Day: 24 February 2023

European cold-rolled and hot-dipped galvanized coil prices were stable to slightly higher in the week to Wednesday February 23 and, despite still-subdued trading, mills are set to increase their offers, citing good order books and limited supplies, Fastmarkets understands.
European producers are largely sold out of April delivery CRC and HDG and are now offering May lead times, sources said.

Producers in Northern Europe maintained their offers for May delivery CRC at €900-920 ($957-979) per tonne EXW and at €920-940 per tonne EXW for HDG, but those prices were still above the level of reported transactions, sources added.

Notably, tradable values were heard at €880-900 per tonne EXW for CRC and €880-910 per tonne EXW for HDG in the north.

One Italian mill was offering HDG to Germany at €940 per tonne delivered.

But trading activity was still muted in both Northern and Southern Europe in the seven days to Wednesday because buyers have not yet started restocking for May volumes.

Producers were quite optimistic, however, citing good order books and limited supply.

Steel mills producing CRC and HDG have been running at reduced rates, keeping the market balanced, sources said.

Fastmarkets’ weekly price assessment for steel CRC domestic, exw Northern Europe was €880-900 per tonne on Wednesday, widening up by €10 per tonne from €880-890 per tonne last week.

Fastmarkets’ corresponding weekly price assessment for steel HDG domestic, exw Northern Europe was €880-910 per tonne on Wednesday, widening from €900 per tonne seven days ago.

Both price assessments reflected the lower end of offers, rare deals and estimates of achievable prices made in the week to February 22.

Southern Europe

Fastmarkets’ weekly price assessment for steel CRC domestic, exw Southern Europe was €880-890 per tonne on Wednesday, narrowing up by €10 per tonne from €870-890 week-on-week.

The corresponding weekly price assessment for steel HDG domestic, exw Southern Europe also unchanged week on week at €880-900 per tonne on February 22.

Both assessments reflect the lower end of offers, rare deals and estimates of achievable prices.

CRC offers in the region were heard at €900-920 per tonne delivered (€880-900 per tonne EXW), while HDG offers came in at €920-940 per tonne delivered (€900-920 per tonne EXW).

Buyer estimates of achievable prices were reported at lower levels during the assessment week, however – at €870-880 per tonne EXW for CRC and at €870-900 per tonne for HDG.

Trading was also quiet in Southern Europe during the assessment week, with most buyers having no need to restock.

Sources said they expect distributors and steel service centers to come back to the market in about two weeks’ time for May volumes, with higher offer prices likely to be gradually accepted in deals

Import offers to the region, meanwhile, were scarce and quite high, supporting the uptrend in the domestic market.

An offer of CRC from South Korea was heard in Southern Europe at around €840 per tonne CFR, sources told Fastmarkets.

And a CRC offer from Japan was heard at €850-860 per tonne CFR for April shipment.

Sources also reported an offer from Vietnam for 0.5mm HDG with Z100 coating at around €900 per tonne CFR.

Published by: Julia Bolotova

The steel hollow sections market in Europe remained stable in the week to Wednesday February 22, with minimal trading because of weak demand, market sources said.
Fastmarkets’ weekly price assessment for steel sections (medium), domestic, delivered Northern Europe, was €970-980 ($1,032-1,042) per tonne on Wednesday, unchanged from a week earlier.

The corresponding weekly price assessment for steel sections (medium), domestic, delivered Southern Europe, was also €970-980 per tonne on Wednesday, similarly stable week on week.

Sections prices increased last week due to rising costs for hot-rolled coil feedstock, but the market remained quiet amid low consumption by the construction sector, market participants said.

HRC feedstock costs have risen over the past seven days, but some sources expected a downtrend in these prices due to low end-user demand.

Fastmarkets’ daily calculation of its steel hot-rolled coil index, domestic, exw Northern Europe, was €776.00 per tonne on Wednesday, up by €9.12 per tonne from €766.88 per tonne a week earlier.

Published by: Holly Chant

Syntagma Capital has issued an exclusive put option to purchase high-speed steel producer Erasteel from French miner Eramet, Kallanish notes.

The sale of the company should be completed “in the months ahead”, Eramet says in its 2022 earnings report. In June last year, the miner signed a share purchase agreement with a consortium that includes Airbus, Safran and Tikehau Ace Capital to buy its lossmaking subsidiary Aubert & Duval (A&D). The divestment of A&D is expected to be completed at the end of March. Together with Erasteel, A&D is part of Eramet’s high-performance alloys division.

In February, Eramet said this divestment is in line with the company’s strategic roadmap, which aims to refocus on its upstream activities and develop in metals for the energy transition. The miner has been looking for a buyer for its troubled French subsidiary since last year (see Kallanish passim).

Last year, Erasteel’s turnover increased by 48% to €273 million ($289m). The sales growth of high-speed steels “was also supported by the positive impact of reinvoicing raw material and energy price increases to customers … EBITDA almost doubled, ending at €23m in 2022. The high level of Erasteel’s order book enables the entity to face the first half of 2023 with confidence, despite the macroeconomic uncertainties weighing on its main markets,” the report says.

Natalia Capra France

The European Commission has given the go-ahead to the buyout of Italy’s Compagnia Siderurgica Italiana by German longs specialist Steelag.

Located near Vicenza in northern Italy, Compagnia Siderurgica Italiana is a sheet treatment service centre performing plasma, laser and oxy-fuel cutting and calendaring, CNC machining, bending, sandblasting and chamfering.

With a capacity of over 40,000 tonnes/year, the company serves mostly the construction industry. Steelag Deutschland specialises in the production and distribution of construction steel such as rebar in bars and coils, wire mesh and cold-drawn wire products supplying customers in Germany, Austria and Belgium and expanding into flat products in Italy thanks to the acquisition.

The Commission concluded that the proposed acquisition would raise no competition concerns, “given the limited overlaps and vertical links between the companies’ activities in the relevant markets in the European Economic Area,” the EU says in a note seen by Kallanish.

Natalia Capra France

Northwestern European buyers keep questioning if prices of more than €900/t ($953) for hot-dip galvanized coil can be achieved by domestic mills, but they have fewer doubts about the more than €800/t called for hot-rolled coil.

Various sources point out that especially steel service centres are cautious about accepting the latest price hikes by the market leader mill, as they are having trouble handing them down to their customers. This would paint galvanized coil as a typical SSC product in particular.

A northern European mill manager concedes that “we have some reluctance from distributors /SSCs to accept, as they see challenges with increasing their resale prices.” Still, he claims that his HDG prices have passed the €900/t mark already “and are very close to €950/t.” Against this stands the word of a manager at a northern fabricator, who tells Kallanish that he still buys HDG below €900/t and HRC below €800/t.

The latter option could be expiring, however, other buyers say.

“For HRC the direction is most clear. Within 2-4 weeks we will see in prices of €800/t+, no doubt about that,” one Dutch manager finds. “Demand is a little increasing and competition is not available at the moment.”

A German SSC buyer confirms that “no mill currently sells for a figure starting with a 7.” He notes that in January lead times stretched to 11 weeks, “which is rather long for straight black material.” This duration has not shortened since, although quite many mills are bringing back idled blast furnace capacity.

He doubts that mills are being kept very busy in terms of order intake.

“Warehouses restocked in January, but there is not enough demand to keep up buying; I myself sell rather little these days,” he cautions.

Christian Koehl Germany

UK steel, metals, chemicals and paper industries are set to benefit from exemptions to green levies and network charges proposed by the government under the British Industry Supercharger scheme, the Department for Business, Energy and Industrial Strategy said Feb. 23.

A day earlier British Steel announced it would shut its Scunthorpe coking ovens and cut up to 260 jobs, noting its energy and carbon offsetting costs had increased by GBP190 million ($229 million) in 2022.

“The measures announced by the Business and Trade Secretary Kemi Badenoch today will bring the energy costs of the UK’s energy-intensive industries in line with those charged across the world’s major economies,” BEIS said.

The government is to consult on the measures and bring forward legislation in due course, meaning the relief might not start for a year, Director General of UK Steel Gareth Stace said Feb. 23.

Support under the British Industry Supercharger scheme would be available to 300 businesses exposed to the cost of electricity, notably in the steel, metals, chemicals, and paper sectors, BEIS said.

“These industries employ around 400,000 skilled workers right across the UK and support many more in their supply chains. In 2019, their exports made up around 28% of total UK exports,” the ministry said.

