Day: 8 July 2022

In the past months, the European Commission has adopted several legislative proposals affecting, directly or indirectly, international trade with the EU.

Below you’ll find a Van Bael & Bellis document that briefly illustrate the main aspects of these proposals, with focus on the expected implications for businesses established outside the EU.

Plate prices have remained under pressure across Europe, and buyers have been holding back from trading given that the price bottom is not yet clear, sources told Fastmarkets on Wednesday July 6.
Italy
Italy’s plate market has remained quiet in the seven days to July 6 amid limited trading and buyers’ bearish expectations.

Plate producers in the nation had thin order books for July-August, sources said.

“Plate prices are still under pressure,” a producer source told Fastmarkets. “The main problem is massive unsold [plate] quantities for July-August and cheaper imports. It is still a buyer’s market.”

Bids from stockholders were heard at €1,100 ($1,136) per tonne exw, and even €1,050 from large buyers.

Offers from local rerollers were ranging between €1,150 and €1,200 per tonne exw in the week to July 6, sources said.

But such prices were not workable, market sources said, because in the secondary market, plate from stock was being sold at €1,150-1,200 per tonne cpt.

Buyers’ estimates of achievable prices were in the range of €1,050-1,100 per tonne exw.

Some limited restocking activity is expected in the second half of July, which could support sliding plate prices in the nation, sources said.

“In the plate market, there has been no full-fledged restocking for a long time,” a source in the local market told Fastmarkets. “We are seeing some inquiries for August and September delivery material.”

Fastmarkets’ price assessment for steel domestic plate, 8-40mm, exw Southern Europe was €1,100-1,150 ($1,136-1,187) per tonne on Wednesday, down by €100-150 per tonne from €1,200-1,300 per tonne a week before.

The assessment was a reflection of the lowest offers and highest bids heard in the market during the assessment week.

Offers for plate with August shipment from India and South Korea were heard at €950-980 per tonne cfr Italy, sources said.

Northern Europe
The plate market in Northern Europe was still heavily overstocked, especially for commodity grades, so buying activity has remained thin over the past week.

Stockholders in the region were mainly focused on selling devalued plate stocks rather than restocking in the declining market, Fastmarkets understands.

The official level of offers from German producers was still at around €1,450-1,500 per tonne exw and above, but the workable price buyers had in mind did not exceed €1,350-1,400 per tonne exw for German plate.

August-shipment rolling plate from Belgian reroller NLMK Clabecq was offered at €1,300 per tonne exw.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe was €1,300-1,400 per tonne on July 6, unchanged from the previous week.

The assessment was a reflection of the lower end of offers and market sources’ estimates of achievable prices.

The official offers from German integrated mills were not included in the assessment since, as sources told Fastmarkets, they have been substantially above the spot market level.

German buyers were placing bids for Italy-origin material at €1,100-1,150 per tonne cpt during the week, Fastmarkets heard.

Plate offers from Poland were reported at 1,200-1,230 per tonne exw.

There may still be room for a domestic price drop in Northern Europe, market sources said.

“There are cheaper [plate] offers from Italy and Central Europe, so German prices are not attractive at all,” a distributor in the Benelux region told Fastmarkets, adding that “the level of stock is still pretty high, so buyers are in no rush.”

Published by: Julia Bolotova

Cold-rolled and hot-dip galvanized coil prices in Europe remained broadly stable in the week to Wednesday July 6 amid a partial pick-up in demand, market sources told Fastmarkets. Flat steel producers in Northern Europe reported a slight improvement in demand from automotive original equipment manufacturers (OEMs) over the past week.

Notably, there were more inquiries from end users in the automotive industry for September-delivery material, with some restocking expected in the second half of July, according to market sources.

“The automotive producers are actually well-booked; they need material to keep them going,” a seller in Germany told Fastmarkets.

Potential restocking was supposed to end the price downtrend, which has been persisting in the market for the past couple of months.

“Producers still have some unsold tonnages of [downstream flat steel] for July and August, the market is still oversupplied. However, we do not expect [CRC and HDG] prices to drop significantly below current levels because of the costs [and] unclear post-holiday prospects,” a producer source in Italy told Fastmarkets.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe was €950-980 ($981-1012) per tonne on Wednesday, unchanged from a week earlier.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe was also unchanged week on week at €1,000-1,020 per tonne on Wednesday.

