Day: 22 August 2022

The American Metals Supply Chain Institute (AMSCI) is providing feedback to the US International Trade Commission regarding the impact of Section 232 on the domestic steel industry on behalf of suppliers, Kallanish reports.

At a hearing before the commission last month, AMSCI’s representative leaders for steel suppliers in the US argued that the stressful impact of the pandemic on the nation’s supply chain has increased the need for exclusions from both the nation’s Section 232 and 301 tariffs.

“As this Commission found in the recently completed sunset review concerning galvanized steel, the domestic steel industry has increased its capital expenditures over the past four years even as it has reaped windfall profits. These increased capital expenditures and new manufacturing facilities, combined with the shuttering of older, less efficient facilities … have left the domestic steel industry stronger and more competitive so that continued protection on the current scale is simply not necessary,” testifies AMSCI president Richard Chriss.

President Joe Biden has previously indicated that he plans to reverse several tariffs made by the nation’s previous leader, President Donald Trump.

“We have said from the beginning, some Trump tariffs were irresponsible, and did not advance our economic or national security and instead raise costs for families and businesses,” explains White House press secretary Karine Jean-Pierre.

Zach Johnson USA

Germany’s stockholding distributors sold 10.6 million tonnes of finished product in 2021, which was up 2.7% over the first Covid-19 year in 2020.

In particular, the second quarter saw significantly more volume than Q2 2020, which was throttled by lockdowns, says stockholders’ federation BDS. 2021 began with the relatively high nationwide inventory of 2.07mt, up 8.1% on the “extremely low level” one year earlier, says BDS head of research Jörg Feger. Throughout the first eight months of 2021, inventories were lower than in the corresponding 2020 months, and then peaked at the end of October at 2.18mt.

The increases occurred mostly for flat products, whereas the picture is mixed in the long products categories. Beams and sections saw a slight drop of 0.6% to 1.01mt, and thus remain at a level that is notably lower than in earlier years. Feger suggests German customers are buying increasingly from foreign sources with warehouses outside Germany, meaning those volumes do not enter the national statistics. Another assumption is that German stockholders process sections to finished components, which are also not included in the statistics, Kallanish understands.

Rebar saw a dip too, of 5.6% year-on-year, but still kept a decent overall level at 1.34mt.

Merchant bar and special bar qualities (SBQ) form one category, which gained 1%, totalling 933,000t. Within this category, the share of SBQ has grown quite considerably in the long term, from some 10% in the early 1990s to 40% nowadays, BDS notes.

Christian Koehl Germany

Lotter has completed the modernisation of its location in the port of Würzburg, on which it spent more than €10 million ($10m).

A large share of the investment was spent on two crane tracks of 120 metres length, with a load capacity of 12 tonnes each. The company also rebuilt the ware and storage house, which holds four stir-up bending machines, two straighteners, two cutting devices, and one welding machine.

The machinery currently processes around 2,000 tonnes/month of reinforcing products. According to site director Tom Klossek, it allows for a much higher capacity in the future. As a special feature, he emphasises the site has added sleeping rooms and utilities for workers, many of which come in from other countries.

The machinery is fully connected with the bending pool of the larger Lotter Group, so that the group can balance the utilisation of its various sites. The location forms a triangle with Lotter’s sites in Frankfurt and Schweinfurt, meaning the group has improved its services in the Rhine-Main region, it tells Kallanish.

In January, the group announced the construction of a new warehouse in Schweinfurt, in northern Bavaria. Like many of its kind, Lotter is also a provider of sanitary equipment and building materials.

Christian Koehl Germany

H2 Green Steel and BMW Group have finalized a contract to cement the terms of their carbon-reduction-focused partnership, Kallanish reports.

To help BMW Group meet its aggressive timeline for hitting upstream scope-three emissions reduction goals, H2 Green Steel will provide products that adhere to gross embodied carbon emissions intensity obligations per tonne of steel.

