Day: 31 January 2023

European hot-rolled coil prices were largely stable amid quiet trading on Tuesday January 31, sources told Fastmarkets.
European integrated mills were sold out of first-quarter HRC volumes and have been maintaining offers for April-delivery at €780-800 per tonne EXW, sources said.

There was, however, an offer from a re-roller in Northern Europe at €760 per tonne EXW, they added.

Lead times for HRC in Northern Europe were reported at a minimum of eight weeks, which also suggests that producers have healthy order books.

“There was a restocking in January and buyers were gradually accepting higher prices [for HRC]. But the new increase will be harder to achieve because demand remains slow,” a trading source said.

Estimates of tradable values from buyers in the region varied from €740 per tonne EXW to €770 per tonne EXW, depending on tonnages and lead times.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €755.63 ($821.46) per tonne on Tuesday, up by €0.21 per tonne from €755.41 per tonne on Monday.

The latest calculation of the index was up by €1.08 per tonne week on week, and by €86.88 per tonne month on month.

Offers from Italy to Germany were reported at around €780-800 per tonne CPT with some transactions for limited volumes heard withing the range.

In general, European buyers were reluctant to make bookings at higher prices, sources told Fastmarkets.

“Buyers have bought what they need in January, so now it’s a bit of wait-and-see [moment, in terms of] a new round of bookings, because the new offers are not sexy,” a mill source told Fastmarkets.

Fastmarkets’ calculation of the corresponding daily steel hot-rolled coil index domestic, exw Italy was €751.67 per tonne on Tuesday, up by €0.42 per tonne from €751.25 per tonne on Monday.

The latest calculation of the index was up by €7.91 per tonne week on week and by €99.17 per tonne month on month.

Offers for April-delivery HRC from Italy were heard at €780-800 per tonne delivered, which is equivalent to around €760-780 per tonne ex-works.

Buyer indications of tradable prices were still at €730-750 per tonne ex-works on Tuesday, sources told Fastmarkets.

Buyers in Italy have also been delaying purchases because they consider the current offer prices too high.

Given the bullish sentiment in the domestic market, European buyers generally considered the latest imports offers to be competitive – although the number of offers was remained limited, with some Asian producers still out of the market.

Import offers from India were reported on Tuesday at €735 per tonne CFR to Italy for April shipment. And Turkish suppliers were offering April-delivery HRC to Italy at €740 per tonne CFR.

Published by: Julia Bolotova

British oil company BP expects low-carbon hydrogen demand to grow by a factor of ten between 2030 and 2050, potentially reaching 460 million tonnes/year, Kallanish reports.

By 2050, around 40% of total industrial hydrogen demand will come from iron and steel production, BP forecasts.

According to its annual Energy Outlook report, released on Monday, low-carbon hydrogen (green, blue and biogenic hydrogen) will play a critical role in decarbonising the energy system, but its growth is relatively slow this decade. By 2030, demand is forecast at between 30-50m t/y, replacing unabated gas- and coal-based hydrogen in industrial processes.

The pace of growth will pick up in the 2030s and 2040s as falling costs of production and tightening carbon emission policies allow these types of hydrogens to compete with incumbent fuels. Demand is estimated to grow to 300-460m t/y.

Besides steel, other heavy industries such as chemicals and cement will also start using more low-carbon hydrogen. Within the transport sector, hydrogen will be mostly used in marine and aviation. Hydrogen-derived fuels will account for 10-30% of total energy demand in the aviation sector and 30-55% in the marine sector, the report says.

BP analysts expect supply and demand to be aligned, enabled by a trade mix of regional pipelines and global shipping. Green hydrogen should dominate supply at around 60% in 2030 and 65% by 2050, while blue hydrogen will serve as an “important complement” offering a lower-cost alternative in some regions and a “firm (non-variable)” supply option, they say.