Both assessments were based on market sources’ estimations of achievable prices and lower offers heard from buyers and producers during the reported week.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Southern Europe was €860-870 per tonne on Wednesday, narrowing downward by €10 per tonne from €860-880 per tonne a week earlier.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Southern Europe was €880-890 per tonne on Wednesday, narrowing downward by €10 per tonne from €880-900 per tonne last week.

Post-holiday outlook
Market expectations for September-October were quite mixed due to prevailing uncertainty in the energy sector, Fastmarkets heard.

Should Russia cut off gas supply to Europe completely in the fourth quarter of 2022, energy prices will go “through the roof” and European mills will need to adjust or even halt their operations, sources said.

At the same time, automotive demand was expected to pick up in the final quarter of the year, from the lows seen in the first half of the year, with some automakers in Germany even announcing planned production increases in September.

Market sources see the combination of reduced supply and improved demand as having the potential to provide flat steel prices with a boost in the final three months of 2022.

Published by: Julia Bolotova

The French rebar market remains in a lull with prices that remain high despite their recent drop. Low consumer confidence and the fear of recession continue to hamper sales.

Like in June, very small tonnages are being bought from week to week, Kallanish learns from sources. Domestic rebar contracts are now hovering at €730-740/tonne ($744-755/t) base ex-works, some €40/t less compared to June. Considering a €260-270/t average for size extras, effective values are at €1,000/t ex-works on average, sources suggest.

High values are also reported in Germany, but prices in southern Europe are lower. In the latter region, mills are implementing stoppages to address the current overcapacity. Rebar there is sold at below the level of €770-800/t ex-works, including size extras.

French rebar sales remain low throughout the value chain with customers adopting a wait-and-see attitude. Some demand is expected to resume in the second half of July as customers should stock up before the August summer break. Stocks however remain high.

Natalia Capra France

ArcelorMittal has started ramping up blast furnace 5A at its Eisenhüttenstadt, Germany, site, the steelmaker told S&P Global Commodity Insights July 7.

The blast furnace, which produces 1.8 million mt of hot metal, was shut May 20 to replace internal cooling plates, among other maintenance.

ArcelorMittal Eisenhüttenstadt makes steel mainly for the specific-application requirements in the automotive industry as well as organic coated products for use in construction.

Platts assessed hot-rolled coil in Northern Europe at Eur850/mt ex-works Ruhr on July 7, unchanged on the day, according to S&P Global Commodity Insights data.

HRC prices have reached floor in the EU, market sources believe. The downwards price trend in Europe since late March has came to an end due to change of approach by domestic mills that stopped giving discounts to stimulate buying and instead started to reduce production to balance supply and demand.

Steel demand from end-consumers is expected to remain below usual level, market sources believe. Steel demand from the automotive industry has been below usual as continuing component shortages has limited production.

— Annalisa Villa, Maria Tanatar

Turkey’s trade ministry has imposed antidumping duties on hot-rolled coil imports from the EU and South Korea after a year-long investigation, according to a presidential decree published July 7.

Acciaierie d’Italia S.P.A and all ArcelorMittal mills in the EU will be subject to a duty of 10.9%; Tata Steel Ijmuiden, 7%; Liberty Galati S.A., Liberty Ostrava, ThyssenKrupp Steel Europe and ThyssenKrupp Hohenlimburg, 8.95%, and all other EU producers 12.8%, according to the decree seen by S&P Global Commodity Insights.

South Korean producers POSCO and Hyundai Steel will be subject to a 7% duty and other South Korean producers 8.95%.

The duties were imposed with immediate effect July 7.

Turkey’s antidumping investigation was launched two days after the EU imposed provisional antidumping duties of 4.8%-7.6% on imports of HRC from Turkey at the start of 2021, which remain in force.

“It is determined that EU and South Korean hot-rolled coil producers sold their products to Turkey with dumped prices in the investigation period, and these imports caused damage in the domestic industry’s production,” the ministry said in the decree.

The duty rates announced by the trade ministry July 7 were lower than the duties announced in the preliminary report published March 11, S&P Global observed.

