Day: 5 October 2022

Automaker Volvo Cars sold 128,575 rechargeable vehicles in the first nine months of 2022, down 2.7% year on year, it said Oct. 4.

The total included 32,369 full electric vehicles, or EVs, up 110% year on year, while plug-in hybrid sales dropped 17.5% to 96,206 units.

“Overall underlying demand for the company’s cars remains robust, especially for its recharge range of pure electric and plug-in hybrid cars,” Volvo said.

Total vehicles sales for the January-September period were 428,987 units, down 19% year on year.

In Europe, Volvo’s largest market, 81,314 rechargeable vehicles were sold over the nine-month period, down 11.6% year on year, including 20,574 EVs, up 108.2% year on year, and 60,740 plug-in hybrid sales, down 26%.

Total vehicle sales in Europe for January-September fell 25% to 166,016 units, sales in China dropped 11% to 117,744 vehicles and sales in the US decreased 24% to 72,216 units.

In China, rechargeable vehicles sales for the period rose 15% year on year to 8,251 units, including 1,945 EVs, up 321% year on year, and 6,306 hybrids, down 5.9%.

Volvo’s rechargeable vehicle sales in the US also climbed 21% year on year to19,415 units, including 4,265 EVs, down 3.5%, and 15,150 hybrids, up 31%.

Increased demand for EVs has driven up battery metal prices, with Platts seaborne lithium carbonate and lithium hydroxide assessments surging 120% and 149%, respectively, since the start of 2022 to $74,500/mt CIF North Asia and $79,000/mt CIF North Asia as of Oct. 3, S&P Global Commodity Insights data showed.

— Jacqueline Holman

The European Commission said Oct. 4 that it had approved under EU state aid rules a Eur1 billion ($997 million) funding measure to sustain Germany-based steelmaker Salzgitter’s efforts to decarbonize its steel production using hydrogen.

As reported in a separate release by Salzgitter Oct. 4, the approval will secure financing for the first development stage of the company’s Salcos program, to be implemented by the end of 2025. Salcos aims, in three stages between now and 2033, to switch steelmaking in Salzgitter entirely to low-CO2 crude steel production, replacing fossil fuels such as iron ore.

Platts assessed 62% Fe Iron Ore Index at $95.50/dmt CFR North China Oct. 4, down 20.1% since the start of 2022. The 62% Fe Iron Ore Index was at $95.50/dmt CFR North China Oct. 4, up 20 cents/dmt from Oct. 3, according to Platts assessment. Platts is part of S&P Global Commodity Insights.

Salzgitter’s current annual CO2 emissions of around 8 million mt are expected to be reduced by as much as 95% when the new production systems are fully in place.

The EC aid, which will take the form of a direct grant, will be used to replace one blast furnace at the company’s site in Salzgitter, Lower Saxony, with a direct reduction plant and electric arc furnace producing 1.9 million mt/year of green steel. The measure will also be used to build a 100 MW electrolyzer, which will produce around 9,000 mt of renewable hydrogen per year that will be used as feedstock in the direct reduction plant.

The electrolyzer, the direct reduction plant and the electric arc furnace are expected to start operating in 2026.

“This will contribute to the greening of a very energy-intensive and hard-to-abate sector while reducing Germany’s dependence on imported fossil fuels,” EC Executive Vice President Margrethe Vestager, in charge of competition policy, said. “This is a good example of how our state aid framework enables member states to help the EU’s energy-intensive sectors tackle the challenges of greening.”

— Annalisa Villa

Turkish-origin rebar import volumes awaiting allocation at the European ports already exceeded country specific quota, according to European Commission data.

According to the EC data, released late Oct. 3, the 100,425 mt of Turkish-origin rebar was awaiting allocation on that day. The EC has a total October-December import quota for Turkish-origin rebar of 90,856 mt.

“It could be worse as far as I know,” one European buyer said Oct. 4. “Romania and Bulgaria are not yet included in that allocation so it can easily be 10,000-20,000 mt on top of that,” the source told S&P Global Commodity Insights, adding that 25% safeguard duties would be applied on all exceeding volumes evenly.

“It’s an individual decision to keep volumes at the port [to avoid safeguard duties],” the source said, adding that if buyers decided to wait for the next quota period to received shipments and store them at the ports, there would possibly be a three-month financing cost incurred and even then, there would be no guarantee that the quota would not exceed next quarter.

