Day: 11 February 2022

Polish apparent steel consumption rose 19.4% on-year in January-November 2021 to 14.15 million tonnes, with full-year use expected to reach 15.3mt, an annual record. However, consumption in November alone of 1.05mt was the lowest monthly figure since January 2021, points out the Polish Union of Steel Distributors (PUDS).

Imports remain a crucial component to supplying domestic demand, with a 24% surge in the 11 months to 12.46mt, while exports rose 8% to 5.22mt, PUDS chief executive Iwona Dybal said during a meeting on Thursday attended by Kallanish. In the nine months through September, Ukraine-origin imports into Poland soared by 129% on-year, meaning the country overtook Czech Republic as second-largest supplier. The largest supplier to Poland, Germany, increased shipments by 20%.

11-month crude steel output in Poland rose 8% to 7.76mt. Hot rolled flat and long products output grew 10.2% and 9.1% respectively.

Polish distributors’ sales in January-September meanwhile rose 8% on-year, while inventories grew 3.7%.

Finally, distributors’ prices of steel products in Poland are markedly higher now than they were 12 months ago. For example, S235J grade hot rolled coil and DC01 cold rolled coil prices are at PLN 4,577/tonne ($1,165) and PLN 5,730/t respectively this week, up 34% and 39% on-year. BST500 12mm rebar is at PLN 3,947/t, up 29%.

Adam Smith Germany

Thyssenkrupp Group made a good start to its new fiscal year, with significantly better order intake, revenue and earnings in the first fiscal quarter through December 2021. This was driven mainly by steelmaking unit tk Steel Europe and distribution unit tk Materials Services.

These divisions each lifted December-quarter revenue by 39% year-on-year – tk Steel Europe to €2.7 billion ($3.1 billion) and tk Materials Services to €3.3 billion. The increase was achieved despite lower shipments due to the disruption in automotive industry output, with tk Steel deliveries down 6% to 2.28 million tonnes and tk Materials down 9% to 1.18mt.

For the distribution unit, adjusted Ebit of €219 million was also significantly above the prior-year level of €5m. Notably, the order intake here in the December quarter rose by as much as 50%, to €3.7 billion.

Regarding the massive increase in energy costs in recent months, thyssenkrupp AG chief financial officer Klaus Keysberg said during a conference call on Thursday that these are being “partly handed down, partly compensated by measures”. He noted that this has been considered in the group’s altogether positive outlook for the near future. “Forwarding these costs is a key theme for the management,” he said during the call attended by Kallanish.

At tk Materials Services, the main emphasis of activities will be on sharpening the network of locations in North America. In the December quarter, it drove forward major investment projects at sites in the USA and Mexico. In Europe, it plans the expansion of the Veghel location in the Netherlands, with the objective of further consolidating the network in the Benelux region. Its mid-term planning envisages warehouse shipments of more than 6mt worldwide.

Christian Koehl Germany

Traders tell Kallanish they have been receiving more merchant slab enquiries so far this year, but availability remains tight, making it difficult to satisfy customers’ requirements. Increasing power costs are driving some mills to consider importing slab instead of making crude steel, the practice that was widespread in the 2000s.

CIS merchant slab suppliers have been developing their downstream capacities throughout the last decade, and ended up with significant flat rolling capacities of every type – plate, hot rolled coil, sheet – in Europe and the US. Since flat products demand went through the roof after the first Covid-19 lockdowns in 2020, these producers have been sending more slab to their own mills, reducing available merchant availability. At the same time, they have also been expanding downstream capacity in Russia and Ukraine, curbing availability further. 

Ukraine’s Metinvest did commission a new 2.5 million tonnes/year continuous slab caster at its Mariupol Ilyich Iron and Steel works in the first quarter of 2019, but it also re-rolls the bulk of its output at the relatively new 1700 rolling mill. This balanced out supply of pig iron, but merchant slab availability has not increased much, especially considering Metinvest’s slab requirements in Italy. Supply issues with coking coal in Ukraine in the past six months also restricted production somewhat.