Exemptions would relate to renewable energy obligations such as the Feed-in Tariff, Contracts for Difference and the Renewables Obligation, as well as GB Capacity Market costs.

The government would also look at reductions on network charges, BEIS said.

Speaking to BBC Radio, UK Steel’s Stace said UK industrial electricity prices “have been uncompetitive for many years, and today, this announcement from the government goes a long way to bridging the gap between what we pay and what our competitors pay in France and Germany.”

UK steel had been paying 60% more for its energy than its German competitors, Stace said.

“There is a long way to go, and what is particularly concerning is that we might see our electricity prices going down in just over a year’s time” given the government’s proposals had only just gone into consultation, he said.

“My fear is that if we don’t see competitive power and carbon prices within the year we won’t see investments and we might see more closures,” he said.

In a statement to S&P Global Commodity Insights, Liberty Steel, a subsidiary of GFG Alliance and the UK’s third-largest steel producer, also welcomed the announcement but warned that the UK steel industry faces immediate challenges that require further intervention from the UK government.

“With the proposed new measures subject to consultation and not expected to be in place until Spring 2024, the challenges the steel industry in the UK has been facing for some time are still set to continue for another year,” GFG said

“The Chancellor has an opportunity with the budget statement in March to set out additional measures that will foster more confidence in the UK’s commitment to enabling a sustainable future for the industry and its customers, and to securing jobs, growth, and economic resilience in communities across the UK,” it added.

Chemical Industries Association Chief Executive Steve Elliott described the announcement as “welcome news” for UK manufacturers but noted that the package only applies to a “limited number of firms” with many businesses still subject to “high and increasingly volatile prices.”

The CEO of the UK Aluminium Federation, Tom Jones, said that Alfed “very much welcomes” the announcement of the British Industry Supercharger scheme and the measures to reduce UK electricity prices for energy-intensive industries.

“Industrial growth, the development of the UK’s aluminum sector, and job creation come from our sector being competitive with Europe and the rest of the world. This action today from the government recognizes the strategic value of UK manufacturing, the contribution the sector makes to the UK economy and its role in the drive to developing a sustainable manufacturing future,” Jones said.

Two weeks ago, Alfed called on the government to develop a long-term integrated green growth plan encompassing all the departments of the UK government.

Aluminum is among the UK’s most energy-intensive industries. The UK currently has only one aluminum smelter, operated by GFG Alliance in Scotland, although various processing works in the UK make aluminum products, including extrusions. A large smelter previously operated by Alcan at Lynemouth in northern England was mothballed in 2012 due to factors like high electricity prices.

UK spot wholesale prices assessed by Platts, part of S&P Global, are averaging Eur156.11/MWh in the year to Feb. 23, 28% higher than the comparable EPEX spot price average for Germany.

— Henry Edwardes-Evans, Staff

Steel, metals and energy grouping GFG Alliance will go to court on Feb. 24 seeking to overturn the administration process of Aartee Bright Bar, it said Feb. 23.

GFG Alliance acquired the collapsed UK steel company on Feb. 17 with the intention of incorporating ABB into its Liberty Steel Group subsidiary.

The acquisition followed the appointment of administrators over ABB on Feb. 6, with the company citing challenging economic conditions and high metal costs for its collapse.

On Feb. 17, GFG said it would seek to restart operations across ABB’s two UK productions sites in the West Midlands, and three distribution and sales offices in Warwickshire, Lancashire and South Wales.

“GFG believes the administration is unjustified and unnecessary and risks an ongoing insolvency process that will lead to significant job losses and a fire sale of the business’ assets,” said Liberty Steel chief transformation officer Jeffrey Kabel.

“The alternative is clear: maintain the business as a going concern and integrate it into Liberty Steel’s UK operations, securing workers’ livelihoods and protecting a vital part of the UK’s steel supply chain and distribution network,” he added.

GFG Alliance also described the administration of Aartee Bright Bar Property as “grossly inappropriate” and advised that GFG is reserving its rights to commence ancillary proceedings to prevent a sale of the properties and for it to exit administration expediently.

Platts, part of S&P Global Commodity Insights, assessed the weekly UK hot-rolled coil price at GBP 730/mt ($871/mt) DDP West Midlands Feb. 16 down 40.4% from the all-time high of GBP 1,225/mt April 22, 2022.

— Euan Sadden