Day: 9 April 2021

The European Commission has terminated its investigation into anti-subsidy duties on hot rolled coil imports from Turkey, according to documents sent to interested parties and seen by Kallanish.

The investigation was opened in June 2020, but during the procedure the Commission found no evidence of the need to impose duties.

In February the Commission announced that provisional measures related to this investigation would be skipped, and on 24 March European steelmakers’ association Eurofer withdrew its complaint on which the investigation was initially based.

“The investigation had not brought to light any considerations showing that a continuation of the case would be in the Union interest,” the Directorate General for Trade of the European Commission explains in a note.

While anti-subsidy measures are now ruled out, the market is still waiting for a decision on definitive measures in the anti-dumping case against Turkish-origin HRC imports. In January the Commission imposed provisional measures of 4.8-7.6%.

Emanuele Norsa Italy , Burcak Alpman Turkey

Negotiations for coil contracts in Germany for the second half of 2021 have started earlier than in previous years, Kallanish hears from several market sources, although not everyone is aware yet.

Normally, talks do not start until late May/June, and some buyers at stockholders before Easter were still laid back about the topic, saying it was too early to worry. But according to a manager at a cold-rolling company – a segment of relatively big customers with a need for continuous input – various negotiations have started already, instigated by the mills.

“They [mills] signalled that they wanted to talk earlier than the typical June, so some talks are in full swing, and there have been agreements struck already, too,” he says. He hears that deals signed were between €200 and €300/tonne ($238-357) above those for the first half, depending on the time of the agreement, given the extreme momentum of prices these days.

In fact, one other big buyer was very early with striking his deal, in late February, and got away with a premium of €180 over the last negotiation round. In that case, it was him instigating the talks proactively. “I wanted to get things clear early, as I did not see prices getting any weaker going forward,” he says.

Negotiations for long-term contracts occurred earlier than usual last autumn in October/November, rather than in December, when mills pushed buyers into signing quickly, encouraged by the initial recovery of prices. Buyers were in a state of panic, and ready to accept year-on-year premiums of €100/t. Hardly anyone expected the massive further surge that would follow, so many buyers got away with favourable deals of around €500/t for hot rolled coil.

Christian Koehl Germany

The escalation in cold rolled and hot-dip galvanised coil prices in Italy is continuing. Contracts are increasing again by as much as €50/tonne ($59/t) on average on-week on account of serious supply shortages from domestic producers and on the import market.

Most coil makers are not quoting this week and continue to allocate a limited amount of material for high-price sales and for certain customers, Kallanish notes.

Domestic CRC is in extremely short supply in Italy, while Asian producers have allocated very little material this month for shipment to the country. CRC imports were last offered at €1,100/t cfr, but this batch from traders was sold fast.

Offers of limited material from India and Taiwan are reported at €1,060-1,080 cfr. However, the new import offers are also expected to increase, reaching €1,100/t cfr for delivery in August, sources suggest. HDG is also very hard to find on the import and domestic markets.

Contracts for local material have gone through the level of €1,000/t base ex-works. CRC transactions are reported at €980-1,030/t base ex-works, while HDG hovers at €1,000-1,050/t base ex-works, sources suggest.

Producers’ lead times stretch until September for certain qualities, and thinner grades “are impossible to find”, a source comments. ArcelorMittal is meanwhile said to be increasing its prices again this week. Hot rolled coil now starts for southern Europe at €920/t, while CRC is priced at €1,040/t base ex-works and the company is quoting €1,075/t for HDG.

Natalia Capra France

Mills are this week seeking staggering increases for hot rolled coil in Southeast Asia, Kallanish understands. A Japanese Tier 1 mill is even offering re-rolling HRC at a record high $1,000/tonne cfr in the region, regional trading sources say.

The Japanese mill’s offer given on 7 April for 2-2.3mm thickness SAE 1006 material, for shipment by early June, tops other offers heard in Vietnam. The Japanese producer’s offer was around $850/t cfr Vietnam two weeks ago. Before the latest hike, the mill’s offer was $920/t cfr Southeast Asia last week, a trader reports hearing.

Other re-rolling HRC offers, including an Indian offer, are currently tagged at $910-930/t cfr Vietnam. Several Chinese re-rolling 2mm and up thickness HRC quotes are also within this price range and these offers specify that the seller will bear the full cost of any change in the Chinese export tax rebate. The Chinese HRC offers are for shipment by May/early June. Indian SAE 1006 HRC prices were last heard at $840-845/t cfr Vietnam at the start of the week beginning 29 March.

Earlier this week, a Vietnamese re-roller booked a 10,000-tonne cargo comprising 2mm, 2.3mm and 2.5mm thickness HRC from a Tier 1 Chinese mill at $890/t cfr Vietnam, local trading sources report. Since it is a resale of a trader’s April-shipment position cargo, this is the final price for the buyer, with no further factoring of the tax rebate, a Vietnamese trader observes.

A regional trader also heard of a deal for Chinese SAE 1006 HRC for June shipment at $900/t cfr Vietnam. This is the net price to the buyer because the mill has factored in the 13% tax rebate into the price, he says.

Prices have risen fast, a Chinese trader notes. An Indonesian mill is offering its SS400 HRC for July shipment at a base price of $900/t fob Cigading. The producer was offering at $825/t fob for June shipment only last week. However, he thinks the increase is “reasonable” given the current strong market situation.