NLMK, the largest CIS merchant slab supplier, also reduced its availability in 2021 on the renewal of slab shipments to its US assets, and higher in-house requirements both in Russia and Europe. Other, relatively opportunistic Russian suppliers such as Severstal and MMK are also not seen offering slab due to seasonally high demand for their flat products now.

Brazil is continuing to supply the US and the region. The recent rain season has not hampered production volumes drastically, but it tightened output and shipments. No Brazilian slab was seen in the eastern hemisphere in the past year, save for one lot, due to ample demand in the west and high prices, driven by America’s strong flats market. European and Turkish re-rollers were seen enquiring for Brazilian slab this year, and some tonnages may be sold, depending on regional demand and prices, traders muse.

Meanwhile, Turkey, one of the largest merchant slab buyers, has not been importing as much as it used to (see separate article) due to high prices and higher reliance on domestic production instead of billet. Overall, the trend is likely to continue. With all the extra capacity coming on stream in Turkey, slab will probably become like billet – imported more when the price spread works, and less when it does not. Power prices are likely to remain an issue, so mills will remain on the lookout for slab, especially as scrap and iron ore prices are not showing signs of letting up.

Katya Ourakova UK

Seaborne iron ore prices have leapt over the $150/tonne mark for the first time since 1 September 2021. Fundamentals have outweighed concerns of regulatory intervention, wiping out the losses of the previous day.

The Kallanish KORE 62% Fe index jumped on Thursday by $5.10/t to $150.67/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index increased $5.62/t to $179.81/dmt cfr, while the KORE 58% Fe index inched $0.76/t higher to $124.43/dmt cfr.

On the Dalian Commodity Exchange May iron ore settled up CNY 6.5/t at CNY 802.5/t ($126.13/t), while on the Singapore Exchange March 62% Fe futures settled up $7.33/t at $152.94/t. The same contract for 65% Fe and 58% Fe futures settled up $6.96/t at $179.84/t, and up $2.34/t at $127.04/t respectively.

Both scrap and billet prices are also appreciating. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta gained CNY 11/t to CNY 3,652/t. In Tangshan, billet prices were up CNY 20/t to CNY 4,690/t.

Iron ore and steel prices have rapidly brushed aside concerns from the National Development and Reform Commission that prices were increasing too rapidly. The seasonal recovery in steel demand and a recovery in steel output after the Olympics and meetings in Beijing mean iron ore consumption is only expected to increase. By attempting to reassure markets that the real estate sector will not be allowed to collapse, the NDRC itself undermined its attempts to control iron ore prices, by boosting speculation that demand will be strong.

FMG has meanwhile said it plans a 5.4-gigawatt renewable energy power hub in the Pilbara to power its operations and fulfil its net zero targets for 2030. The Uaroo Renewable Energy Hub would include a solar farm and up to 340 wind turbines, as well as a battery storage system. The company expects this to reduce its scope 1 and scope 2 emissions by 1.5 million tonnes/year.

Tomas Gutierrez UK

European HRC prices continue on an upward trend as more contract demand and bookings limited forward spot availability. Steel mills and service centers cited higher offers in both Northern and Southern Europe, fueled by rising raw material costs and decarbonization initiatives. Market participants believe end-user demand for steel from key consuming industries will pick up in the near term, with the exception of automotive.

In the Italian market, a service center source reported a pickup in daily demand alongside confirmed deals on the day, while Northern Europe had “weak” liquidity as buyers held too much stock given reduced project demand, a buyer source reported.

The spread between Northwest European and Italian ex-works HRC prices now stands at Eur80/mt on the day, as offers picked up more aggressively in Italy and the south of Europe. Leading South European mills plan to further increase headline offers up to Eur950/mt by as soon as next week, a distributor source added.

Lower steel production and higher-priced and limited imports further supported the market and new offers, a steel distributor source said.

Platts assessed North European HRC prices stable at Eur980/mt ex-works Ruhr and in Southern Europe prices were assessed at Eur900/mt ex-works Italy Feb. 10.

— Catherine Brown