Offshore wind growth to boost steel demand: WoodMac

Growth in the offshore wind market is set to explode, with wind tower tonnage getting heavier, meaning more demand for steel, says Wood Mackenzie.

With increasing numbers of countries committing to tougher climate targets, offshore wind is a key technology that will power global decarbonisation – the industry is no longer in its infancy, the consultancy points out. Almost $1 trillion is predicted to flow into the market over the next decade, Kallanish notes.

Driven by continually larger turbine technology, by 2029 most towers will be over nine metres in diameter – a significant increase from the average five to six metres that was required in 2021. Turbines will also need more tower sections, which will result in a four-fold increase in demand for those sections.

By 2031, the average tower will be nearly three times heavier in comparison to a decade before. Beyond 2030, meanwhile, the uptake and globalisation of floating wind farms will further increase both complexity and weights of the required components.

Offshore wind towers will need nearly 500% more steel in 2031 compared to 2022 demand levels. As the volume of orders increases, similarly the annual spend on towers will increase five-fold, with the cumulative spend from 2022 to 2031 reaching €15 billion ($15.3 billion).

“Up until now, offshore developers have had the luxury of significant oversupply in the offshore wind market,” says Wood Mackenzie research analyst Finlay Clark. “With ample supply to cater for fluctuating demand, suppliers’ margins have been squeezed to unsustainably low levels. Aggressive bidding in tenders, combined with higher steel and logistics costs, is also having a detrimental impact as developers’ cost pressures are passed onto the supply chain.”

However, towards 2025 the growth in demand will significantly outpace the growth in supply.

Adam Smith Poland

European HRC market seasonally quiet, post-holiday outlook pessimistic

The European hot-rolled coil market remained quiet on Wednesday August 17, with the post-summer outlook becoming increasingly gloomy, mainly because of the poor performance of the major consuming industries and chronic overstocking, sources told Fastmarkets.
Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €757.50 ($769.50) per tonne on Wednesday, down by just €2.50 per tonne from €760.00 per tonne on Tuesday.

The latest calculation of the index is down by €41.25 per tonne week on week and by €94.17 per tonne month on month.

Market sources estimated achievable prices to be at €750-770 per tonne exw on Wednesday, with a few transactions for small volumes reported within the range.

The market was seasonally quiet with buyers seen largely holding back from conducting business and assessing the post-holiday trend, Fastmarkets heard.

“Currently, it is a totally silent because most customers are on vacation until end of August,” a source at a steel-service center in Germany told Fastmarkets.

The post-summer outlook was largely pessimistic, however. Market sources said they did not expect a “booming recovery” of buying activity in September, mainly because of weak end-user demand and high inventories at buyers.

“Some carmakers in Germany have made announcements about production increasing from September, but it is very theoretical. In any case, buying activity [for HRC] might only recover in late September-early October with some restocking activity,” a trader in the Benelux area told Fastmarkets.

Fastmarkets’ calculation of its daily steel HRC index, domestic, exw Italy, was €743.75 per tonne on Wednesday, down by €11.25 per tonne from €755.00 per tonne the day before.

The latest calculation of the Italian index was down by €27.25 per tonne week on week and down by €26.25 per tonne month on month.

The calculation was based on buyers’ estimates of achievable prices reported at €720-750 per tonne exw and offers reported at €780-800 per tonne exw.

No trading activity was reported on Wednesday, with most mills and buyers currently out of the market.

Expectations for the post-summer market varied among buyers and mills; buyers expected HRC prices in the nation to drop further amid weakened demand and the availability of cheaper imports, while producers opposed the idea of prices trending lower owing to costs pressure.

Imports
The market for imported coil was also quiet in the week to Wednesday.

Buyers from Northern Europe estimated the tradeable level for imported HRC to be €650-670 per tonne cfr Antwerp, with the most recent offers reported closer to €700 per tonne cfr Antwerp from Turkey and Asia.

A booking of HRC from South Korea was heard late last week at €650 per tonne cfr Italy, sources said.

Fastmarkets’ price assessment for steel hot-rolled coil, import, cfr main port Southern Europe, was €650-680 per tonne on Wednesday, narrowing downward by €20 per tonne from €650-700 per tonne a week earlier.

Fastmarkets’ corresponding price assessment for steel hot-rolled coil, import, cfr main port Northern Europe, was €670-700 per tonne on Wednesday, down by €20-30 per tonne from €700-720 per tonne seven days earlier.

Both assessments were based on deals, the lower end of offers and buyers’ estimates of achievable prices.

Published by: Julia Bolotova

Steel sections prices in Europe stable during exaggerated summer lull

The prices for steel hollow sections in Europe were unchanged this week in what some sources described as a “quieter than usual” summer lull, Fastmarkets heard on Wednesday August 17.
Fastmarkets’ weekly price assessment for steel sections (medium), domestic, delivered Northern Europe, was unchanged at €1,140-1,200 ($1,158-1,219) per tonne on Wednesday.

The corresponding weekly price assessment for steel sections (medium) domestic, delivered Southern Europe, was €1,140-1,180 per tonne on Wednesday, also stable week on week.

The holiday season, plus the fact that most market participants held high stock levels, meant that demand was very low. When buyers have needed to make a purchase, the tonnages involved were usually small and they have had plenty of sellers from which to choose, putting pressure on prices.

