental programme in 2019 were the construction and commissioning of environmental protection facilities of the new sinter plant No. 5, as well as the construction of dust collection systems in the sinter and coal preparation shops. Sinter plant No. 5 is equipped with 20 modern high-performance environmental protection facilities and uses the best available technologies. The commissioning of the new sinter plant will make it possible to decommission the outdated equipment at sinter plant No. 4. As a result, dust emissions will be reduced by half, a fourfold reduction in sulphur dioxide emissions and a sixteen-fold reduction in benzopyrene emissions. By the end of 2019-2020, it is expected to reduce dust emissions from the sinter plant by 2,075 tonnes and sulphur dioxide emissions by 3500 tonnes.

Source : Strategic Research Institute
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SCHMOLZ + BICKENBACH Cautious Optimism for 2020

SCHMOLZ + BICKENBACH reported 12.6% lower sales volume of 1,830 kilotons for the 2019 financial year compared to 2,093 kilotons in 2018. The decline in turnover was lower in percentage terms and fell by 10.0% to EUR 2,980.8 million. Adjusted EBITDA reached EUR 51.2 million after EUR 236.7 million in the previous year. At EUR –7.1 million, free cash flow was negative (2018: EUR –159.8 million), but improved year-on-year as net working capital was reduced by around EUR 160 million to EUR 773.1 million since the end of 2018, mainly due to disproportionate inventory reductions. CEO Clemens Iller commented: “Business development in 2019 was determined by an unusually strong and prolonged decline in demand, both in terms of its extent and duration. We were not able to fully offset the impact of the pronounced market weakness on earnings with internal measures, which meant that we did not achieve the targets we had set ourselves at the beginning of the financial year. With the refinancing of the company, which will be completed in the first quarter of 2020, we are creating the prerequisites for securing the continued existence of SCHMOLZ + BICKENBACH beyond the crisis. Building on a strengthened financial basis and supported by a stable shareholder base, we will resolutely implement the restructuring measures identified in the transformation plan in order to advance the turnaround of the company in the coming years. We expect little economic tailwind in 2020, also due to the consequences of coronavirus for the global economy, but nevertheless expect the market environment to stabilize and earnings to improve accordingly compared to 2019.”

Source : Strategic Research Institute
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Ernst & Young Completes British Steel Sale to Jingye

The Official Receiver and special managers from Ernst & Young have sold some of the business and assets of British Steel to Chinese steel giant Jingye Steel. The sale to Jingye Steel (UK) Ltd and Jingye Steel (UK) Holding Ltd includes the steelworks at Scunthorpe; UK mills in Teesside and Skinningrove, shares of FN Steel BV and the TSP Engineering business based in Cumbria. Discussions continue to resolve the regulatory approvals required to sell British Steel’s French subsidiary, based in Hayange, to Jingye. The Official Receiver, David Chapman, appointed by the High Court in May 2019 as liquidator along with special managers at EY to assist, said “The sale of British Steel is the culmination of nine months of work to transition this business to a new owner committed to its future. I am grateful to the British Steel workforce for their professionalism during difficult times as the business continued to trade and to its customers who have continued to show their confidence in the products the company produces. This show of commitment was an essential element in concluding the sale.”
The sale of British Steel will secure approximately 3200 jobs, but around 440 employees have not received offers of employment in the new company.

Jingye Group CEO Li Huiming said: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world. Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”

UK’s Business Secretary Alok Sharma said “The sale of British Steel represents an important vote of confidence in the UK’s steel industry. It also marks the start of a new era for those regions that have built their livelihoods around industrial steel production. I would like to pay tribute to everyone who has been involved in getting this deal over the line, in particular to British Steel’s workforce for whom I recognise the uncertainty will have been challenging. I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on the ground support and advice to those affected.”

Source : Strategic Research Institute
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Latin America Steel Consumption in 2019 Falls by 5%

Latin American steel association Alacero announced that the steel consumption in Latin America in 2019 registered a 5% decrease, totaling 64 million tonnes due to worsening deindustrialization process, which has been present for decades and can impact the stability of 260,000 direct jobs in the sector. It said “The lower steel consumption in the region reflects a significant economic contraction of Latin American countries, particulary of the three main economies: Mexico, Argentina and Brazil, which account for 87% of the reduction. Among the main reasons for this situation are the global economic slowdown, lower commodities prices, US trade disputes with its partners, the descrease of world trade and political uncertainties and their effects on investment facing these countries and their neighbors in Latin America”

Comparing the consumption trend in previous years, a gradual fall is seen from 2014, when consumption reached its highest level at 72.1 million tonne.

In 2020 the initial expectation in Latin America is a 2.8% growth in steel consumption, which is expected to reach 66 million tonnes. The projection is influenced by Brazil, the main economy of the region, which has a favorable outlook for this year, due to the economic reforms that have been implemented.

Source : Strategic Research Institute
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Klöckner & Co Reports Loss for 2019

Falling steel prices and weak demand resulted in a decline of around 7% in Klöckner & Co’s sales to EUR 6.3 billion in fiscal year 2019. While operating income EBITDA before material special effects was within the guidance range at EUR 124 million as compared to EUR 229 million in 2018, it remained substantially below the prior year, as did net income of minus EUR 55 million as compared with EUR 69 million in 2018.

