Firm Turkish rebar exporters face resistance to their offers from buyers, holding market activity in deadlock

• Mills maintained higher offers as lira weakens further
• Buyers refrain from bookings

Turkish rebar exporters faced resistance from buyers to their offers and no new bookings were reported on the day June 8.

As lira-denominated rebar offers paced upwards in response to fast Turkish lira depreciation, the export offers in US dollars remained stable.

The Turkish currency neared 23.4/$1 on June 8, which was another daily drop from around 23.21/$1 on June 7. Market players lacked confidence that this was the bottom of the Turkish currency’s nosedive. The rebar export offers stood firmly at minimum $630/mt FOB Turkey during the week. A Marmara-based mill source put his target range at $630-$640/mt FOB, which he admitted was high for buyers. “Probably, this week and next week will be weak,” the source added.

A European trader said that the workable levels for Turkish rebar producers were minimum $625/mt FOB, which was slightly up on account of good sales in domestic market and the higher scrap price indications. Tradable values for premium heavy melting scrap 1/2 (80:20) were around $390/mt CFR Turkey on the day, but some sellers’ target prices for the US-origin material were reported at $400/mt CFR.

Despite Turkish rebar producers’ insistence on export offers, buyers were not biting more as the demand in many areas was not strong and cheaper rebar was available elsewhere.

“Rebars ex Turkey have no chance to sell anywhere for export at such numbers, not even to Israel,” a European trader said. He added that EU demand was dormant, stock levels were still high and competition was high.

“I did not ask for any [Turkish rebar] prices as demand is zero. $630/mt FOB is anyway not competitive and by far,” another trader said.

A UK-based trading source said that the rebar offers he had seen from Turkey were much above $600/mt FOB, “whereas Egyptians are maximum $580/mt FOB.”

Platts assessed Turkish exported rebar at $622.50/mt FOB on June 8, unchanged from June 7.

Platts is part of S&P Global Commodity Insights.

Author Wojciech Laskowski, wojtek.laskowski@spglobal.com

Central European HRC traded at competitive prices in Germany

• Import offers rise
• Non-EU coil competitive despite the increase

Central European steelmakers have sold hot-rolled coil to Germany at competitive prices, threatening Northwest European prices, sources told S&P Global Commodity Insights June 8.

Deals from Central European mills have been reported at Eur650-660/mt delivered Germany.

Northwest European mills, in the meantime, have been offering HRC at Eur700-730/mt ex-works Ruhr. And market participants estimated tradable values at Eur700/mt ex-works Ruhr.

Platts assessed domestic prices for hot-rolled coil in Northwest Europe unchanged on day at Eur705/mt ex-works Ruhr on June 8.

“It does sound though that the German market has plunged below the Eur700/mt ex-works [Ruhr] line even if German mills themselves are not moving yet,” a trader said.

Some market participants believe that German mills would have to accept lower prices to secure deals.

Although import offers increased this week, they remain substantially below domestic prices.

Platts assessed prices for imported hot-rolled coil in Northwest Europe up by Eur10/mt on day to Eur620/mt CIF Antwerp on June 8.

Offers for the material from Asia have been heard at Eur630/mt CIF Antwerp. The assessment was settled between offers and previous assessment due to lack of trading.

Platts assessed domestic prices in South Europe unchanged on day at Eur670/mt ex-works Italy on June 8.

Offers and tradable values have been reported at Eur670/mt ex-works Italy.

Platts assessed prices for imported hot-rolled coil in the region at Eur610/mt CIF Italy on June 8, up by Eur5/mt on day.

Offers have been heard at Eur600-620/mt CIF Italy for the material from Asia.

Platts is part of S&P Global Commodity Insights.

Author Maria Tanatar, maria.tanatar@spglobal.com

Europe’s decarbonization focus sets region’s steel sector in motion

Sir Isaac Newton famously theorized in his laws of motion that objects react when force is applied.

And just as an inert object remains at rest if not acted upon, the European steel industry – without government regulation and end-user demand – might not have acted to reduce carbon emissions as quickly as it had in recent years.

