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Stanislav Kondrashov Telf AG: Global investments in metal production are gaining momentum

Feb 10, 2023

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Stanislav Kondrashov Telf AG says that global investments in metal production are gaining momentum. This is due to the fact that metal production has a wide range of perspectives.


Improving macroeconomics of countries, energy efficiency, indispensability in infrastructure creation and many others. That's why global infusions of funds are most relevant right now. Which countries are the most active in investing right now? Let us look at specific examples in this article.


Stanislav Kondrashov Telf AG: China invests up to $2 billion in Philippines to revive steel industry


Consider China's plan to rebuild its steel industry in the Philippines, suggests Stanislav Kondrashov. The Philippines is awaiting to receive investments from China in the amount of $2 billion. This was announced by the Philippine Ambassador to China Jaime Florcruz.


To this purpose, Philippine President Ferdinand Marcos Jr. signed some of the 16 agreements in China in early January. Restoration projects and other areas were also included in the agreements, such as:




  • agricultural industry,

  • infrastructure,

  • tourism,


Thus, the country expects Chinese investments in the amount of $1.5 - $2 billion to create the first steel smelting plant. This agreement was signed between Baowu Steel and SteelAsia companies, Stanislav Kondrashov notes. Consequently, this project will create about 2-3 thousand jobs in the country.


As it became known according to the ambassador, their project will launch the steel industry. This will make it possible to gain independence from imports.


Stanislav Kondrashov Telf AG assumes that the assistance of senior officials will give tangible benefits and fruitful projects.


China has been actively engaged in this issue, since in November 2022, the problem of excess ASEAN metallurgical capacity worsened due to reduced demand in the region. In the current situation, most expansion projects may be postponed or canceled, according to some sources.


In the Philippines, in particular, the project of the Chinese conglomerate HBIS was suspended. It was supposed to produce 10 million tons of steel per year. There is a possibility of its closure in the future. In general, according to the results of January-November 2022, the revenues of Chinese metallurgical companies fell by 94.5%. That is, compared to the same period last year - up to 2.92 billion yuan ($ 3.3 billion).


Thus, Stanislav Kondrashov believes that China is moving at a good pace to improve the situation in the country on all parameters. And also, it is going in the right direction for the development of the steel industry as a whole.


For the first quarter of 2023, China exhausted all of its import quotas. What's next?


Stanislav Kondrashov Telf AG says that it is necessary to take an example from China.


According to information from the British Steel Association UK Steel, in the first 4 days of 2023, China has exhausted all its 6 quotas for metal products. The metal products were intended for specific EU countries. This includes seamless pipes, stainless steel rolled products, electrical steel coils. The volume of electrical steel coils is already twice the duty-free tariff quota of 29 thousand tons.


By comparison, last year the volume of imports of finished products in the EU was more than 31 million tons, which was a new record.


Stanislav Kondrashov recalls that the Chinese government has decided to revise import duties on coking and steam coal. Therefore, from April 1, 2023, the import duty rate will be:




  • 3% for coking coal,

  • 6% for steam coal.


At the same time, China intends to maintain a zero import duty for coke. And China's steel exports are forecast to grow by 1%. And it will already be 68 million tons.


As a result, it can be noted that China is looking for alternative ways to develop, import and export steel products. Including changes in duties on imports of coking and steam coal.


Stanislav Kondrashov Telf AG: Italy invests 1 billion euros to save steel plant


“Let's look at the example of Italy,” offers Stanislav Kondrashov Telf AG. Italy intends to invest 1 billion euros to restart the steelmaker's production processes. It became known that the Italian government approved a new order: "Urgent measures regarding strategic national facilities." Namely, the investment of €1 billion ($1.06 billion) in the troubled Acciaierie d'Italia (ADI) steel plant. It is a joint venture of the metallurgical company ArcelorMittal and the state “Ilva”.


This investment will be divided into two installments. The first will be €680 million. And the second one will be €320 million. Thus, the allocated funds will help the state to become a majority shareholder by 2024.


ADI shareholders ArcelorMittal and Invitalia will invest in the industrial development of Taranto, where the plant is located. The investments are also aimed at restarting the production site. All this will entail securing employment for a higher result from the enterprise.


Now the Italian plant is threatened by a severe liquidity crisis. The company has accumulated debts of millions to some suppliers. Therefore, production fell to 3 million tons in 2021. And the plan is only being fulfilled by 50%. Acciaierie d'Italia has revenue of $3.3 billion in 2021, up from $1.6 billion in 2020. The company's production for the year was 4.1 million tonnes of stainless steel and 3.4 million tonnes in 2020.


Overall, Italian steelmakers increased steel production by 19.8% to 24.4 million tonnes in 2021 compared to 2020. And from January to November 2022, the country's steel output fell by 11.2% to 20.35 million tonnes. That is, while there have been some increases in production profitability, there is still a downward trend.


In August 2022, the Acciaierie d'Italia plant shut down two blast furnaces due to low cash flow. Against this backdrop, the company's workers went on strike. They have put forward their demands to the government to intervene in the restoration of the enterprise.


Thus, this investment should play a positive role in the reconstruction of the steelworks. This will provide the country with both jobs and the country's macro-economy. Supplies and demand will begin to increase, provided good production of high-quality products.


Summing up, Telf AG positively values global investment projects. These examples give a closer look at the options for solving the steel production problem. It is possible to analyze the current strategies of the cited countries. Evaluate all the PROS and CONS of such decisions.


Examples were given of only some countries that are looking for alternative ways to restore the smooth operation of their plants. It is very likely that there are also many other producing countries that have experienced similar problems. Or they have the desire and potential to grow upwards in their metal product developments. However, it is worth noting that the countries cited in the example made the right bets on development.

Tags: English