Ugur Dalbeler, vice president of the Turkish Steel Exporters’ Association and CEO of major steelmaker Colakoglu, told S&P Global July 7 that the dumping margins in the report did not reflect real dumping in the market, but were an important step to prevent unfair trade.

“It is also a message that Turkey will not allow the countries who are continuing unfair trade persistently,” Dalbeler added.

The duty decision is expected to support domestic HRC prices in the Turkish market, a service center manager said July 7, adding that some upward price movement in Turkish flat steel pricing had already begun and could be accelerated after the week-long Eid holiday in Turkey that begins July 8.

Turkish HRC prices, which exceeded $1,200/mt in mid-March due to the collapse of the supply chain from the Commonwealth of Independent States amid the war in Ukraine, have eased gradually since mid-April due to slow demand and low-priced import offers.

Turkish domestic HRC was assessed at $710/mt EXW July 1, down around $500/mt since mid-March, S&P Global data showed.

Although Turkish buyers imported 5.6 million mt of HRC in 2021, 1.5 million mt more than in 2020, imports from traditional main supplier the EU region fell over the same period, Turkish Statistical Institute data showed.

HRC imports from France fell 130,000 mt year on year to 315,000 mt in 2021, from Romania fell 28% over the same period to 157,700 mt, and from the Netherlands plunged to 23,500 mt from 155,000 mt.

Turkish mills’ HRC exports from South Korea in 2021 were also down 20% year on year at 225,000 mt, the data showed.

The affected products fall under CN codes 7208.10.00, 7208.25.00, 7208.26.00, 7208.27.00, 7208.36.00, 7208.37.00, 7208.38.00, 7208.39.00, 7208.40.00, 7208.52.10, 7208.52.99, 7208.53.10, 7208.53.90, 7208.54.00, 7211.13.00, 7211.14.00, 7211.19.00, 7212.60.00, 7225.19.10, 7225.30.10, 7225.30.30, 7225.30.90, 7225.40.15, 7225.40.90, 7226.91.20, 7226.91.91 and 7226.91.99.

— Cenk Can

The two integrated flat producers in Italy are expected to halt part of their production in the coming weeks for maintenance works, market sources told S&P Global Commodity Insight July 7.

Electric arc furnace base steelmaker Arvedi will stop production at its plant, including its melt shop and rolling mills, for five weeks in August for summer maintenance.

Another integrated steelmaker, Acciaierie d’Italia, will temporarily halt production at its blast furnace No. 2 from the week starting July 11 for about a month and a half, trade union sources said.

Press officers for both companies declined to comment when contacted by S&P Global July 7.

A majority of European coil producers have been operating with reduced capacity over the past month and were planning longer summer maintenances in an attempt to balance supply with reduced demand. Automotive manufacturers consumed less steel because of lower car production rates caused by a shortage of components. Other end-users, including in the white goods segment, were also reported to show lower demand for steel.

European distributors have sufficient inventories and, as a result, they have been avoiding restocking. A negative price trend in the EU flat steel market contributed to a wait-and-see approach among buyers.

In the first half of July, however, domestic hot-rolled coil prices appear to be reaching a bottom. Reduced steel output combined with the reluctance of the steelmakers to lower prices to secure deals have triggered the change.

HRC in Southern Europe was assessed at Eur770/mt ex-works Italy July 7, unchanged day on day, and down by Eur630/mt from the peak reached March 24.

Arvedi, now the largest Italian flat producer, operates two EAFs in Cremona, in northern Italy, that feed 75% of the finishing operations there. EAF No. 1 has a capacity of 1.4 million mt/year of crude steel, and furnace No. 2’s capacity was expanded to 2.6 million mt/year in 2021.

Acciairie d’Italia BF No. 2’s production capacity is about 2 million mt/year of pig iron, and it was originally supposed to be temporarily closed for maintenance in April.

In the week that began March 21, the company restarted its BF No. 4 after it was shut at the beginning of December because of what it called a technical problem in the blast furnace’s crucible. Three weeks ago, BF No. 1 was stopped due to technical problems, but at the beginning of the week beginning July 7 it restarted production. After the BF No. 2 stoppage, the mills will continue to run BF No. 4 and BF No. 1.

