The steel market - France (2023)

1.2 World market: Global steel production to slow down in 2022, despite considerable resilience to Covid 19

World steel production Source: ****

Since the subprime crisis, global steel production has continued to rise, with an average annual growth rate of *,**%. The steel industry has shown remarkable resilience during the global health crisis of COVID-**, maintaining relatively stable production between **** and ****, even when the global economy, particularly the construction sector, was hit by the crisis.even when the global economy, particularly the construction and automotive sectors (***), came to a standstill. In ****, with the global economy recovering and the Chinese economy reopening, production rose by almost *,*%.

However, in ****, global production entered a slowdown phase a phase of slowdown, with steel production declining by almost *% in one year in one year, returning to levels close to those of ****. In Europe, crude steel production fell significantly by**,*%for the EU-**. This was partly due to higher energy costs, which led to the temporary closure of several production sites in Europe, such as ArcelorMittal's Fos-sur-Mer plant, as well as a number of other European plants. Fos-sur-Mer, as well as decisions to slow down production, as in the case of Aperam in Belgium, also linked to the sharp rise in energy costs.

This turnaround in activity seems to be confirmed in the first months of ...

1.3 French market

French steel market sales trend (***) France, ****-****, Million euros Source: Insee /Insee sales in the French steel market grew at an average annual rate of *,**% between **** and ****. GDP, meanwhile, grew by an average of *% a year over the same period, reaching **.* billion euros in ****. The French market has not been as resilient as the global market to the COVID-** crisis, recording a decline in sales of over **% between **** and ****. Nonetheless, there was very significant growth in the two years following the COVID-** crisis, with an average annual growth rate between **** and **** of **%.

Sales index (***) France, ****-****,base *** (***)

This graph, depicting the evolution of the French steel market's sales index, strikingly highlights the influence of the COVID-** crisis in **** on the French steel market. It also reveals a very positive trend reversal after the post-Covid period, starting in the final months of ****, a dynamic that is maintained in the first few months of ****, marked by a fall in activity of around **% in the first half of **** (***).

1.4: Balance of trade

Imports/exports of steel products in France France,****-****, million euros Source: French Customs French exports of steel products (***) grew by an average of *.**% over the period **** to ****with a significant drop of around **% in ****. This decline was largely offset in **** and ****, with respective increases of **% and **% in exports. However, despite this substantial growth in French exports, French imports increased more significantly, posting average growth of *,**% over the period **** to ****. In ****, French imports reached **.* billion euros, while exports amounted to **.* billion euros in ****. Source: French Customs France's international trade in steel products consists mainly of basic steel products in terms of value. Over the period from **** to ****, France's trade balance has suffered a sharp deteriorationfrom a surplus of over* billion euros in **** to a deficit of *.* billion euros in ****. This deficit trend since **** can largely be attributed to the **% tariffs imposed by the United States on steel. More generally, France faces intense competition from Asian countries that produce steel at lower cost. The COVID-** crisis has only accelerated a phenomenon that had been underway for over a decade.

Main partner countries (***) steel and primary steel products World, ****-****, % of total Sources: French Customs On the graph showing the percentage breakdown of ...

2.1 Construction: Europe's No. 1 consumer of steel products

Steel consumption in France France, ****, %, steel consumption

At European level, the construction industry is the leading consumer of steel products. Despite French production mainly based on the production of flat productsused in industry (***), beams and steel for metal envelopes

Index of evolution of income in construction ****-****, value of index **** = *** Source: ****

Despite significant growth in the wake of the post-COVID-** economic recovery, reflected in a notable increase of *.*% increase in sales in the construction sector by ****, we are facing a major crisis in the new-build market. Since the start of ****, reservations for new apartments have fallen alarmingly, by **%. Sales of new homes have also fallen by **.*%. These worrying indicators point to difficult months ahead for the construction sector.

It should be stressed that the steel industry is closely linked to the construction industry, which remains Europe's leading consumer of steel products. This interdependence inevitably translates into a drop in orders for steel productsresulting in lower sales for the steel industry

2.2 The transport industry: France's second-largest consumer of steel products

With**%of French steel production,the transport sector is France's second largest steel consumer. This is largely due to the automotive sector, but also to the railways

Steel used in the automotive sector (***) is a high value-added product.high value-added productsused for bodywork and engine components.

Sales growth index for the automotive sector France, ****-****, base ***:**** Source: ****

The automotive industry, one of the main markets for the French steel industry, has begun to recover in ****, recording an increase of around *% increase in production in terms of volume. In financial terms, this recovery translated into a significant increase in sales, a trend which seems to be confirmed for **** as a whole, with a projected average increase of around **% over the first six months, extrapolated for a full year. However, it is important to note that in ****, despite this growth, the level of activity in terms of sales has only reached the levels recorded prior to the COVID-** crisis in ****. This upturn in activity observed for **** is particularly beneficial for the steel industry, especially for flat products producers such as ArcelorMittall.

