Wednesday, 02 August 2017 09:06

Tungum Ltd recognises staff loyalty

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Members of staff at Tewkesbury based Tungum Ltd, manufacturer of corrosion resistant alloy tubing, are celebrating more than 120 years of combined service.

Established in 1933 in Cheltenham, Tungum tubing is a cost effective and reliable alternative to stainless and super duplex steel alloys, and is used across the oil and gas, shipbuilding and dive industries.

Operations Director John Zbihlyj and Stores Supervisor Dave Kavanagh are the longest serving members of the team, with a combined 59 years of service, followed by Managing Director Ian Johnstone, who joined Tungum in 1998.

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Next in line is Ian Rickard, Technical Sales, and Sean Hammond, Sales & Marketing Director, who have clocked up 31 years of service between them, while Alison Keen, Credit Controller, marks nine years at Tungum.

The company is continuing to expand its team following the appointment of Ruben Muro, Vice President of Sales USA, in 2015 and Mick Hopkins, Technical Sales Engineer, in 2016. More recently, they have welcomed Sales Administrator, Hannah Robinson, who joins Tungum from an events management company, along with new Stores Operative, Dave Rawlins.

Ian Johnstone commented: “Over the past 19 years, we’ve seen a lot of change at Tungum, including our move from Cheltenham to our current location in Tewkesbury in 2006. The team has grown and developed, and the wealth of experience and knowledge relating to the industry sectors in which we work allows us to deliver a total solution for our customers.

“It’s a privilege to work as part of such a committed team that works hard to contribute to the success of the business. I look forward to continuing to see Tungum grow in the years to come.”

Corrosion resistant Tungum tubing has been proven to deliver safety critical, long lasting solutions in demanding environments across the world. For more information visit

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DecarbEurope unites decision makers and industry for efficient energy production and consumption

The European Copper Institute (ECI) has launched a new sustainable energy initiative that will connect technologies, policies and markets with the goal of decarbonizing Europe. DecarbEurope will engage decision makers in both the policy and industry sectors to provide cost-effective technical solutions that can each reduce European greenhouse gas emissions by several hundred million tonnes per year.

2017 06 15 110437“Industrial companies are at the forefront in taking responsibility for their contribution to climate change, for their carbon footprints and for the energy consumption of their products,” said Hans De Keulenaer, director of energy and electricity for ECI. “The European copper industry has demonstrated a long commitment to reducing its own energy consumption. Now, we are enlarging this leadership role by providing a multi-faceted roadmap for decarbonization.”

DecarbEurope provides concrete solutions that are technology-based, cost-effective and scalable. These ambitious targets promote a smart and user-centric energy system by utilizing technologies that are ready for market but currently face some regulatory or technological barriers. ECI vows to act as a connector between manufacturers and policymakers to remove some of these barriers and to unlock the significant contribution these solutions can bring to the EU’s energy and climate objectives. The initiative also recognizes the need for a strong and systematic focus on energy efficiency when designing, installing, commissioning and operating energy solutions.

“Our goal is to create an open opportunity for industry representatives, policy makers and other stakeholders to work toward responsible energy consumption, carbon reduction and economic growth,” said Fleming Voetmann, vice president of public affairs at the International Copper Association (ICA). “Together we can make a significant contribution to a low-carbon energy transition.”

ICA and ECI are part of the Copper Alliance®, a federation of copper promotion centers that collectively represent the world’s copper industry. The Copper Alliance is active in more than 60 countries.

Copper plays a crucial role in the transition to a sustainable and efficient energy environment. Its natural properties of high conductivity, recyclability and reliability make it a key component for increasing the efficiency of equipment or integrating renewable technology into energy systems. Using one additional kilogram of copper in a device (e.g., a generator, transformer or motor) can reduce energy-related greenhouse gas emissions over its lifetime by 100 to 7,500 kilograms, depending on the application, generating energy savings of 24 to 2,400 EUR (or about 26 to 2,600 USD).

