Day: 10 March 2022

European domestic steel section prices jumped significantly on week March 9 as mills held back offers amid high costs and supply constraints.

S&P Global Commodity Insights’ Platts European medium sections price, category one, S235 JR, was assessed at Eur1,250/mt delivered March 9, up Eur145 on week, reaching the highest level on record since the index began in January 1998.

Sources noted that the ongoing crisis between Russia and Ukraine greatly disrupted the supply chain in the market, pushing prices up to record high levels.

“A lot of mills have stopped offers,” one distributor source in the Benelux region said, adding that issues related to scrap and energy costs were affecting production processes.

“There is a lot of speculation in the market,” the same distributor said. “Gas and electricity prices doubled in one day yesterday. There are also problems from scrap and other raw materials which the European mills were buying from Ukraine and Russia.”

The source also noted that around 40% of the country’s requirements came from Russia, but the developing situation in the crisis region was creating a lot of volatility in oil and gas prices. However, he expected that long steel product prices would return to normal in the near term and put current workable levels for medium sections at Eur1,250/mt-Eur1,300/mt delivered. “Some mills are only offering these prices from stock, because this week and the next, a lot of mills will still be out of the market,” he added.

One European mill source also highlighted high energy and scrap costs, and told S&P Global that he was currently withholding offers.

“Many mills, including ourselves, are still out of market,” he said, adding that current prices for category one medium sections were around Eur1,300/mt delivered. “There are actually no mills offering right now, these prices are just a reference,” he said. “Mills are out because of energy costs and high scrap. All these costs are just going crazy. Very few deals are happening at the market because…demand is low.”

Elsewhere, Northwest European domestic rebar prices also strengthened significantly on week March 9 as mills held back offers. The Platts TSI Northwest Europe Rebar increased Eur70 to Eur920/mt ex-works on week March 9.

One seller sold said that the rebar business was at a standstill. “No price level, no business — everything has stopped,” he said, as a lot of mills had stopped offering products in the domestic Northwest European market. The source noted that one mill was heard offering rebar in coils at Eur1,200/mt delivered, which would make indicative standard rebar offers around Eur1,160/mt-Eur1,180/mt delivered, depending on the mill.

“We are hearing Eur900/mt price levels for rebars with potentially higher prices, but a lot of mills are out of market at the moment,” one trading source said.

— Rabia Arif, Staff

ArcelorMittal tells Kallanish it is applying flexible production shifts at its Olaberría plant in the north of Spain. The facility, which is part of the steelmaker’s Gipuzkoa unit, can produce 900,000 tonnes/year of structural profiles.

On 8 March, the Olaberría plant halted production for most of the day. ArcelorMittal, however, resumed activities within less than 24 hours. According to the company, operations at the site will be carried out only when the daily electricity rate is lower.

“We are producing in the time slots in which the cost impact is less, or approximately for 1/3 of the day,” ArcelorMittal explains.

Meanwhile, the company confirms it is still evaluating the possible delay of starting operations at its Acería Compacta de Bizkaia (ACB) plant in Sestao due to the high energy costs.

“In Sestao, currently, we have steelmaking halted due to a shift cycle of six days working and four days off,” the firm observes. Full production should be resumed on 13 March, but this could be delayed depending on how energy prices develop. “We are monitoring daily the evolution of energy prices to decide if to start production at a normal rate or to postpone it,” ArcelorMittal comments.

The steelmaker halted ACB operations on 7 December to undertake one-month maintenance work and an upgrade of the second continuous casting line. In January, however, the steelmaker extended the shutdown period due to costlier energy in Spain.

Todor Kirkov Bulgaria

German scrap prices skyrocketed at the beginning of March due to the Russian invasion of Ukraine and short supply, according to German scrap market participants. Most sources expect new hikes this month.

Prices in southern Germany and in most other parts of the country increased by €80-90/tonne ($88-100/t) this month, a German participant tells Kallanish.

Nationwide average prices for old thick scrap sort 3 are up from €450/t to €530/t. The price for new scrap sort 2/8, meanwhile, has reached €570-580/t.

The price for E40 shredded scrap has reached €570/t.

In Austria, scrap prices have also increased significantly, for old thick scrap sort 3 to €515t, with new scrap sort 2/8 reaching €540/t.

“The scrap market in Germany and other European countries is going crazy due to the Russian-Ukrainian war and new sanctions against Russia,” a merchant observes. “Prices will most probably reach and even go above €600 very soon. This, combined with short supply due to logistical problems in Europe, can create a serious lack of this raw material for the steel industry.”

Supply continues to be pressured further by persistent semiconductor shortages, which have led to production halts in the automotive industry, sources say.

Svetoslav Abrossimov Bulgaria