Both companies aligned on using 40% pre-consumer steel scrap of the volumes returned to H2 Green Steel’s electric arc furnaces for recycling.

“Working with progressive companies like BMW Group pushes us to be better, both in our own operations and our value chain. It also pushes us to be an even better partner to our customers and raises the bar for industry peers on the decarbonization journey,” says Henrik Henriksson, H2 Green Steel ceo.

H2 Green Steel aims to make its product with renewable electricity.

Kristen DiLandro USA

Polish steel rebar producers were pushing for higher prices in the week to Friday August 19 to account for rising costs, but buyers were reluctant to accept any increase amid poor end-user demand, market sources told Fastmarkets.
The rebar market in Poland has been relatively stable in the seven days to Friday, with the material trading at around 3,800-3,900 zloty ($816-838) per tonne exw.

In particular, one transaction was reported at 3,830 zloty per tonne exw.

But traded volumes during the assessment week were quite low and buyers were mainly interested in purchasing mixed lots of materials, rather than just rebar, market sources said.

At the same time, prefabricators and cut-and-benders mentioned that there had been no inquiries for large volumes of rebar from end users lately. This was due to a slowdown in the construction industry, notably in the private sector, because many new projects have been put on hold due to a lack of demand for new apartments and houses.

Despite the gloomy prospects for the construction sector, some local rebar producers in Poland attempted to push for higher prices this week, citing surging energy costs. Notably, an offer from Celsa Huta Ostrowiec was reported at 4,300 zloty per tonne delivered (about 4,250-4,270 zloty per tonne exw), however this was said to be substantially higher than the price buyers were willing to pay in the current market.

As a result, Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, exw Poland, was 3,800-3,900 zloty per tonne on Friday, widening downward by 50 zloty per tonne from 3,850-3,900 per tonne on August 12.

The assessment was based on deals, the lower end of offers and buyers’ estimates of achievable prices.

In the secondary market, stockholders were offering rebar at 3,960-3,980 zloty per tonne cpt, stable from the week before.

Market sources said domestic rebar prices in Poland would likely rollover until September, while further prospects were still unclear.

“On the one hand we have an energy crisis and cost inflation, and on the other we have a looming recession. So, [rebar] price direction is hard to predict,” a trading source in the local market said.

No new offers for imported rebar were reported during the week.

European producers were largely out of the market due to summer closures and were in no rush to make new offers for September.

Published by: Julia Bolotova

The North European plate market continued on a downtrend Aug. 19, with mills hungry for volumes on low demand toward the close of the holiday period.

In Northern Europe, Platts assessed heavy plate down Eur75/mt on week, at Eur1,125/mt ex-works Ruhr.

German mills have been heard as offering additional volumes into the spot market in recent weeks, given poor overall demand, with offers cited by sources at Eur1,150-1,200/mt ex-works and delivered Ruhr.

Distribution sources reported tradable value at Eur1,100-1,150/mt ex-works Ruhr, with indications generally falling by Eur50/mt on week.

Spot offers were reportedly limited to October delivery and for established customers, with sources speculating mills want to protect prices for later in Q4, anticipating a price increase. Customers were heard as happy with this arrangement, not wanting to expose themselves fully for the full fourth quarter on high stocks and uncertainty on price direction.

“I think distributors are pretty happy just to fill gaps in stocks on the current price trend,” said a distributor. “Of course, stockholders will quickly change their mind if they see prices start to go up again.”

A service-center source said ex-stock prices were being driven “into the ditch,” with sales from stockholders Eur600-800/mt below the purchase price.

In Italy, the market remains quiet through the holiday period, with little transactional activity reported. Prices in the region are stable at Eur950/mt ex-works, with the assessment unchanged on week.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven

UK hot-rolled coil prices have reached bottom levels, market sources said Aug. 19, with distributors reportedly ready to restock on better end-user demand and recent stability.

Market participants reported a general stability in offer levels, with the Platts assessment hovering around GBP700/mt DDP through August.

