Asian stainless CRC rises on jump in nickel prices

Asian stainless cold-rolled coils increased in the week to Jan. 14, supported by the strong rallies seen in nickel prices which reached multiyear highs despite the slowdown in trade activity with the Lunar New Year holidays approaching.

S&P Global Platts assessed 304 grade 2 mm 2B stainless CRC at $3,090/mt CFR East and Southeast Asian ports Jan. 14, up $40/mt on the week.

Market sentiment was supported by strong nickel prices, which surged to their highest in a decade during the week. The official nickel cash price on the London Metal Exchange settled at $22,125-$22,130/mt Jan. 13, up $1,652.5/mt on the week.

The strong nickel prices have also boosted the sentiment in Chinese stainless futures, market sources said. Spot stainless steel market in southern China increased by above Yuan 300/mt in the week, although market activity was winding down as the Lunar New Year holiday falls end of the month, they said.

“Sellers have suspended offers for cargoes for immediate delivery, especially for 304 CRC, due to the market volatility,” said a Chinese trader. “Market inventory is relatively low now, and even if we could find the materials, it’s also tough to arrange the delivery as warehouses would be closed soon.” It’s also too tight to find the vessels now, he added. Both buyers and sellers preferred to wait on the sidelines until the Lunar New Year holidays get over.

Some major mills’ export offers, which are usually announced late of the month, expected to be above $3,000/mt FOB, sources said.

Meanwhile, Taiwanese and Japanese mills were also heard stopped providing offers due to strong nickel and more positive market outlook supported by raw material prices, said a regional trader. Taiwanese mills are likely to raise offers by at least $100/mt to $3,100/mt CFR, he said.

The most actively traded February 2022 stainless steel contract on the Shanghai Futures Exchange closed at Yuan 17,895/mt Jan. 14, up Yuan 985/mt, or 5.8%, week on week and marked the highest level in about two months.

— Staff

Europe may see Q1 steel ‘shortage’ if auto demand recovers: Vanilla Steel

European steel market participants expect another quarter of high product prices on the back of surging electricity prices and import restrictions despite rather slow activity levels at present, according to Alexis Ducros, co-founder of Vanilla Steel, a digital platform for the auctioning of excess steel products and capacity.

The ongoing quotas system under the European Union’s steel imports safeguards system is preventing further imports and could provoke ongoing tightness, Ducros said in an interview.

“Framework contracts are still being negotiated with difficulties given the new highs and players are trying to source complementary procurement solutions,” he told S&P Global Platts. “[The] big unknown factor is the automotive industry as it was paused with ongoing semiconductors shortage. If automotive resumes its consumption, we can expect further shortage of steel in Europe in 2022.”

Ongoing logistics issues, including high prices, transport shortage and delays, have recently limited export market activity, Ducros said.

European flat and long steel prices reached record levels in the third quarter of 2021, as the market spiraled to recovery on stimulus funds following 2020’s COVID-19-related market slump. Furnaces halted near the start of the pandemic regained production levels slowly, leading prices to ease in Q4, especially as demand from the automotive sector continued weak on the semiconductors shortage, which is expected to last well into this year.

Overall, the European steel market remains tight, however. While the lifting of US Section 232 tariffs on EU steel has renewed the region’s export opportunities in that market, with reciprocal opportunities in Europe, the EU continues to exercise a tariff-rate quota (TRQ) import safeguard system which restricts its overall import levels.

A major steelmaking source with mills in Europe said this week that the EU’s quotas for India’s cold rolled steel, Chinese auto grade and Turkey’s wire rod had already been exceeded after one week of this year’s TRQ regime.

Auto demand still ‘sluggish’

European hot rolled coil market participants said Jan. 13 it was unclear whether the market would soon strike a balance between supply and demand as automotive demand continued sluggish. With little purchasing activity heard as buyers took a step back from inquiries, mills were keen to keep prices high despite slowness on import material, the sources said. Mills were heard mostly booked for January and February.

Platts assessed North European HRC prices down Eur2.50 at Eur922.5/mt ex-works Ruhr, and in Southern Europe, prices remained stable at Eur835/mt ex-works Italy Jan. 13.

In the hot-dip galvanized sheet market, where the automotive sector is a major consumer, some market participants said this week they were expecting uptake from import material to slow on account of increasing protectionist measures, with a lot of material waiting at Italian ports.

An Italy trader source said that although imports were looking less attractive, prices were not likely to fall.

“Prices will not decrease, energy and raw material costs are too high to do so,” an Italian trader told S&P Global Platts. “European mills will reduce production before lowering price.”

Platts assessed North European HDG prices stable at Eur1,100/mt ex-works Ruhr and in Southern Europe Jan. 12, while prices softened by Eur5/mt to Eur1,075/mt ex-works Italy.

Enabling ‘slow mover’ sales

Ducros said that during the period of material supply scarcity in Q2-Q3 2021, Vanilla Steel had aimed to enable suppliers to either sell “slow movers” or to sell material in high demand at higher prices via a competitive bidding process on its Berlin-based auction platform, launched in 2020. “The main usage is still to allow European suppliers to auction their excess inventory … to help the suppliers to requalify materials in the European domestic market,” he added.

Carbon and stainless steel flat and long products and tubes are made available on the platform for a four-day period each week at a minimum price and incoterms defined by the supplier. Tinplate and aluminum have been added to the platform this year.

Around 160 steel suppliers from 60 countries now trade on the platform, with German long steel products producer Saarstahl having announced its adhesion to the system this week. Other authorized suppliers include Vitkovice, a plate producer in the Czech Republic and German steel service center Stahlo, Ducros said.