About International Copper Association (ICA)

ICA brings together the global copper industry to develop and defend markets for copper and to make a positive contribution to society’s sustainable development goals. Headquartered in New York, ICA has offices in four primary regions: Asia, Europe and Africa, Latin America and North America. Copper Alliance® programs and initiatives are executed in nearly 60 countries through its regional offices. For additional information please visit

About European Copper Institute (ECI)

ECI—founded in 1996 and based in Brussels—coordinates a team of 38 professionals based in 10 offices across Europe and works closely with its copper industry members on regulatory matters and market-development programs. ECI is part of the Copper Alliance, which brings together the global copper industry to develop and defend markets for copper and to make a positive contribution to society’s sustainable development goals Read more about ECI on

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The latest Outokumpu stainless steel innovations, high-chromium ferritic stainless steel grade Core 4622 (EN 1.4622) and high-chromium austenitic stainless steel grade Supra 316plus (EN 1.4420) have been granted European patents in March 2017.

2014-09-11 121016 outo logoBoth products have been developed in Outokumpu’s R&D Center in Tornio, Finland. It has taken only four years from market introduction in 2013 to a patented product. These grades answer to customer demand for products with enhanced properties and stable raw material cost.   

Says Mikko Ylitalo, Chief Technology Officer at Outokumpu: “These grades are suitable for wide range of applications. Ferritic Core 4622 has excellent deep-drawability, and it is very good choice for example for pots and pan makers as it is virtually roping free. Selecting Core 4622 speeds up our customer’s production process as final product requires less polishing. Supra 316plus offers great alternative for customers who are looking for better corrosion resistance and strength than 316L/1.4404. One example of such application is LNG, where Supra 316plus offers great corrosion resistance and superior strength and ductility performance in cryogenic temperatures.”

Outokumpu has a long legacy in innovations. The very first austenitic, duplex and martensitic grades were invented at Outokumpu plants in Germany, Sweden and the UK. Receiving patents for Supra 316plus and Core 4622 demonstrates the continuous innovation legacy of Outokumpu.

Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs some 10,000 professionals in more than 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq

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Outokumpu announces enhancement of stainless bar production in its facilities in in Richburg, South Carolina, USA. New capabilities include a new coil-to-bar line to cover bar sizes from 0.600” to 1.250” inches and full reinforcement bar capabilities. The new lines enable Outokumpu to better serve its key end-customer segments including automotive, aerospace, oil & gas, construction and chemical processing in the North American market. The investment increases Outokumpu’s stainless bar production capacity by more than 15,000 tonnes annually.

2014-07-15 071744Says Bob Beatty, head of the Outokumpu Stainless Bar, USA: “The new investment allows us to expand our capacity in the area of coil-to-bar peeling where we have been capacity constrained. The line utilizes hot-rolled coil bar feedstock which is straightened, peeled, chamfered and polished to finished bars. This new capacity helps us to expand our business in key growth markets including the important automotive segment where we have a strong position.”

Outokumpu serves the North American market through its key service center partners. The company has a strong reputation in the market as a premium producer of high performance bars with unique knowhow in stainless steel applications and material performance.

Outokumpu has over a century of experience in creating efficient, long-lasting, and recyclable stainless steels. Our global offering includes quality-critical long products for equipment, buildings and infrastructure projects. Our Long Products sites are located in the US, the UK, and Sweden and are known for their high quality products, flexibility, and world-class delivery performance. Read more about Outokumpu Long Products’ offering at

Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs some 10,000 professionals in more than 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq

Friday, 28 October 2016 10:41

Redesign for eddy-current separator

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Improved ease of use, durability and ROI

The complete line of eccentric Eddy-Current, non-ferrous separators from Goudsmit Magnetic Systems BV of Waalre has recently been redesigned for reduced cost and technical improvements. The goal was improved ease of use, durability and ROI (return on investment). Special focus was placed on the frame, accessibility for service and the magnetic rotors. The Quality Function Deployment (QFD) method was used to analyse customer needs and market trends.

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The improved version of the eccentric Eddy Current Separator is durable and easy to use.

Based on this results the machine was then completely redeveloped and optimized, but with the understanding that no compromises would be made as concerns separation requirements, finish level and quality. Buyers of the Eddy-Current separators can expect the same grade/recovery performance and the same high level of quality at a considerably lower purchase price. Separators of this type are used to remove non-ferrous metals from material streams such as incinerator slags, shredder residues, glass, wood, construction and demolition waste, electronic scrap or household waste.  Goudsmit is present at the Pollutec in Lyon, Stand 3-B-206.

Magnetic rotor

The eccentric magnetic rotor can be adjusted to different angles relative to the outer shell, which affects the ejection moment of the non-ferrous metals. Because the magnetic rotor is mounted off-centre in the outer shell, iron particles cannot adhere to the outer shell; this prevents burn-in problems. Applications of Eddy-Current separators include: household waste (shredded), incinerator slags from household waste, WEEE scrap, glass recycling, heavy and light shredder residues (e.g. Auto Shredder Residue), wood and/or chipboard recycling.

