Day: 13 March 2023

Klöckner & Co expects global steel markets will increasingly normalise this year. A stronger demand trend in the company’s key European and US markets will bring a considerable increase in shipments compared to 2022, it predicts.

Last year, the volume of shipments dropped by 4% on-year to 4.7 million tonnes, owing to a disciplined margin-over-volume strategy in early 2022, and negative macroeconomic environment in the second half, Klöckner says. Regarding the development of prices, the German-based steel distribution group expects a lower level overall compared to the prior-year period and correspondingly lower revenue.

At the group’s annual press conference in Dusseldorf last week, attended by Kallanish, chief executive Guido Kerkhoff stated that overall demand in the first two months of 2023 in Europe and the USA “has been stronger than we had thought”. Sold volumes have risen quarter-on-quarter, as the automotive industry recovers from shortages, books at plant-builders are full, and infrastructure projects are a driver mainly in the USA.

In 2022, high average prices boosted the group’s revenue significantly year-on-year to €9.4 billion ($10 billion). Despite the challenging economic environment, it achieved what it says was a strong operating income (Ebitda) of €417 million before material special effects, after €848m in 2021.

Christian Koehl Germany

Blastr Green Steel plans to invest in an iron ore pelletising plant in Gildeskål municipality, northern Norway, Kallanish learns from the company. The pellet plant will supply Blastr’s projected steelmaking plant in Inkoo, Finland.

The planned facility in Gildeskål will convert iron ore pellet feed into high-quality direct reduction pellet, which is used as raw material for green steel production. The power needed for the process will be based on hydropower, and Blastr is now in discussions about long-term power contracts. The location is considered beneficial as it provides an ice-free harbour with easy access to seaborne iron ore from the Norwegian Sea, Blastr notes.

It says the plant will provide 120 jobs when operational, in addition to significant indirect employment opportunities and economic effects for the municipality and the region. The investment in Gildeskål is estimated to exceed €1 billion ($1.06 billion). According to Blastr chief executive Hans Fredrik Wittusen, the pellet plant will also supply “a significant and growing world market for direct reduction pellets”.

A final investment decision is expected in 2025, subject to relevant permits and agreements. The plant is tentatively planned to start production in 2028.

Christian Koehl Germany

French and Benelux scrap prices are increasing compared to February by some €20-30/tonne ($21-31), depending on each mill and their needs. This is on the back of strong demand and increasing Turkish import prices.

The price surges are in line with other countries, like Italy, Spain and the Eastern European region, where values are surging by approximately €20-25/t on average. This is having the effect to level up prices in Europe and thinning the gap between countries for most grades. E8 new arisings mixed grade is now at around €400/t delivered in most EU markets, Kallanish observes.

French and Benelux shredded and chiselled E40 and E1 continue to be in short supply and in demand, unlike E8. Higher volumes are being bought in Belgium and Luxembourg to satisfy March production needs. This month, French and Benelux domestic shredded E40 is reaching the level of €415-420/t delivered, while E8 is sold at €395-400/t, E1 is hovering at €375-380/t, and E3 is at €395-405/t delivered, sources suggest.

Natalia Capra France

The increase in coil prices observed in Germany, the Benelux and even Italy do not seem to be replicating in the Austrian market, Kallanish hears from observers.

While north of the Alps the market leader is seen successfully pushing up hot rolled coil prices twice in recent weeks to €850/tonne ($906) currently, Austrian buyers did not even accept the first move. “They [the mill] did try for a €50 leap three weeks ago, but ended up not getting a single cent more,” one buyer says. In the first days of March, his company still secured a deal at the preceding price level of around €780/t, he adds.

He does not reveal the seller company but adds that the local mill is also wishing for higher prices, but cannot extort them in an environment of reservation and low demand. “They told me only last week that they are trying, but that the market does not accept,” he says.

Another manager tells of rumours in the market about offers at even lower values than the deal of the above buyer. According to his sources, the offers come from mill-owned service centres. If true, this would mean contradicting sales strategies on the steelmakers’ side. It gives Austria a special position, sandwiched between big neighbours Germany and Italy, both with price levels relatively close to one another.

Christian Koehl Germany

Serbia’s sole flat steel producer, Hebei Iron and Steel Serbia (HBIS Serbia), is going to restart one of its two blast furnaces (BF) after several months of downtime, several sources told Fastmarkets on Friday March 10. HBIS Serbia stopped its smaller BF in July 2022 due to prolonged poor demand and falling prices, Fastmarkets reported at the time.

Several sources familiar with the matter told Fastmarkets that the company is going to restart the idled BF in the week beginning March 13.

“They [HBIS Serbia] will be running with two BFs for three months and then stop one BF for maintenance during summer [2023],” one source told Fastmarkets.

HBIS Serbia did not reply to a request for a comment by the time of publication.

HBIS Serbia operates two BFs with combined capacity of 2.2 million tonnes per year of pig iron. The company produces hot-rolled and cold-rolled coil, and tinplate products.

Flat steel prices across Europe started to recover this January, supported by limited supply and restocking activity.

In February, Fastmarkets’ daily steel HRC index, domestic, exw Northern Europe averaged €768.42 ($811.72) per tonne. This was up by €48.06 per tonne from a monthly average of €720.36 per tonne in January.

A number of European steel producers have restarted steelmaking capacities since the beginning of 2023 as a result of the potential for improved profits.

Meanwhile, some European HRC market participants worry that a gradual reignition of idled capacity bears a risk of killing the uptrend in flat steel prices in the second half of 2023 should end-user demand not recover.

Published by: Julia Bolotova