Day: 3 November 2022

Domestic prices for hot-rolled coil have been fairly stable in Northern Europe on Nov. 2, but they inched down in Italy as the country’s mills started to give discounts.

Platts assessed domestic HRC in Italy at Eur650/mt ex-works, down Eur5/mt day on day.

A big service center source indicated that buyers’ price idea for domestic HRC as been Eur650/mt ex-works Italy. A smaller trader estimated achievable prices at Eur660-680/mt ex-works Italy.

A pipemaker reported deals at Eur640-650/mt ex-works Italy.

Offer from a smaller Italian mill has been heard at Eur680/mt ex-works. But offers of HRC from France have been available at Eur660/mt delivered Italy and from Northern European mills – at Eur650/mt delivered Italy.

Platts assessed hot-rolled coil in Northwest Europe stable day on day at Eur650/mt ex-works Ruhr Nov. 2.

Two distributor sources reported tradable values at Eur640-650/mt ex-works Ruhr and at Eur650/mt ex-works Ruhr.

A German service-center source saw tradable value for bigger lots at Eur650/mt ex-works Ruhr, but also mentioned official offers Eur700-750/mt ex-works Ruhr and that deals for small tonnages have been settled within the offer range.

A trader estimated achievable prices at Eur600-650/mt ex-works Ruhr.

Neither Italian nor Northern European steelmakers have announced HRC prices for the first quarter next year yet. The mills continued to sell the material with delivery this year at discounted prices.

“I think the mills had a really good start of the year and they figured out that even with current low prices and weak demand it would be better to fill production lines even if they cut prices further,” an Italian source said. “With the strong first half of the year, they most likely would still have good full 2022 results.”

Demand from distributors remained limited as they have been focused on material destocking, which has been taking longer due to limited end-consumer demand.

The lack of clarity on the first quarter of 2023 offers also supported the cautious approach of the buyers to new deals. The mills are expected to make an attempt to increase prices, but the majority of market sources have been skeptical if such a rise would be reflected in transactions.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Anqi Liu

Domestic prices for hot-dipped galvanized coil were down Eur10/mt in Northern Europe and down Eur25/mt in Italy on the week to Nov. 2 due to low demand.

Platts assessed domestic hot-dipped galvanized coil at Eur810/mt ex-works Ruhr based on tradable values reported at Eur790-830/mt ex-works Northern Europe.

In Italy, tradable value for HDG has been reported at Eur760-770/mt ex-works. Taking into account the lack of transactions in the market, Platts assessed Southern European domestic HDG prices at Eur795/mt ex-works Italy, the midpoint of last week’s assessment and achievable prices reported.

Negative sentiment continued to plague the market toward the year’s end. Distributors struggled to reduce inventories as end-consumers were also unwilling to settle large tonnage deals on low demand.

“Not a lot of mills offering for first quarter coil,” an Italian trader said. “They are trying to follow the market as the price evolves, and they focus on filling their order book right now for the fourth quarter. Next round they will try to go up with the price.”

Mills refrained from offering clear prices for first-quarter delivery next year. In the meantime, buyers have been expecting mills to push up first-quarter delivery prices amid lower energy costs.

Platts assessed North European CRC unchanged on the week at Eur780/mt ex-works Ruhr.

A distributor reported tradable values at Eur770-800/mt ex-works Ruhr. A service center source reported tradable values at Eur770-800/mt ex-works Northern Europe.

Platts assessed Southern European CRC down Eur25/mt week on week to Eur775/mt ex-works Italy, reflecting achievable prices reported at Eur750-800/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Anqi LiuMaria Tanatar

Northwest European domestic rebar prices continued to soften week on week on Nov. 2 amid a lack of activity.

Platts assessed TSI Northwest Europe rebar down Eur10 to Eur850/mt ex-works week on week.

One seller source highlighted slow demand and noted that there was no current tradable level for rebar amid a lack of activity in the market.

One distributor source in the Benelux region also cited weak demand, adding that prices were changing on a weekly basis for long steel products in the domestic market, so buyers were holding back to gauge a better idea of the market. In addition, transportation costs were stable at elevated levels, and customers were hoping for prices to come down before placing any orders.