The dynamics of supply and demand vary according to geographic locations and its demand drivers. The EU is expected to produce 70% of its low-carbon hydrogen needs in 2030 and 60% by 2050% – if it reaches a net-zero scenario then. The bloc’s remaining needs should be met by imports – half via pipeline from North Africa and European countries such as Norway, and half shipped by sea from global markets.

Gabriela Farhangi UK

Sentiment among French construction companies deteriorated in January. The firms surveyed were less optimistic than in December regarding their expected and past activity, Kallanish learns from a l’Institut National de la Statistique et des Études Économiques (Insee) report.

However, fewer companies than in December “considered the evolution of their company situation to be unpredictable”, the report shows, adding that compared to the fourth quarter last year, the general outlook for activity remains stable.

In January, fewer contractors than in the previous month considered their order book level to be higher than average. The current order levels provide for 8.9 months of work.

This month, production capacity remains stable and the tension exerted on production by global supply disruptions is slightly easing. A higher number of construction firms than last month reported slowing output in January due to workforce shortages, but fewer companies reported supply difficulties.

The share of companies at the limit of their production capacity also dropped in January: 29% of business managers reported being in this situation. 12% meanwhile reported supply difficulties, the report states. This month, more companies than in December say they will increase their prices over the next three months.

Natalia Capra France

Spanish steelmaker Megasa says it will invest almost €100 million ($108.84m) in 2023-2024 in a new preheating furnace at the Megasider Zaragoza plant.

The company will also replace its existing rolling mill with equipment based on environmentally-friendly heating technology, Kallanish notes. The new facility will be designed to produce a wide range of merchant bar.

Megasider’s production was almost 500,000 tonnes last year, with net sales approaching €400m, up 23.1% on €325m in 2021. “These results allowed us to plan a significant investment in expanding the product range and on future-oriented technology to improve energy efficiency at the mill,” the steelmaker’s chief executive, Eduardo Piñera, told Spanish news outlet Heraldo de Aragón.

The upgrade has already been awarded to Germany’s SMS Group. The project includes a walking beam furnace with capacity of 120 tonnes/hour. In addition, the company will supply the so-called SMS Prometheus Level 2 control, which ensures uniform temperature distribution and low oxidation and carbon enrichment of steel.

It will also provide the SMS DigiMod combustion management system and ZeroFlame HY2 burners. These are capable of operating with both natural gas and a blend of natural gas and hydrogen in any ratio, making this furnace hydrogen-ready, SMS says.

Megasider Zaragoza produces merchant bar, as well as a wide range of dimensions and grades of rebar and steel sections.

Todor Kirkov Bulgaria

Scrap prices in the Benelux have recovered since last week. However, even a price recovery does not seem to be helping ease ongoing supply limitations.

Exporters’ dock prices, which were at around €320-330/tonne a week ago, were mostly at $340-350/t ($370-381) delivered on Monday.

Benelux exporters, however, are bemoaning the lack of material as sourcing from collectors remains an issue, even at €350/t.

A Benelux exporter tells Kallanish: “When you buy at €350/t, you have to sell to Turkey at above $420/t cfr [Turkey]. However, those values are not yet available in Turkey.”

“On the other hand, collectors are not keen to sell at €350/t. Most say they prefer to wait today. We do not have favourable market conditions here,” says another exporter.

In Turkey, prices rose throughout last week, with EU-origin HMS 1&2 80:20 reaching $414/t cfr on the latest booking, from $407-410/t cfr levels earlier last week.

However, suppliers are seen targeting higher levels this week amid positive developments arising from China’s strong return from holiday. Also supportive are the decrease in Turkish mills’ energy prices and strong Turkish flat steel prices, which have found even further support from the increase in import duties last weekend.

One European exporter is heard targeting $425/t cfr Turkey for HMS 1&2 80:20.

In India, although buyers’ appetite is not strong, sentiment has also turned bullish. EU-origin containerised shredded is offered at $455/t cfr levels, although buyers are bidding at $440-445/t cfr.

Burcak Alpman Turkey

Nordic steelmaker SSAB restarted the blast furnace at its facility at Raahe in central Finland early in 2023, the company said on January 27 and now expects the market to stabilize.