Despite the difficult market environment, the Company continued to drive its digital transformation forward. The share of sales generated via digital channels increased again, reaching 32% in the fourth quarter of 2019 (Q4 2018: 25%). The Kloeckner Assistant, a digital application, was also launched, which uses Artificial Intelligence to automate and significantly speed up the processing of price inquiries and orders received through conventional channels such as fax or phone. This makes virtually every customer a digital customer without having to change their processes.

The XOM Materials open industry platform launched by Klöckner & Co again showed dynamic growth during the past fiscal year. More than 60 suppliers with some 22,000 products and around 700 customers were already registered with XOM Materials at the beginning of the current year. The integration of additional solutions such as eShops and eProcurement services will further enhance the platform’s attractiveness, thus additionally boosting growth.

Klöckner & Co already anticipates a considerable increase in operating income for fiscal year 2020. The expected positive earnings performance will be driven by the anticipated increase in the stability of steel prices as well as planned efficiency improvements and cost savings such as those generated through the growing automation of processes thanks to digital applications.

Source : Strategic Research Institute
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Tata Steel Europe to Cut 1250 Jobs across Europe

Tata Steel Europe's chief executive Mr Henrik Adam has told staff job losses across Europe would number 1,250 rather than the 3,000 that had been expected. In a letter to staff on Monday, Mr Adam described the company's financial situation as serious. He said “There's an urgent priority to improve the performance of the business and our cash position. The business had lost GBP 76 million in the first nine months of the financial year. We have identified a range of measures, including not replacing employees who have retired or left the business, which would minimise job losses. The proposed plans aim to secure the future of our company and do what's best for our employees given the very challenging circumstances we're currently facing. Arrangements will be made to commence consultations for the start of April on the proposed organisational changes with the relevant national employee representatives. Our transformation is about securing the future of our business for generations of steelmakers to come."

In November it was suggested two thirds of the job losses across Europe would be management and office-based roles

Unions demanded urgent talks to discuss transformation plans set out in the memo, which included not replacing employees who have retired or left the company and making 1,250 job cuts.

Source : Strategic Research Institute
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Cleveland-Cliffs and AK Steel Shareholders Approve Merger Deal

Cleveland-Cliffs and AK Steel said that their respective shareholders voted to approve all proposals necessary to complete Cliffs' acquisition of AK Steel. Under the deal terms, AK Steel shareholders will receive 0.4 Cleveland-Cliffs F common share for each outstanding AKS common share they own; Cliffs shareholders will own ~68% and AK Steel shareholders will own 32% of the combined company on a fully diluted basis.

The Tuesday vote occurred at a special meeting. The transaction is currently scheduled to close on March 13, 2020.

Source : Strategic Research Institute
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Pennar Industries Bags Orders worth INR 550 Crores

Pennar Industries Limited announced that it has bagged orders worth INR 550crore across its business verticals during the month of February 2020. The Pre-Engineered Buildings division received orders for Manufacturing Plants, Airport Terminal, Solar Mounting Structures and Warehouses from leading names such as MRF, Mega Wide - GMR GoaAirport, Azure Power, Saffron Grid, TVS ILP, and Indus Project The Railways division received orders from customers such as SAIL Rites, Integrated Coach Factory, and Universal Engineering. The Steel division received orders from Adani, L&T, Tata Nuevosol Energy, L.G.Balakrishnan, Steel Mart Schaeffler, JM Frictech and others. The Tubes division received orders from Alf Engineering, VE Commercial, TVS Ancillaries, BajajAncillaries and others, besides Export orders from Sourcing Systems, USA and Steel Tube Investments,USA. The Industrial Component division received orders from Emerson, Endurance, Tecumseh, INEL, Yamaha, Ashok Leyland, IFB, WABCO, Firestone and others.

The current order book position for Pre-engineered Buildings division stood at INR 455crore, Railways division at INR 290 crore and Water Treatment Solutions at INR 78 crore.

Source : Strategic Research Institute
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US Steel Mills Ship 8.5 Million Net Tons in January 2020

The American Iron and Steel Institute reported that for the month of January 2020, US steel mills shipped 8,535,755 net tons, a 6.4 percent increase from the 8,021,250 net tons shipped in the previous month, December 2019, and a 5.6 percent increase from the 8,079,757 net tons shipped in January 2019.

A comparison of January shipments to the previous month of December shows the following changes: hot dipped galvanized sheet and strip, up 13 percent, cold rolled sheet, up 12 percent and hot rolled sheets, up 6 percent.

Source : Strategic Research Institute
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Chinese Auto Production and Sales Tank in February

According to the China Association of Automobile Manufacturers, Chinese auto sales in February plunged 79.1% year on year to only 310,000 units. Automakers and suppliers generally deferred the resumption of their manufacturing businesses, which no doubt resulted in the flagging outputs. Last month, only 285,000 vehicles were produced countrywide, a significant year-on-year slide of 79.8%. For the first two months, auto sales in China tumbled 42% from the year-ago period. Apart from the coronavirus, the Spring Festival holiday was another key factor that brought down the whole volume.