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The non-ferrous separators are available in different types, categorized by fraction size. The EddyCan® contains a 10-pole magnetic rotor (up to 150 Hz) and is suitable for separation of aluminium cans and coarse particles from lightweight (<350 kg/m3) bulk and recycling streams. The EddyXpert®, fitted with a 12-pole magnetic rotor (up to 300 Hz), is suitable for coarse fractions containing particles 80 mm and larger. The version with an 18-pole magnetic rotor (up to 450 Hz) is suitable for standard 20-80 mm fractions, and that with the 22HI-pole magnetic rotor (up to 733 Hz) is suitable for fine (0-20 mm) fractions. The EddyFines® contains a 38-pole magnetic rotor (up to 1140 Hz) and is suitable for fine (0-5 mm) fractions. Available machine widths: 600 / 800 / 1000 / 1500 / 2000 mm.

In addition to the standard versions, every effort will be made to accommodate specific requirements for non-standard applications.

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In an industrial setting, a material is never selected by chance. During the design phase, the characteristics of the materials must be carefully studied and determined in order to avoid subsequent complications when in use, and to avoiding incurring unnecessary costs.

This is especially the case when choosing a material to be used in a pipe. This is because some pipes are subjected to considerable mechanical, thermal or chemical stresses, depending on the type of fluid they convey, with pressure and temperature playing a determining role.

The material used to manufacture the pipe has an influence on all the manufacturing operations, including machining. The machinability of the pipe depends directly on the material used to manufacture the pipe, and for each given material, specific precautions must be taken in order to ensure high quality machining.

Machining is a common operation when preparing a piece for welding. The pipe end has to be machined at specific angles so that the weld can penetrate the entire thickness of the pipe material.

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Standard steel

Standard steel pipes are the most commonly used types of pipes owing to their low cost and mechanical properties which make them suitable for a wide range of applications. Steel pipes are resistant to mechanical stresses, durable and formable. This means that they can be used for applications with significant temperature or pressure variations. Standard steel pipes are also very commonly used in situations where impacts or vibrations can affect the pipeline (underneath roads, for example). In addition, steel pipes are fairly easy to manufacture, bend and cut.

Steel pipes are, however, very prone to corrosion if no preventive treatment is applied. Galvanization is a common corrosion-control treatment; this consists of applying a zinc coat to the steel pipe. This coating then oxidizes in the place of the steel which it protects, with the all-important difference, however, being that the zinc oxidizes very slowly.

Low-alloy steel (i.e., with a low carbon level between 0.008% and 2.14%) can be easily machined. When the carbon rate increases, the material properties (such as hardness or mechanical resistance) tend to improve significantly. However, machining steels with a high carbon level is more difficult.

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P91 Steel

P91 steel is an alloy steel with a high chromium (9%) and molybdenum (1%) content. Adding chromium increases the mechanical resistance at high temperatures as well as corrosion resistance, and adding molybdenum improves creep resistance. Small amounts of nickel and manganese are added to enhance the overall hardness of the material. P91 steel is very sensitive to changes in its microstructure that can occur during excessive heating. These microstructure variations tend to weaken the material. This is why cold machining is often preferred for cutting this material.

P91 was initially developed for the manufacturing of pipelines in conventional or nuclear thermal power plants, where the steam leaves the superheater of a boiler in a modern conventional/thermal plant at a temperature of between 570°C to 600°C and a pressure of 170 bars to 230 bars. This means that the final stages of the superheater and the pipelines delivering the turbine steam must be able to withstand these extreme conditions. In such a case, the high mechanical resistance of P91 and its fatigue strength makes it the right choice.

By using P91 in such circumstances, the engineers were able to reduce the thickness of the pipelines while simultaneously increasing the operating temperature, all of which enhances the overall thermodynamic efficiency of a power plant.

The high mechanical resistance of P91 steel means, however, that machining is difficult. Thus, the tool bits should be changed regularly to ensure their sharpness, and the cutting speeds should be kept slow. The feed rate can also be adjusted to increase the machining speed.