3.1 Value chain

Today, steel production can be divided into two main processes: the melting process and the casting processhe cast-iron processand theelectric die. In France, the electric sector accounts for around **% of steel production, a figure lower than before the ****-**** crisis. In the United States, on the other hand, the electric sector predominates, accounting for **% of total steel production. Steelmaking in electric furnaces is significantly more environmentally friendly in terms of CO* emissions than the blast furnace method, generating around *** kg of CO* per tonne of steel, compared with *.* to *.* tonnes of CO* in the case of the traditional method.

It is important to note that the steel industry is still responsible forapproximately *% to *% of greenhouse gas emissionsequivalent to three to four times the CO* emissions of aviation.

With the new directives aimed at reducing our industry's carbon emissions, theincrease the use of electric power seems to be a necessity.

Source: ****

3.2 The different professions in the French steel industry

Basic steelmaking :

Basic steelmaking encompasses the process of steel production in a steel mill, where raw ore or scrap is transformed into various forms of semi-finished products such as slabs, billets, blooms, and many others.

Cold drawing

Wire drawing refers to the operation whereby a metal wire is passed through a die to reduce its diameter. The resulting wires are used mainly by the electrical industry (***) and by wire mesh manufacturers

Wire drawing is the process of passing a metal wire through a die to reduce its diameter. The wires thus obtained find their main application in the electrical industry, notably in the manufacture of cables for very high voltage lines, as well as in the production of wire mesh by manufacturers.

cold drawing :

Cold drawing refers to the operation whereby a metal wire is passed through a die to reduce its diameter. The resulting wires are mainly used by the electrical industry (***)

Cold forming :

Profiling is a continuous cold-forming process involving the continuous bending of sheet metal. This deformation is carried out using successive pairs of rollers, and the end result takes the form of profiles, generally longer than they are wide. A concrete example of products obtained by profiling ...

3.3 Determinants of steel industry activity

In this section, we will examine the various factors that explain the past and future development of the steel industry:

*) Consumers of steel products

As we have already seen in section * on the sectors that consume steel products, the good financial and economic health of these various sectors has a direct impact on the steel industry.

Long products are used in building structures, engineering structures, water and gas pipes, etc. The growth in the number of building sites and infrastructure projects has a direct impact on the steel business.infrastructure projects have a direct impact on the steel industry, and if construction activity declines, so will demand for steel products.

As for the manufacturing industry, we can see the same trend: changes in manufacturing output have a direct impact on the activity of steelmakers and traders. the vitality of this sector is crucial to demand from steelmakers, as it is widely used in automotive manufacturing.

*) Raw materials prices:

International price indices for imported raw materials: Iron France, ****-****, base *** (***) Source: ****

Iron ore and coking coal prices have a direct impact on the direct impact on production costs for French steel products. In ****, following the COVID-** crisis, raw material prices ...

3.4 Workforce and steel plants in France

Number of establishments in the steel industry in France France, ****-****, Number of establishments Source: ****

Number of employees in steel establishments in France France, ****-****, Number of employees Source: ****

The number of steel plants in France has remained relatively stable for around a decade, with a total of around ** . Significant barriers to entry and lack of profitability dissuade potential new entrants from entering the sector, but this stability masksa downward trend in the number of employees in the sector over the last few years (***). This reduction was particularly marked during the Covid-** crisis, which led to the closure of many factories. This trend persists today, largely due to high energy costs, which make the business less economically viable for some players in the sector.

As is the case for most industrial activities in France, companies operating in the steel industry have traditionally made their home in the north of the country, mainly in the Hauts-de-France and Grand Est regions, with almost **% of establishments.what sets the steel sector apart is that it also has a significant number of companies based in Auvergne-Rhône-Alpes, representing **% of all companies in the sector in this region.

4.1 Types of offer

Steel is the second most the produced in the world after cement. This metal is widely used because it is cheap, strong and highly versatile. Steel is relatively environmentally friendly compared to other materials, as it is fully recyclable and consumes little energy. Most steels contain iron and varying amounts of carbon. To increase the resistance of steels to mechanical and chemical stress, chemical elements can be intentionally added to their composition. These elements are known as additives, which transform steel into steel alloys.