Platts’ assessment of Turkish exported rebar was stable at $682.50/mt FOB on Oct. 3, according to S&P Global Commodity Insights data. Turkish mills were currently offering rebars at elevated levels around $690-$720/mt FOB amid high energy costs while sources reported weak demand.

“For the Q1 2023 quota, it’s too early for EU buyers to buy [Turkish rebar] – EU demand is not active as they are consuming their stocks and postponing purchases, but when demand returns Turkey remains the best alternative due to the short lead time,” a Turkish trader said.

Approximately 56,323 mt of imported rebars from other countries subjected to safeguard measures remained out of a quota tally of approximately 132,668 mt, while 76,345 mt was awaiting allocation.

One distributor source in the Benelux region noted that the gap between Turkish imported rebar levels and domestic rebar prices played a significant part in buyers seeking rebars from Turkey, however, no significant import activity was seen for flat steel products in the European market.

Indian HRC steel import quotas

Indian hot-rolled steel imports into Europe dominated the market over the last few quota periods, however, according to EC data published Oct. 3, the market saw low activity for Indian-origin flat steel imports.

For hot-rolled coils, no volumes were awaiting allocation on Oct. 3, out of a country specific quota of 287,227 mt. For the July-September period, 82,226 mt of the allocated quota, remained out of the country specific quota of 287,227 mt. For April-June period, 11,163 mt remained out of a total quota of 314,545 mt.

Some sources noted that the export duties introduced by Indian government in May might have hampered the import volumes for Indian-origin flat steel into Europe. On May 21, the Indian government announced plans, effective May 22, to increase export duties on some iron ore and steel products, including hot-rolled, cold-rolled and coated coils.

“Indeed, the main factors are the then-new export duties and the preference to export boron-added material. Adding boron means the CE mark is lost which excludes all EU service centers for Indian origin purchasing,” an Antwerp-based trader told S&P Global.

“India is also claiming to have a decent domestic market which would limit motivation to compete with lower import levels from other Asian mills such as in Korea, especially under the current export duty,” the source added.

Approximately 22,535 mt of the total October-December quota of 179,365 mt for South Korea-origin HRC was awaiting allocation on Oct. 3.

For Turkey-origin HRC, 9,210 mt of total quota of 452,373 was awaiting allocation as of Oct. 3, according to EC data.

Platts assessed Northwest European hot-rolled coil stable at Eur730/mt ex-works Ruhr on Oct. 3.

— Rabia Arif, Benjamin Steven, Viral Shah

Subdued demand from key end-user sectors – including the automotive industry – and high stocks at buyers has kept trade at a minimum in the cold-rolled and hot-dipped galvanized coil markets across Europe, sources said.
There was a substantial gap between mills’ official offers and buyers’ estimations of achievable prices. Sources said the key reasons were weak demand from end-user sectors, competitive imports and surging production costs.

Therefore, European producers were holding back from giving firm indications for CRC and HDG coil recently, amid weak buying activity.

“It does not matter what the price is; there is absolutely no demand. Buyers are not interested in bookings,” a Northern European trading source said.

“Stocks are still high, while demand is low. More and more end-users are [reducing work hours] and cutting output,” another source said.

CRC
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €830-850 ($822-842) per tonne on Wednesday October 5, stable week-on week.

Rare offers were reported at €850-870 per tonne exw in Italy, while buyers’ price ideas did not exceed €830 per tonne exw.

Some producers have even withdrawn offers from the market.

“The costs of annealing [a heat treatment during the cold-rolling process] are very high, so our margins in the CRC segment are squeezed. The price should be over €900 [per tonne exw], but it is not possible for the time being,” one mill source said.

On top of the existing supply-demand imbalances, CRC prices in Southern Europe were under pressure from competitive import offers, sources said.

Market participants said, a supplier from South Korea has reduced its CRC offer price to Italy from €780 per tonne cfr last week to €760 per tonne cfr this week.

Offers from other suppliers in Southeast Asia were heard at €770-810 per tonne cfr Italy.

HDG
Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Southern Europe was €870-890 per tonne on October 5, stable week on week.

The assessment was based on lower end of offers and higher end of buyer’s estimations of achievable prices.

Transactions were rare in the market, because Italian buyers had high stocks and preferred to hold back from trading.

Some offers from Southeast Asia of 0.5mm HDG were reported at €930-940 per tonne cfr for early-first-quarter delivery. That price, however, was not considered workable by buyers.

Published by: Julia Bolotova