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Duplex steel

A Duplex stainless steel consists of stainless chromium steel with nickel added. The matrix contains both ferrite and austenite, hence the name Duplex. This alloy was designed to provide corrosion resistance and tensile strength. Duplex steel pipes are very commonly used in gas and petroleum offshore platforms where the pipelines are subjected to intense pressures and corrosive elements (salt water). Duplex steel tubes can also be found in industries with chlorinated products and acids, such as in the chemical or pharmaceutical industries. In recent years, more strongly alloyed Duplex steels have emerged under the name of Super-Duplex or Hyper-Duplex.

Duplex steel pipes are relatively difficult to machine due to their tensile strength and high yield strength. This can lead to very high cutting temperatures and to plastic deformation of the pipe. In any case, the tooling and clamping must be sufficiently rigid and stable in order to machine a Duplex steel pipe.

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Stainless steels

Just like standard steels, stainless steels are comprised of iron and carbon, to which chromium has been added. Upon exceeding a certain proportion of chromium (10.5%), a chromium oxide layer is formed on the steel surface. This so-called “passive layer” is chemically inert, corrosion resistant and stable.

Other elements can be added to improve the mechanical strength (nickel) or high-temperature performance (molybdenum, titanium, vanadium, tungsten).

Although more expensive than standard steel pipes, stainless steel pipes are widely used in many industries (chemical, petroleum, pharmaceutical, food, aerospace, shipbuilding, etc.).

Their popularity stems from their corrosion resistance and chemical stability which make stainless steel piping suitable for fluids that must not be contaminated (pharmaceutical industry, food industry, etc.) and for corrosive fluids (the chemical industry, in particular).

The machinability of stainless steel is highly dependent on the proportion of alloying elements. Specifically, a high proportion of chromium, nickel or titanium makes machining more difficult, whereas adding carbon or sulfur facilitates machining.

The cutting edge must be sharp to facilitate chip detachment from the material and reduce the cutting forces.

The cutting tool must be sufficiently well assembled and the machine itself must be sufficiently rigid to support the forces caused by machining; as a rule of thumb, the forces deployed when cutting stainless steel can be more than 50% higher than with standard carbon steel.

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Most of the superalloys used to manufacture pipes belong to the range of nickel-based superalloys. This range includes Inconel and Austenite, named after the alloy manufacturer.

Therefore, the alloy base is nickel which can be alloyed with chromium, iron, titanium or aluminum. These alloys have the same advantages as stainless steels, but to a greater extent. Specifically, their heat resistance is higher (about 900°C) as is their corrosion resistance (corrosion in chlorine ion solutions, ultrapure water and caustic mediums). They are also much more expensive than standard alloys, but this is justified for applications where operator safety is an essential criterion.

Pipes made from nickel-based superalloys are used in aerospace (in combustion chambers, for example), the chemical industry (due to their corrosion resistance), nuclear engineering, and, to a lesser extent, in the food industry.

Superalloys are considered very difficult to machine. This can be attributed to several factors. First, one must bear in mind that 70% of the heat is returned directly to the cutting tool (as opposed to 15% for standard steel, for example). Therefore, it is essential to keep the cutting-edge cooled during machining. The second complication is the hardness of the material; in fact, the lifetime of a cutting tool used to machine a superalloy can be reduced to just a few minutes if the tool does not have the necessary power, or if the cutting speeds and tools are not suitable.

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Titanium is an extremely interesting metal for the industry. Titanium can be used to manufacture pipes which are light and yet highly resistant to corrosion and able to withstand very high temperatures (600°C). Its mechanical properties (resistance, fatigue and ductility) are also appreciated. Titanium is, however, expensive and this limits its use to specific applications. In general, one finds titanium in the aerospace sector where its low density combined with its attractive mechanical properties make it an essential material.

Since the thermal conductivity of titanium is very low (about ten times lower than steel), the heat dissipation during machining is relatively poor. Therefore, the cutting edge needs to be properly cooled to avoid machining defects.

Sharp tools should be used to facilitate chip detachment from the material, and thus reduce the cutting force.

Machining is even more difficult in the case of treated titanium (e.g., treatment by precipitation hardening, presence of chromium coating or alloying).

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Aluminum is very widely used in the industry. Aluminum pipes are inexpensive, easy to form and assemble. They are also light and corrosion-resistant, making them a natural choice in the aeronautics, transport and construction sectors. Aluminum pipes are also used to build compressed-air pipelines.

Aluminum pipes have a very low level of hardness, and are therefore relatively easy to machine. However, the malleability of aluminum can cause problems (shavings can lead to machine jamming, for example). In this case, the best response is to increase the cutting speed, the depth of the pass and the feeding speed. There is also a risk of aluminum pipes being deformed during machining if the machine tool, and in particular, the clamping jaws, are not correctly chosen.

