Day: 17 January 2023

Digital industrial solutions provider Mobilaris Industrial Solutions and steel start-up H2 Green Steel (H2GS) will work together to make use of digital solutions for H2GS’s large-scale green steel plant.

The two companies have signed a letter-of-intent to collaborate for the use of digital solutions during construction, and later operations, for the steel plant in Boden in northern Sweden, Kallanish learns. “We are very happy to establish this relationship with H2 Green Steel. They represent a new way of thinking around industrial projects where digital is not added, it is built in from the start,” says Mikael Nyström, chief executive of Sweden-based Mobilaris. Both companies share a belief in pushing boundaries and transforming hard-to-abate industries for the better by the use of technology, he adds.

“Mobilaris has a proven capability to transform industrial operations and are headquartered in the Norrbotten region, making them a very good match for us,” says Olof Hernell, chief digital officer of H2GS. The ambition of the collaboration between the two companies is to improve workforce safety and provide a more efficient site coordination enabling an efficient, safe and transparent way of operating, they say.

Christian Koehl Germany

Scrap prices in the Benelux have softened due to weak buying interest in major export destinations.

Exporters’ dock prices, which were at around €340-350/tonne a week ago, were mostly at $330-335/t ($357-362) delivered on Monday.

Although inflow remains slow at these levels, exporters, who are still cautious about export markets, are refusing to increase their prices unless they need to fill a vessel.

A Benelux exporter tells Kallanish: “We are able to obtain low volumes from some small suppliers at €330/t but big ones are refusing to sell at these levels. They [collectors] received respite with the latest sales at above $340/t and are not willing to decrease prices now.”

Another exporter says that most domestic suppliers are targeting €340-350/t levels again as, despite pressured exports, prices now have support from the European domestic market.

However, last week Turkey refused to buy scrap even at the previous week’s levels amid subdued steel sales and falling product prices. Despite higher domestic European prices and the stronger euro against the dollar, Benelux scrap exporters are seen to have sold at lower levels.

In Turkey, EU-origin HMS 1&2 80:20 dropped to $405/t and $408.5/t cfr on two bookings last week, from $414-417/t levels the previous week. UK-origin HMS 1&2 80:20, meanwhile, fell to $400/t cfr on the latest booking for 22,000 tonnes on Friday, from $412/t cfr in the first week of the year.

Although a Poland-origin sale is heard to have been booked at $414.5/t for HMS 1&2 80:20 and $434.5/t cfr for shredded, it was concluded on 6 January.

Besides Turkish mills’ low appetite for scrap purchases, Pakistani scrap importers’ being unable to open letters of credit is also pressuring scrap prices.

An Indian supplier says that around 20,000t of material – mostly shredded – on the water has to be directed to alternative destinations, mostly to India. “This coupled with traders’ open positions and offered material is expected to total 70,000-80,000t and will put prices in Indian and other markets under pressure,” he adds.

Containerised shredded offers hit $460/t cfr last week in India, but were at around $450/t cfr on Monday.

Burcak Alpman Turkey

Italian scrap prices are beginning to increase this month but quiet activity persists and not all mills are in a buying mood.

Faced with requests for month-on-month increases of €30/tonne ($32), mills are taking their time to decide and putting off agreeing on large-volumes contracts. Some, however, have started to grant €15/t hikes on average, sources tell Kallanish.

One mill is yet to resume production after the holidays, while most producers are using up their scrap stocks. Towards the middle or end of this week, some high-volume contracts will be signed, giving the market a clearer direction.

Very few deals have been signed at increases exceeding €30/t or, in general, for the noblest grades of new arisings E8. According to the first indications from the few contracts agreed, domestic E8 mixed grade is sold at €360-380/t delivered and at €390-420/t for the very high grade. Old thick scrap E3 is pegged at €350-370/t delivered depending on quality. E40 mixed grade is hovering at €360/t, while E1 is being transacted at €340-350/t delivered, depending on quality.

Local steel trade association Assofermet reports issues with the local road transport sector, both in terms of availability of trucks and higher costs, which will impact the Italian scrap market this year. The increase in fuel prices could also play an important role in the stability of the supply chain in the coming months, the association says in its latest market note.

Italian steel and scrap companies are now dealing with a market fuelled by high hopes of a restart after the long Christmas holiday break, while the expensive energy issue seems to have partially returned. December was a month of “stability and cautious optimism” but mills’ demand is forecast to remain sustained, with prices being negotiated this week.

Natalia Capra France

Sources in the market have confirmed that ArcelorMittal is raising offer prices for long products across Europe, on the back of higher scrap and other input costs.

The increase announced to buyers is of some €50/tonne ($54) for all products with immediate effect. A source notes that part of this hike has already been achieved in new orders. “Stockholders are looking to place new orders after a prolonged period of silence due to uncertainties created by macroeconomic challenges. A €25-35/t increase has been already achieved in Europe, compared with levels seen before the winter holidays,” the source observes.

Last week, British Steel also announced a price increase for merchant bar and sections, due to higher production costs (see Kallanish passim).

A source within a European steelmaker says that while energy prices have moved down somewhat in Europe, the rebound in scrap and raw materials prices has been strong enough to offset the reduction of energy costs.

