Day: 18 July 2022

European Steel Association Eurofer July 15 called for the European Commission to set out a practical framework and timetable for phasing in the European Union’s hydrogen market, including a lengthening of the proposed transitional period for its introduction until at least 2030.

Proposed restrictions on industrial CO2 use also need to be reconsidered and the definition of possible CO2 sources broadened, Eurofer, along with other European industrial associations, said in a joint statement.

Prolonging the introductory phase for a hydrogen market will not only allow more time for electrolyser construction but would also take into account the lead times for new renewable energy generation installations, with offshore wind projects taking up to seven years to build, according to the statement.

“Our sectors crucially depend on the large-scale availability of renewable fuels of non-biological origin, or RFNBOs, supplied cost-competitively and securely across Europe,” Eurofer said.

A longer time frame would also allow steelmakers to continue producing during the introductory period to meet global steel demand, without seeing their investments in production capacity curtailed by restrictions on Carbon Capture, Utilization and Storage technologies, Eurofer said. Integrated steelmakers are concerned about the narrow time window being proposed for use of CCU and CCUS technologies under the EC proposals, it indicated.

CCS is currently seen by some quarters as the only available technology to decarbonize blast-furnace steelmaking in the short to medium term. Various sources see blast furnace steelmaking continuing for decades due to the massive capital investment they represent.

“The proposed sunset date (2035) for the use of industrial CO2 sources would immediately lead to a halt in CCU investments today. CO2 emissions from fossil sources are set to be reduced gradually by multiple regulatory files, including the Renewable Energy and Energy Efficiency Directives and the EU Emission Trading System, leaving only process-related and thus unavoidable hard-to-abate or not-to-abate emissions,” the joint statement said.

“CCU is an effective solution to capture those remaining emissions and convert them into valuable transport fuels by using CO2 emissions that would have been otherwise emitted to the atmosphere,” continued the statement, also signed by associations from the EU mining, chemicals, cement, ceramics, fuels and fertilizers sectors. “Storage options for captured carbon may not be accessible or even allowed in certain locations. This unjustified time limitation would have significant profitability implications as an operating lifetime of max. 13 years is not sufficient to recoup the investment costs for CCU and would therefore discourage investments that enable meaningful recycling and reuse of CO2 emissions.”

UK Steel sees CCUS ‘advantage’

UK Steel, an association grouping UK steelmakers, who will not be subject to EU hydrogen market rules due to the UK’s recent exit from the EU, said this week that the UK may gain “a substantial advantage” from the use of CCUS in its steel industry decarbonization.

“Within a 2035-timeframe, CCUS is the only available technology to reduce emissions from ore-based production significantly,” UK Steel said in its “Net Zero Steel – a vision for the future of UK steel production” report. “This will be especially true for the production of specific steel grades, which require ore-based production. Ore-based production is essential to meeting global steel demand and will continue to be beyond 2050. To prevent significant climate change, the world has to solve the decarbonization of ore-based steel production. There will be significant commercial opportunities from the associated intellectual properties with any decarbonized ore-based production – giving the UK a substantial advantage.”

CCUS captures CO2 from industrial process and transports it for storing underground in depleted gas and oil fields or deep saline aquifer formations. CCUS can capture 80-90% of ore-based steelmaking emissions, although maximizing the capture rates from blast furnaces could involve “significant rebuilding of the blast furnaces…. increasing capital costs,” the UK Steel report said.

The July 15 statement signed by 18 EU industrial bodies follows the EC’s publication of the drafts for the outstanding RED II Delegated Acts on Article 27.3 (‘Additionality’ Delegated Act) and Article 28.5 (Greenhouse Gas Reduction Methodology).

“The signatories of this letter appreciate the European Commission’s call for feedback,” the associations said.

— Diana Kinch

New passenger car registrations in the European Union fell 15.4% year on year in June to 886,510 units, bringing the total sales for the first half of 2022 to 4.6 million units, down 14% year on year, according to European Automobile Manufacturers Association (ACEA) data released July 15.

June was the 11th consecutive month of decline, with the top three markets — Germany, France and Italy — all seeing double-digit losses, although the monthly volume was up 12% month on month to the highest level since June 2021, the data showed.

The auto market has been facing supply issues due to the ongoing semiconductor shortage, which in turn has impacted production.

This has also somewhat impacted steel demand, with Platts assessing domestic HRC prices in Northern Europe at Eur855/mt ex-works Ruhr July 14, 2.3% higher than it was at the start of 2022, according to S&P Global Commodity Insights data.

In Germany, the largest EU car market, new car registrations drop 18.1% year on year in June to 224,558 units, which was 8.4% higher than the previous month and at a three-month high.

German H1 car registrations amounted to 1.2 million units, down 11% on the year.

In France, the second largest market, sales for the month dropped 14.2% on the year, but rose 34.9% on the month to 171,087 units, the highest monthly level since June 2021.

Similarly, car sales in Italy dropped 15.0% on the year to 127,209 units, but climbed 4.9% from May to the highest volume since June 2021.

H1 car sales in France totaled 771,980 units, down 16.3% on the year, while sales in Italy dropped 22.7% to 684,027 units.

In Spain, 89,252 units were sold in June, falling 7.8% on the year, but up 5% on the month to the highest volume since May 2021. This brought the H1 total to 407,740 units, down 10.7% year on year.

— Jacqueline Holman

Stockholders in the UK HRC market were focused on depleting stocks July 15, though demand remained muted with scarce transactional activity reported.

Stockholders in the UK HRC market were focused on depleting stocks July 15, though demand remained muted with scarce transactional activity reported.

S&P Global Commodity Insights assessed hot-rolled coil in the UK down GBP40/mt on week, at GBP740/mt DDP West Midlands.

Distributors remained focused on offers from European mills with short lead times available at price levels of around GBP740/mt DDP West Midlands. Distribution sources considered GBP740/mt as a tradable value on the day.

Cheaper offers were reported from one mill at GBP690-710/mt DDP UK — but these offers could not be confirmed by market sources and were not regarded as representative of current market levels.

“No one’s buying at the moment, so a lot of the offers being circulated are fictitious to say the least,” said a stockholder source. “Demand is down, outsell prices are down and things won’t pick up until stocks are down too. Restocking will have to happen eventually, once all this negativity goes out the window — if stockholders run out of stock, they aren’t stockholders anymore, are they?”

Sentiments in the UK market were mixed, though more negative than in Europe, where HRC prices have stabilized at around Eur850-860/mt ex-works Ruhr with demand revival expected in the coming weeks.

“EU mills shut down in the summer months whereas the UK market tends to keep moving, we don’t really have the same evidence as on the Continent to say that the downtrend is over or demand has to come back in the near-term – the only thing we can be certain about is that substantial bookings should come back around September, everything else is up in the air,” said a trader source.

UK stockholders were heard as focused on depleting high stock levels, made more difficult by poor demand across the UK market. End-user demand to distributors was reportedly down 25%-30% with similar decreases in import interest meaning traders were struggling to fill vessels.

— Benjamin Steven, Maria Tanatar

Domestic prices for heavy plate have been fairly stable in Europe in the week to July 15 as market activity remained muted.

Platts assessed plate in Southern Europe at Eur1,050/mt ex-works Italy July 15, unchanged week on week, according to S&P Global Commodity Insights data.

Deals with smaller buyers have been reported at Eur1,100/mt ex-works Italy, but tradable value for bigger stockists has been estimated by a producer at Eur950-1,050/mt ex-works. And market participants estimated achievable prices at Eur1,000-1,050/mt ex-works Italy. Official offers have been heard at Eur1,100-1,200/mt ex-works Italy.

Although few sources reported some restocking revival, the overall market activity remained below average due to seasonal buyers slowdown and summer maintained at the mills.

“Market is quiet. Northern European mills are moving into maintenance shut down,” a German trader said. “Due to vacation period in Germany, demand from stock is slowing down. Order books are still good, but buyers try to wait as long as they can before booking new volumes.”

“Mills are offering mid-September production now and customers need to act now to get volumes required for restocking, so demand might improve,” a German trader said.

Italian re-rollers were reported to take 4-6 weeks of maintenance this summer and a German mill was heard to stop operations a week earlier than originally planned due to technical issues.

Slab offers from Brazil were reported at $700/mt CIF Italy, a trader said. Another source estimated achievable prices for the semi-finished product from Asia at Eur640-650/mt CIF Italy.

Plate producers in Germany and Northern Europe, in the meantime, have been holding back from sales in the spot market. They continue to enjoy solid order books because of long-term contracts with projects.

In Northern Europe, Platts assessed plate unchanged week on week at Eur1,375/mt ex-works Ruhr July 15, up by Eur25/mt week on week.

Offers from German mills have been reported at Eur1,400-1,450/mt ex-works Ruhr and tradable value has been estimated at Eur1,350/mt ex-works Ruhr.

Central European mills have been less active in German market, sources said, with offers from one integrated producer heard at Eur1,100/mt ex-works.

— Maria Tanatar, Benjamin Steven

Russian steel producers are experiencing losses in both export and domestic markets, Moscow-based daily Kommersant reported July 14.

All major Russian steel manufacturers saw negative margins in June with the sector actively reducing steel production while also considering reducing investment programs, Kommersant said.

In June, Severstal saw a negative 46% margin in exports though a positive 1% margin in the domestic market, the Kommersant said, citing Severstal’s director and vice President of the Russian Steel Association, Andrey Leonov.

Severstal, being Russia’s biggest steel exporter to the EU, has seen operations hit hard as a result of Western sanctions imposed on it.

In May, Severstal said its hot-rolled coil exports were likely to shrink to half of its total HRC sales this year, down from 71% in 2021, when the company sold 1.9 million mt to the EU.

Severstal’s Latvia-based distribution company ceased activity around mid-March due to sanctions, which targeted the Russian steel industry and Severstal majority shareholder Alexey Mordashov.

Steel producer MMK, which supplies up to 90% of its products to the domestic market, reached an average profitability rate of negative 5.9%, Kommersant said.

In terms of investment programs MMK owner, Viktor Rashnikov, said in June that the plant’s investment program could be implemented with a profitability of at least 15%, but in May this figure was 4%, Kommersant said.

Although coal and iron ore suppliers were reducing prices, there is little room for maneuver, Kommersant said, citing Rashnikov.

Platts assessed Northwest Europe hot-rolled coil stable day on day at Eur855/mt ($855.77/mt) ex-works Ruhr July 14.

Producers expect output to drop

Depending on the Russian steel producer in question, June steel production fell by 20%-50% year on year, the Russian Steel association said last week, while the cost of production increased by 50% year on year.

Taking into consideration current market conditions, the Russian Federation’s Ministry of Industry and Trade has proposed to alleviate the country’s steel sector through tax cuts and cancel the excise tax on liquid steel, which was approved in 2021 as a measure to withdraw excess profits, Kommersant said.

However, the Ministry of Finance was not yet ready to cancel the excise tax, but may look into considering in adjusting it, it said.

Steel producer NLMK expects steel production in Russia to fall by 15%, or 11 million mt, by the end of the year, Kommersant said, with the steepest decline expected in the second half of the year.

In May, steel production in the Russian Federation decreased 1.4% year on year to 6.4 million mt, Kommersant said.

Global crude steel production totaled 169.5 million mt in May, down 3.5% from May 2021, according to World Steel Association data published June 22, while production for the first five months of the year totaled 791.8 million mt, down 6.3% year on year.

— Filip Warwick

Domestic prices for hot-rolled coil in Northern Europe remained flat on July 15, supported by some demand revival and the effects from production cuts across Europe.

Platts assessed HRC in Northern Europe at Eur855/mt ex-works Ruhr July 15, stable day on day, according to S&P Global Commodity Insights data.

Deals for minor tonnages and achievable prices have been heard at Eur850-860/mt ex-works Ruhr. One Northern European mill was reported to increase offers for HRC to Eur900/mt ex-works.

The region’s steelmakers are expected to announce higher offers soon. One Northern Europe steelmaker has already reported increased offers for HRC to Eur900/mt ex-works, making it about a Eur50/mt rise compared to previous prices.

Some sources believe that transaction prices for coil will move up to that offer level in September, when more buyers return to the market looking for orders.

“I think we will see HRC prices rise to Eur900/mt Northern Europe in September,” a Northern European distributor said. “Stronger dollar makes import steel more expensive, so there is no competition now. And the mills face challenges related to high energy costs and possible disruption of gas supply.”

In the meantime, trading activity has been slowly recovering as more distributors have been looking for the material to restock, sources said. Some market participants believe that buyers have to restock by the end of July, otherwise they would struggle to get volumes in time for autumn due to the effects of longer maintenance stoppages by steelmakers and equipment stoppages. ArcelorMittal in France, HBIS Serbia, Acciaierie d’Italia and Arvedi, both in Italy, confirmed furnaces stoppages, and other producers were planning longer summer maintenances to reduce supply and support domestic prices.

“We see some stability in the market now, and this, combined with production cuts, will hopefully give prices an opportunity to recover,” a European trader said. “The demand is uneven, some buyers have stocks from floor to the roof and even stocking coil outside, but others have medium stocks, and they need to plan September restocking now not to face long lead times and high prices if they delay purchases.”

HRC in Southern Europe was assessed at Eur785/mt ex-works Italy July 15, up Eur5 day on day.

Deals for minor tonnages have been heard at Eur800/mt ex-works Italy. Official offers have been reported ta Eur800-820/mt ex-works Italy and buyers estimated tradable value as Eur750-800/mt ex-works Italy.

— Maria Tanatar, Benjamin Steven

Rebar prices in Poland rebounded in the week to Friday July 15 following the release of new offers, which are set to continue rising due to high costs, market sources told Fastmarkets.
The downtrend that had persisted in the Polish rebar market for the past couple of months has finally come to an end, according to sources.

Polish rebar producers were pushing for higher prices this week amid a surge in production costs and a looming energy crisis, market sources said.

During peak hours, electricity prices in Poland are exceeding 1,000 zloty ($208) per megawatt-hour in July, market participants told Fastmarkets. This is up from 650-700 zloty per MWh in June and sharply up from 378 zloty per MWh in July 2021

Last week, rebar prices in the nation had plummeted to their lowest since May 2021 amid persistently low activity.

But local mills withdrew offers after that, claiming that “sales at such prices are loss-making,” Fastmarkets heard.

This week saw some producers return with higher offers of 3,850 zloty per tonne cpt (about 3,800 zloty per tonne exw), sharply up from the official offers of 3,650 zloty per tonne reported earlier in July.

Buying interest in the local market remains low because buyers had purchased some tonnages at lower prices earlier in the month. But sources said they expect trading activity to improve toward the end of July because more buyers will need to restock, and higher prices will be accepted.

Additionally, flagship European producers ArcelorMittal has increased long steel prices in Europe by €60 ($60.10) per tonne this week. This, sources said, has given the market a clear signal that the downtrend is over.

The producer has a rebar mill in Warsaw and a wire rod mill in Sosnowiec.

“I think we should see price around 4,000 [zloty per tonne delivered] in the second half of July, then in August price can go up even a bit more,” a trading source told Fastmarkets.

Other sources, however, said that rebar price growth in Poland will be constrained by weakening end-user demand from the construction industry.

“Demand [for rebar] will decrease […] which can prevent [the rebar] price from surging. The number of construction projects will be significantly lower in Poland, mainly due to the high cost of debt,” another market source told Fastmarkets.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Poland was 3,600-3,800 zloty per tonne on Friday, up by 100-200 zloty per tonne from 3,500-3,600 zloty per tonne a week earlier.

In the secondary market, rebar was offered and traded at 3,900 zloty per tonne cpt, up from 3,700-3,750 zloty per tonne cpt last week.

Moldova’s rebar offers to Poland were heard at €820 per tonne cpt for August delivery, up by €60 per tonne from €760 per tonne cpt heard earlier in July.

Italian producers withdrew from the market last week, reconsidering their prices to Poland, sources told Fastmarkets.

Rebar offers from Czech Republic to Poland were reported at €800 per tonne delivered this week.

Published by: Julia Bolotova

Klöckner & Co hat die Unternehmen Hernandez Stainless GmbH („Hernandez“) und RSC Rostfrei Coilcenter GmbH („RSC“) übernommen. Beide Akquisitionen erfolgten über die deutsche Tochtergesellschaft Becker Stahl-Service („Becker“). Mit den Zukäufen steigt Becker in die Verarbeitung von Edelstahl ein und weitet damit sein Produkt- und Serviceportfolio erheblich aus: Hernandez bearbeitet Oberflächen und lagert rostfreie Flachprodukte. RSC ist auf das Abtafeln von Edelstahl-Coils spezialisiert. Über die Kaufpreise für beide Unternehmen wurde Stillschweigen vereinbart.

Guido Kerkhoff, Vorsitzender des Vorstands der Klöckner & Co SE: „Beide Akquisitionen sind für uns von hoher strategischer Bedeutung. Hernandez Stainless und RSC Rostfrei Coilcenter werden unsere Position als führende digitale One-Stop-Shop-Plattform für Stahl, Edelstahl und Aluminium sowie als Vorreiter für Nachhaltigkeit stärken. Künftig werden wir unseren Kunden ein noch umfangreicheres und passgenaueres Produkt- und Serviceportfolio zur Verfügung stellen können.“

Hernandez und RSC beliefern europaweit rund 400 Kunden

Hernandez und RSC betreiben umfangreiche Maschinenparks und beliefern europaweit rund 400 Händler und Edelstahl verarbeitende Unternehmen aus verschiedenen Industrien. Zudem ist RSC ein wichtiger Zulieferer von Hernandez. Zusammen beschäftigen beide Unternehmen rund 70 Mitarbeitende und erzielten im Geschäftsjahr 2021 einen Umsatz von rund 160 Mio. €. Hernandez hat seinen Hauptsitz in Hockenheim, RSC in Süßen (beides in Baden-Württemberg).

Fortschritt bei der Strategieumsetzung

Im Rahmen der Unternehmensstrategie „Klöckner & Co 2025: Leveraging Strengths“ treibt Klöckner & Co den umfassenden Ausbau des eigenen Produkt- und Serviceportfolios voran. Das durch die Transaktion erweiterte Angebot ermöglicht es Kunden zukünftig, bearbeiteten Edelstahl über Becker zu beziehen. Darüber hinaus hat Becker seine Service-Center-Aktivitäten in den Bereichen Carbonstahl und Aluminium bereits deutlich ausgeweitet.

Die Konsolidierung beider Unternehmen erfolgt voraussichtlich ab Beginn des dritten Quartals 2022. Die Transaktionen stehen noch unter dem Vorbehalt der Genehmigung durch die Wettbewerbsbehörden.

Quelle und Foto: Klöckner & Co

Swiss distribution group Debrunner Acifer has regained its ability to supply all steel and metals products as well as technical services, following a cyberattack, Kallanish learns from the company.

On 20 June, the Swiss unit of Klöckner & Co informed its customers that it had to take large sections of its IT system off the web, due to security concerns. This also affected the landline communications system. Customers were asked to use the mobile phone number of their respective sales representatives.

As it turned out, one of the company’s IT service providers had become the target of a cyberattack, which also idled operations at the provider’s customers. About a week later, Debrunner Acifer announced it had started the IT recovery process to reboot all systems step by step. It noted that its e-shop was not affected by the blackout, and that customer accounts and passwords remained secure.

On 15 July, the company gave the all-clear, but noted that some supply delays could still occur for tailored sheet.

Christian Koehl Germany

ArcelorMittal is restarting the upgraded continuous pickling line at its Mardyck electrical steel plant in northern France. The line, revamped by Danieli, includes a pay-off reel, coil car, hold-down roll structure, flattener, shear, pinch roll, steel structures and roller tables.

“The purpose of the upgrade requested by ArcelorMittal was to operate with oval coils that give extra loads in the uncoiling phase, due to the oval coil inertia during rotation, and to reduce periodic maintenance time,” Danieli explains in a note sent to Kallanish.

ArcelorMittal is to invest €300 million ($301m) into its Mardyck site. Scheduled to start in 2024, a new line will produce 200,000 tonnes/year of electrical steel for use in manufacturing engines for battery electric vehicles (BEVs) and hybrid vehicles.

The project will add to the steelmaker’s electrical steel plant in Saint-Chély d’Apcher, southern France. “All of the group’s electrical steels will be produced in France, strengthening France’s electromobility sector,” the steelmaker says. The project is receiving French government financial support (see Kallanish 17 March newsletter).

Natalia Capra France