Day: 21 December 2022

Domestic prices for hot-rolled coil remained unchanged in Europe Dec. 20, as market slowed down ahead of Christmas holidays.

“Some mills have stopped giving offers and they will return to the market in the first half of January,” a steelmaker source said.

Platts assessed North European hot-rolled coil stable on the day at Eur665/mt ex-works Ruhr on Dec. 20.

Market sources reported tradable values at Eur650-680/mt ex-works Ruhr.

“I think we will no longer see prices of Eur650/mt ex-works next year, at least the mills will do their best to revive the price rise achieved in December,” a German service center said.

Outlook for January remains uncertain, with some expecting the prices to stabilize as demand would remain limited, others believe that high energy costs and market activity recovery combined with production cuts would drive prices up.

Platts assessed domestic Italian HRC prices unchanged on the day to Eur645/mt ex-works Italy on Dec. 20. The assessment was based on tradable values heard at Eur640-650/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar, Benjamin Steven

The reduction in procurement of ferrous scrap in Ukraine will amount to 930,00 tonnes this year, down by 77.5% on-year, according to the Ukrainian association of secondary metals, UAVtormet.

Steel production in 2022 will amount to 6.5 million tonnes, down 69.5%, Kallanish notes. Domestic shipments of scrap to Ukrainian steelmakers will fall 74.4%, while exports are seen dropping 92.4%.

In 2023, according to the optimistic scenario, Ukrainian steel production could amount to 12-12.5mt, while supply of scrap to metallurgical plants could reach 1.5-1.6mt, and scrap procurement total 1.85-1.9mt. Exports of scrap next year may reach 300,000-320,000t.

However, a realistic forecast assumes that Ukrainian steelmakers will produce 7-7.5mt of steel, with domestic supplies of raw materials to plants amounting to 900,000-950,000t, exports reaching 200,000-220,000t and scrap procurement at 1.2-1.25mt.

“The projected volumes of steel production in 2023 are based on the assumption that the metallurgical plants operating as of 1 December 2022 will retain their production potential, supply chains with raw materials and energy resources,” UAVtormet says.

Scrap procurement volumes in 2023 will depend on the price situation in the Ukrainian market, fair pricing for domestic deliveries and export opportunities for companies specialising in scrap procurement and processing, it adds.

“Export opportunities will continue to stimulate the development and functioning of the Ukrainian scrap metal market,” the association observes. “Cancellation of export duties, simplification of obtaining the €1 certificate and revision of current legislation could allow to stabilise the price situation in the market, which will lead to an increase in the procurement and supply of scrap.”

At the same time, it notes an increase in the volume of ferrous scrap generated as a result of the destruction of residential, industrial and infrastructure facilities, as well as from the disposal of destroyed military equipment and other equipment.

“Such material needs to be processed using special technologies and equipment, which means it has a higher cost,” UAVtormet notes. “The total volume of such scrap generation can now be estimated at 120-150 million tonnes,” it adds.

Svetoslav Abrossimov Bulgaria

Primetals Technologies, Mitsubishi Corporation, Fortescue, and voestalpine have joined up to design and engineer an industrial-scale prototype plant with a new process for net-zero-emission ironmaking at voestalpine’s home in Linz, Austria.

The new ironmaking process will be based on Primetals’ HYFOR and Smelter solutions. According to Primetals, HYFOR is the world’s first direct reduction process for iron ore fines that will not require any agglomeration steps, like sintering or pelletising. A pilot plant has been in operation since the end of 2021, and Primetals has run numerous test campaigns over the last year including trials on Fortescue’s Pilbara iron ore products.

The new Smelter technology from Primetals is a furnace powered by electrical energy, Kallanish learns from the plantbuilder. It is used for melting and final reduction of direct reduced iron based on lower-grade iron ores. In that way, it produces alternative green hot metal for the steelmaking plant, Primetals claims.

Fortescue’s main responsibility in the new project is to provide knowledge about iron ore quality and preparation. In addition, it will supply various iron ores for the new plant.
The main goal of the project planning phase is to develop the basis for decision to realise a prototype plant capable of continuous operation, and to gain the know-how for a full-scale commercial plant.

Christian Koehl Germany

Italian rebar prices are stable compared to last week despite the hike attempted in recent days by local steelmakers. Market activity is now gradually fading apart from the last few orders before the market shuts down for the Christmas holiday break, market sources tell Kallanish.

This week, mills are asking for €520-530/tonne ($553-563), down from last week’s €550/t base ex-works. Agents and sales executives say the level of orders has increased in December, but prices have so far remained mostly stable in the range of €500-520/t base ex-works. Including size extras, domestic rebar prices have flattened at €760-790/t ex-works. Mesh also remains at €610-620/t ex-works base, sources suggest.

Most mills will idle production on Thursday this week and reopen on 9 January. Next month may bring some price increases, in line with expectations of hiking energy costs. Buyers however report “fragile and unreliable” demand from their clients and believe January contract levels will remain below €800/t ex-works, even in the case of energy increases.

While in other European countries sources expect scrap prices to hike next month, Italian scrap buyers believe January demand from mills will be sustained but prices are forecast to remain at December levels.

Natalia Capra France

German rebar pricing shows split signals
Although demand has recently encouraged most German rebar mills to ask for higher prices, some say this may be a temporary flexing of muscles that should subside going forward.

Since many transactions were closed below a base price of €550/tonne ($585) by early December, mills have their order books sufficiently filled and are now asking for €30-40/t hikes, observers tell Kallanish. This should raise the upper end of the offer range to €580/t base, which plus the size extra of €265 totals €845/t delivered. But figures diverge, depending on the mill and deal, a northern German manager cautions.

“Often in past years, distributors would buy in December for January delivery because they believe the new year begins with a price increase. But often enough, that did not ring true,” he tells Kallanish. He himself prefers the philosophy of buying only enough to have outstanding construction jobs covered, but not to replenish inventory for the longer run. “We buy enough to serve our projects, but will not go for 1,000 tonnes that last until April,” he opines.

In line with observers in other German states, he sees a relative stabilisation of prices, but considers it shaky. “If one mill gets nervous and starts giving concessions, and often it is the big international players that do so, the others will follow quickly,” he warns.

International rebar association Irepas, too, said last week that “the current status of the market can be described as highly unstable and unpredictable”. It noted that competition in regional markets is “very difficult and fierce”, which could easily undermine a temporary stabilisation.

Christian Koehl Germany