Use cases are extremely diverse and ubiquitous; the product range includes, for example, railroads, oil and gas pipelines, skyscrapers, elevators, subways, bridges, automobiles, ships, knives and forks, razors and surgical instruments. [***]

Steel is made mainly from iron, with some carbon integration. It may also contain small amounts of silicon, phosphorus, sulfur and oxygen. What's more, steel is not a single product; today there are over *,*** different grades of steel with many different physical, chemical and environmental properties. worldsteel reports that around **% of modern steels have been developed in the last ** years.

Steel is also notoriously difficult to cast, making it unsuitable for large, complex-shaped parts (***), for which cast iron is preferred. Similarly, when its high density becomes ...

4.2 Basic steelmaking

Basic steel production trend index France, ****-****, Base *** in **** Source: ****

In ****, basic steel production in France recorded a significant drop of *.*%to below pre-crisis levels. This decline is mainly due to the combined effects of the deteriorating economic context and the energy crisis affecting Europe, which had a particular impact on the basic steel sector.

French industry output price index: Basic steel products and ferroalloys France, ****-****, base ***: **** ****: first * months Source: ****

producer price trends played a dominant role in the change in sales. Despite a significant decline in activity in volume terms since ****, sales in basic steel production have recorded an increase of **.*% in **** and **.*% in ****. However, it is important to note that producer prices have also risen, with increases of **.*% and **.**% respectively over the same period.

4.3 Primary steel production

Sales for the French manufacture of steel tubes, pipes, hollow sections and related accessories France,****-****, Index base *** in **** Source: ****

since the subprime crisis, there has been a general since the subprime crisis, there has been a general downward trend in sales in steel tube and pipe production. However, it is worth noting that an interesting recovery has emerged in the wake of the COVID-** crisis.

In ****, sales of pipes and tubes rose significantly by **,*%. This growth is mainly attributable to a positive positive price effectresulting from high raw material prices. However, it should be noted that there are preliminary signs of a slowdown in activity were observed in the second half of ****, pointing to a trend reversal in ****.

It should be emphasized that, despite a **% reduction in sales in value terms between **** and ****, due to the sharp rise in primary steel prices, the volume contraction is even more marked. The significant drop in business is closely linked to the reduction in investment in the hydrocarbon sector (***)

Sales index - Domestic and export market - Manufacture of other primary steel products France,****-****,base *** ****: first * months Source: ****

in the case of other primary processing products, although activity has recovered significantly by ...

4.4 A price strongly correlated with raw material prices.

French industrial producer price index: (***) France, ****-****, base *** (***) Source: ****

International price indices for imported raw materials: Iron France, ****-****, base *** (***) Source: ****

Producer prices for steel products rose sharply in **** and ****, in correlation with the significant increase in raw material prices, particularly for iron ore. However, this upward trend in producer prices began to slow down from the third quarter of ****.

French industrial producer prices recorded a significant increase of almost **% between **** and ****largely due to the substantial increase in the price of iron iron, which rose by **% in ****.

However, in the period from **** to the first six months of ****, production prices for steel products recorded an **.*% decreasewhile iron ore prices fell by *.*% over the same period over the same period. It is important to note that variations in raw material prices have a direct impact on the level of production prices, which in turn directly influences final prices for consumers.

5.1 Regulations

As steelmakers generate almost **% of their business from exports, they are highly sensitive to changes in international regulations, particularly with regard to customs duties.

In France, the steel industry is governed by the Convention Collective Nationale de la Sidérurgie of November **, ****

The EU is the world's second largest steel producer after China. The European Union has declared its ambitions to strengthen the steel sector, given its strong links with the various related industries; by the end of ****, it expects the industry to account for **% of the Union's GDP. [***]

To achieve this, the EU has set up projects including Horizon **** , structural funds and the Research Fund for Coal and Steel .

In the Steel Action Plan , the EU sets out its expectations for meeting the challenges of the environment, competitiveness and access to raw materials. These include the following points:

A sound regulatory framework: European legislation must create a healthy investment climate; Stimulating demand for steel: Implementation of growth-oriented EU initiatives in construction and automation (***); At international level: Enforcing international commitments and ensuring a level playing field for the EU steel sector; Reviewing market accessibility; Access to raw materials: access to raw materials is covered in raw materials policy and strategy; Trade ...

6.1 Player segmentation

• ArcelorMittal
• Aperam Groupe - Aperam Stainless France
• Eramet
• China Baowu Group
• Nippon Steel Trading Europe
• Riva Acier France
• Vallourec
• Aubert et Duval
• ThyssenKrupp
• Ascometal
• Industeel (Arcelor Mittal)
• H2 Green Steel
• Nippon Steel Corporation
• Erasteel
• Saarstahl Ascoval
• Bacacier Groupe (Kingspan)
• Paturle Aciers
• Aciers Coste
• Aciéries et laminoirs de Rives
• Bonpertuis
• NLMK Strasbourg