“For the sake of logistics efficiency, most of the auctions are of fully-loaded truck size lots and the average transaction value last year was around Eur18,000,” he said.

Vanilla Steel is now building a secondary market with spot trading for the EMEA market, to closely accompany market cycles, he said.

Currently, 90% of spot steel trading is being done offline including prime and excess steel (slow movers, overrollings or declassified material), according to a statement issued by the platform.

— Diana Kinch

US hot-rolled prices continue to drop, floor uncertain

US hot-rolled coil’s precipitous price decline from last September’s all-time high continued on Jan. 14 as any talk of a pricing floor appeared to be more of a trap door.

The daily Platts TSI US HRC index fell by $40/st to $1,400/st on an ex-works Indiana basis. Prices are now down nearly 29% from Sept. 2021’s peak.

Most market participants were not even attempting to put a number on where prices could bottom out as steelmakers remain extremely profitable given input costs as finished steel prices decline. In addition, there remained an uncertainty from both buyers and sellers about what price level would even generate buying activity given the existing margins for steelmakers and potential for further declines.

One mini-mill source said sellers were basically competing against themselves if they started approaching customers with lower numbers. Even if a mill was to lower pricing it was unlikely to generate any new orders, added the source.

“Something has got to give,” said the mill source, as buyers were still shedding higher-priced inventory and reluctant to place new orders.

A Midwest service center source said his contacts at a Midwest mini-mill maintained prices were still at a minimum of $1,400/st. Still, the buyer was skeptical the mill had booked much of anything during the week. There were still “massive inventories in spots,” according to the source.

Even if mills lowered numbers significantly it was no guarantee of an order. A service center source reported an offer from an established domestic mill at a value closer to new import offers but still did not buy. “We are over-inventoried,” said the source.

A Midwest mill was still able to sell small commodity orders at $1,500/st but admitted there were not many transactions or large-tonnage orders over the past week. He expected larger buyers to start negotiating tons next week.

— Michael Fitzgerald

Liberty Steel confirme le financement de ses activités à Liège

Nouveau rebondissement à Liège: Liberty Steel confirme finalement le financement de la première étape du plan de transformation sur ses sites en bord de Meuse.

En toute fin d’année dernière, Liberty Steel Liège avait annoncé aux ouvriers renoncer à un plan de relance, pourtant validé par la justice belge un mois plus tôt , suite à son incapacité à trouver de l’argent frais (devant venir de la filiale roumaine du sidérurgiste) nécessaire à l’achat de matières premières pour l’approvisionnement des sites de production. Ce qui mettait en péril l’avenir de plus de 600 ouvriers. 

Du fait des liens industriels avec le site de Liberty Steel à Dudelange, la situation liégeoise était également suivie de près par les syndicats et ouvriers au Luxembourg .

Ce vendredi, Liberty Steel a effectué un virage à 180° en confirmant le financement de la première étape du plan de transformation de Liège. «La direction de Liberty Liège annonce que le financement nécessaire à la réalisation de la première étape du plan de transformation de l’entreprise, qui comprend deux usines à Flémalle et Tilleur, a été reçu de Liberty Steel Group. Ce financement, combiné à l’aboutissement d’un certain nombre de négociations commerciales, permet d’envisager le redémarrage des usines pour la mi-février, conformément à l’engagement pris par Liberty auprès des autorités», indique le groupe sidérurgique, dans une communication officielle, avant de souligner que «le plan de transformation, qui assurera à l’entreprise liégeoise un avenir durable à long terme, devrait être bien avancé d’ici au printemps».

Un peu plus loin, Toker Ozcan, CEO de Liberty Steel Greensteel, a réaffirmé son engagement à voir les activités de Liberty Steel s’inscrire durablement à Tilleur et à Flémalle.

Le sidérurgiste a également rappelé avoir déjà apporté plus de 40 millions d’euros de financement dans ses deux sites liégeois depuis leur acquisition en juillet 2019, tout en soulignant avoir vu ses plans d’investissement à long terme freinés par la médiocrité du marché de l’acier en 2019, avant que l’activité ne subisse l’impact négatif de la pandémie et des perturbations de la chaîne d’approvisionnement.

Si l’annonce va rassurer du côté luxembourgeois, du fait de l’importance de l’activité liégeoise dans les approvisionnements du site de Dudelange, le manque de certitudes autour de la surface financière du sidérurgiste risque d’agacer encore un peu plus les syndicats liégeois.

Écrit par Jeremy Zabatta

Publié le 14.01.2022

Europe plate: Market slow to resume

London, 14 January (Argus) — Sentiment in the European plate market has been mixed this month, as Italian mills pushed for higher prices after offering discounts in late December, but competition remained high.

The Argus monthly ex-works Italy plate assessment fell by €20/t to €840/t, but ex-works plate in northwest Europe was flat at €970/t.

Italian producers lowered plate prices to €840-850/t ex-works for base grade in the second half of December in order to boost their competitiveness, but have started to lift offers to €860/t ex-works, reflecting increased energy costs and anticipating that slab prices will pick up. At the same time, some suppliers were heard willing to provide at least €10/t discounts to the latest workable prices to fill their order books, as well as in the face of cheap import offers and sufficient margins.

Plate offers from different Asian countries were heard at €820/t cfr and slightly below to main European ports. But complications with quotas and finances made imports from Indonesia and India less attractive, with a South Korean supplier targeting other markets, a European participant said. In particular, an offer of S355J2 grade was heard at $970/t cfr to north Africa from South Korea.

Northwest European producers were sold out in December and resisted the downward pressure. Actual trading is yet to resume, as many participants have only returned from holidays this week.