— Maria Tanatar, Annalisa Villa

Rebar prices in the Northern European domestic market remained depressed in the week ending Wednesday July 6, with market activity negligible due to weak demand and customers’ continued wait-and-see approach, market sources told Fastmarkets.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe was €950-1,100 ($970-1,124) per tonne on Wednesday, unchanged week on week.

Given the ongoing low demand, customers continued to hold off on significant movements, a variety of sources said. With activity so sluggish and few deals taking place, little had changed during the week, several market sources said.

An abnormally wide €150 range for the second consecutive week is the result of the gap between actual offers and market sources’ estimates of achievable prices, as well as the overall lack of trading activity.

“No one is sure in what direction we are moving. New projects are on hold and delayed, and there is not much demand for existing orders,” one source said. “There is a lot of uncertainty – to buy or not to buy, to wait or not to wait.”

Energy costs also remain a concern for mills, the same source said. This is especially the case in terms of accepting large-volume orders for the fourth quarter, in the event the orders cannot be realized due to energy shortages, the source said.

Decreasing international scrap costs since mid-April have also been a major factor in the falling rebar market. Scrap prices have, however, begun to surge during the week. Rising international scrap prices, alongside other soaring input costs, may be another critical catalyst pushing rebar prices up in the coming months.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $403.75 per tonne on Wednesday, up significantly from $325.58 week on week.

Published by: India-Inés Levy

European hot-rolled coil prices were said to be near a bottom in Northern Europe and Italy on Thursday July 7, although some buyers said there was still room for a further decline, while producers were resisting any more price falls, sources told Fastmarkets.
But there were signs of a pick-up in buying activity since Monday July 4, Fastmarkets understands.

Market participants said they expect to see some restocking activity in the second half of July, but agreed that it is too early to talk about a rebound.

“The [restocking] activity will be limited because buyers are overstocked and will only book the tonnages they absolutely need,” a trading source in Germany said.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €841.25 ($859.24) per tonne on Thursday, down by just €5 per tonne from €846.25 per tonne on Wednesday.

The index was down by €8.75 per tonne week on week and by €108.75 per tonne month on month.

Indications of achievable prices from buyers in the region were heard between €800 and €850 per tonne exw.

Some bids were reported at €830 per tonne exw and sources said that producers were “likely to accept” that price “for tonnages above 1,000 tonnes.”

Offers from mills in the region were between €850 and €900 per tonne exw, with €850 per tonne exw considered to be the price floor by producers due to their high costs.

HRC offers from Central European mills were heard at €770-790 per tonne delivered, but for smaller volumes.

 Buyers remain convinced, however, that there is still room for prices to fall further.

“I still believe that, until the end of July, [HRC] prices could drop by another €20 per tonne,” a buyer in Germany said. “But the days of prices falling by €100 per week are done, for sure. We are near the floor.”

Mill sources again said there has been some improvement in demand from automotive original equipment manufacturers (OEMs) over the past week, with more inquiries for August-September material coming in.

But some market participants were more skeptical about the automotive industry recovery, pointing to the fact that the industry currently consumes about 20% less flat steel than it did in 2021 – and in the second-half of 2021, automotive production had already begun to contract across Europe.

“I think we can say there is likely to be some normalization [of automotive production] in the fourth quarter of 2022, but all forecasts are very unreliable because, let’s not forget, we have a war going on the middle of Europe [in Russia’s invasion of Ukraine],” a trading source in Belgium said.

Market participants said they were counting on HRC prices to stabilize in July-August, with a potential rebound in September-October.

“There is market chatter that the German government has asked energy-intensive industries, such as the steel industry, to reduce production to save energy (gas). If that is true, [HRC] availability will be reduced and that could give prices a boost,” another trading source in the region said.

The energy market in Europe has been highly volatile in recent months due to international sanctions applied since the Russian invasion of Ukraine. Electricity prices were said to be five times higher than at the same time last year in some nations.

 And if Russia cuts off gas supplies to Europe in the final quarter of 2022, energy prices will jump even higher.

Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy, meanwhile, was €755.00 per tonne on Thursday, down by €4.89 per tonne from €759.89 per tonne on Wednesday.

The Italian index was down by €13.75 per tonne week on week and by €160.22 per tonne month on month.

Offers in Italy were heard at €750-800 per tonne exw, with buyers looking to pay closer to €750 per tonne exw, sources told Fastmarkets.

Published by: Julia Bolotova