Day: 16 March 2023

HBIS Group Serbia Iron & Steel will resume operations this week at its idled blast furnace, according to media reports. It plans to ramp up production to full capacity this month.

HBIS Serbia did not reply to Kallanish’s request for comment before deadline.

According to reports, the enterprise will operate both blast furnaces, but will suspend one BF in summer for maintenance.

The firm idled blast furnace No.1 at its Smederevo works last July due to low global demand for steel products (see Kallanish passim), saying the unit would be restarted once conditions improve.

The plant in Smederevo can produce about 2.2 million tonnes/year of steel with its two furnaces, while No.1 alone has a capacity of about 900,000 t/y. Product range comprises hot and cold rolled coil, pickled coil and electrolytic tinplate.

HBIS Serbia’s production in January-September 2022 amounted to 901,000t (see Kallanish passim).

The company’s exports to the EU market during the first seven months of 2022, meanwhile, were 397,000t, up by 3.9% on-year.

Serbia’s production of crude steel totalled 100,200t in January, down by 7.4% on-year, according to the latest worldsteel data. In 2022, the country’s output was 1.67 million tonnes, up by 0.3% on-year.

Svetoslav Abrossimov Bulgaria

Not quite two weeks ago, Tata Nederland declared force majeure over the malfunction of a cold-rolling mill at Ijmuiden that has failed to run up properly.

The announcement has of course raised concern in the coil market over potential supply shortages. But not across the board. “I do not see it causing any shortage,” an Austrian manager tells Kallanish. “We are far from it, and there are enough of others [suppliers] to compensate.”

Another Austrian however offers a different view. “You do feel that Tata is out of the game; their problems do have repercussions,” he says. Meanwhile, a German trader denies current outages pretty explicitly as “definitely non-existing”. But he, too, concedes they could come further down the road – mainly for automotive coil grades, rather than for commodity DC01 coil. Northwest European mills’ current DC01 CRC transaction values are pegged at €930/tonne ($984).

A differentiated view comes from a person closer to the source of the problem in the Netherlands who observes the overall market’s purchasing behaviour. “European buyers who had so far postponed their restocking will now face trouble,” a Dutch manager believes. He furthermore points at nearby Belgium, where he hears of similar problems at NLMK, which possibly still needs to fully recover from its fire in December.

Christian Koehl Germany

European traders have noted in recent weeks a revival of interest in Indian hot rolled coil, after a year in which orders were significantly below the levels registered in 2021, Kallanish notes.

Indian HRC offer prices are currently increasing (see related story), but they remain the most competitive for EU buyers looking to purchase from third countries.

“I see offers from India now at some €790/tonne [$836] cfr southern Europe, up almost €60/t compared with mid-February,” a trader notes. “This increase confirms that they have had success in booking volumes during the last weeks, for sure.”

According to Eurofer data, last year India supplied around 650,000 tonnes of HRC into Europe, half the volume imported in 2021. This figure was in line with 2020 and the lowest since 2016.

During the first quarter of this year, arrivals of HRC from India have continued to remain slow. According to data compiled by UK Steel, by the end of February only around 10%, or 55,000t, of available EU safeguard quotas had been used for Indian HRC. This trend could nevertheless be reversed in Q2 as volumes ordered during January and February will be arriving in Europe.

Indian sources confirm that mills are currently looking to sell mainly small lots into Europe, to achieve higher prices than when booking bulk volumes.

Emanuele Norsa Italy

Italian rebar producers and buyers alike remained bullish regarding future price increases amid rising input costs.
Despite prevailing optimism about a future uptrend, demand remained slow and market activity was quiet in the week to Wednesday March 15, sources said.

Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €730-760 ($782-814) per tonne on Wednesday, narrowing upwards by €5 per tonne from €725-760 last week.

Energy costs are expected to rise in the Italian rebar market following an announcement from the Italian government that support provided to steel producers to lower energy costs could be reduced starting from April 1, Fastmarkets heard.

Despite the fact that energy costs have been dropping considerably over 2023, mills in Italy have been provided with ongoing support from the government.

With the government reducing these subsidies, energy costs could weigh heavier on production costs and support price increases, Fastmarkets heard.

“Prices are expected to move upwards in the next two weeks due to sharp and fast increases in scrap prices and significant reductions in energy cost support granted to certain heavy industries by the Italian government starting from April 1 onwards,” a producer source said.

Despite the expected price increases, demand remained subdued.

“The market is quiet, and prices are stable since last week,” another source told Fastmarkets.

“Prices are the same as last week and little has changed in terms of market fundamentals,” a trader source said. “However, scrap prices are increasing a lot, so we expect prices to start rising.”

Spain
Rising input costs could support future price rises in the Spanish rebar market, Fastmarkets heard.

Rebar prices were stable week on week.

Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €740-770 per tonne on Wednesday unchanged week on week.

International scrap prices, which have been rising since December 2022, have affected the price of all long steel products.