The source indicated a workable level for rebar in the domestic market at Eur865/mt delivered Benelux.

One Europe-based trader indicated a tradable value for rebar in the domestic Northwest European market around Eur870/mt delivered, but only for small volumes, as customers still had high stock levels.

One Italian mill source noted that some local mills in Germany were lowering prices for rebar in the domestic market amid weak demand, while some local mills were maintaining relatively higher prices. However, he indicated that Eur860/mt delivered levels might be workable for rebars from local suppliers in Germany.

Elsewhere, European domestic steel sections prices were stable week on week to Nov. 2, as sources reported slow demand. The Platts assessment of European medium sections (category 1, S235 JR) remained flat at Eur1,125/mt delivered on Nov. 2.

One European mill source cited that transactions were being booked around Eur1,150/mt delivered, even if the volumes or number of transactions were lower.

One Benelux-based distributor source cited a tradable value for category-1 medium sections stable week on week at around Eur1,100-Eur1,150/mt delivered Benelux. The source noted that demand was better for their market, however he expected energy prices to increase as winter season approached, indicating that it might lead to mills increasing prices for long steel products in the near term.

Another distributor source in the Benelux region indicated a workable level for beams at Eur1,130/mt delivered.

Platts is part of S&P Global Commodity Insights.

— Rabia Arif, Staff

The UK foreign, commonwealth and development office announced the sanctioning on 2 November of four more Russian individuals. Two of them are former executives and proprietors of steelmaker and miner Evraz, Kallanish learns from the office.

The government statement says the sanctions apply to “four oligarchs who have enabled Putin to mobilise Russian industries to support his military effort”.

Two of the four individuals are Alexander Abramov, a former non-executive director of Evraz, and Alexander Frolov, a former director and chief executive. The two are Evraz founding directors, as well as major shareholders, alongside Roman Abramovich, who was sanctioned in March, shortly after Russia’s military incursion into Ukraine.

According to the UK foreign office’s statement, “the pair, known to be business associates of Roman Abramovich, previously owned major stakes in Russian steel manufacturer Evraz plc, are thought to have an estimated global net worth of £4.1 billion and £1.7 billion respectively, and are reported to have UK property investments worth an estimated £100 million.”

Both, the statement says, “had been involved in obtaining a benefit from or supporting the Government of Russia by working as a Director at Evraz PLC, an entity carrying on business in sectors of strategic significance to the Russian government, namely, the extractive sector, the transport sector, and the construction sector.”

Evraz is a vertically integrated steel producer with iron ore and coking coal mining assets in Russia, long and flat steel production in Russia, the US, Canada and Kazakhstan, and ferroalloys in Czech Republic. On 10 August, the company announced its intention to start negotiations to sell its 3.5 million tonnes/year capacity North American assets.

Evraz’s London Stock Exchange listing and all appropriate programmes were cancelled in March, shortly after the sanctioning of Abramovich.

Katya Ourakova UK

The European Commission has confirmed the extension of EU antidumping duties on Chinese and Russian cold rolled coil imports for a further five years.

The decision was the result of the expiry review on existing duties initiated in August last year, following the formal request by Eurofer, Kallanish notes.

The Commission concluded its investigation by noting that existing duties needed to be retained in order to continue to protect the European industry from unfair competition.

As a result, Chinese suppliers are subject to a duty of 19.7-22.1%, while Russian CRC will face a duty of 18.7-36.1%.

Emanuele Norsa Italy

Prices for commodity plate on the northwest European market, even from domestic mills, are currently heard diverging by as much as €250/tonne ($247).

Sources from both distributors and mills agree that peak offers of €1,300/t for S355 do occur, although the mainstream price is seen easily at around €1,100/t ($1,087). One big player especially is fairly saturated with project business that demands high-grade plate, and hence will offer commodity grade only at high prices.

“They [aforementioned mill] sit on a high horse, and can cherry-pick orders, so they ask for prices only few will pay,” a German distributor’s manager says. Asked who would buy, an observer from another mill adds: “Maybe distributors in which it [the mill] owns stakes and which need to buy a certain share of material from the parent.”