“There’s nothing going on, more so than we usually see in summer. It’s really dead,” one distributor said.

But the market was keeping an eye on prices for hot-rolled coil, the feedstock for sections manufacture, which have decreased so far in August but which had gone up for much of July.

Fastmarkets daily steel hot-rolled coil index, domestic, exw Northern Europe, was €757.50 per tonne on Wednesday, down from €798.75 per tonne a week earlier.

Sources were looking to September for a pick-up in demand and activity, although some believed that the market was unlikely to revive until later in the month.

Gas prices continued to be a key concern for market participants, with rising costs putting pressure on producers’ margins, and a recent agreement by EU member states to cut demand for natural gas ahead of winter contributing to the higher prices.

Logistics were also a concern across Northern Europe with low water levels on the River Rhine hampering water-borne transport.

Steel plate prices stabilize in Italy, slide in Northern Europe

Steel plate prices in Italy flattened in the week to Wednesday August 17 amid the summer lull, while those in Northern Europe fell, market sources told Fastmarkets.
Northern Europe
Slow demand and chronic overstocking continued to put pressure on plate prices in Northern Europe this week, according to market sources.

A producer source in Germany was heard to be selling October-delivery plate at €1,140-1,170 per tonne during the assessment week.

At the same time, offers from integrated mills in the region were at €1,200-1,250 per tonne exw, sources said.

As a result, Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe was at €1,140-1,200 per tonne on Wednesday, down by €50-60 per tonne from €1,200-1,250 per tonne on August 10.

Italy-origin plate was offered to the south of Germany at €1,000-1,050 per tonne cpt, depending on volume and chemistry.

And market sources said that an electric-arc-furnace-based mill in Poland had offered plate to Germany at €1,000 per tonne cpt, but could consider a lower price in case of a firm bid.

Italy
The Italian market was in holiday mode during the assessment week with most producers and buyers out of the market.

The most recent deals for plate in the country were reported in the spot market at €930-970 per tonne exw during the week ended August 12, market sources said. Some bids from large buyers were heard as low as €900-920 per tonne exw, however no trades at these levels were reported.

Despite subdued activity and an unclear market trend, sources suggested that Italy’s plate makers will likely attempt to push for higher prices in September to account for surging energy costs.

“[Production] costs have started to bite, so clearly, we will try to increase prices [for plate]. We will see how it goes,” a mill source told Fastmarkets.

An influx of cheaper overseas material could hamper the possible price rise, however, sources said.

Two sources reported boron-alloyed plate offers from India to Italy at €730-760 per tonne cfr.

The most recent bookings of plate from Asia to Italy were done at €850 per tonne cfr in early August, sources told Fastmarkets.

Published by: Julia Bolotova

Turkey, EU agree on January 2023 deadline for action on EU steel import safeguards

Turkey and the European Union have agreed to implement World Trade Organization rulings and recommendations related to import tariffs on Turkish steel, by January 16, 2023, the World Steel Association said this week.
The announcement follows the 2020 establishment of a WTO Dispute Panel to review a complaint from Turkey over EU safeguard measures on imports of certain steel products.

On April 29 2022, the WTO said the EU measures were inconsistent with the General Agreement on Tariffs (GATT) and needed to be realigned. And in May the WTO formally accepted Turkey`s complaints about the EU safeguard duties.

But on May 30, the European Commission decided to keep steel safeguard measures in place for a further two years, with certain adjustments to global quotas.

Turkey then imposed anti-dumping duties on hot-rolled coil from the EU and South Korea in July 2022.

And on August 9, the WTO said the reasonable time to implement recommendations and rulings on safeguard measures on certain steel products would expire on January 16, 2023.

Turkish steel market participants said adjusting the safeguard duties would help to increase demand from Europe, but added that the duties against Turkish steel still mean exports will be limited.

Turkey`s flat steel exports increased year on year in June after falling for the six months of 2022, according to the Turkish statistical Institute (TUIK).

Published by: Serife Durmus

EU HRC market sentiment turns gloomy on high stocks, poor demand

European hot-rolled coil market witnessed bearish sentiment Aug. 17 due to weak demand from end consumers and high stocks with distributors.

Some market participants expect that September would bring further price decreases instead of traditional restocking and price recovery.

“Risks of prices continuing to decrease are higher than the possibility that they would see a recovery, unfortunately,” a Northern European distributor said. “Distributors have high inventories, and they will not need more material soon, probably not until next year.”

In addition, demand from end consumers, including automotive and white goods industries, remained muted.

Availability of flat steel from the EU steelmakers is likely to continue to exceed the demand, sources said. Production cuts and furnaces stoppages across Europe have not been sufficient to bring balance to the market and to support the prices.

“European mills are desperately looking for orders and September might be another crash, though I don’t hope so,” a Northern European service center source said.

Platts assessed hot-rolled coil in Northwest Europe stable at Eur750/mt ex-works Ruhr Aug. 17.

Three distributors estimated tradable value at Eur750/mt ex-works and a trader reported achievable prices at Eur740-750/mt ex-works Ruhr. A fifth source reported offers at Eur750-800/mt ex-works Ruhr.

In the Southern market, the Platts HRC assessment also remained stable at Eur720/mt ex-works Italy.

Market participants reported tradable value for HRC from Italian mills at Eur710-720/mt ex-works.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven