Day: 26 July 2022

Tata Steel’s Maastricht service centre will receive a high-performance levelling and cut-to-length line, with an automated packaging system designed for high-strength strip steels.

The subsidiary of Tata Steel Nederland has begun installing the line, which has been supplied by equipment maker FIMI. Its start-up is scheduled for mid-2024.

Tata Steel says it is preparing for increasing future demand for abrasion-resistant and high-strength premium steels, particularly in the markets for equipment in construction, mining and agriculture. The finished products will be delivered to customers in Germany, Eastern Europe, the Benelux, UK and to the Nordic region, Kallanish understands.

The line will be capable of processing coils weighing up to 40 tonnes and having a yield strength of up to 1600 N/mm².

Service Centre Maastricht consists of two sites: Multisteel and Feijen. Multisteel specialises in steel coils in the thinner-gauge segment, such as cold-rolled and galvanised steels: The new line will be installed at Feijen, which processes hot rolled coil.

Christian Koehl Germany

An estimated €10 trillion ($10.24 trillion) of investment will be needed by 2050 for Europe’s energy transformation, which can then be entirely recouped from the savings of net energy imports, says Goldman Sachs.

Investments will accelerate and peak by 2035, driven largely by the initial infrastructure expansion required for power networks, charging networks, the massive expansion of renewable power, buildings upgrades and heating pipeline infrastructure to accelerate the penetration of electrification and clean hydrogen, Goldman says.

Inter-regional hydrocarbon flows between Europe and the rest of the world can be substituted for a more inter-connected European system of power networks and hydrogen pipelines.

This is likely to result in significant demand for steel, Kallanish notes.

The recouping of costs will occur with a decade of time lag, meaning efficient financing and a reliable regulatory environment are key to bridge this time gap.

Natural gas nevertheless remains key to Europe’s energy supply for the next two decades and Goldman says it is in the interest of Europe to sign new long-term LNG contracts to improve security of supply.

While many industrial sub-segments could potentially be electrified, over 50% of Europe’s industrial natural gas consumption stems from heavy industries, typically requiring high operating temperatures making direct electrification unfeasible, Goldman points out. This includes steelmaking.

“While green hydrogen’s move towards cost parity with grey hydrogen is accelerating, and we expect this to be reached before 2030 across regions of low renewable power costs, we note that the current macro environment of higher commodity prices, in particular for European natural gas, combined with carbon prices is creating a unique green hydrogen cost parity dynamic in Europe,” Goldman observes.

“With most currently produced hydrogen being sourced from natural gas in the region, the notably higher natural gas price to which the region is currently exposed is tilting the scale in favour of green hydrogen from an economic standpoint,” it adds. The bank estimates the carbon price implied by the current higher natural gas price environment in the region is equivalent to over $200/tonne of CO2 equivalent.

This is even without considering European ETS carbon prices, which are currently well above $50/tCO2e despite their correction from the peak. This is more than sufficient to bridge the cost of grey hydrogen with green across regions of Europe where green hydrogen is produced with dedicated RES and a renewable power LCOE lower than $70/MWh, Goldman concludes.

Adam Smith, Poland

European hot-rolled coil prices were broadly stable in the week to Friday July 22, with buyers and producers holding different expectations about the future price trend, sources told Fastmarkets.

Buying activity in the European coil market remained subdued with only limited volumes being traded.

Sentiment was mixed, with producers agreeing that HRC prices had touched a floor and were poised to increase amid surging production costs and output cuts. Buyers, meanwhile, believed there was still room for a further price drop, because of oversupply and persistently weak end-user demand.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe at €855.00 ($873.22) per tonne on Friday, stable day on day.

The index was up by €3.33 per tonne week on week, but down by €13.00 per tonne month on month.

Some transactions were reported at €860 per tonne exw on Friday, while buyers’ estimations of achievable prices were at €850-860 per tonne exw.

But producers in Northern Europe maintained official offers closer to €900 per tonne exw, source said.

Offer prices from mills in Central Europe were heard closer to €800 per tonne exw, but trading was reported at €760-780 per tonne exw.

One more integrated mill announced production cuts last week.

Liberty Steel will stop one blast furnace (BF) at its Ostrava site this week for a planned maintenance. Market sources said the BF might remain offline for at least four months.

Fastmarkets’ calculation of the daily steel HRC index, domestic, exw Italy remained at €775 per tonne on Friday, stable day on day.

The calculation of the Italian index was up by €5.00 per tonne week on week but down by €36 per tonne month on month.

HRC offers from mills in the nation were reported at €800-820 per tonne exw.

A transaction from a local reroller was reported at €760-770 per tonne exw.

But some large buyers estimated the achievable price level even lower – at €750-760 per tonne exw.