The latest uptrend in scrap prices started in Turkey in mid-November, lifting HMS 80:20 prices to almost $420/t cfr Turkey at the beginning of 2023, the highest level since June 2022.

Emanuele Norsa Italy

The UK Government’s Trade Remedies Authority has started a tariff rate quota review on steel product imports from over 120 developing countries, which are currently subject to its steel safeguard trade remedy measure, it said Jan. 16.

The aim of the review is to see whether developing countries could be subject to exceptions on rebar, one of the categories included in the measure, set in July 2022, after it received a request.

However, the TRA will also review other categories as well, as part of a planned annual review brought forward to ensure businesses can benefit more quickly from any necessary changes to tariffs.

“The TRA will assess whether the exceptions for imports from developing countries need to be amended based on updated import data,” it said, adding that its assessment would consider imports from all developing countries, including those excepted from the measure.

It noted that imports from some developing countries could possibly exceed 3% of total UK imports — with imports from developing countries under 3% given exceptions to TRQs.

They are also given exceptions if the low volume exporters collectively account for no more than 9% of the total imports of a product.

The TRA invited interested parties to register their interest and comment by Jan. 30, 2023, after which it said it would confirm the scope of the review.

Once the review as been completed, the TRA will make recommendations to the Secretary of State for International Trade, who will make the final decision and decide whether revisions to the TRQs are required.

Rebars are mainly used in the construction industry, with the main producers in the UK being Celsa UK and Liberty Steel UK.

In 2021, the UK imported 35% of its rebar from Portugal, 14% from Spain, 13% from Russia, 11% from Algeria and 9% from Turkey.

Platts, part of S&P Global Commodity Insights, assessed Turkish exported rebar at $690/mt FOB Jan. 13, down from a peak of $970/mt reached March 24, 2022.

— Jacqueline Holman

BSH (Bosch Siemens Hausgeräte) has signed another memorandum of understanding with Salzgitter Flachstahl to source green steel from a new production route from 2025.

Europe’s largest home appliance manufacturer has already been sourcing quantities of green steel from Salzgitter’s strip unit since 2021 (see Kallanish 17 September 2021). That steel is being used to produce mounting brackets for washing machines at the BSH plant in Lodz, Poland.

The new MoU between the two companies provides for large volumes of green steel from 2025 for the European market, with increases each year. The steel will be produced by means of the new hydrogen-based production route SALCOS – Salzgitter Low CO2 Steelmaking. This means that carbon emissions in production will be reduced gradually by some 95% by 2033, Salzgitter says.

BSH has set itself a sustainability target for 2030. “We intend to reduce our indirect Scope 3 carbon emissions resulting from the purchase of raw materials and parts and through use of home appliances,” says BSH chief operating officer Lars Schubert. “We are also closely examining how to improve processes over which we have no direct control – for example, the production of materials that we use for our appliances.”

Christian Koehl Germany

The European Commission says it is adding a new annex to the existing regulation regarding safeguard measures on imports of certain steel products.

The decision has been taken following a request from a World Trade Organization (WTO) panel in 2022. This stated that the EU should bring its definitive safeguard measure into conformity with the Agreement on Safeguards and the General Agreement on Tariffs and Trade (GATT 1994).

Kallanish notes that the addition of the annex to the original 2018 regulation does not bring any significant changes to the existing safeguard measures. The annex includes data and details taken in consideration by the European Commission during the original investigation prior to 2018, confirming the fact that main exporting countries such as Russia, China and Turkey increased their sales to Europe while they were reducing exports to other third countries.

The European Commission explains that the annex was added to bring “the original measure into conformity with WTO rules in those instances where the panel had found inconsistencies, and inviting interested parties to submit comments”.

The requests made by the WTO panel were generated by a formal complaint lodged by Turkey back in March 2020. In addition to requesting recommendations, Turkey asked the WTO to suggest that the EU revoke the safeguard measures. However, the trade organisation declined to do so.

Emanuele Norsa Italy

The European Commission has modified the safeguard measures on imports of certain steel products that have been in effect since 2018, following a report adopted by the World Trade Organization’s Dispute Settlement Body.

The EC on Jan. 13 amended the regulations by adding an annex in line with WTO rules, however, no changes were made to the measures themselves, as the EC found that there was a threat of serious injury from imports and that would have materialized if the Commission had not imposed a definitive safeguard measure.

The EC introduced them in July 2018 in the form of tariff-rate quotas.

In a WTO panel report released April 29, 2022, the WTO, however, called on the EU to bring its measure into conformity with the agreement on safeguards and the General Agreement on Tariffs and Trade, or GATT.

The panel found at the time that the EU steel safeguard was WTO-compatible on most points while it also found, on three points, that the EU safeguard measure lacked sufficient justification.

The EU and Turkey then agreed on Aug. 9 that the EU would modify its safeguard measures on certain steel products until Jan. 16, 2023 to comply with the GATT, as previously reported.

Turkey is one of Europe’s largest steel suppliers along with Asian and CIS suppliers.

Turkey’s hot-rolled coil exports for the first 10 months of 2022 fell 20% year on year to 1.76 million mt amid reduced shipments to the EU and the US, according to the Turkish Statistical Institute data.

Platts’ Turkish exported HRC was assessed at $710/mt FOB Jan. 13, according to S&P Global Commodity Insights, representing a $500/mt decline from mid-March.

— Cenk Can