This is in contrast to dramatic slides witnessed since April peaks — when the assessment stood at GBP1225/mt. Prices fell GBP185/mt in May, GBP150/mt in June and GBP80/mt in July before reaching a rough stabilization point in the last few weeks.

Demand levels have been poor after the initial price drop following the Russian invasion of Ukraine in February, given market uncertainties and fears of devaluation, with some sources preferring the term “correction” to characterize the recent pricing trend.

However, UK HRC prices have fallen beyond levels seen in the market prior to the Russian invasion and the resultant rally, where January-February prices were assessed between GBP800-850/mt DDP UK.

This has led sources to describe current price levels as “non-sensical,” given dramatically higher input costs, especially on energy, creating a squeeze between downward demand pressures and tightening production margins.

“Compared to prices pre-invasion, the current spot level is non-sensical,” said a stockholder source. “It’s purely driven by the demand question – many have been ready to push the button in terms of restocking but were waiting for some certainty before doing so.”

Sources widely consider current levels as the bottom, plateauing longer than expected due to the traditional summer wind-down, but with an uptick in both demand and offer levels in sight.

Buy- and sell-side sources agree that price increases will need to be substantial to push the market upward, as some buyers continue to attempt to drive the market lower, perceiving opportunity for cheaper offers.

“The market needs a strong signal that this is the end and prices have to go up,” said a mill source.

A stockholder agreed, offering that buyers are “waiting for a trigger point. If mills are bullish and push prices up by GBP100/mt or more people will be more inclined to believe it,” he said.

For distributors, end-user demand is reportedly improving, with holes beginning to appear in inventories worthy of restocking – stockholders were heard on the day as ready to engage more substantive purchasing now some stability has returned to the market.

Northern European mills remain the focus, able to offer high-quality material at competitive prices and short lead-times.

Offers from Northwest European mills were heard Aug. 19 at GBP680-690/mt DDP UK, with domestic offers reported on a range of GBP690-705/mt DDP. Offers from a domestic mill at this level were heard as pulled on the day, however, regarded as “unsustainable” by the mill source – anticipating near-term increases.

Rising prices in the non-EU import market continue to avert buyer attention, with Asian and Turkish material heard higher on week at GBP710-715/mt and GBP730-750/mt respectively, both DDP West Midlands. Long lead times and lingering uncertainties on late-Q4 price direction – the delivery time for said material – also render imports further afield as unattractive.

The Platts assessment was down GBP10/mt on week, at GBP695/mt DDP West Midlands, UK.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven

Sentiment in the European hot-rolled coil market was downward on Aug. 19 due to weak demand, caused by high stocks of distributors and limited end-users’ consumption.

Trading activity is unlikely to see a substantial recovery in September as distributors have high stocks of coil. In addition, they are expected to focus on destocking to minimize inventories by the year end, taking into account limited steel consumption by end-users.

Platts assessed hot-rolled coil in Northern Europe down Eur5/mt day on day at Eur745/mt ex-works Ruhr on Aug. 19.

Two sources reported offers at Eur750/mt ex-works Ruhr, another three market participants estimated achievable prices at Eur750/mt ex-works Ruhr.

One source, however, said that the European buyers viewed achievable prices at Eur700/mt ex-works Ruhr.

Two sources reported unconfirmed deals at prices around Eur700/mt ex-works Ruhr. This information, however, has not been widely confirmed in the market.

“Market is silent, the mills are desperate for orders as there is no hope for restocking,” a Northern European distributor said. “Offers are at Eur750/mt ex-works and there are rumors that some deals have been settled at Eur700/mt ex-works.”

Some market participants believe that the European steelmakers need to further reduce production to balance supply and demand as equipment stoppages and output cuts introduced this summer were not sufficient to support domestic prices.

Platts assessed hot-rolled coil in Southern Europe down Eur10/mt day on day at Eur710/mt ex-works Italy on Aug. 19.

Tradable value has been heard at Eur700-720/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven