Day: 23 August 2022

We are pleased to inform you that Synergy Tradeco NV joined as associate member of EUROMETAL.

This Belgian trading company based in Zwijndrecht (Antwerp) since 2017, trades and distributes recyclable, non-prime, and prime steel materials.

They sell a range of products including Steel, Plastic, Paper, Minerals and Timber.

Website: synergy-tradeco.com

European steel importers have now used more than half of their quotas for Q3, while UK importers have used just over a third, according to EU and UK data collected by UK Steel. Demand in the EU and UK has been weak over the summer months, but competitive imports from Asia and Turkey have taken a bite out of the market, Kallanish notes.

About 56% of all import quotas to the EU for the quarter (7.884 million tonnes) have been consumed. For standard HRC, half the quota remains unused, and no country has yet maxed out its allowance. MCS 04A and OCS material quotas, however, have already been 81% and 86% consumed respectively.

China has been active as a supplier. It has run out of quotas for category 3B electrical steel, 04B MCS, tinplate, sheet piling and other welded tubes. Turkey has run out of quota for shipments of OCS, stainless CR, merchant bars and light sections, rebars, and hollow sections. It has also consumed 99% of its quota for gas pipes. India has filled its quotas of OCS, stainless bars and light sections, stainless wire rod, and gas pipes.

Demand for steel into the UK has meanwhile been quieter. Only 36% of the total quota for Q3 (1.643mt) has been used, although UK Steel there remain some errors in the database and so figures are preliminary.

The only quota to have run out is for OCS from “other countries,” which means not the EU or South Korea. Turkey has almost fully utilised its quota for rebars and non-alloy merchant bars and light sections.

Tomas Gutierrez UK

European hot-rolled coil prices slid further in the week to Friday August 19 after producers took an aggressive approach to filling gaps in their order books, Fastmarkets heard.

Despite discounts, provided by mills in Northern Europe, traded volumes have remained limited in quiet conditions.

Most buyers still had sufficient inventories and were in no rush to purchase any HRC. In fact, buyers would rather hold back and assess the post-holiday market trend, sources told Fastmarkets.

Market participants were generally sceptical about the traditional revival of buying activity in September, mainly because of the chronic overstocking and poor performance of the key consuming industries.

Producer sources, however, expected at least HRC prices to stabilize amid high production costs and the energy crisis in Europe.

Fastmarkets calculated its daily steel HRC index, domestic, ex-works Northern Europe, at €750.00 ($752.95) per tonne on August 19, down by just €1.67 per tonne from €751.67 per tonne a day earlier.

The latest calculation of the index is down by €24.17 per tonne week on week and by €105.00 per tonne month on month.

Market sources estimated achievable prices to be between €740 and €770 per tonne exw on August 19.

Some HRC volumes traded at €750-770 per tonne exw during the week, sources said, but in general activity was slow.

Fastmarkets’ calculation of its corresponding daily steel HRC index, domestic, exw Italy, was €740.00 per tonne on August 19, unchanged from the preceding day.

The latest calculation of the Italian index is down by €30.00 per tonne week on week and by €36.67 per tonne month on month.

The calculation was based on buyers’ estimates of achievable prices reported at €720-750 per tonne exw.

The Italian market was in holiday mode during the week to August 19. Both mills and buyers in the nation were absent from the market but should return in late August or early September.

Imports
The market for imported coil was also quiet in the week to August 19.

Buyers from Northern Europe estimated the workable level for imported HRC to be €650-670 per tonne cfr Antwerp, with the most recent offers reported closer to €700 per tonne cfr Antwerp from Turkey and Asia.

Published by: Julia Bolotova

Germany’s crude steel output continued to drop in July in a year-on-year comparison, marking the fifth consecutive month of declines, the national steel association WV Stahl said on Friday August 19.
German domestic crude steel production amounted to 2.97 million tonnes in July 2022, down by 2% from 3.02 million tonnes in June 2021, WV Stahl said.

Steel output from Germany’s basic-oxygen furnaces – mainly used in the production of flat steel – rose marginally by 0.40% year on year to 2.13 million tonnes in July 2022, WV Stahl said.

Crude steel production in Germany is unlikely to increase this year due to the high cost of production, notably the unprecedentedly high energy prices, weak demand and declining prices for finished steel products generally, Fastmarkets understands.

Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe averaged €851.17 ($854.52) per tonne in July 2022, sharply down from an average of €1,156.90 per tonne in July 2021.

Domestic coil prices have been declining across Europe since April 2022, due to pressure from chronic overstocking by buyers and weak demand from key end-user sectors, mainly automotive.

