Day: 19 January 2023

New passenger car registrations in the European Union rose 12.8% on the year to 896,967 units in December, the fifth consecutive year-on-year increase, but full-year sales dropped 4.6% from 2021 to 9.3 million units, European Automobile Manufacturers Association (ACEA) data released Jan. 18 said.

Although the market improved from August to December, the overall 2022 sales were the lowest level since 1993’s 9.2 million units.

The auto market has been facing supply issues due to the ongoing semiconductor shortage, which in turn has impacted production.

This has also somewhat impacted the steel demand. Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Northern Europe at Eur680/mt ($738.80/mt) ex-works Ruhr Dec. 30, 26.2% lower than it was at the start of 2022.

The December volume was up 8.1% month on month and at the highest monthly level since June 2021.

The EU’s largest car market, Germany, saw new car registrations increase 38.1% year on year to 314,318 units in December, also up 20.7% month on month to the highest level since July 2020.

German car registrations for 2022 totaled 2.65 million units, up 1.1% year on year .

In the second largest market, France, sales in December were down 0.1% year on year, but rose 18% month on month to a six-month high of 158,027 units. The full-year sales in France totaled 1.53 million units, down 7.8% from 2021.

December car sales in Italy climbed 21% year on year to 104,915 units, but fell 12.5% from November to a four-month low. Italy’s 2022 total sales fell 9.7% year on year to 1.32 million units.

In Spain, 73,937 units were sold in December, falling 14.1% on the year, but up 1% on the month, bringing full-year sales to 813,396 units in 2022, down 5.4% year on year.

— Jacqueline Holman

Scrap metal industry association International Recycling Bureau (BIR) said Jan. 18 it is “very concerned” about the impact on the global circular economy of the European Parliament’s approval of revisions to the European Commission’s 2013 Waste Shipment Regulation.

European Recycling Industries’ Confederation EuRIC expressed “dismay” at the revisions, which have been under discussion since 2021.

The EP voted Jan. 17 in a plenary session to approve 154 amendments designed to “improve and toughen up” the regulation, in line with the EC’s Green Deal principles, according to Brussels-based BIR. International scrap industry sources, many affiliated to BIR, fear the new regulation, by curbing scrap exports from the European Union, could play into the hands of EU steelmakers seeking scrap supplies for their decarbonization, while impeding decarbonization elsewhere and generally distorting markets.

According to an EP briefing document, the revised regulation aims “at easing shipments of waste for reuse and recycling in the EU, to support the transition to a circular economy; ensuring that waste exported from the EU is managed in an environmentally sound manner in the destination countries; and stepping up enforcement to counteract illegal shipments of waste.”

Trade of vital raw materials such as recycled metals should not be restricted, argues BIR, particularly as secondary and recycled metals are becoming increasingly valuable raw materials in the decarbonization of the metals industry worldwide.

Scrap merchants

“These regulations represent a thinly disguised back-door protectionism that puts our industry in danger while severely disrupting the global circular economy,” BIR president Tom Bird said in a statement.

BIR noted that while intra-European movements of scrap or “waste” are clearly facilitated by the revised regulation, exports to countries outside the EU – industrialized (OECD) countries and developing (non-OECD) countries – will be considerably burdened by new intergovernmental agreements and inspections, audits and checks on facilities in third countries.

“There is a fine line between applying the proximity principle for wastes, keeping them in the EU, and commercially disadvantaging trading partners outside the EU, denying them resources,” BIR said.

The bureau claims that certain amendments adopted by the EP will need to be examined and likely changed by the Council of Ministers in coming weeks and months in order to comply with the EU’s international obligations.

BIR executives last year said the imposition of EU scrap steel and metal export controls risked distorting both international and regional scrap markets, particularly for ferrous scrap. Controls could reduce global market supplies, inflating prices in some markets, but at the same time lowering EU prices due to higher regional supply, which could in turn inhibit scrap arisings and collection within the EU. This would play into the hands of EU steelmakers, reducing the cost to mills of ferrous scrap, likely to be increasingly sought after for their decarbonization programs.

Ferrous scrap is by far the most exported type of waste from the EU – 19.5 million mt in 2021, equal to 59% of all EU waste exports, according to statistical database Eurostat. For every metric ton of carbon steel scrap recycled, a saving of 1.5 mt of CO2 is achieved, and in case of stainless-steel scrap this saving is even higher, reaching roughly 5 mt of CO2, reports European steel industry association Eurofer.