Voor cijfers, zie pdf.

Source : Strategic Research Institute
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US Federal Reserve Cuts Rates to Zero as Coronavirus Spreads

In an emergency move on Sunday, US Federal Reserve announced that it is dropping its benchmark interest rate to zero and launching a new round of quantitative easing entailing USD 700 billion worth of asset purchases of Treasurys and mortgage-backed securities. The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consumer rates, will now be targeted at 0% to 0.25% down from a previous target range of 1% to 1.25%. The Fed also cut reserve requirements for thousands of banks to zero. The Federal Reserve said “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. We will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals.”

Stock futures plunged Sunday night even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak. Stock market futures hit “limit down” levels of 5% lower, a move made by the CME futures exchange to reduce panic in markets. Dow Jones Industrial average futures were off by more than 1,000 points, triggering the limit down level. S&P 500 and Nasdaq 100 futures were also at their downside limits.

The Fed’s announcement came after they issued another emergency rate cut earlier this month. It also comes on the heels of the market’s biggest one-day gain since 2008, with the major averages all surging more than 9% on Friday.

Source : Strategic Research Institute
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Tata Steel Suspends All Business Travel of Employees over Coronavirus

In view of COVID-19 being reported in several cities, Tata Steel has been decided to suspend all domestic travel on company business with immediate effect as a measure of abundant precaution. The suspension of domestic travel either by air, train or road will remain effective till further notice. It said “The company has already announced the restrictions on overseas travel that will continue until further notice. Further, we are in the process of disabling the biometric system based attendance recording; only RFID based monitoring will be continued.”

It added “Tata Steel follows a robust management system framework and a sound safety governance structure that drives its health and safety measures.We are constantly monitoring the COVID-19 situation across our locations and are also ensuring regular communication with our workforce. We have put in place several measures including increased precautions at our plants/offices and travel advisories to ensure the safety of our employees.”

Source : Strategic Research Institute
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Circular Economy Action Plan a step in the Right Direction - EUROFER

The European Steel Association has greeted the release of the Circular Economy Action plan. The sector believes the Action Plan is an important step in developing a truly circular economy in Europe. However, it is missing incentives to keep valuable steel scrap within the EU, which undermines circularity and the EU’s climate objectives. Axel Eggert said “As producers of an essential, 100% recyclable and permanent material, steelmakers are eager to see circularity put at the heart of the EU’s policy focus. However, beyond the first principles of the circular economy there are more in-depth considerations that must be addressed which this Commission Communication, in part, does”.

He said “Having a sustainable products policy initiative in which the Eco-Design Directive is extended in scope to help circularity and the assessment of product sustainability is a good thing, for instance. It is also important to have robust tools for substantiating environmental claims on products – supporting consumers and buyers in making truly sustainable choices”.

He added “EUROFER also fully supports the development of an EU market for secondary raw materials. We need EU-wide criteria for the granting of ‘by-product’ or ‘end-of-waste’ status to certain industrial streams generated during the production processes. More widely, when a secondary raw material – generated either as waste or as a by-product is fit for certain applications and can be safely used – its access to the market should be improved, regardless of its legal status.”

Another concern addressed in the Action Plan is about the leakage of waste to export markets. The carbon embedded in scrap means that using it as a raw material can help reduce emissions from steel production.

While welcoming the Action Plan, EUROFER nevertheless urges caution on some elements. Not all materials are the same and a one-size-fits-all policy will not suit all. The path towards greater circularity must be built upon scientific, evidence-based principles. Otherwise, the intentions of the Communication may not improve circularity.

Source : Strategic Research Institute
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Severstal Acquires Sintex-CIP and Sintez PP

Russian steelmaker Severstal has completed the acquisition of 100% of the shares of Sintez-CIP Ltd and Sintez PP Ltd, the owners of the only producer and supplier of carbonyl iron powders in Russia and the CIS region. Sintez-CIP will become part of Severstal's metalware manufacture division and will be under the operational management of Sergey Kovryakov, CEO of Severstal-metiz.

Sintez-CIP is based in Dzerzhinsk, Nizhny Novgorod Region, and produces a wide range of unique carbonyl iron powders for high-tech firms around the world. Carbonyl iron is widely used in electronics, primarily in the automotive industry (electronics in cars, electric vehicles), as well as in the manufacture of household appliances, mobile phones, computers, and televisions. It is also used in various powder metallurgy processes, metal injection moulding technologies, the production of diamond tools and artificial diamonds, the production of magnetorheological fluids (that change viscosity when exposed to electromagnetic radiation, and are also used in the automotive industry and mechanical engineering), not forgetting food supplements (carbonyl iron is a product that can be used as a dietary supplement containing iron).

According to Severstal, Sintez-CIP is the second largest producer of these products globally, with approximately 10% of the market share. The company produced more than 1,500 tons of finished goods last year. More than 95% of the company’s sales are export sales.

Source : Strategic Research Institute
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Vertraagd 28 feb 2025 17:36
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