World Steel: July global steel output increases 6.6% on year
China, the world’s largest steel producer, produced 90.80 million mt of crude steel in July, up 12% year on year. India, the second-largest world steel producer, saw its production rise 14% year on year to 11.48 million mt.
In Japan, the third-largest worldwide steel producer, production increased 0.9% year on year to 7.39 million mt.
Production in the EU in July fell 7.1% year on year to 10.32 million mt, with production in Germany, the seventh-largest worldwide steel producer, seeing output fall 0.5% to 2.98 million mt.
German output in July was pulled lower by owing to a slowdown in industrial production and subdued market demand, according to WV Stahl, the German steel federation. Electric steel production in particular fared particularly badly in June, falling 17% on the year, according to the federation.
German crude steel output by blast furnaces in July increased 6.1% year on year to 2.26 million mt.
In Iran, crude steel production was heavily disrupted by a cyberattack on June 26 that forced one of the countries largest steel companies, state-owned Khuzestan Steel Company, to halt production.
According to World Steel, Iranian crude steel production was 1.98 million mt in July, down 37% from the previous month but only 1.5% lower year-on-year.
Japanese output was up 0.9% year on year at 7.39 million mt, while US production of 6.95 million mt was 0.5% higher year on year.
South Korea’s production for July was reported at 5.71 million mt, down 9% year on year but 3.3% higher on a monthly basis while Turkey produced 2.89 million mt, up 6.4% year on year
Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Northern Europe at Eur635/mt ex-works Ruhr Aug. 21, down 35% since March 30.
Majority of EU HRC mills inactive in the market, offer rise likely
Majority of the European steelmakers have withdrawn offers of hot-rolled coil on Aug. 22 and they are expected to return to the market in early September, seeking higher prices.
Only one German steelmaker has been offering HRC at Eur650/mt ex-works Ruhr or delivered Ruhr, depending on the buyers’ location. Other German and Northwest European mills have withdrawn offers from the market or remained inactive.
Some sources said that the big steelmaker has already increased offers by Eur50/mt, but the information has not been widely confirmed in the market. Majority of market participants expect the EU mills to increase prices by at least Eur50/mt and the new target price would be Eur700/mt ex-works Ruhr.
“The mills will increase offers after September holidays,” a German service center source said. “They hope that the seasonal demand recovery would give an impulse that would increase the prices.”
Market participants estimated tradable values at Eur630-650/mt ex-works Ruhr.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up Eur10/mt on the day at Eur645/mt ex-works Ruhr on Aug. 22.
Buyers, however, have been skeptical about bullish mood of the mills due to largely negative demand outlook for the second half of the year.
“I do not see buyers accepting higher prices, as demand outlook remains rather gloomy,” a trader said.
Platts is part of S&P Global Commodity Insights.
Author Maria Tanatar
European HRC market awaits higher offers after summer break
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €635.00 ($691.48) per tonne on Tuesday, up by €0.42 per tonne from €634.58 per tonne the previous day.
But the index was down by €9.58 per tonne week on week and down by €21.25 per tonne month on month.
Firm offers were rare in the market, while buyers’ estimates of tradeable prices were reported between €630 and €650 per tonne ex-works.
European producers were mulling price increases from September, according to several sources, amid expectations of increased trading and tighter supply, due to maintenance work at some mills.
Some mills gave price ideas of €700 per tonne ex-works for October-November rolling HRC. But other market sources pointed out that some mills still have September-rolling HRC available.
“Steel-service centers form their pricing policy based on expectations of [HRC] offer prices starting with a ‘7’ [meaning €700 per tonne or more]. However, it is still debatable whether such prices could be achieved,” a trading source said.
Buyers were skeptical that such massive rises would actually be accepted, considering the gloomy prospects for consumption.
“End-user demand is likely to remain low,” a second trader said. “We do expect some restocking, because distributors and steel service centers will need to close gaps in [their] stocks, but restocking is likely to be limited.”
Fastmarkets’ calculation of its daily steel hot-rolled coil index, domestic, exw Italy, was €627.50 per tonne on Tuesday, down by €2.50 per tonne from €630.00 per tonne the previous day.
The Italian index was also down by €6.18 per tonne week on week, and down by €10.83 per tonne month on month.
There was no trading in the Italian market due to seasonal absences. Local mills and buyers were expected to come back to the market in the week starting August 28.
Market sources suggested that Italian mills were likely to push offers to €700 per tonne ex-works, but doubted that such prices would be accepted by buyers, given the slow demand and the availability of import tonnages bought at competitive prices, expected to arrive into the market during September.
Currently, buyers’ estimates of tradeable prices for HRC were no higher than €620-640 per tonne ex-works.
Offers of November-December delivery HRC from Asian mills to Italy were reported at €600-630 per tonne CFR.
Published by: Julia Bolotova
Chinese surge lifts global steel output in July
Global crude steel output increased 6.6% on-year in July to 158.5 million tonnes, as Chinese output surged and US production remained stable, Kallanish notes from worldsteel data. It was however down 0.5% on June.