Eurofer Jan. 17 welcomed the EP’s adoption of the revision of the Waste Shipment Regulation, but warned that existing loopholes must be closed in order to avoid circumvention of the new measures. Monitoring of waste treatment needs to be carried out to ensure a level playing field between the EU and other countries, it said.

BIR did however see some positive aspects of the revision, in terms of introduction of an electronic system and improved record keeping and statistical analysis.

No target for metals recycling levels

Brussels-based EuRIC expressed “dismay” at the latest revision of the Waste Shipment Regulation, while applauding the establishment of mandatory recycled content targets for plastics. However, “the failure to consider targets for metals and paper is a significant omission that will erode demand and subsequently green investment in new and upscaled recycling facilities in Europe,” the recycling confederation said in a statement.

“Recycled materials already struggle to compete with extracted raw materials,” noted Emmanuel Katrakis, EuRIC secretary general.

Turkish import deepsea ferrous scrap prices – a barometer of the global scrap market – softened on Jan. 18, as Turkish mills continued to hold back for lower prices, while sell side indications also softened, after months of price volatility.

Platts, part of S&P Global Commodity Insights, assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $407.50/mt CFR Jan. 18, down $1/mt on day.

Plastics ‘taking a beating’

“The worldwide concern about plastic pollution will likely lead to a prohibition on plastic recyclables exports from the EU, and furthermore has led to harsher conditions on exports of other recyclables desired by industries around the world,” BIR’s statement said.

“Plastics are taking a beating with the intention to keep all plastic waste in the EU. ‘EU waste, EU responsibility’ was the mantra,” BIR said in a bulletin. However, the association added that it foresees that supplanting more recent EU classifications of plastics wastes with the slightly older Basel Convention codes will hamper intra-EU movements of plastic wastes to recycling and recovery facilities.

— Diana Kinch

European steelmakers were targeting higher prices for cold-rolled and hot-dipped galvanized coil in the week to Jan. 18 despite muted interest of the buyers in the material.

The upwards attempts of the mills were driven by combination of hot-rolled coil rise in Europe, reduced coil supply due to production cuts, anticipated demand recovery as well as full order books of the mills. This, however, failed to spur buyers’ interest in the material.

Muted end consumer demand and uncertain outlook supported hesitance of the buyers to stock CRC and HDG.

“The mills want higher prices, but truth is all we have to back it up is restocking activity and stopped equipment,” a distributor said. “Restocking will end, and the buyers are not willing to risk and buy bogger volumes as they know end users are not very active. And with current geopolitical and economic situation risks are too high and outlooks are uncertain.”

Platts assessed domestic hot-dipped galvanized coil prices in Northwest Europe at Eur875/mt ex-works Ruhr on Jan. 18, up by Eur55/mt week on week.

German buyers estimated tradable value at Eur900/mt ex-works Ruhr and reported offers at Eur900-950/mt ex-works Ruhr. A steelmaker source, however, reported offers at Eur850/mt ex-works Ruhr.

The assessment for domestic cold-rolled coil prices in the region was down Eur10/mt on week and Eur25/mt on day to Eur825/mt ex-works Ruhr.

The assessment moved down as a steelmaker reported offers at Eur800/mt ex-woks Northern Europe.

Platts assessed domestic prices for hot-dipped galvanized coil in Southern Europe at Eur830/mt ex-works Italy on Jan. 18, up by Eur50/mt week on week. The assessment was based on tradable values heard at Eur800-850/mt ex-works and offers at Eur840-850/mt ex-works.

The assessment for domestic cold-rolled coil prices in the region also increased – up by Eur45/mt on week to Eur815/mt ex-works Italy, reflecting tradable values reported at Eur800-830/mt ex-works Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar

European prices for hot-dipped galvanized coil and cold-rolled coil have risen over the past week amid improved buying and bullish sentiment, even though end-user demand was still limited, Fastmarkets heard on Wednesday January 18.
Buying interest for CRC and HDG in Europe has started to pick up, with buyers seen to be digesting recent price rises.

The limited availability of CRC and HDG, because of output cuts and increased lead times at mills, was supporting the prices.

“Stocks [of CRC and HDG] are not high at distributors, and import stocks in Antwerp are also quite low,” a trading source in Italy told Fastmarkets. “European mills can comfortably wait, and buyers are already starting to accept higher prices.”

In Southern Europe, CRC offers were heard at €850-870 ($919-941) per tonne delivered, which would net back to €820-840 per tonne ex-works. HDG offers in the region were heard at €870-880 per tonne delivered (€840-850 per tonne ex-works).

Italy-origin CRC was sold to Germany at €820 per tonne CPT during the week, market sources said.

