Day: 29 May 2023

May has been a month of poor orders for French rebar. Quiet activity persists, with material only being bought back-to-back, while export sales to other European markets have reduced considerably.

Distribution sources say last week was slightly livelier in terms of rebar orders but new construction projects in France are being postponed. Buyers’ stocks are said to be relatively low as is the market’s appetite for material. Demand in May has been for one or two truckloads each week. Local mills are implementing production cuts but, given the deadlock in the European construction industry, this does not seem to be having a positive effect on consumption.

After falling in the first half of the month, domestic rebar prices are now keeping mostly stable. Values are at between €650-680/tonne ($697-729) delivered, depending on volume and customer, Kallanish notes.

French private residential construction permits have been falling this year together with the number of new building sites. French construction federation Fédération Française du Bâtiment (FFB) reported earlier this month that in the first quarter construction permits fell by 31% year-on-year.

Natalia Capra France

Southeast Europe (SEE) crude steel production increased in April, according to the latest worldsteel data monitored by Kallanish. Regional output amounted to 317,861 tonnes, compared to 296,394t in March.

In the first four months of the year, regional production decreased to 1.07 million tonnes from 1.44mt in January-April 2022.

However, worldsteel did not provide data for April steel production in Bosnia or Moldova.

Serbia was again the largest steel producer among the seven countries of SEE, which also include Bulgaria, Croatia, Slovenia, Bosnia, North Macedonia and Moldova.

Serbia’s production of crude steel totalled 515,800t in January-April, down by 12.3%.

Second-largest producer in the region Slovenia saw production in the first four months of the year at 206,213t, down by 5.4%.

However, third-largest steel producer Bulgaria saw its crude steel output up by 2.8% to 198,100t.

Fourth-largest steel producer North Macedonia produced 91,181t, up 13.2% on-year.

Fifth-largest Croatia produced 63,375t, down 7.8%.

HBIS Group Serbia Iron & Steel restarted blast furnace No.1 in March at its Smederevo works. The enterprise will operate both blast furnaces, but will suspend one BF in summer for maintenance (see Kallanish passim).

Special steelmaker Slovenian Steel Group (SIJ) reported a 35.3% on-year increase in revenue in 2022 to €1.303 billion ($1.44 billion), of which 84.6% was generated by exports. According to the company, even though production volumes were lower compared to 2021, the group was still able to generate higher sales revenue and improve other financial indicators.

The Bulgarian Association of Metallurgical Industries (BAMI) meanwhile warned earlier this year of increased imports into the EU of rebar and light sections of non-alloy and other alloy steels from Egypt and Algeria.

Svetoslav Abrossimov Bulgaria

Europe’s spend on oil, gas and coal increased from 4% to 10% of GDP last year and this expenditure will remain elevated for the foreseeable future, guest speaker Ole Rolser from McKinsey & Co. said at last week’s Bureau of International Recycling (BIR) Ferrous Division meeting in Amsterdam.

Attributing “record-high” global gas prices last year directly to the conflict in Ukraine, Rolser noted that for energy-intensive industries, many of which form part of the recycling industry’s customer base, these huge energy costs had led to production cuts or even shutdowns. Aided by a notable shift in householder behaviour, Europe’s power demand declined by 3-4% last year when compared to 2021 and by 6-8% in the period from September.

Crude oil prices had now returned to levels seen before the Ukraine conflict, Rolser said, predicting a continuing decline before settling at around $50-60 per barrel, Kallanish notes.

Following a question from outgoing BIR president Tom Bird about the extent of energy company profit-taking now that prices had returned to lower levels, Rolser explained that these businesses were in a high-investment industry that had to contend with substantial volatility. He also noted a greater reluctance to invest owing to the push towards decarbonisation.

In response to a question from George Adams of SA Recycling in the USA, Rolser expressed the view that, with the necessary investment, the EU could become energy-independent of Russia within just a few years. In his presentation, Rolser indicated that the EU has historically relied on Russia to meet around a third of its gas supply, with Germany, Italy and Poland the most exposed.

Burcak Alpman Turkey