The high thermal conductivity of aluminum allows for good heat dissipation. Thus, the cutting speed can be increased without reducing the lifetime of the tools.

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Protem SAS

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At this year’s Alihankinta Subcontracting Fair in Tampere, Finland, Ovako launched its new hollow bar M-Steel® 280 developed to offer component manufacturers design, machinability and cost advantages while also promoting its greatly increased service package and distribution operation in Finland, Ovako Metals Oy Ab.

Both enhanced offerings are intended to provide customers with significant advantages, both in terms of material consistency and availability, with a range of customized services that are fine tuned to fully meet, or even exceed customers’ expectations and improve their competitive edge.

Developing the new M-Steel 280, a low carbon, micro alloyed steel 20MnV6 M, as hollow bar makes it suitable for even more demanding applications by combining high strength with excellent machinability. Because the material is based on M-Steel technology, which stands for machinability, it also facilitates higher cutting speeds and, conversely, superior tool life.

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(Ovako M-Steel 280 Tubes): New Ovako hollow bar M-Steel 280 is a low carbon, micro alloyed steel 20MnV6 M, combining high strength with excellent machinability and weldability.

Seminars on the new M-Steel 280 hollow bar were held on the Ovako stand on each of the three days of the exhibition. On Wednesday, September 28th, Åke Nilsson, Product & Application Turning Specialist, Sandvik Coromant Sverige AB, presented a seminar on machining advantages using M-Steel.

“M-Steel technology is unique as it enhances the machining process by forming a protective film on the cutting tool. This promotes increased cutting speeds, while extending tool life, reducing tool changes and enhancing productivity,” explained Göran Nyström, Executive Vice President of Group Marketing and Technology at Ovako. “New hollow bar M-Steel 280 not only reduces machining time; it also means customers can increase their productivity without the need for capital investment.”

A major advantage of M-Steel 280 hollow bar, close to finished component sizes, is that its use can eliminate a complete machining process where a central bore is required. This helps cut down on production time significantly, reduce component costs and increase profitability.

Also on the stand, steel and metals distributor Ovako Metals Oy Ab will take the opportunity to highlight the latest facilities which have been added to its distribution centre in nearby Tampere. The centre now boasts the capability to provide customers with a complete first stage in the production chain.

“Our extensive experience as a distributor for companies in the Finnish market, including Ovako, covers a comprehensive range of materials including low alloy carbon steels, engineering steels, carbon steel thin plates, stainless steels, brass and copper,” said Heikki Nyholm, Managing Director Ovako Metals Oy Ab, in Finland. “We provide stockholding, material purchasing, warehousing, cut to length, logistics as well as technical advice and full customer support.”

In addition, Ovako arranged an evening customer visit to its local Tampere distribution centre during the week of Alihankinta, so visitors could see the enhanced facilities and new capabilities available to customers.   

Heikki Nyholm added, “Subcontracting is very much about trusted partnerships. Visitors to our stand will be able to see how Ovako works closely with its customers to optimize material selection, quality and consistency in order to bring performance and cost advantages across their operations.”

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ArcelorMittal is supplying over 75,000 tonnes of hot-rolled coils (HRC) for the Trans-Adriatic Pipeline (TAP). TAP, the construction of which will begin mid-2016, is the final European leg of the 3,500km Southern Gas Corridor and will transport natural gas from the giant Shah Deniz II field in the Caspian Sea to Europe, improving Europe’s energy security. The steel coils for the project are being produced at ArcelorMittal Bremen (Germany) and then shipped to the group’s partner Corinth Pipeworks in Greece, where the pipes are being produced. Deliveries of the hot rolled coils began in late 2015 and will continue until the first quarter of 2017.

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ArcelorMittal Bremen: longstanding experience in oil and gas

ArcelorMittal Bremen was selected to produce the HRC because of the mill’s longstanding experience in pipeline steels. In 2011, ArcelorMittal Bremen installed the world’s largest heavy-duty crop shears on its hot rolling mill, enabling the site to produce heavy wall and super-heavy wall pipeline steels which meet the most stringent requirements. The pipes used on the TAP lines have wall thicknesses of 18mm and must pass strict mechanical testing requirements and dimensional tolerances. The steel used is an X70, high-end grade for pipeline applications. All the steel and the majority of the pipes will be produced in Europe.