Some buyers reported lower price estimates, at €800-820 per tonne for both CRC and HDG. Notably, distributors and steel service centers said that end-user demand was still stable at low levels, so the implementation of a price increase would be difficult.

Given the need to restock, however, buyers have started to accept higher prices recently, with deals for CRC reported at €820 per tonne ex-works, and for HDG at €820-840 per tonne ex-works.

Fastmarkets’ weekly price assessment for steel CRC, domestic, exw Southern Europe, was €820-830 per tonne on Wednesday, up by €20-30 per tonne from €800 per tonne seven days before.

The corresponding weekly price assessment for steel HDG, domestic, exw Southern Europe, was €820-840 per tonne on January 18, narrowing upward by €20 per tonne from €800-840 per tonne seven days before.

Uncompetitive and limited overseas offers of CRC and HDG were also supportive of the domestic price uptrend, sources said.

Notably, CRC offers from Southeast Asia to Italy were heard at €780-810 per tonne CFR for March-April shipment. Sources also reported a CRC offer from Turkey at €860 per tonne CFR, but this was “out of the question” for EU buyers.

And sources said that 0.5mm HDG from Vietnam was offered to Spain at €950-960 per tonne CFR.

Published by: Julia Bolotova

European hot-rolled coil prices moved up on restocking activity and limited availability on Wednesday January 18, but market sources questioned the viability of further rises, Fastmarkets has heard.
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe at €729.17 ($788.57) per tonne on Wednesday, up by €13.75 per tonne from €715.42 per tonne on Tuesday.

The latest calculation of the index was up by €22.92 per tonne week on week and by €84.38 per tonne month on month.

Market sources said that the apparent demand for HRC was picking up due to restocking activity, but that real steel demand was still subdued.

“There’s a bit of a wait-and-see attitude in the market now, while buyers are digesting higher prices. But consumption [of HRC] is stable at low levels,” a distributor told Fastmarkets.

Most European mills were said to be sold out for March-delivery coil and had yet to announce prices for April delivery, with most sources expecting a rise.

“This week, most of the big producers are out of the market,” a steel-service center in the region said. “Mills have comfortable order books [for HRC]. They are likely to announce another €20-30 per tonne increase and let buyers think it over.”

Transactions in the region were reported at €730 per tonne ex-works on Wednesday, with tradeable values estimated by buyers at €710-730 per tonne ex-works.

A Nordic mill’s latest offer of HRC to Germany was heard at €760 per tonne delivered for March delivery, but the producer was reported to have sold out its March volumes and had yet to table new offers.

An offer from an Italian mill was reported by two trading sources at €750 per tonne delivered to Germany, with some bookings reported at this level earlier in the week.

In general, sources expected to see offers for April-delivery HRC about €30 per tonne higher compared with March deliveries.

Alternatively, several trading sources expressed doubts about the sustainability of the acute uptrend in prices.

“The price rise [for HRC] is driven by output cuts and some restocking. But we do not see real steel demand picking up,” a second steel-service center in the region said. “Our customers in the automotive industry are largely holding back from bookings now.”

Another trading source even suggested that the current HRC deals “could be the peak for HRC prices in [the first half of] 2023.”

Fastmarkets’ calculation of its daily steel hot-rolled coil index, domestic, exw Italy was €723.09 per tonne on Wednesday, up by €16.42 per tonne from €706.67 per tonne on Tuesday.

The latest calculation of the index was up by €28.26 per tonne week on week and by €84.76 per tonne month on month.

Offers from two domestic integrated mills were heard at €750 per tonne ex-works on Wednesday.

But one of these mills indicated a new target price for HRC of €800-830 per tonne ex-works for April delivery. And an offer from a re-roller was heard at €760-770 per tonne ex-works.

Buying interest at these prices was quite limited, however, sources said.

Transactions in Italy were still being reported at lower levels around €720-730 per tonne ex-works, sources said.

Meanwhile, overseas HRC offers to Italy were heard at €695-700 per tonne CFR from Japan and South Korea for March-April shipments.

And Turkish HRC was offered to Italy at €740 per tonne CFR.

European buyers did not consider those prices workable due to the long delivery terms. In fact, buyers’ price ideas did not exceed €660 per tonne CFR Italy, sources said. This was considered too low by the sellers, however.

One mill source told Fastmarkets: “We expect European buyers to accept HRC prices of at least €685 per tonne CFR.”

Published by: Julia Bolotova

German steel industry associations have conceded a good deal of the influence they used to have, with calls growing from market players for their representative bodies to regain strength.