Fastmarkets’ daily calculation of the index for steel scrap HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey was $459.26 per tonne on March 15, up from $456.26 per tonne last week.

Published by: India-Inés Levy

Downstream flat steel prices in Europe increased in the week to Wednesday March 15, driven by limited supply, Fastmarkets heard.
European producers of cold-rolled and hot-dipped galvanized coil had good order books and could offer coil with June-July delivery to the market.

Offers for CRC in the region were reported at €940-970 ($1,007-1,039) per tonne EXW and at €970-990 per tonne EXW for HDG during the assessment week.

Estimations of tradeable values, meanwhile, were reported at €920-950 per tonne for CRC and at €950-970 per tonne for HDG.

Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €920-950 per tonne on Wednesday, up by €10-30 per tonne from €910-920 per tonne on March 8.

Fastmarkets’ corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €950-970 per tonne on Wednesday, up by €20-30 per tonne from €930-940 per tonne on March 8.

Buyers preferred to book small lots of CRC and HDG, given long lead times and mixed views on market trends in the summer.

The demand from the automotive industry — a major end-user — was stable recently.

“Demand from the automotive industry had stopped dropping; it has stabilized since early 2023, but we do not see it increasing,” a distributor said.

Nevertheless, supply of CRC and HDG in Europe was still falling short of demand, with the situation aggravated by production issues at one of the major suppliers.

Tata Steel Netherlands declared force majeure on CRC deliveries in late February, which is supposed to have aggravated the supply tightness, according to sources.

Southern Europe
Producers in Southern Europe were also aiming for higher prices, despite cautious buying. Similar to Northern Europe, tight supply was the major factor behind the price rise.

Offers for CRC in Southern Europe were heard in the range of €930-950 per tonne EXW during the assessment week, while buyers’ estimations of tradeable levels were heard at €920-930 per tonne EXW.

HDG offers in the region were heard at €950-970 per tonne EXW. Transactions for small lots were heard at €940-950 per tonne EXW.

“[A supplier in Italy] was offering us €950 per tonne EXW for HDG [in the week to March 10], but starting this week the minimum offer from them is €970 per tonne EXW,” a distributor in Italy said.

Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €920-930 per tonne on Wednesday, up by €10-20 per tonne from €900-920 per tonne on March 8.

The corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Southern Europe was €940-950 per tonne on Wednesday, up by €10-30 per tonne from €910-940 per tonne on March 8.

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

Import offers to the region remained limited and quite high. Most overseas supplier could offer May-June shipment, which would mean July-August arrival.

So, general buying interest for imports was rather weak due to long lead times and safeguards-related risks.

CRC offers from South Korea were heard at €865-875 per tonne CFR for May-June shipment, compared with the latest bookings at €835 per tonne CFR done from South Korea in February.

Two sources also reported an offer for a limited allocation of CRC from Taiwan at €820 per tonne CFR, but it was not clear if the offer was still standing.

An offer for 0.5mm HDG with Z100 coating from Vietnam was heard at around $1,045 per tonne CFR for May shipment, stable week-on-week. No bookings were reported at this level during the assessment week so far.

Published by: Julia Bolotova

Prices for steel hot-rolled coil across Europe were stable or slightly higher on Wednesday March 15, despite limited trading, with low availability cited as the major market driver, sources told Fastmarkets.
HRC producers in Northern Europe were offering June-delivery HRC at €840-870 ($900-932) per tonne ex-works, sources said.

Earlier in the week, ArcelorMittal increased its European flat-steel prices once again, with new offers for HRC reported at €870 per tonne ex-works and at €990 per tonne ex-works for hot-dipped galvanized coil, effective for June deliveries.

Some buyers in Germany said that tradable values were no higher than €820-830 per tonne ex-works, but producer sources said that such prices were no longer achievable. Transactions were only reported for small tonnages of HRC, at €830-840 per tonne ex-works.

Trading sources from the Benelux area estimated a workable price of €840-850 per tonne ex-works.

Numerous production restarts announced by European mills since January this year have yet to affect the market.

“Mills are managing their capacities wisely, keeping buyers hungry,” a distributor in the region said.

One integrated mill in the Netherlands was reported to be out of the market for technical reasons, sources said.

“Customers of [an integrated mill in the Netherlands] are inquiring with other producers for automotive grades [of HRC],” a trading source said.

Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €837.92 per tonne on Wednesday, up by €2.42 per tonne from €835.50 per tonne the previous day.

The latest calculation of the index was up by €13.23 per tonne week on week and by €71.04 per tonne month on month.

HRC prices in the region were likely to keep climbing in March, supported by reduced supply, sources said.

In southern Europe, Fastmarkets’ calculation of its daily steel hot-rolled coil index, domestic, exw Italy, was €815.50 per tonne on March 15, up by €2.78 per tonne from €812.72 per tonne on Tuesday.

The latest calculation of the index was up by €20.34 per tonne week on week and by €58.00 per tonne month on month.