The company confirmed the restart of the 1.25-million tpy Raahe BF earlier in January 2023 after 1.5 months of downtime.

SSAB stopped the BF in mid-November for maintenance, with the outage was brought forward to reduce output during the fourth quarter in the face of weak steel demand.

“Maintenance work lasted around six weeks and the blast furnace was re-started in the beginning of 2023,” the company said.

In the fourth quarter 2022 SSAB’s crude steel output amounted to 905,000 tonnes, down from 1.19 million tpy in the same quarter of 2021.

Steel shipments from SSAB’s production assets in October-December 2022 was also down year on year at 778,000 tonnes, down from 832,000 tonnes in October-December 2021.

But SSAB said the steel market in Europe has now stabilized, although it acknowledged there is still some uncertainty.

SSAB is the third steelmaker to recently relight a BF idled in the fourth quarter 2022, which has raises concerns among European flat steel buyers, sources said..

Last week Slovakia-based integrated steelmaker US Steel Kosice restarted a second BF at its Kosice facility while earlier in January, ArcelorMittal said it was considering restarting a BF at its facility in Gijon, in northwest Spain.

Most market participants said the recent prices rises in Europe’s flat steel sector have been achieved mainly thanks to more balanced market, in other words, due to the numerous output cuts, so the return of idled capacity could threaten that uptrend.

“It takes several weeks to restart a BF, so I wouldn’t worry about an immediate effect on the market, but if real steel demand doesn’t pick up, we might see tumbling prices in the second half of 2023,” a steel distributor in Norther Europe said.

Published by: Julia Bolotova

Prices for steel hot-rolled coil in Europe were largely flat on Monday January 30 because buyers did not consider new offer prices to be sustainable, Fastmarkets has heard.
During the week to January 27, European flat steel producers pushed HRC offers upward to €780-800 ($848-869) per tonne for April deliveries. Good order books, limited availability and some restocking were the main factors behind the price rises, sources said.

“Stockholders and [steel service centers] reduced their inventories and were looking to restock in January,” a mill source told Fastmarkets.

Buyers, meanwhile, were holding back, resisting a new price rise, citing insufficient steel demand.

“This [HRC price increase] looks like a price bubble because it is not supported by a recovery in demand,” a trading source in Germany said.

“I don’t think that those prices will be accepted in the next 1-2 months,” another source in Northern Europe said. “I think those prices are not sustainable in the current market.”

One buyer source said that tradeable values for HRC in Northern Europe were around €730-750 per tonne ex-works.

Notably, buyers were worried about EU mills bringing idled capacities back into operation, pointing out that recent price increases achieved in HRC transactions, compared with the fourth quarter of 2022, have come mainly thanks to the more balanced market, itself a consequence of numerous earlier output cuts.

This month, SSAB and US Steel Kosice have restarted blast furnaces, while ArcelorMittal was considering the possibility of such a restart in Spain.

Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe, at €755.42 ($820.87) per tonne on Monday, up by €1.67 per tonne from €753.75 per tonne on Friday.

The latest calculation of the index was up by €2.92 per tonne week on week, and by €86.67 per tonne month on month.

In Southern Europe, Fastmarkets’ calculation of the corresponding daily steel HRC index, domestic, exw Italy, was €751.25 per tonne on Monday, up by €0.83 per tonne from €750.42 per tonne on Friday.

The latest calculation of the index was up by €12.80 per tonne week on week and by €98.75 per tonne month on month.

Offers of April-delivery HRC from mills in the region were heard at €780 per tonne delivered, equivalent to around €760-765 per tonne ex-works.

Similarly to Northern Europe, Italian producers raised their offers during the week to January 27.

Buyers’ indications of tradable prices were still at €730-750 per tonne ex-works, sources told Fastmarkets.

Import offers from Asia were reported on Monday at €710-715 per tonne CFR.

Published by: Julia Bolotova