The technical organisation VDEh (Verein der Eisen- und Hüttenleute, or Iron and Steel Institute) and business association Wirtschaftsvereinigung (WV) Stahl lost much of their feathers following a series of cartel cases some eight years ago. Back then, several mills were fined for price fixing, and the cartel office imposed limitations on the associations with regard to networking activities. This meant that conferences and get-togethers became largely taboo.

One obvious sacrifice was the annual “STAHL” gathering in Düsseldorf each November, with numerous talks, papers, international guests, and especially an evening party with a four-digit number of people attending. “Such gatherings were seen as an illegitimate opportunity for company people to address topics under cartel law, so the event was banned altogether,” one seasoned participant tells Kallanish.

Price information from mills’ websites, too, came under suspicion. Until some seven years ago, the pricing consisted of a customary base price (for coil, “Teileffektivpreis”, or TEP for short) accessible on the companies’ websites, plus the extras according to the customer’s request. The given price would be relatively high, and of course still be modified in individual negotiations.

Such information has since disappeared from the websites. “Mills these days give you a final price for your tailored request, and you have to deduct yourself what the underlying base price is,” a coil buyer explains.

The general ban also affects, and impairs, technical exchange and cooperation. “We cannot share information that would be to the benefit of everyone,” the former managing director of VDEh, Hans Bodo Lüngen, bemoaned when he was still in office. “While in the USA, the AIST can publish such findings openly to the entire industry.”

In fact, some German companies have sought a new home at US association AIST, representatives pointed out at the ecoMetals Day conference last autumn. “We used to have organisations that worked very well, and this was sacrificed to the lawyers,” Klaus Harste of Swiss Steel said at a discussion forum. “There are so many topics we should go through together,” he said.

The ecoMetals Day largely addressed the dawning transition of the steel industry towards zero-carbon steel, and participants noted that this effort requires more intensive exchange between players. “I think the associations could and should be allowed to do the work they used to do,” said Frank Ahrenhold of thyssenkrupp Steel. He received applause from the floor when he stated that “I would definitely support a return to decent association work”.

Christian Koehl Germany

Italian rebar prices are beginning to fall after demand failed to resume as hoped following the winter holiday break. The market remains quiet, with few contracts being agreed and always for small volumes, market sources tell Kallanish.

Last week, mills were asking for €560/tonne ($607) base ex-works or €580/t base delivered but encountered stubborn resistance from buyers who adopted a wait-and-see attitude.

Distributors who spoke to Kallanish, however, say that while the market is sluggish, they have orders from the construction sector. Any price increase nevertheless results in sales halting as customers refuse to purchase rebar and mesh above a certain price level.

As order intake has been poor in recent weeks, some local producers have only partially resumed output this week. One has switched on one electric arc furnace and will restart the second in February.

Rebar makers are now asking for €510-520/t base ex-works. So far, rebar contracts in Italy are pegged at €500-510/t base ex-works. Including size extras, domestic prices have returned to the level €760-770/t ex-works, sources suggest.

Natalia Capra France

Shortcomings in maritime and railway transportation have been stressing the patience of plate buyers in Germany, when ordering domestic as well as overseas.

A manager at a distributor in Lower Saxony tells of delays in railway freight due to maintenance work on the lines. “Deutsche Bahn is a massive construction site; freight trains often need to take considerable detours these days,” he tells Kallanish. From one mill, for example, “I wait only three days for delivery, but a colleague in the west waits three weeks,” he adds.

The distributor itself was hurting more when ordering overseas. Last year, “one Asian mill had our material ready within a week, but then needed three weeks to get a ship organised. And after three weeks of travel, it had to wait two months for clearance in Antwerp. Low prices do not compensate for such delays, and many importers have subsequently refrained from ordering in Asia,” he says.

The shortage of shipping space since Covid-19 impacted trade, with many vessels parked outside of closed Chinese ports, did not hurt everyone equally, though. A manager at a processor says he cannot complain about long wait times, probably because buyers of small volumes may be less affected. He is now about to place an order for material from India, which he expects to arrive within three months, in April/May. The price for S355 grade plate here is at €920/tonne ($997) delivered, ordered through a German distribution group, which suggests that direct buyers can get prices below €900/t.

Domestic European mills are ambitious to bring up prices, “but I’m not sure I will get a higher price from my customers yet”, the distributor’s manager cautions. He and a source in the Benelux state that current offer prices inch up to €980/t, from below €950 previously.

The manager also points to the large volumes of Russian-origin slab supply, which he partly blames for last year’s price deterioration. “After the European Commission granted a grace period for Russian slab, people went for it because they can still feel safe from paying penalties,” he says.

Christian Koehl Germany