Offers were reported at €820-830 per tonne ex-works in Italy, mainly for June-delivery HRC. One supplier was targeting prices as high as €850 per tonne ex-works.

Buyers, meanwhile, reported estimates of tradable values at €800-820 per tonne ex-works.

Imported HRC prices were largely unattractive for European buyers, given long lead times. Notably, offers from Southeast Asia for May-June shipment were reported at €780-790 per tonne CFR.

India-origin HRC was offered at $830-840 per tonne CFR to Southern Europe. A transaction for a limited tonnage of HRC from one Indian supplier was, however, reported at €750 per tonne CFR during the week to March 10, two sources said.

But they added that this offer price was no longer available in the week starting March 13.

Published by: Julia Bolotova

Steel, metals and energy grouping GFG Alliance has disclosed the arguments it planned to present in court at a hearing on March 15 as it seeks to overturn the administration of the collapsed UK steel producer Aartee Bright Bar.

The group acquired ABB on Feb. 17 with the intention of incorporating it 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.

According to a statement released March 14, GFG planned to argue that ABB was wrongly put into administration by financial services provider FGI Finance, which was being advised by management firm Alvarez & Marsal.

The group said that it has a business plan that would ensure AAB remains solvent and which is supported by the majority of its creditors.

According to GFG, AAB would also benefit from ongoing financial support from the group in order to cover working capital needs and satisfy existing creditors.

GFG also noted that it has already provided GBP620,000 to fund wages and avoid immediate redundancies.

“The administration process at ABB is unjustified, unnecessary and unsupported by a majority of its creditors and employees whose jobs are on the line,” said chief transformation officer Jeffrey Kabel.

“We urge creditors, employees and stakeholders to get behind our application to save ABB,” he added.

Platts, part of S&P Global Commodity Insights, assessed the weekly UK hot-rolled coil price at GBP 755/mt ($918/mt) DDP West Midlands March 9, down 38.3% from the all-time high of GBP 1,225/mt April 22, 2022.

— Euan Sadden

ArcelorMittal has increased offers for hot-rolled coil across Europe as other mills have not been active in the market, and market participants expect them to also move prices up, sources told S&P Global Commodity Insights March 15.

ArcelorMittal has set new prices for June shipment coil at Eur870/mt ex-works Ruhr, up by Eur20-30/mt from previous offers.

Trading activity, in the meantime, remained limited as buyers have been holding back from acquiring bigger lots of coil. The reluctance to buy volumes was caused by uncertainty in price sustainability in the third quarter. European steelmakers have been offering May-July shipment flat steel, indicating full order books.

The supply from both domestic and overseas mills has remained tight. European mills have full order books, equipment restarted in February-March has not reached necessary production rates, and technological issues at Tata Steel’s cold-rolling mill in the Netherlands contributed to the issue. Tata Steel Nederland invoked force majeure due to difficulties following its Cold Mill 21 upgrade, the steelmaker had said Feb. 24

“Situation at Tata Steel has a big influence in the market,” a steelmaker source said. “Their customers are now looking for alternative supply, but mills are not interested in selling spot, but they can offer any other longer-term arrangement.”

“There is lack of supply and offers both from European mills and imports,” a trader said.

As a result, buyers have been accepting higher prices only for small tonnages of specifications they needed to restock.

The further price recovery could be supported by such trading activity in the short run, but prices are expected to soften in the second half of summer, following the traditional market cycle, sources said.

“Customers are reluctant to buy,” another mill source said. “There is almost no interest in the commodity coil, but anything with higher added value is booked. But not big volumes. Some mills withdrew offers and are preparing to increase offers.”

Platts assessed domestic hot-rolled coil prices at Eur850/mt ex-works Ruhr March 15, up by Eur2.50/mt day on day.

The assessment was based on deals and tradable values reported at Eur840-850/mt ex-works Ruhr and offers heard at Eur870/mt ex-works Ruhr.

In South Europe, the assessment for domestic hot-rolled coil prices remained unchanged at Eur810/mt ex-works Italy March 15.

Deals have been heard at Eur800-810/mt ex-works Italy and tradable values at Eur800-820/mt ex-works. Offers were expected to rise to Eur850-870/mt ex-works Italy.

The number of import offers heard in the market has been limited, and the only material available from Asia was for delivery in late July-August. As a result, buyers have been holding back from overseas bookings.

Platts assessed prices for imported hot-rolled coil in Northwest Europe at Eur780/mt CIF Antwerp March 15, up by Eur10/mt day on day. Offers of the material from Asia have been heard at Eur780-800/mt CIF Antwerp.

Platts assessed import prices for hot-rolled coil in South Europe up by Eur10/mt day on day to Eur770/mt CIF Italy March 15.

Material from Asia has been offered at Eur770-800/mt CIF Italy and from Egypt at Eur820/mt CIF Italy.

Platts is part of S&P Global Commodity Insights.

— Maria Tanatar