Day: 7 June 2023

Some apparent demand for welded tube is forecast to resurface in the second half of June as both distributors and end-users in Italy have low stocks and are expected to come back to purchasing. The European market is currently in a deadlock that started several weeks ago, market sources tell Kallanish.

Real demand is also particularly subdued. Discounts are at some 33-35 points in Italy. Values fell significantly in May, in line with dropping hot rolled coil prices. The tube price weakness is seen continuing, with discounts declining by a couple of points per week over the next few weeks.

Some sources however believe the bottom is not far off because HRC import offers seem to have stopped falling. A stabilisation in both imported and European HRC levels is expected by end-June. However, for the next two days, values for coil and its derivatives will continue to edge down, sources believe.

Some European countries, such as France and Germany, are also going through a heavy destocking phase. Sources also expect German buyers to come back to restocking by the end of the month, which should trigger a more balanced market in terms of demand and supply.

Natalia Capra France

Only hand-to-mouth trading was reported in the European hot-rolled coil market on Tuesday June 6, Fastmarkets understands, with buyers holding back in the expectation that prices will fall further as June progresses.In Northern Europe, distributors and stockholders were only purchasing small tonnages of coil to cover gaps in stocks of specific grades or sizes, sources said.

Buyers said they had enough material in stock and could therefore afford to hold back from restocking for a little longer. They added that they expected prices to hit the floor at some point in June.

“The level of stock at distributors and stockholders is still quite high, while [HRC prices] keep falling – so, not a good time for restocking,” a distributor in the region said. “Besides, negotiations with the automotive [sector] for the second-half of 2023 are still not finalized,” the source added.

Expectations regarding the price floor varied, however.

Some buyers expect HRC prices in the region to stabilize at around €650 ($695) per tonne EXW, while other suggested that €700 per tonne EXW would be the cost line for the producers.

The latest offers from integrated mills in Northern Europe came in at €720-740 per tonne EXW, for August-September delivery HRC, while Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €721.04 ($771.56) per tonne on Tuesday, down by €2.29 per tonne from €723.33 per tonne on Monday.

The latest calculation of the Northern European index was down by €27.09 per tonne week on week and by €100.59 per tonne month on month.

Fastmarkets’ corresponding daily steel HRC index, domestic, exw Italy was calculated at €667.50 per tonne on Tuesday, down by €2.50 per tonne from €670.00 per tonne on Monday.

The index was down by €13.13 per tonne week on week and by €132.50 per tonne month on month.

Buyer sources in Italy said that local mills were will to sell at €670-680 per tonne CPT, which would net back to €650-660 per tonne EXW, for July-August delivery.

A mill source reported an offer at €680 per tonne EXW, but said discounts were still possible for larger tonnages.

Transactions were, however, limited, because buyers remain unconvinced that prices have reached rock bottom yet.

Overseas suppliers, meanwhile, were resisting an further downturn in prices, sources said.

Offers from one Japanese supplier for August shipment HRC were heard at €585 per tonne CFR, while another producer from the nation was aiming for around €595-600 per tonne CFR – the same offer seen in the week to June 2.

In general, however, HRC offers from Asian mills were consolidating at around €580-590 per tonne CFR for August shipment, sources said.

Other sources, however, said that some Vietnamese mills were willing to accept €560 per tonne CFR for tonnages of 20,000 tonnes or more.

Published by: Julia Bolotova

Stellantis is partnering with scrap merchant Galloo to boost the automaker’s end-of-life Vehicle (ELVs) recycling, Kallanish notes.

The firms will create a joint venture to collect and recycle ELVs initially in France, Belgium and Luxembourg, working with selected Authorised Treatment Facilities. The new company will be operative at the end of this year, offering its services to other automakers and eventually expanding its scope to other European countries.

This will “make it easy for customers to recycle their End-of-Life Vehicles,” a joint note says. “Returning parts and materials to the value chain preserves scarce resources.” The aim of the project is to accelerate Stellantis’s circular economy.

Galloo already collaborates for ELVs collection and scrapping with Peugeot and Citroën. It recycles over 1 million tonnes/year of steel and about 60,000t of other metals.

Stellantis, whose Circular Economy Business Unit’s strategy is “reman, repair, reuse, recycle” expects a ten-fold increase in its recycling revenue and a four-fold increase in its scrapping parts revenue by 2030. The company is targeting more than €2 billion ($2.1 billion) in recycling turnover by the end of this decade.

Natalia Capra France