Day: 1 September 2022

Steel plate prices rose in Italy in the week to Wednesday August 31 on a partial recovery in buying activity, market sources told Fastmarkets.
Italy
Trading activity in Italy started to recover in the past week, with buyers seen coming back to the market to restock.

In addition, buyers said they anticipated further price increases given surging energy prices in the country.

Electricity prices in Italy averaged around €400 ($399) per MWh in July, up from about €271 per MWh in the preceding month and up sharply from €103 per MWh in July 2021, according to local energy service company Gestore dei Mercati Energetici.

During the week to Wednesday, several plate bookings were reported between €950-1,000 per tonne exw in the nation. But sources said that higher price end is more representative for smaller volumes.

Sources added that large stockholders were still holding back from trading, while smaller companies have returned to the market this week.

“Large stockholders are trying to lift [plate] prices for end users as well. If they succeed, they’ll come back for plate purchases,” a mill source said.

Plate offers from the local producers were reported at €1,000-1,050 per tonne exw for October-November volumes.

As a result, Fastmarkets’ price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €950-1,000 per tonne on Wednesday, up by €20-30 per tonne from €930-970 per tonne exw seven days earlier.

Northern Europe
Trading activity in the Northern European steel plate market remained slow in the seven days to Wednesday, with prices seen by market sources as mainly unchanged.

An offer from integrated mill in the region was reported at €1,100-1,150 per tonne exw.

One trading source in the region, however, said that producers could accept lower prices – €1,050 per tonne exw – for larger volumes. This, however, could not be widely confirmed by other sources.

A re-roller from Belgium was offering plate to the market at €1,100 per tonne exw and a booking at this level was reported late last week.

Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Northern Europe, was at €1,100-1,150 per tonne on Wednesday, widening from €1,120-1,140 per tonne on August 24.

Poland-origin plate was offered to the south of Germany at €985-1,000 per tonne cpt, late last week, however, sources said that the mill was now targeting at least €100 per tonne higher prices due to surging energy costs.

Published by: Julia Bolotova

European producers have increased cold-rolled and hot-dipped galvanized coil offers in the week to Aug. 31, following ArcelorMittal’s announcement, but trading activity remained muted.

Platts assessed domestic HDG prices in Northern Europe at Eur900/mt ex-works Ruhr, up Eur50 week on week.

Official offers have been reported at Eur920-980/mt ex-works Ruhr and tradable value has been heard at Eur920/mt ex-works Northern Europe.

Due to an absence of transactions, the assessment has been settled at prices between the latest deals and this week’s price indications.

Platts assessed CRC in Northern Europe at Eur875/mt ex-works Ruhr on Aug. 31, up Eur20/mt day on day and up Eur80 week on week. Tradable value has been reported at Eur900/mt ex-works Ruhr and offers have been heard at Eur900-950/mt ex-works Ruhr.

Demand has been slow due to distributors holding high stocks and low steel consumption from end-users, particularly from the automotive industry. Distributors still have high stocks of expensive material booked in the second quarter. And automotive industry demand has been limited due to a combination of a components shortage, high energy costs and lower demand for cars caused by the economic situation.

Although some steelmaker sources reported a higher number of enquires from buyers this week, they have not resulted in transactions, and so far, it remains unclear what volumes the buyers would actually need, sources said.

Steelmakers, however, pushed offers up as they need to cover rising energy costs and the bottom coil prices had been close or below production costs, according to estimations of market participants.

“Electricity costs are already a big problem across Europe,” a trader said. “Each government is trying to find regulations. Steel price was for 100% driven by energy costs. The restocking scale is uncertain and prices are high, steel demand remains very weak from both automotive and white goods industries.”

“To be honest, it would be nice if all the mills held prices higher and resisted lower bids,” a German trader said. “But demand is not there, I think some mills would give up and undermine the price recovery.”

Platts assessed South European CRC at Eur860/mt ex-works Italy on Aug. 31, up Eur60 week on week, and assessed domestic HDG at Eur870/mt ex-works, down Eur50 over the week.

Offers for CRC have been reported at Eur900-920/mt ex-works Italy and for HDG – at Eur930/mt ex-works Italy. The assessments were increased in line with prices for hot-rolled coil, used as feedstock for CRC and HDG, due to lack of deals settled.

— Maria Tanatar, Benjamin Steven

Limited transactional activity was heard at increased price levels Aug. 31, although market participants warned that mills should hold firm so as not to undermine price recovery despite reduced demand.

Platts assessed hot-rolled coil in Northern Europe up Eur20 on the day at Eur780/mt ex-works Ruhr.

Distribution and producer sources alike reported offers and tradable values at the Eur800/mt level, ex-works Ruhr and Northern Europe.