He sees the low end at “closer to €1,000 than €1,050”, but notes that this is not the mainstream either. “It’s not the cheapest supplier that makes the market price. Not everyone would buy there. Buyers are pretty much diversifying their sources, after all,” he tells Kallanish.

Notably, high-grade plate products have an effect on commodity pricing, while maintaining a price logic of their own. “They are pretty much detached from the development of commodities,” the mill source says. “After all, not everyone can make boiler plate, let alone different qualities for one boiler in one order.” They also face less competition from imports, which for commodities are undercutting the €1,000/t cfr mark, “but you’d have to wait until March/April [for delivery],” the German buyer says.

Pricing on the higher-end is not only more stable but also more homogeneous. According to an Austrian buyer, they are based on logical parameters like need for orders and capacity. “Up there, mills are pretty unanimous with assessing the market,” he says.

Christian Koehl Germany

Sales activity for Italian stainless steel coils, sheet and tube is slowing substantially after resuming in September and sustaining in the first days of October, sources in the sector tell Kallanish.

Despite weak demand for flat products from service centres, end-users and re-rollers, stainless tube prices are being pushed up by some €200/tonne ($197) on average this month on higher processing costs.

In October, hot and cold rolled coil mills, re-rollers and service centres implemented production stoppages to balance demand and supply. This month, however, Acciai Speciali Terni (AST) is restarting all equipment and will produce at normal levels, sources close to the company confirm.

Coil buyers say that since around 10 October, demand for flats has faded, particularly in southern Europe, while northern European buyers are still reporting a good level of demand. In Italy, main producer AST is said to be focusing on commodity rather than less requested grades. Given squeezed margins and lower demand, many producers in Europe are now “standardising” their coil production due to the higher costs of producing certain less common grades.

According to a large coil buyer, the weaker demand of the moment is mostly due to prices remaining too high, considering the substantial slowdown in activity downstream. However, another source argues that, with inventories of nickel being low on the London Metal Exchange and prices fluctuating, coil and other flats prices will not weaken.

Italian stainless HRC remains at €2,500-2,550/t ex-works, with CRC at around €3,000-3,050/t. Most European producers are now quoting for December. However, in other European countries such as Spain and France, mills are beginning to ask for over €200/t increases for January delivery. At current coil sales values and amid skyrocketing costs, steelmakers are said to be selling nearly at a loss.

Natalia Capra France

Prolonged geopolitical uncertainty, coupled with the need to change Europe’s energy mix will keep energy prices higher for longer, posing a major terms-of-trade shock to European economies, says Moody’s.

This holds especially relative to low-energy-cost competitors like the US. “This disadvantage could weaken the region’s long-term price competitiveness and lead to a structural decline in the European Union’s industrial bases over the medium term in the absence of effective government support,” the credit rating agency says in a report sent to Kallanish.

Energy prices have pushed inflation to double-digit levels not seen since the 1980s, which resulted in central banks increasing their policy rates and ending the lengthy period of low interest rates. They also led to a collapse in consumer and business confidence that is choking the post-pandemic recovery. “Higher prices will likely push the industrial sector and the EU economy into a recession over the winter half of 2022-23. These conditions also materially increase the risk of a stagflation scenario taking hold,” Moody’s observes.

Because the EU is a net importer of energy, the surge in prices also presents a longer-term, negative terms-of-trade shock for the region. The EU’s average terms of trade – defined as the ratio between the index of export prices and that of import prices – worsened 4.5% in the first half of 2022, and increased the region’s energy import bill by around 1.5% of GDP, Moody’s says. US terms of trade actually improved 3% because of significant price and volume rise of LNG exports to Europe.

In case of a longer-lasting, continued deterioration of the terms of trade, there is also a high risk of investment in energy-intensive manufacturing sectors shifting away from the EU countries to other countries with lower energy costs like the US, the agency explains.

“Sufficient energy storage and falls in consumption should allow most [EU] sovereigns to avoid government-imposed rationing of energy this winter. However, risks will remain elevated until governments are able to source reliable, long-term alternatives to Russian supplies, which we expect will take years,” Moody’s concludes.

Adam Smith Poland

Italian rebar producers were targeting higher prices in the week to Wednesday November 2, thus reversing the downtrend which has been occurring across long steel markets in Europe. Prices for rebar in the Spanish market remained stable.Depressed demand and an uncertain outlook continued to inhibit trading activity in both markets, sources told Fastmarkets.

Italy
Rebar producers targeted higher prices despite slow demand and ongoing pessimistic sentiment, Fastmarkets heard.

Mills were looking to target and maintain higher prices until Christmas, sources said.

Whether demand is sufficient to absorb these higher prices remains uncertain, they added.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €860-890 ($853-883) per tonne on Wednesday, up by €30-55 per tonne from €805-860 per tonne on October 26.

Slow end-user consumption and persistent destocking, in part due to projects being postponed or cancelled, have inhibited demand levels.

Despite no significant increase in demand, Italian producers targeted higher prices in the week to Wednesday.

“Since last Wednesday producers have established new higher prices and they don’t want to sell cheaper than this,” a buyer in Italy said. “I think that they will try to sell at a higher price till Christmas closures.”

With market conditions not expected to improve for the remainder of the year, it remains to be seen whether these prices can be maintained, sources said.

Production cuts have not affected prices because of the ongoing supply-demand imbalance, sources added.

At the same time, energy costs are expected to surge toward winter as demand increases, sources said. Rising prices for rebar in Italy would help cushion mills against rocketing energy prices.

Overall appetite for imports remained depressed, Fastmarkets heard.

“Imports to the south have always been most attractive when domestic prices have reached high levels,” a second buyer in the region said. “With prices going down since the middle of September, imports have become rare.”

Spain
Prices remained stable in the Spanish rebar market in the week to Wednesday, Fastmarkets heard.

Weak end-user consumption and a depressed outlook among buyers continued to plague market activity.

Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €800-850 per tonne on Wednesday, unchanged since October 12.

International scrap prices affect the price of all long steel products. Scrap prices have largely stabilized since mid-October.

Fastmarkets’ daily calculation of the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was €354.41 per tonne on Wednesday, up from €351.83 per tonne a week earlier.

Published by: India-Inés Levy

Steel plate prices were stable to slightly weaker in Italy in the week to Wednesday November 2, with producers struggling to secure sales for fourth-quarter material, Fastmarkets heard.Fastmarkets’ weekly price assessment for steel domestic plate, 8-40mm, exw Southern Europe, was €880-920 ($871-911) per tonne on Wednesday, narrowing downward by €20 per tonne from €880-940 per tonne exw on October 26.

Offers prices from the local re-rollers were reported at €900-950 per tonne exw, depending on a volume, the same as seven days ago. Bids from large buyers were heard at €850-880 per tonne exw.

Transactions were reported at €900-920 per tonne exw during the assessment week, but for limited tonnages.

Several sources said, that for large volumes (over 3,000 tonnes) buyers’ price idea was actually below €850 per tonne exw. No large volumes have been traded recently, however.

Italy-origin plate was offered to Germany at around €900 per tonne exw, which nets back to about €950 per tonne delivered to the south of Germany.

Trading activity in Italy’s plate market remained sluggish over the week; buyers were not looking to restock due to sufficient inventories and on the expectation of a further downtrend in prices.

On the other hand, producers in Italy still had December rolling plate to sell.

Reduced energy prices and the availability of cheap slab have created additional downward pressure on plate prices in the nation.

In Italy, for instance, average wholesale energy prices were €224.77 per megawatt-hour (MWh) in October 2022, down from €429.92 per MWh in September and €543.15 per MWh in August, according to local energy service company Gestore dei Mercati Energetici.

Sentiment for steel slab, the key feedstock for plate production, was also quite negative, with the most recent offers from China and South Korea reported at $580-600 per tonne cfr.

Additionally, import plate offers from Southeast Asia to Italy were reported at quite competitive levels – €790-800 per tonne cfr, mainly from Indonesia and South Korea.

Published by: Julia Bolotova