Anna Low Singapore

As steel output outside China had not increased during the first two months of the year compared to the same period last year, despite the increases reported in India, South Korea, Turkey and Brazil, there is still a shortage of material, which is keeping prices and margins high, International Rebar Producers & Exporters Association (Irepas) said in its latest short-range outlook April 7.

Lead times are longer than ever in the global long steel market and there is still strong demand, encouraging mills to continue increasing their prices, Irepas noted, adding that there are still shortages for many products in the global market exacerbated by disruptions in logistical and shipping chains.

“Customers are buying less than what they need, but these local shortages keep pushing the markets up. Prices keep on climbing in most areas across the world as demand is strong,” the association said.

“China seems to be happy with its situation and is not interested in increasing exports, but instead keeps importing. Their new five-year plan promises considerable public spending on many projects. China’s buying of billets gives the global market additional strength,” Irepas observed, adding that the expected US infrastructure bill and China’s timid export behavior are the main positives for the second and third quarters.

“It seems the current prices will hold for the next three months and that reductions will be gradual rather than sudden,” it said, adding that tight availability from most exporting countries and companies is affecting the level of competition in most markets.

“Even though there may be some fluctuations, the current status of the market is generally stable and the second quarter should be better than the first quarter. Accordingly, the outlook of the market is very good and satisfactory,” Irepas concluded.

— CenkCan

Swedish automaker Volvo Group and steel producer SSAB said April 8 they will collaborate to cut carbon emissions, with zero-emissions steel production starting this year.

Volvo plans to start the production of concept vehicles and components from steel made by SSAB using hydrogen in 2021, with smaller-scale serial production to start during 2022, the companies said. The companies said they expected “a gradual escalation towards mass production to follow”.

Direct reduction iron from the HYBRIT joint venture pilot plant using green hydrogen is planned to produce steel for use in trials, after the Lulea-based facility launched last year.

HYBRIT “will be used to make the steel for use in this collaboration,” and “will soon start to produce smaller volumes of sponge iron made using hydrogen,” the companies said.

HYBRIT is a joint venture between Swedish state-owned iron ore miner LKAB, SSAB and utility Vattenfall, which aims to use renewable power and sustainable fuels for energy and steelmaking.

“We are constantly looking at how we can become a more comprehensive supplier of fossil-free steel to customers like Volvo. We see a new green revolution emerging,” SSAB CEO Martin Lindqvist said.

“We will work together with our customers to reduce their climate impact while strengthening their competitiveness.”

To meet the Paris Agreement goal, by 2050 Volvo will review steel and other materials used in products and gradually switch to fossil-fuel free alternatives, said Martin Lundstedt, President and CEO at Volvo Group.

“This is an important step on the road to completely climate-neutral transports,” Lundstedt said.

Optimizing steel

Volvo and SSAB will work together in research and development to optimize steel in Volvo’s products based on weight and quality, developing a number of fossil-free steel products with the goal to reach serial production within a few years, it said.

The framework includes a logistics review, for use of Volvo vehicles powered by batteries or fuel cells which may reduce SSAB’s emissions from transportation.

“Newly made fossil-free steel from SSAB will be an important complement to the traditional and recycled steel used in Volvo’s trucks, construction equipment and other products,” it said.

“The steel industry considers the need for steel will grow significantly in the long term and that newly made fossil-free steel will be needed to meet this demand.”

SSAB produces steel in Sweden and Finland through blast furnaces at three sites, and intends to convert the sites eventually to electric arc furnaces. In the US, SSAB already uses EAF facilities.

The HYBRIT joint venture chose Gallivare in northern Sweden for a new demonstration scale plant expected to start in 2026 with 1.3 million mt/year capacity in hot briquetted iron, or sponge iron, with plans to double the venture’s initial HBI capacity in 2030 to 2.7 million mt/year.

The new HYBRIT demonstration plant will be integrated with iron pellet making to gain from efficiencies, and is part of miner LKAB’s transition plan to invest into HBI production.

SSAB plans to convert the Oxelosund blast furnace works in 2025 to an EAF fed by HBI, and plans to offer commercial quantities of its fossil-free steel in 2026.

— Hector Forster

US sheet service centers continued to cite robust demand levels from customers April 8 despite hot-rolled coil prices hovering near record highs.

The daily Platts TSI US HRC index increased by $1 to $1,345.75/st and remains around an all-time high.

“A lot of service centers are saying they had a record month in March,” one buy-side source said. “They doubt the same will happen in April as they have very low inventories now.”

He referred to the inventory resale prices as “incredible,” adding that it’s almost like service centers are trying to price their inventories not to sell.

Mills were offering HRC at $1,340-$1,380 with a converter at the low end and an integrated mill at the high end, according to the buy-side source.

Two other buyers confirmed the low end of prices available from the converter at $1,340 based on recent offers from the mill.

“Inquiry rate from end-users is steady. We are still not able to accept most of those inquiries. We do not have enough steel,” one service center source said.

He recently had paid $1,360 for 200 st from a converter with a late-May lead time.

“It seems like the coil will be tight in the spot market for another two months at least,” the service center source said.

A mill source said June spot negotiations were beginning with prices at a minimum of $1,350 and demand remains strong.

The combined Platts TSI price index uses a volume-weighted-average calculation — according to TSI’s standard — to determine value on an ex-works Indiana basis.

— Michael Fitzgerald