Offers were considered firm in the Northern market, reinforcing the uptrend, and there was some acquiescence to higher prices from buyers in the form of small tonnage deals reported at Eur800/mt ex-works Northern Europe.

“We’ve seen some immediate positive feedback at the Eur800/mt level,” a mill source said. “I think the market sees prices as increasing so those who really need to buy will take purchases right away.”

Market participants were optimistic that higher prices would hold at least for the near term. However, looking to future weeks, this would require a pick-up in demand and solidarity from mills not to resort back to discounted offers. Overall transactional activity remained limited, especially in Germany.

“If the mills guys cut discounts in the first week of increased prices then the market isn’t going to function at all,” a service center source said. “Sustaining the increase requires solidarity and brainstorming otherwise it’s completely senseless.”

Demand remained the primary question, with some producers reportedly selling at or close to a loss in recent weeks to secure volumes.

Sentiment for demand revival was uncertain, although overall inventories remained high. Many buyers were heard to have restocked some material in the week ended Aug. 26 in order to take advantage of expiring, cheaper offers.

“We’ve seen some more inquiries, but it’s hard to tell if this is a genuine need for material or just probing for discounts,” a second mill source said.

“We’ll have to see in the next few weeks,” a second service center source said. “Real restocking could begin this month, but it’s possible everyone just tries to survive to the end of the year on small purchases.”

In the Italian market, offers were also heard higher at Eur800-820/mt ex-works Italy. Sentiments largely mirrored those in the Northern market, with skepticism about demand recovery and concerns over high energy costs.

Platts assessed HRC in South Europe up Eur20 at Eur770/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Benjamin Steven, Maria Tanatar

The UK has decided to immediately suspend trade remedy measures on hot rolled flat and coil steel imports from Ukraine for nine months, meaning these will not face a higher trade remedy rate, the government said Aug. 31.

The UK’s Trade Remedies Authority had assessed whether the rate of around GBP50/mt ($58.18/mt) should be removed after the Ukraine government asked the UK government to investigate the issue.

The TRA began the investigation on whether to suspend antidumping measures for Ukraine in June and looked into whether there had been a change in market conditions and if the effect was temporary.

It found that the conditions had been met after Russia’s invasion of Ukraine in March and it also found no evidence that suspending the tariffs on Ukraine exports would cause injury to UK producers, it said.

Platts assessed weekly DDP West Midlands UK hot-rolled coil at GBP685/mt on Aug. 26, down 17.5% since the start of 2022, according to S&P Global Commodity Insights data.

The suspension will run for nine-month period, which is the maximum duration allowed for an initial suspension under UK legislation, but can be extended thereafter if required, the government said.

In June, the TRA also started a review into antidumping measures on hot rolled flat and coiled steel from Ukraine, Russia, Brazil and Iran, as well as into anti-subsidy measures on imports of stainless steel bars and rods from India.

— Jacqueline Holman

Northwest European domestic rebar prices firmed in the week to Aug. 31, as mills hiked offers sharply amid rising production costs.

Platts assessment of TSI Northwest Europe Rebar was up Eur5/mt to Eur955/mt ex-works on Aug. 31.

New offers for rebar were heard above Eur1,000/mt delivered in Northern Europe on Aug. 30, market sources said, but no deals were heard booked at this level yet.

“Due to increasing energy costs, there is more acceptance of higher prices, and many mills have followed suit,” said a distributor in the Benelux region who had bought 500 mt at an effective price of Eur965/mt delivered just prior to the jump in offers. “Rebar demand overall still needs to pick up after the holidays though.”

“In Germany, the local offers are now above Eur1000/mt delivered but there are opportunities to buy from elsewhere for cheaper, and customers are now trying to buy at the bottom,” an Italian mill source said. “Eur960-970/mt delivered Germany is where people are currently buying but offers are Eur50/mt higher.”

Platts assessment of European medium sections price (category 1, S235 JR) rose sharply by Eur42.50/mt on the week to Eur1,225/mt delivered Aug. 31.

Distributor sources reported the lowest offer available on Aug. 31 at Eur1250/mt delivered, but no deals were heard concluded at this level.

“We’re not in the market yet or giving a price, as there is no real request or demand, but we don’t see anything workable below Eur1250/mt delivered,” one European mill source said.

One large European mill was heard to target Eur1350/mt delivered for new September and October deliveries, sources said.

“We are pausing and cutting production during peak energy costs, and we’re not ruling out longer stoppages,” a second mill source said.

The benchmark German year-ahead power contract on EEX settled at Eur610.03/MWh Aug. 31, down from a record Eur985/MWh Aug. 26, exchange data showed. The contract broke through the Eur500/MWh mark for the first time on Aug. 16.

Platts is part of S&P Global Commodity Insights.

— Viral Shah