"We have provided steels for the global oil and gas pipeline industry for more than 30 years. ArcelorMittal has a proven track record in this field, ensuring proximity to the customer and continuous technical support - in combination with the high quality products provided by our mill in Bremen. ArcelorMittal Europe – Flat Products is proud to be a part of this vital strategic project which is creating value for local communities as well as securing Europe’s future energy supply," said Stéphane Tondo, chief marketing officer in charge of packaging and oil and gas at ArcelorMittal Europe - Flat Products. 

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About ArcelorMittal 


ArcelorMittal employs more than 80,000 people and produces approximately half of its total steel volume in Europe. With a presence in 17 European countries and around 400 different sites, ArcelorMittal Europe had revenues of €29 billion and a crude steel production of 44 million tonnes in 2015. We supply flat and long steel products for all major steel markets, including the automotive, construction, packaging and household appliances industry – supported by a leading R&D and distribution network with 9 laboratories and 1,000 full-time researchers in Europe.

For more information about ArcelorMittal Europe please visit:


ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 19 countries. Guided by a philosophy to produce safe, sustainable steel, we are the leading supplier of quality steel in the major global steel markets including automotive, construction, household appliances and packaging, with world-class research and development and outstanding distribution networks. 

Through our core values of sustainability, quality and leadership, we operate responsibly with respect to the health, safety and wellbeing of our employees, contractors and the communities in which we operate. 

For us, steel is the fabric of life, as it is at the heart of the modern world from railways to cars and washing machines. We are actively researching and producing steel-based technologies and solutions that make many of the products and components people use in their everyday lives more energy efficient. 

We are one of the world’s five largest producers of iron ore and metallurgical coal and our mining business is an essential part of our growth strategy. With a geographically diversified portfolio of iron ore and coal assets, we are strategically positioned to serve our network of steel plants and the external global market. While our steel operations are important customers, our supply to the external market is increasing as we grow. 

In 2015, ArcelorMittal had revenues of US$63.6 billion and crude steel production of 92.5 million tonnes, while own iron ore production reached 62.8 million tonnes. 

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).

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OJSC Magnitogorsk Iron and Steel Works ("MMK" or "the Company") (LSE: MMK) aims for 100% of car manufacturers operating in Russia to accept its metal. The Company consistently implements its import substitution strategy and receives approved rolled steel supplier status.

2016-04-07 064954MMK’s rolled steel has already been approved by 80% of carmakers in Russia. 60% of them procure MMK’s metal on a regular basis. In particular, MMK is a key supplier of rolled steel for AvtoVAZ and UAZ. Furthermore, MMK has received approval from a number of international companies with localized production in Russia. The Company has a track record of supplying steel to such producers and continues to promote its products for existing and potential car plants. In the coming years, MMK plans for 100% of car manufacturers who localize their production in Russia to receive MMK’s steel.

Currently, MMK is a leading supplier of ferrous metal products for car plants and related facilities which produce various car components. MMK holds leading positions in supplying cold-rolled and hot-dip-galvanized steel for the car industry. This was mainly supported by the commissioning of a state-of-the-art cold-rolling Mill 2000 in 2011-2012. The launch of this new facility enabled MMK to convincingly compete with international peers. Thanks to its technological specifications, the Mill 2000 is able to meet the most rigorous requirements for surface quality of cold-rolled and hot-dip-galvanized steel, cover tight thickness requirements, as well as apply zinc-iron (galvanneal) and phosphate coating for anti-corrosion protection, produce high-tensile IF-HS, HSLA, BH and DP steel, which is demanded by producers of cars and car components.

MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2015, the company produced 12.2 million tonnes of crude steel and 11.2 million tonnes of commercial steel products. MMK Group had sales in 2015 of USD 5,839 million and EBITDA of USD 1,668 million.

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Steel tubes are still a success story. Except for a downturn in 2009, global production figures have been pointing in one direction only – upwards. According to the German Steel Tube Association (Wirtschaftsvereinigung Stahlrohre) in Düsseldorf, steel tube manufacturers increased their worldwide production by another 7 per cent in 2014, reaching a record 166m metric tonnes.

As in previous years, the rise was due, in particular, to higher production figures in China. In 2014 the People’s Republic achieved yet another above-average increase in steel production by 11.6 per cent, reaching 89m tonnes. In the same year 54 per cent – over half the world’s steel tubes – was produced in China. China is even more dominant in seamless hot-rolled steel tubes, where its share in global production has reached two thirds now.

In other parts of the world growth was four per cent – 77m tonnes – and thus considerably lower. In East Asia (excluding China) production remained more or less constant, at 2.2m tonnes. Japan recorded 7.2m tonnes and thus three-per-cent growth. The EU, too, experienced a slight production increase in 2014, after the previous year’s sharp downturn, though without achieving the record values of 2005-2008. Nevertheless, at 12.6m tonnes, European steel tube manufacturers are still producing four per cent more than in 2013.

German steel tube market is buoyant again
A four-per-cent production increase (2.7m tonnes) was also recorded by the German steel tube industry in 2014.  But of course 2013 had been one of the weakest years for a long time for Germany’s manufacturers. The industry is certainly still a long way off the record values of around 4m tonnes between 2006 and 2008. Neither did all industry segments benefit from the recovery alike. Gains were made, above all, by welded steel pipe manufacturers, while seamless steel producers suffered rather a decline. According to the Association, the poor results in this market segment were due to a substantial drop in crude oil prices, particularly during the second half.

The main reason for the rise in German production was an increase in domestic demand. Germany’s foreign trade surplus, on the other hand, experienced a decline, as exports dropped 12 per cent to 2.4m tonnes. At the same time imports went up five per cent, reaching 1.9m tonnes. This resulted in supplies for the German market rising to 2.2m tonnes, i.e. up 18 per cent.

In addition to this development in volumes, the development of prices was equally important to manufacturers. After a general decline in the previous year, 2014 displayed a variety of tendencies for different types of steel tubes. Whereas prices went up for large-diameter tubes, they went down for seamless tubes. For precision steel tubes, on the other hand, prices varied only negligibly.

Growth mainly outside Western Europe
According to Salzgitter AG, 2014 was marked by rising energy requirements in the BRIC countries, the development of the United States towards self-sufficiency in oil and gas and, at the same time, a decline in energy demand in the industrial nations, caused by improvements in efficiency. These developments meant that growth opportunities for the tube industry largely shifted to regions outside Western Europe. Moreover, partly due to overcapacities on the steel tube market in 2014, several markets also saw a toughening of competition.

In its 2014 annual report Salzgitter broke down global production into products and manufacturing processes. It shows that seamless tube production increased globally by just under six per cent, reaching 49m tonnes, of which 32m was produced in China alone. The production of welded steel tubes up to 406 mm (outer diameter) rose to 94m tonnes – a segment where the Chinese share reached 50 per cent for the first time. By contrast, large-diameter tube production (i.e. above 406 mm outer diameter) stagnated globally at 22m tonnes. Slight increases in the CIS, China and Japan were offset by a decline in production in the Western world. The downturn in large-diameter tubes was particularly noticeable in the United States – partly because US production had been at such a high level in 2013.

Benteler International AG is another company whose 2014 annual report focuses on the background of developments on the steel tube market. The company reports that the year was marked by positive stimuli from good developments in the global automotive industry, yet also by crisis-induced downward movements in Brazil and Russia. Furthermore, the company observed a decline in drilling activities caused by falling oil prices and, as a result, a lowering of demand for pipes in oil and gas exploration. The big regional differences in the use of steel tubes were reflected in growth rates of 3 to 5 per cent – and sometimes even higher – in Asia, Africa, the Middle East, Eastern Europe and Turkey, while the Western European market remained rather weak, with growth mainly below 2 per cent.

North America continues to be an important market
According to Benteler, positive signals came from the important OCTG market in the United States. Thanks to a considerable increase in oil exploration and production, the demand for tubes rose substantially from mid-2014 onwards. US anti-dumping measures against imports from various countries, particularly Asia, led to price increases in the second half of the year. Towards the end of the year, however, a major drop in oil prices began to cause a tangible reduction in demand.

In all, says André Sombecki, CEO at Benteler Steel/Tube, the steel tube market has basically developed very positively over the last few years: “The demand for tubes is rising, and the market is growing – especially in the United States and Asia. Europe recorded some slight growth and a high level of existing capacities. At the same time we can observe increasing competition from China, Russia and Eastern Europe.” The US market is seen as an important growth market, which is underlined by the new hot rolling mill in Shreveport, Louisiana. In this way Benteler not only seeks to demonstrate a close customer focus and a local approach, but it also wants to achieve a better long-term ability to serve markets in North and South America.