Against the backdrop of the European Union’s impending Carbon Border Adjustment Mechanism scheme and decarbonization efforts accelerating around the globe, many steelmakers in the region have invested in new equipment and less carbon-intensive production routes to cut emissions. Now, many are looking for a return on their investments in the form of premiums for certified carbon-accounted steel over standard material.

Low volumes ‘will change soon’

The CO2 emissions reduction targets set by the European Union triggered a massive change in the region’s steel industry. Legacy producers have increased their use of low-carbon steelmaking raw materials and metallics, and new hydrogen-based producers, such as H2 Green Steel in Sweden, have emerged to begin production in the coming years.

In addition to regulation like CBAM, which will require steel importers to declare – and pay for – CO2 emissions from 2026, large end-users, such as automotive and white goods manufacturers, have increasingly demanded low-CO2 steel as their customers seek out cars, washing machines and refrigerators made with more sustainable materials. In 2023, low-CO2 steel demand has extended to service centers and distributors, as well.

As the market develops, demand is expected to rise faster than supply, boosting premiums for carbon-accounted steel, market sources contend.

“Right now, the volumes of low-CO2 coil traded are low, but this will change soon,” a source from a German service center said. “End-users and distributors will need material soon, and the mills would not finalize their upgrades fast enough.”

As interest has increased in carbon-accounted steel, the need for clarity regarding how it is defined has increased as well, particularly around maximum CO2 emissions and the routes various European mills are taking to reduce them.

The European Commission has been developing unified standards around certification for carbon-accounted steel, market sources said, but until the EU adopts firm regulations, some buyers will remain reluctant to take full part in the sector.

“We are all waiting for the Commission to make an announcement that would, hopefully, clarify requirements and standards for green steel,” a source from another service center said. “Until it would be adopted, buyers would not rush to book volumes, as there is no clarity what standards for emissions and other restrictions could be included.”

Looking for a ‘permanent solution’

European steelmakers offering carbon-accounted hot-rolled coils have mainly pursued routes that include electric-arc furnace production, hydrogen and fossil-free fuel production, mass balance calculations or the application of voluntary carbon credits and offsets.

“Some mills use carbon credits to reduce emissions on paper, but this is not a permanent solution to the problem,” a Northwest European steelmaker said. “A buyer can get such products with shorter lead time as it does not require actual technological changes, but a lot of buyers are not ready to pay extra for the material that does not actually have lower emissions. And such material does not have certifications.”

Some steelmakers have been seeking carbon-accounted HRC premiums in the range of Eur100-300/mt for material with CO2 emissions below 2.1 mt per metric ton of steel produced.

“Mills say that currently a premium of Eur200/mt would cover the additional costs,” a source from an Italian service center said. “But it seems that mills are ready to accept [a] really low premium, in some cases close to zero, from new buyers just to get more people involved in the new products.”

Many buyers have been holding back from such purchases until the European Commission provides firm guidance. Those that have already booked carbon-accounted HRC deals have paid premiums in the range of Eur50-100/mt, sources said.

Steelmakers including Arvedi in Italy and ArcelorMittal Spain have been actively offering certified carbon-accounted HRC via the EAF route. SSAB in Sweden as well as Salzgitter in Germany have been offering limited volumes from their fossil-free pilot projects.

Platts, part of S&P Global Commodity Insights, launched new daily carbon-accounted hot-rolled coil steel assessments in early May, including a European HRC Carbon-Accounted Steel Premium, or CASP, and a Northwest Europe HRC Carbon-Accounted Steel Price to provide relevant price assessments and data to help bring transparency to the process.

Based on industry feedback, the CASP reflects any differential or premium achieved for the spot sale of HRC on an ex-works basis, with total accounted carbon emissions of 2.1 mt of CO2 or less for every metric ton of steel produced.

The assessments reflect trade in HRC with carbon emissions certified by an internationally accepted, independent organization, and exclude material that has had offsets or voluntary carbon credits applied to lower overall emissions profiles.

The CASP total includes emissions from direct, indirect and associated upstream and downstream activities such as mining and processing of steelmaking raw materials, hot metal production, steel rolling and associated transportation and logistics, so-called Scopes 1, 2 and 3.

