Day: 7 September 2020

The European hot-rolled steel coils market climbed higher Sept. 4, with declining product availability a growing concern for buyers, sources said.

The Platts TSI hot-rolled coil index was calculated Sept. 4 at Eur456/mt ($537.90/mt) ex-works Ruhr, climbing Eur5.50/mt on the day.

Cold-rolled coil slipped back Eur2/mt from Sept. 3 and was assessed at Eur525.50/mt ex-works Ruhr.

In Southern Europe, HRC gained Eur2/mt on the day and was assessed at Eur449.50/mt ex-works South Europe, the highest since March 23.

In the UK, the Platts TSI hot-rolled coil index was assessed Sept. 4 at GBP 450-470/mt DDP West Midlands UK, rising GBP10/mt on the week.

The HRC shortage continued in the Italian market, while Italian mill Arvedi’s production remains impacted following a fire at the Cremona plant in August.

A ramp up of production has been delayed to the end of the week beginning September 7, according to sources.

A German-based mill source said prices were continuing to move up with mills offering HRC now at Eur480-500/mt EXW Ruhr, but that European prices were still lagging behind the global steel market, despite the recent hikes.

Although HRC imports are currently at European domestic levels with delivery times in January, the source said because of the anticipation of Europe prices increasing heavily, some buyers are saying they would be looking at import offers to secure volumes at the current price level.

An Italy mill source said there was panic in the market as buyers returning from vacation contend with higher prices and declining availability.

“There is panic in the market, its a disaster with such shortages in coils, there is a real shortage,” he said.

The mill source said RFQs had surged higher as buyers moved to secure product for October and November requirements, the source said, adding, “There was limited import bookings over the summer so there is a supply shortage now.”

While demand is pushing higher, any additional supply from steel mill furnace restarts will not reach the market until December and this will mean that the target of Eur500/mt for HRC will be possible.

— Len Griffin, Laura Varriale

Gebhardt Stahl, a maker of cold-rolled profiles used mainly in construction applications, is expanding its production site in Soest, Germany.

The company has rented 9,000m² from the premises of local company Kettler Freizeit, which has gone out of business. The move will enlarge Gebhardt’s production area to 26,000m². It has already acquired a new profiling machine to commence production in September. A second one will follow, to increase production gradually over time, Kallanish hears from the company.

It plans to mainly make specialised profiles to strengthen its position as a supplier for niche products, often bespoke elements used in architecture and interior design. It claims to be the European market leader in reinforcement profiles for plastic window frames and in air conditioning systems. The company says it has barely been impacted by the coronavirus pandemic and has continued working normally.

Gebhardt Stahl achieves an annual revenue of about €130 million ($146m) with a staff of 180. It operates two sites in Germany and one in Poland, and supplies to 55 countries, including Australia and New Zealand, it says. Last year, Dutch equity investor firm Bencis Capital Partners became a partner in Gebhardt.

European steel industry decarbonisation is inevitable, but the prohibitive cost of hydrogen steelmaking technology and energy means Poland will remain reliant on blast furnace steelmaking for years to come. This was the conclusion of the steel industry panel at last week’s European Economic Congress (EEC) in Katowice.

Tomasz Slezak, ArcerlorMittal Poland head of corporate governance & government affairs, head of energy & environment office, said the implementation of EU climate policy is happening too fast and not motivating non-EU mills to reduce carbon emissions.

Marek Frydrych, chief executive of Huta Czestochowa (HCz) lessee Sunningwell, however, said the EU carbon border tax must be implemented immediately. “We were offered slab earlier this year at the same price as an eastern mill was selling plate in Europe,” he observed at the event monitored by Kallanish. “If Huta Czestochowa didn’t exist today we would be flooded by Ukrainian and Russian imports.”

Carbon-free steelmaking technology is within reach, but this does not mean it will be implemented quickly, Slezak pointed out. “Maybe in the next two decades the technology will mature to the point it can be used by the EU steel industry, but this requires huge energy sources which don’t exist in the EU,” he commented. The estimated cost for producers is exponential. “Business will not be able to afford this without state support,” he added.

Ceo of Polish merchant coke producer Koksownia Czestochowa Nowa, Marek Serafin, meanwhile, said hydrogen technology will develop in the long term, but in the shorter term “…we have to learn to live with the existing technologies.” For electric arc furnace steelmaking to expand, you need a supply of electricity which is prohibitively expensive in Poland, he said, adding he does not see an immediate alternative to blast furnace steelmaking using coke.

Polish Steel Association (HIPH) head Stefan Dzienniak agreed, adding that although EAF steelmaking is on the rise, it is dependent on scrap which is in limited supply. He also said direct reduced iron technology is unlikely to take off in Europe, despite it being more environmentally friendly than coke-based steelmaking, because it is prohibitively expensive.

Frydrych pointed out that although HCz is an electric arc furnace mill using mainly scrap, 30% of its feedstock mix is still accounted for by iron ore products, making blast furnaces essential. He expressed concerns over potential energy shortages in Poland in the coming years and said HCz is therefore looking into establishing an incineration plant to generate electricity.

HCz’s ceo also said the shortage of young skilled workers is a serious issue in Poland’s steel industry. “If we’d want to commission a second line, I don’t know where we would get 200 extra workers from,” he lamented.

Die Stimmung unter den deutschen Autoherstellern und Zulieferern hat sich im August verbessert. Das hat die neueste Konjunkturumfrage des ifo Instituts ergeben. Von minus 68,3 Punkten im Juli stieg die Beurteilung auf minus 34,8 Punkte im August. „Im dunklen Keller geht ein Licht an“, umschreibt Klaus Wohlrabe, Leiter der ifo-Umfragen, die Situation. Die Erwartungen zum künftigen Geschäft fielen leicht auf plus 37,4 Punkte, nach plus 40,9 im Juli.

Die Exporterwartungen gaben ebenfalls etwas nach, auf 31,3 Punkte, nach 39,9 Punkten im Juli. Die Produktionspläne erreichten 48,4 Punkte, nach 49,4 Punkten im Juli. „Die Beschäftigungssituation bleibt angespannt, die Unternehmen planen weiter mit Personalabbau“, sagt Wohlrabe weiter. Die entsprechenden Erwartungen legten geringfügig zu: auf minus 48,3 Punkte, nach minus 51,7 Punkten im Juli.

Der Auftragsbestand hat sich gegenüber dem Vormonat verbessert. Der Indikator stieg auf plus 37,9 Punkte, nach plus 25,9 im Juli. Die Nachfrage hat sich im Vergleich zum Vormonat etwas verschlechtert, bleibt aber weiter auf hohem Niveau. Der Nachfrageindikator fiel auf 62,3 Punkte, nach 69,5 im Juli. „Hier spielen Nachholeffekte und die Mehrwertsteuersenkung sicherlich eine Rolle“, ergänzt Wohlrabe. Die Nachfrage wurde vor allem aus den Lagerbeständen bedient. Diese konnten merklich abgebaut werden.

Quelle: ifo Institut