Meanwhile, Germany’s crude steel output from electric-arc furnaces (EAFs) decreased by 7.70% on an annual basis to 839,000 tonnes in July 2022, WV Stahl said. Steel produced via EAFs is mainly used in the production of long steel products.

Energy cost increases had a bigger impact on electric-arc furnace operators. Therefore, EAF-based mills were reluctant to cut prices despite slowing buying activity, stating that they would rather cut output than sell long steel products below costs.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe averaged €980 per tonne in July 2022, up from average of €903.13 per tonne in July 2021.

Published by: Julia Bolotova

Some Turkish long steel mills have begun considering stoppages after failing to secure higher prices in either the domestic or export markets, while energy and scrap costs have remained high, a major Turkish long steelmaker manager told S&P Global Commodity Insights Aug. 22.

“Without a recovery in demand, it wouldn’t be possible for Turkish producers to continue production,” the manager said, adding that as producers had been adding to stocks for a while due to low demand, they had begun considering stoppages.

“As our raw material stocks are enough to work till the end of October, we could continue to work with reduced capacity depending on market conditions,” the manager said, adding that his company had already reduced output to 12 hours/day.

“If the weak market sentiment persists and input costs remain high, we may stop production fully in the first week of November,” the manager said.

Although some Turkish long steel mills raised their lira-denominated domestic rebar list prices Aug. 19 to keep them stable on a dollar basis in the range of $650-$670/mt EXW, after the Turkish currency depreciated further, low demand continued to pressure quotes amid strong input costs, sources said.

Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $397.50/mt CFR Aug. 19, unchanged day on day, while Turkish exported rebar was assessed at $645/mt FOB, down $7.50/mt on the day, according to data from S&P Global.

Domestic scrap purchase prices

Although imported scrap prices remained relatively stable, some major Turkish steel mills reduced their domestic scrap purchase prices Aug. 20 amid a weak finished product market.

According to company price lists seen by S&P Global, Colakoglu cut its DKP grade scrap (autobundle) purchase price and its extra grade domestic scrap price by Lira 200 to Lira 7,480/mt ($412/mt) and Lira 6,955/mt, respectively.

Oyak Maden Metalurji Group’s Iskenderun mill, Isdemir, and its Eregli mill, Erdemir, both lowered purchase prices by Lira 100/mt to Lira 7,400/mt and Lira 7,480/mt for DKP grade domestic scrap, and Lira 7,395/mt and Lira 7,475/mt for extra-grade scrap, respectively.

Asil Celik’s DKP scrap buying price was set at Lira 7,530/mt while its extra grade domestic scrap buying price fell to Lira 6,800/mt.

— Cenk Can

China’s steel inventories at major trading hubs continued to remain low as of mid-August, despite a marginal improvement in the crude steel production in August after a decline for two straight months.

Relatively low steel production and falling steel market inventories were signs that both steel mills and traders were cautious about the steel demand in the upcoming months, market sources said.

Steel output cuts are expected to continue through the end of 2022 in a bid to maintain relatively stable steel prices and reasonable profits, some mill sources said.

Inventories deplete

As of Aug. 19, rebar inventories held by traders in eastern China’s Hangzhou city were down by around 31% from late June and 19% lower from the end of July, according to market sources.

Around the same period, long steel inventories — mainly rebar and wire rod — in southern China’s Guangzhou spot market were down 28% from late June and 9% lower from late July.

Steel inventories in Hangzhou and Guangzhou were also 37% and 23% lower year on year, respectively.

Meanwhile, hot rolled coil inventories in southern China’s Lecong market as of Aug. 17 dropped 12% from late July and posted a decline of 23% on year. On the same day, HRC inventories in eastern Shanghai dropped 5% from late July, although stocks were still around the same level as a year earlier.

Depleting inventories were mainly due to relatively low steel production and destocking by traders. “China’s overall end-user demand in construction and manufacturing sectors actually hasn’t shown much improvement in August, because of extremely hot weather and power shortages along Yangtze River,” a trader said.

Production pace

China’s daily crude steel output over Aug. 1-10 increased by 3.8% from the July average but was still 12.5% lower from May and 10% below than June level, according to latest data from the China Iron & Steel Association.

The Chinese steel profit margins shrank again in mid-August because of rising steel output, which would be able to limit further output growth during the rest of August, some market sources said.

One mill source based in eastern China said his company actually cut steel output by more than 15% in August due to sluggish local demand and a cautious outlook for the steel demand in September.

In general, major Chinese steel mills are at least not willing to increase the production significantly at the moment, because they know if steel production increases too much amid weak demand, profits will soon turn negative, another mill source in northern China said.

“The situation of low steel demand, low steel production and low steel inventories may continue in the coming months,” the source said.

— Staff