Chinese steel output was up 11.5% on-year in July to 90.8mt, while Indian output grew 14% to 11.48mt. Japanese output was up 1% to 7.39mt but South Korean production fell 9% to 5.7mt. Compared to June, however, Chinese output was slightly down.
EU27 output dropped 7% on-year in July to 10.3mt, with German output down 0.5% to 2.96mt but Italian production estimated up 2.8% to 1.65mt. Spanish and French output were both estimated to have fallen. EU output also fell 2% versus June.
Turkish production rose 6% to 2.89mt.
US production inched up 0.5% to 6.95mt, but Brazilian output fell 4.7% to 2.7mt.
Russian output is estimated to have risen 5.8% in July to 6.3mt.
Crude steel output in the 63 countries monitored by worldsteel was thus flat on-year in January-July at 1.103 billion tonnes.
Adam Smith Poland
Polish housing construction downtrend could accelerate: ING
Polish housing construction is unlikely to improve this year and the downtrend could even accelerate till year-end, while positive industrial and commercial construction will not be sufficient to offset this, says ING Bank.
Polish construction output rose by 1.1% year-on-year in July, significantly below expectations of 2.5%. EU-backed infrastructure projects continue to be the main growth driver, while housing remains a major drag, the bank says in a note sent to Kallanish.
Civil engineering, which rose by 11.8% year-on-year, remains construction’s biggest growth driver. “This is most likely because there are still incomplete infrastructure projects planned under the last settlement year of the ‘old’ EU budget. The experience of previous EU budget perspectives allows us to assume that dynamic growth in this category will be maintained (or even accelerated) until the end of this year,” ING observes.
The construction of buildings, primarily residential, remains the weak spot, falling by 7.8% in July. The number of housing units under construction remains on a strong downward trend from record levels in the first half of 2022 but is still at a fairly high historical level.
“Combined with weak demand at the turn of the year, the result is a very high number of apartments on offer, enough to cover demand for many months. Therefore, even a significant increase in interest in housing related to the government’s ‘2% Safe Credit’ programme will not be enough to substantially improve housing construction this year,” ING says.
Major Polish rebar producer CMC Poland said last month that May-quarter performance was impacted by Polish construction activity decelerating and industrial production across Central Europe remaining muted.
Adam Smith Poland
EU coil demand, mills’ backlogs appear blurry
The EU coil market remains quiet amid the typical summer season and September is not seen bringing a major change, with observers keeping their expectations modest.
“I feel like demand will slightly pick up, but there will not be a big jump – the main reasons [as previously] for demand weakness remain valid,” one Swiss-based source tells Kallanish. Concurring, a Scandinavian buyer considers demand from the automotive industry to be fairly okay, but sentiment in other sectors to remain weak. Both see prices from northwest European mills still hovering at around €650/tonne ($707) for hot rolled coil, with an €80+ premium for cold rolled and around €100+ for galvanized coil.
One mill source claims price levels are some €50/t above that. He also sees “relatively stable demand in most segments and very strong demand in the automotive and heavy truck industry.” However, those mills not primarily serving those sectors will be more prone to making price concessions.
One Dutch buyer notes that several EU steelmakers claim their order books are full, partly due to the holiday period and maintenance work. But he also observes that some mills are looking for new orders and wonders to what extent mills can be trusted regarding what they say about their utilisation and order backlogs. He sees current delivery times of October to November, “which does not make most buyers too nervous at the moment”.
A Belgian buyer tells of lead times into December at one mill group. But he is critical as to whether this translates to real demand. “I can’t imagine they have that many orders, so that points to deliberately reduced capacity,” he says.
Christian Koehl Germany
German steel product sales and stocks dip amid manufacturing slowdown
Steel product sales in the German distribution and stockholding system totaled 776,079 mt in July, down 0.7% from a year earlier, German steel stockholders’ association BDS reported Aug. 22
The July total was down 6.5% from the 829,612 mt sold in June, as the slowdown in German industrial production and weak demand weighed on the market.
Germany’s industrial output fell for a second consecutive month in June, with a drop of 1.5% on a monthly basis, worsening from the previous month’s dip of 0.1%.
Within the overall sales figures, monthly sales of long products totaled 244,917 mt, down 6.4% year on year and little changed from the prior month. Monthly sales of flat products were reported at 476,850 mt, up 3.9% on the year but down 9.1% on the month.
Weaker demand from stockists was also evident in the monthly steel inventories which fell 11.8% on the year to 2 million mt. Stocks of long products were reported at 684,005 mt, down 14.3% on the year and 2.1% lower on the month, while those of flat products were reported at 1.29 million mt, down 10.7% on the year but up 5.9% on the month.
Platts, part of S&P Global Commodity Insights, assessed domestic hot-rolled coil prices in Northern Europe at Eur635/mt ex-works Ruhr Aug. 21, down 35% since March 30.
Author: Euan Sadden