Some lower HRC offers were heard from the Far East this week, which also affected the market’s mood.

Notably, HRC with September shipment was offered to Italy at €680 per tonne cfr. Egypt-origin HRC was offered to Italy at €730 per tonne cfr.

Boron-alloyed HRC from India was offered to Italy at €700-710 per tonne cfr.

Published by: Julia Bolotova

Spanish crude steel production in May fell 8% year on year to 1.24 million mt, data from Spanish steel association Unesid showed July 25.

May was the seventh consecutive month with an annualized decline in production, leading trailing 12-month steel production to a nine-month low of 14.8 million mt as energy costs and related factors have stalled a recovery from the COVID-19 pandemic lows of 2020.

Production in May was nonetheless Spain’s highest monthly output in seven months, buoyed by seasonal factors, while a new mechanism designed to cap wholesale energy prices could ease constraints on June’s production figures.

Since the mechanism was applied in mid-June, wholesale energy costs, which are usually used as indexes for large buyers such as steel plants, have fallen 26%, according to data from market operator OMIE.

Spain has the capacity to produce 17 million mt/year from electric arc furnaces and 6.6 million mt/year from blast furnaces and basic oxygen furnaces. Usually around 85% of annual production is non-alloy steel.

Spain’s May steel recycling volume followed a similar pattern to crude steel production, reaching its highest monthly total since October 2021 at 976,000 mt, although down 9% year on year.

Shredded scrap for South Europe domestic delivery was assessed at $356.44/mt on July 22 compared with $537.18/mt at the end of May.

— Gianluca Baratti

Italian coil prices are mostly stable compared to last week, fluctuating at around €750/tonne ($766) base ex-works depending on client and volume. This is happening despite some Italian coil producers pushing up their values by €40/t, mainly because of higher production costs.

Italian coil prices are mostly stable compared to last week, fluctuating at around €750/tonne ($766) base ex-works depending on client and volume. This is happening despite some Italian coil producers pushing up their values by €40/t, mainly because of higher production costs.Service centres interviewed by Kallanish have registered a significant increase in demand for certain products and stable prices of coil derivatives throughout the country. While the automotive sector remains stuck and is showing little improvement, encouraging signs of demand recovery are reported from several industrial sectors.

Some restocking and apparent demand is also reported, and local service centres will shut down for the August holiday break next week with decidedly improved order books. End-users, however, are refusing any price increases, and sources believe demand will continue to be sustained only if prices remain below €800/t.

Hot rolled coil import values from Asia remain competitive at about €700-730/t cfr, but the long lead times, sometimes stretching into November, are discouraging Italian buyers from committing.

Italian HRC makers are now asking for €780-800/t base ex-works for new orders and quoting for August delivery. Domestic contracts hover at €720-750/t base ex-works. Sources forecast values to stabilise at the level of €750/t until the end of the month.

Meanwhile, cold rolled and hot-dipped galvanised coil are also stable at €880/t base ex-works for the former and €900/t base ex-works the latter. There are no competitive import offers for CRC, which is sustaining Italian price stability and demand for the product. Some import offers at €820-840/t cfr are reported for HDG from Asia.

Natalia Capra France

S&P Global Commodity Insights assessed hot-rolled coil in Northwest Europe stable July 25 at Eur860/mt ex-works Ruhr.

Distribution sources reported achievable prices as stable at Eur850-860/mt ex-works Ruhr, with most activity concentrated at the top end of the range.

A mill source said one large German mill had been trading below the Eur800/mt mark, even as low as Eur770/mt in some cases, both ex-works Ruhr. However, a German distributor source clarified that these deals would only be seen between affiliated companies – not representative of general spot market activity.

The Eur850-860/mt level was agreed by another mill source, seeing current prices as the floor.

“It looks like the HRC market price has definitely reached its bottom and intends to resume on a slight positive curve,” said the source. “We’re seeing Q4 RFQs circulating now from general industry, alongside strong signs of recovery from the automotive sector.”

Despite positive indications, the source questioned to what extent requests for quotes were speculative rather than representative of real needs.

In the southern market, sources gave tradable value indications at Eur760-800/mt ex-works Italy, with one trader reporting deals in the same range. Offers were heard stable at Eur800-820/mt ex-works Italy.

A service center source saw decreased potential for price recovery in southern Europe due to competitive import offers from a bearish Asian market.

An offer was heard at Eur680/mt CIF Italy ex-Taiwan from one service center, with other offers reported by a trader source at Eur700/mt and below, CFR Italy.

HRC in Italy was assessed at Eur785/mt ex-works on the day, according to S&P Global data.

— Benjamin Steven, Maria Tanatar