Statistics of the various customer industries of German steel tube manufacturers show that the energy sector is the biggest single area, with around 40 per cent. It is followed by the automotive industry (around 20 per cent) and mechanical engineering (15 per cent). Not surprisingly therefore, the energy sector is seen in the industry as the biggest growth engine and global market of the future. According to a forecast published by Benteler, the production of shale oil, for instance, is expected to have risen more than 100 per cent between 2012 and 2025. The production of liquid petroleum products and liquid gas is apparently set to increase 100 per cent in Latin America, 40 per cent in North America and 35 per cent in the Middle East.

Restrained development on the steel tube market in 2015
In 2015, however, the steel tube market did not confirm the correctness of such forecasts. In all, after the weakness of the first six months, this market continued to develop in a rather more restrained manner during the third quarter of 2015. This, at any rate, was the conclusion drawn by Salzgitter AG in its provisional report for January to September 2015. One major reason for the situation in the industry was apparently the crude oil prices which ultimately caved in again after a brief period of recovery. This led to weaknesses in exploration activities which are so important for the industry. The impact could be felt, above all, by seamless steel tube manufacturers which had to cope, for instance, with up to 40 production slumps in North America. However, substantial downturns were also recorded in the European Union, including Germany.

In all the other segments, by contrast, the economic performance was more positive. In welded steel tubes up to 406 mm (outer diameter) manufacturers achieved a slight increase in production output. Increases were also recorded for large-diameter pipelines (above 406 mm outer diameter), especially in North America, Russia and China. In the EU, on the other hand, production was only negligibly higher than the very low level of the previous year. German manufacturers benefited when the suspension of the Black Sea Pipeline Project, Part One, was lifted – the former South Stream Pipeline, now TurkStream. At the same time, the demand for precision steel tubes, says Salzgitter AG, continued to be satisfactory in the EU, including Germany, thanks to the automotive industry.

Yet, in all, the number of new and existing orders recorded by Salzgitter’s Energy Division – which handles its tube activities – was lower for the first three months of 2015 than for the same period a year earlier. As oil prices continued to be low, numerous gas and oil exploration projects were postponed or even abandoned throughout the world. Reduced demand coupled with newly created production capacities, particularly in Asia, led to greater price pressure and thus to a massive decline in revenue. This development also affected HFI and spiral-welded tubes, a segment which recorded a tangible downturn in existing and new orders in the first three quarters compared with the previous year. The precision tube market, on the other hand, benefited from a good order volume coming from Germany’s highly export-focused car manufacturers during the first nine months of 2015.

After the continuing weakness of Europe’s large-diameter pipeline market throughout much of 2015 a number of facilities in Germany did, however, experience an improvement in their employment situation at least. This was helped by the resumption of production for the Black Sea pipeline project, the order for the Trans-Adriatic Pipeline (TAP) and the ongoing positive situation in North America. The Salzgitter Group won the tender for 270 kilometres of large-diameter pipes and 1,559 pipe bends for the Trans-Adriatic Pipeline which will eventually transport natural gas from the Caspian Sea to Europe. In the future Salzgitter is expecting some robust and sustainable demand from car manufacturers in the precision tube segment. Due to low oil prices, however, the company is also anticipating results below the level of 2014 for seamless stainless steel tubes.

No crisis in the steel tube industry
“The steel industry is going through a global crisis which even the German steel industry won’t be able to avoid,” Hans Jürgen Kerkhoff warned in Düsseldorf in mid-December 2015. But the President of the German Steel Tube Association also admitted that the “weak economic figures in the steel industry are in contrast with the prospects of its big customer industries”.
 Apparently, a positive picture continues to emerge and inspire confidence – partly from performance indicators and thus a good mood in most customer industries, but partly also from the forecasts of the most important steel-processing companies. In the coming year growth is expected in the German automotive industry and also the construction industry. It seems that certain signs of stabilisation can now be observed in mechanical engineering and construction. Kerkhoff says further: “In the steel tube segments stimuli should mainly be coming from large-diameter pipes.” In total, production in the processing industry is expected to increase somewhat, while the need for steel will move slightly sideways.

The odds are therefore fairly good that 2016 will develop better for the steel tube industry than for the steel industry as a whole and that the forthcoming International Pipe & Tube Fair, Tube, will take place in a favourable economic environment. As before, the next leading trade fair of the tube industry will be held together with wire in Düsseldorf from 4 to 8 April 2016.

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