Day: 26 May 2021

Italian merchant bar values are increasing again this week, by €30/tonne on-week, after all domestic long product mills issued in mid-May hikes of €100/t ($122), sources tell Kallanish.

Asking prices are now at €420-430/t base ex-works. Starting next week, another increase will bring values to €470/t base ex-works for June, in line with June’s hiking domestic scrap values.

Including size extras, contracts for merchant bar are now, for the first time in a decade, at well over the level of €800/t ex-works. Buyers are now paying €400-430/t base ex-works for the cheapest merchant bar grade. With €420 size extras, contracts are hovering at €820-850/t ex-works, sources suggest.

Italian and Spanish mills are said to have full order books also thanks to northern and Eastern European demand, as those buyers are currently refusing to work with Liberty Steel Ostrava.

Customers in Italy are accepting the general steep increases on all long products, but insurance and bank guarantees for their purchases are becoming a matter of concern. The Italian distribution sector is said to be encountering difficulties in absorbing the steep increases and passing them on to end-users. One distributor tells Kallanish he is concentrating on other products as, despite the price rally, Italian demand for merchant bar remains subdued.

Thanks to the current steep increases in longs prices, distributors agree this will be a record year in terms of revenue.

Natalia Capra France

H2 Green Steel (H2GS) has secured $105 million of initial funding to push forward its plan for a greenfield hydrogen-based steelmaking plant in Boden-Luleå, northern Sweden, Kallanish notes. One new investor to the party is Italy’s Marcegaglia.

“The strong investor interest and high-quality investor base demonstrate a firm belief in H2GS and the market potential for green steel. New investors include a broad spectrum of companies and individuals ranging from strategic off-takers, technical partners and long-term investors focusing on green impact, sustainability and industry 4.0,” H2GS observes.

Among the investors are companies already in the steel business, such as steel supplier Marcegaglia and recycler Stena. Other investors include Mercedes Benz, Kingspan, Scania and Exor.

Italian re-roller Marcegaglia confirms it will also become an industrial partner for the plant.

H2GS construction is expected to start by mid-2022, with 2.5 million tonnes/year of hot and cold rolled coil capacity to be reached by 2026. Production will begin in 2024, with a capacity of 5m t/y targeted by 2030 (see Kallanish passim).

H2GS, to be headed by current Scania chief executive Henrik Henriksson, will integrate a giga-scale green hydrogen plant into the steelworks, which will also produce galv. Power will be sourced from hydroelectric power plants in the Luleå area, as well as wind farms.

Marcegaglia intends to buy 5% of the green steel coil production and will re-roll 5% of H2GS output as the steelmaker intends to reach southern and Eastern European markets. Marcegaglia will re-roll a total of 250,000 tonnes in 2024 and will double this figure to 500,000t when H2GS’s production reaches 5m t/y.

Natalia Capra France , Emanuele Norsa Italy

Stainless steel coil prices in Europe are increasing again and achieving the level of €3,000/tonne ($3,673) delivered for cold rolled coil, market participants tell Kallanish.

Short supply and high prices have continued this month as stocks at flat steel distributors are said to be low and deliveries for coil and coil derivatives stretch in some cases to the first quarter of 2022. Demand for coil and flats is reported strong in all European countries. Despite the steady increases on coil, all buyers continue their purchasing as they are in need of material.

Coil offers from Asian countries have come down and the few import prices available are at European levels. While Chinese sellers are not quoting for Europe, Indian material is offered in very small quantities, traders confirm.

The main European mills are quoting stainless hot and cold rolled coil for December delivery. Prices have increased by a further €100/t on average compared to the beginning of May. CRC now starts at €2,980/t and may reach €3,000/t delivered, while HRC is at €2,900/t delivered depending on tonnage, sources say.

Values for coil and sheet are forecast to increase again in June on the material shortage. Demand for European coil remains strong from service centres and end-users, sources say.

Natalia Capra France

Turkish mills’ sections exports in the first quarter totaled 441,600 mt, relatively flat year on year, as market diversification and strong demand, especially from South America and the Middle East North Africa (MENA) region, supported mills’ export volumes in that period.

According to monthly Turkish Statistical Institute (TUIK) data, Peru became the largest importer of Turkish sections in Q1 at 35,600 mt, around fourfold higher on year.

Turkish mills’ sections exports to Morocco totaled 33,300 mt, 26% higher on year, while Turkish mills’ also exported 22,500 mt of sections to Egypt in the three-month period, sharply lower than 43,900 mt exported in the same period the previous year.

Argentina bought 21,600 mt of Turkish sections in Q1 but no notable sections cargo was shipped to that country in Q1 2020, while exports to Colombia totaled 19,200 mt, up 26% on year.

Turkish mills also exported 19,100 mt of sections to the UK in Q1, 10,000 mt higher on year.

Turkey’s section exports to Israel totaled 16,300 mt in Q1, down 11% on year, while exports to Romania totaled 14,600 mt, relatively flat on year.

Turkish mills’ sections exports to the US rose more than double on year to 14,100 mt in Q1, while the country’s other sections export markets in that period were: Malaysia (12,800 mt), Greece (11,400 mt) and UAE (11,300 mt), the latest data showed.

— Cenk Can

The UK is launching a review of its trade policies in place against the US’ steel and aluminum tariffs, but any new measures could be avoided if the US repeals its tariffs following recent bilateral discussions, the Department for International Trade said May 24.

“A public consultation has opened aimed at ensuring any future tariffs applied in response to the US’ unjustified Section 232 duties on aluminum and steel imports are shaped to UK interests,” the DIT said in a statement.

UK International Trade Secretary Liz Truss said the UK is now able to tailor new protective trade policies to its own economy and industries after splitting from the EU.

“The UK will do whatever is necessary to protect our steel industry against illegal tariffs that could undermine British industry and damage our businesses,” Truss said in the statement.

However, following “positive discussions” with the US about trade tensions, Truss said the UK is pressing the US to repeal its Section 232 tariffs, thus removing the UK’s need for further trade action.

“Ultimately, we want to deescalate these disputes so we can move forward and work closely with the US on issues like WTO reform and tackling unfair trade practices by non-market economies,” she said.

The DIT said the UK prefers the full removal of the US’ duties and any further retaliatory measures to progress a more constructive trading relationship.

“The ongoing tariffs are unjustified under WTO rules and unfairly target UK steel and aluminum manufacturers and should be removed,” the department said. “Any claim that UK steel and aluminum imports harm US national security is false and without foundation.”

The UK currently has duties in place on products such as whiskey, motorcycles and tobacco in response to US tariffs.

The six-week trade review and consultation will consider input from UK businesses, industry leaders and other various stakeholders, the DIT said.

The DIT’s review follows a joint announcement May 17 from US and EU trade officials that pledged a cooperative approach from the respective governments to address excess, state-subsidized capacity in the steel and aluminum industry.

As talks between the US and EU continue, the two sides agreed to avoid any changes to trade measures that would negatively affect bilateral trade, according to the announcement.

In separate statements, the United Steelworkers and American Iron and Steel Institute speculated that such talks with the EU could pave the way for the US to remove its steel tariffs. However, both groups strongly urged President Joe Biden to leave the duties intact.

— Nick Lazzaro