The Northwest Europe HRC CASP assessment represents an all-in price for carbon-accounted steel in that region.

While different production routes generate a wide range of CO2 emissions, the majority of European market participants agree that the 2.1 mt of CO2 per mt of HRC that’s reflected in the new Platts assessments is reflective of the current “low-carbon” threshold for blast furnace production in the region. That number will only decrease as EAF production increases and hydrogen and fossil-free production scales up, they said.

Author Christopher Davis, chris.davis@spglobal.com, Maria Tanatar, maria.tanatar@spglobal.com

Demand rises in Southern European rebar market; wire rod prices slide

Steel mills will look to target price rises in the Southern European rebar market amid a slight improvement in demand in the week to June 7.

The Southern European wire rod market remains depressed, though – domestic prices dropped further.

Fastmarkets’ price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €665-685 ($711-733) per tonne on Wednesday, unchanged from the previous week.

Still, improved demand in the Italian rebar market has renewed optimism among market participants, with some sources forecasting price rises throughout June.

“Rebar producers are trying to put the prices up but selling is still much lower,” a buyer source said. “Demand has been good [over the] last week. Rumors of price rises have encouraged customers to buy a little more than the previous weeks.”

Increased appetite for rebar exports and slightly improved domestic demand have boosted mill order books, in turn prompting them to target higher prices.

“Mills have sold big quantities to export at a lower price and they decided to stop the prices decreasing in Italy,” a trader source said. “I don’t think we will see prices falling below €675-685 per tonne until September.”

But given the fact that market conditions remain uncertain, it is not yet clear whether the market will accept significant price rises, Fastmarkets heard from sources.

Fastmarkets’ daily calculation of the index for steel scrap HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $384.45 per tonne on June 7, up from $376.83 per tonne last week.

Prices remained flat in the Spanish rebar market while buyers retained a wait-and-see stance.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €665-685 per tonne on Wednesday, unchanged from the previous week.

Southern European wire rod
Fastmarkets’ price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe was €590-620 per tonne on Wednesday, down by €10-30 per tonne from €620-630 per tonne last week.

Market participants remained bearish in the Southern European market.

“Market demand is very low and the situation is difficult. Steel mills are squeezed between the falling price of wire rod and the price of scrap, which does not fall below a certain level,” a producer source said.

The European Union’s decision to include other countries in European import quotas could affect appetite for imported material, sources said.

“It is interesting to consider how the inclusion of India, Malaysia, Egypt and Indonesia in the European import quotas will influence the purchase of wire rod by big consumers,” the wire rod producer added.

Published by: India-Inés Levy

Tata Steel Netherlands to lift force majeure on CRC deliveries

Tata Steel Netherlands plans to remove the force majeure declaration it invoked on cold-rolled coil deliveries in late February, the company announced on Thursday June 8.

The force majeure, which was declared on February 24 following disruptions during an upgrade of cold-rolling mill 21 at the company’s Ijmuiden steelworks, will be lifted on June 12. The disruption to supply from Tata Steel had initially aggravated tightness in the downstream steel market and supported an uptrend in CRC prices.

“Tata Steel Nederland is set to revoke the force majeure declaration it issued late February, signalling a return to normal operations and ensuring a stable supply of steel products from its Ijmuiden site,” Tata Steel said.

According to market sources, Tata Steel can produce 3.6 million tonnes per year of CRC at two cold-rolling mills at the Ijmuiden steelworks. Cold-rolling mill 21 has a production capacity of 1.6 million tpy.

Current market conditions, however, are rather gloomy, with flat steel prices across Europe seen declining. A wide gap between offers for domestic and overseas CRC and hot-dip galvanized coil, as well as limited end-user demand, has weighed on sentiment for June, sources said.

Fastmarkets’ weekly price assessment for steel CRC, domestic, exw Northern Europe, was €800-830 ($856-888) per tonne on Wednesday, down by €20-40 per tonne from €840-850 per tonne on May 31.

Published by: Julia Bolotova