Day: 3 September 2020

The European hot-rolled coil market paused for breath Sept. 2 with buyers increasingly concerned about declining metal availability, sources told S&P Global Platts.

The daily Platts TSI index for HRC Northern Europe slipped Eur2/mt lower on the day Sept. 2 to Eur449/mt ($531.17/mt) ex-works Ruhr, while CRC dropped by Eur2.50/mt to Eur526.00/mt ex-works Ruhr.

The Southern European HRC index gained Eur1.50 on the day to Eur446/mt ex-works S.EU.

Activity particularly in the Italian market picked up, with HRC buyers starting to look towards northern European mills to secure volumes.

An Italy-based steel service-center source said that the distribution sector has started to buy larger volumes and Italian suppliers would not meet the current spike in demand.

“The [supply] situation in Italy is quite dramatic, Ilva is only producing 3 million mt instead of 9 million mt,” the source said, adding he would be looking to buy from Northern European mills as the narrow regional spread between north and south would allow him to do so.

“There is some sort of sensationalism in the market with increasing offers,” said the source, adding that demand would be “sustainable” for now but that outlook into late Q4 would be difficult to predict.

A Benelux-based stockholder said he now expected consolidation in prices following sharp gains achieved in August.

“I am optimistic but think we will see stable prices for the next few weeks as customers look to assess the market and decide on strategies,” he said.

“We have seen incredible increases over the summer and now hearing lead times extending, everyone now knows that prices are higher and they will book fearful of further increases – this will add to the momentum for higher prices.”

The source said that customer RFQs were now back to presummer levels but that it would take a few more weeks to complete negotiations.

— Len Griffin, Laura Varriale

Severstal Distribution will deliver 30,000 tonnes of A600C “Armanorma” brand rebar for the construction of the Arctic LNG 2 liquefied gas plant, the steelmaker says. 

Armandorma is an alloyed rebar with a unique combination of strength and ductility, the firm claims. Its versatility makes it possible to reduce the consumption of rolled metal and unify the materials used, thus guaranteeing the reliability of the structure at a lower cost, it adds.

It is made from universal steel grade 20G2SFBA, Kallanish notes. It can be used in structures operating at temperatures down to -100°C and in areas with unstable water-saturated soil, Severstal Distribution observes. Armanorma ensures the safety of structures and is not prone to embrittlement after welding.

“We are glad that our partners are interested in reinforcing bars of the new generation of Severstal: armature of class A600C – Armandorma. Its mechanical properties meet modern technological requirements,” says Severstal Distribution head Timur Yudichev.

Parent company Severstal’s output of crude steel and steel products decreased in the second quarter to 2.81 million tonnes, down by -2% on-year (see Kallanish passim). Hot metal output decreased -3% each on-quarter and on-year to 2.33mt, following the short-term upgrades of blast furnaces No.1, No.4 and No.5.

Böllinghaus Steel, a producer of stainless steel long products, has expanded its presence in the Italian market by opening a sales office in Milan, Kallanish learns from the company.

“With our own branch in Milan, we are now creating the conditions for further growth and guaranteeing fast and reliable service,” says Böllinghaus chief sales officer Antonio Perea. The new office comes in addition to the company’s locations in Germany, Portugal and the USA. It also has a cooperation with Outokumpu in Scandinavia that was signed earlier this year.

Böllinghaus makes profiles/sections as well as bars at its own rolling facilities in Portugal, where it purchases billet from third parties. It has no stockholding distribution, with production all based on existing orders, a spokeswoman explains.

The company, founded 130 years ago, is headquartered in Hilden near Düsseldorf, but it has long stopped producing in Germany. It closed down its plant in nearby Remscheid in 2001, after it acquired a rolling mill in Vieira de Leiria, Portugal, in the 1990s.

Steel futures were steady on Wednesday, while iron ore prices continued to tick higher. Mills are increasingly looking to manage costs as iron ore eats into steelmaking margins.

On the Shanghai Futures Exchange the January 2021 rebar contract closed CNY 4/tonne higher than Tuesday at CNY 3,778/t ($553/t). For hot rolled coil the January contract took over from October as the most traded and closed down CNY 4/t at CNY 3,934/t. The October contract closed CNY 4/t lower at CNY 4,033/t. In Tangshan, billet prices were flat at CNY 3,460/t.

The Kallanish KORE 62% Fe index gained $0.64/t to $127.17/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index increased $0.56/t to $139.98/dmt cfr, and the KORE 58% Fe index was up $0.16/t to $115.90/dmt cfr.

On the Dalian Commodity Exchange January 2021 iron ore settled up CNY 4.5/t at CNY 850/t, while on the Singapore Exchange October 62% Fe futures settled up $2.39/t at $121.98/t. The same contract for 65% Fe and 58% Fe futures settled up $2.12/t at $136.58/t, and up $1.14/t at $109.73/t respectively.

Iron ore markets are still being shaped by tight inventories for key products and firm demand. Temporary production restrictions in Tangshan and elsewhere have had very little impact on mill purchasing.

With iron ore strong and steel prices increasing more slowly, margins are again becoming tighter. That is pushing mills towards cost-saving products including lower-Fe and high-grade products, which have better inventories.

ArcelorMittal is relaunching production at blast furnace no.1 in Fos-sur-Mer, southern France, Kallanish notes.

Rumours about the restart of the furnace have circulated since the company confirmed last month the restart of another BF in the north of the country, in Dunkirk.

BF1 in Fos-sur-Mer was stopped at the end of March, in response to the reduction in demand caused by the coronavirus spread in Europe. The furnace is expected to be restarted from mid-September and become fully operational in the following weeks.

Earlier this week the company also confirmed the restart of a BF in northern Spain. Most of the capacity brought back online will offset the production loss from the relining of a furnace in Ghent, Belgium.