British Steel production glitch sparks delivery delays

UK longs producer British Steel is delaying deliveries because of a problem with one of its blast furnaces, according to market sources.

The company has moved to one blast furnace, from two, because it is struggling to make pig iron of sufficient quality, the sources said. There are some suggestions that this could be caused by problems with a batch of imported coke. The company recently took its coking ovens off line with a view to reducing its carbon footprint — and the amount of emissions allowances it needs to buy — and has been importing coke since.

“We are taking decisive action to minimise the potential impact on customers’ orders caused by a production issue,” a company spokesperson told Argus. The spokesperson refused to comment further on the nature of the problem or how many blast furnaces are operating.

The company’s sales director has been ringing customers to inform them that deliveries could slip by 3-4 weeks as a result of the issue, multiple large domestic customers of the mill told Argus.

There are also suggestions that the company has insufficient gas for both its sections and wire rod mills, according to workers at the site and sources close to the company. The spokesperson refused to comment.

Senior officials from British Steel recently met with the head of Liberty Steel, Sanjeev Gupta, in Scunthorpe. It is unclear what was discussed, but sources said one topic could have been gas availability for Liberty Merchant Bar, the site previously operated on coke oven offgases from British Steel.

Others said the discussions could have been centred on state aid in light of the government’s £500mn grant to Tata Steel to help it decarbonise its operations. British Steel also has been in talks with the government and is looking to establish electric arc furnaces to reduce the carbon intensity of its production.


Pandemic, war show European steelmaking importance: Polish minister

The Covid pandemic and Ukraine war have clearly shown the importance of having a domestic steel industry in Europe and made Brussels aware of the dangers of depending on imports of necessary steel inputs. So said Polish state assets minister Jacek Sasin at the European Steel Congress in Katowice on Monday.

European steel production capacity has declined and been replaced by other regions over recent years, resulting in some steel shortages today and the need for imports. Poland imports over 7 million tonnes/year more steel than it exports. This shows the challenges ahead, Sasin said at the event attended by Kallanish.

State-owned Weglokoks is investing into a PLN 5 billion ($1.1 billion) steelworks in Ruda Slaska that will provide “new life” to Poland’s steel industry, setting it on a low-emission course, Sasin pointed out.

There will be no energy transition, strengthening of defence capability, or development of the construction industry without steel, Sasin commented, adding: “Europe understands today that the path to kicking industry out of the region was not a good one.”

Poland’s environment minister, Anna Moskwa, admitted that government decision-making is probably to biggest barrier to ensuring sufficient energy supply for industry. But the government is implementing measures to support domestic industry competitiveness, such as the state support package for energy-intensive industries. This should receive European Commission approval soon, she said.

In 2040, Poland will need – by conservative estimates – double the energy supply it has today, with zero-emission energy especially in demand. Construction of Poland’s first offshore wind farm is to start this year, with 18GW of offshore production expected by 2040. Construction of the first nuclear plant should meanwhile begin in 2026.

The EU’s Carbon Border Adjustment Mechanism (CBAM), meanwhile, due to begin its transition phase from October, involves a too-rapid phaseout of free emissions allowances, which could hurt industry, Moskwa observed. Poland proposed unsuccessfully to Brussels that free allowances be kept during the transition phase, in case it turns out CBAM does not work.

Adam Smith Poland

Wind power park for voestalpine starts running

A wind power park with nine turbines generating power for voestalpine has officially started operation in the Stanglalm region of the state of Styria (Steiermark) in Austria, Kallanish learns from the Austrian Wind Energy Association (IG Windkraft).

The nine Vestas V 126 turbines will together generate 89 gigawatt hours of electricity, according to the association. They come in addition to another nearby wind park also with nine turbines. The energy will be sold exclusively to voestalpine, to feed the steelmaker’s consumption of renewable power from regional sources.

At the opening ceremony, voestalpine executive board member Franz Kainersdorfer emphasised the importance of the wind park for the group’s “greentec steel” transition programme, which involves a changeover to EAFs through 2027. The group last week announced the groundbreaking for its greentec steel programme, which is projected to secure an investment of €1.5 billion ($1.7 billion).

Styria is currently home of 114 wind turbines with a capacity of 294 megawatts. The association sees the potential for as much as 16 terawatts in the state.

Christian Koehl Germany

Steel needs state energy support, slower transition: panel

Poland needs the government to act now on providing cheaper energy to ensure the domestic steel industry remains competitive and survives, said panellists at the European Steel Congress in Katowice on Monday.

Steelmaking is energy intensive and needs to adapt to a host of new EU regulations. The issue must be tackled because energy-intensive industries account for 5% of Poland’s GDP and generate significant value and employment, Polish senator Gabriela Morawska-Stanecka said at the event attended by Kallanish.

A cure for the crisis is the transition to green energy by investing into renewables, but the state must provide incentives for companies to go green, she opined. Securing European Commission approval to access the currently blocked Recovery and Resilience funds, which include some €9 billion ($9.6 billion) funding for renewables, is also critical and will be a challenge for the next government, Morawska-Stanecka observed, referring to next month’s Polish general election.

Polish Steel Association (HIPH) chief executive Mirosław Motyka also said state support on energy is critical and that industry is pinning its hopes on Brussels approving Poland’s energy-intensive industries support package. However, if Germany implements its proposed €60/MWh energy price cap for energy-intensive companies, this would “kill” Polish industry, he added. “So, we’re hoping the Polish state will respond with a similar measure.”

As for the EU’s Carbon Border Adjustment Mechanism (CBAM), its implementation from October is a positive step, but it still needs a solution to support EU steel exports, which will become uncompetitive amid high production costs, Motyka explained.

Stefan Moritz, secretary general of the European Entrepreneurs “CEA-PME” confederation, meanwhile, said Europe’s main challenge is to maintain a strong industrial base amid high costs, with steel being an important material for many end-users but also small and medium-sized enterprises.

SMEs want to maintain European autonomy, meaning not to become dependent on other areas of the world, such as Germany was until recently on Russian gas, or the EU currently is on batteries and windfarm components from China. The taxpayer needs to share the cost of investing into new, cleaner technology, he added.

Member of the European Parliament and former Polish deputy energy minister Grzegorz Tobiszowski questioned if Europe’s green transition really will be green if the enabling components are imported from polluting countries. With Europe turning its back so quickly on the fossil fuel resources it has at home, countries abroad will eye exploiting this by supplying Europe with strategic resources at elevated prices, he warned.

“Ambitions are not enough – we need to think pragmatically,” he concluded, in reference to the speed of the energy transition being set by EU regulations.

Adam Smith Poland

European HRC market quiet amid depressed end-user consumption

Trading remained “dead” across the European hot-rolled coil market, with buyers opting to wait until October to restock, Fastmarkets heard on Monday September 18.

Depressed demand and bearish sentiment continued to drag on buying.

New import quotas on October 1 could prompt a rebound of imported hot-rolled coil into Europe; buyers opted to remain out of the market until gaining greater clarity on import offers, sources told Fastmarkets.

Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €637.50 ($679.44) per tonne on September 18, up by €2.62 per tonne from €634.88 per tonne on September 15.

The index was down by €7.50 per tonne week on week, and up by €1.25 per tonne month on month.

Estimations of tradeable values for HRC in Northern Europe were reported by buyers at €630-650 per tonne ex-works on Monday.

Since early September, offers for October- and November-delivery coil in the region have been reported around €640-670 per tonne ex-works. The upper end of the range was considered unfeasible given current market conditions, sources said.

“Restocking continues to be postponed as buyers look to October, when new import quotas begin,” a buyer source said.

Fastmarkets’ calculation of its daily steel hot-rolled coil index domestic, exw Italy was €626.25 per tonne on September 18, up by just €0.25 per tonne from €626 per tonne on September 15.

The Italian index was also down by €11.25 per tonne week on week, and down by €3.75 per tonne month on month.

Demand remained weak in the Italian HRC market on September 18, Fastmarkets heard.

Buyers’ price ideas were around €620-640 per tonne EXW, for October-November delivery.

A deal was reported by a buyer in the region at €620 per tonne EXW.

“The market is dead at the moment,” a second buyer source said.

Offers for imported stock remained scarce on September 18; however, a few offers from Asian-origin exporters were reported at €600-610 per tonne CFR for 2024 arrival, Fastmarkets heard.

Published by: India-Inés Levy

European distributors create large EU purchasing group

Five European purchasing groups have created a large purchasing unit called Astedis covering a European-wide network.

The groups of distributors that signed a joint cooperation agreement include Spain’s Coalsider, Polish purchasing group European Steel Group, Germany’s Nordwest, Sider Center from Italy, and Socoda from France, Kallanish learns from an Astedis spokesperson.

The five associations together represent over 200 mid-sized steel distributors. The aim of the network is to create synergies and become the sales reference for key European producers as well as develop strategic relationships with all of Europe’s largest manufacturers.

“It is important to the newly created network that the corporate groups continue to be fully independent in their national markets, and that the special features of each of the markets are respected… Private trade among mid-sized companies has become more important in recent years. Astedis wants to become a linchpin within Europe for this trade. We are convinced that our strategic network will create new opportunities for all the partners involved… the cooperation wants to take on future challenges and changes within the steel market related to issues such as digitisation, the changing purchasing markets and green steel”, say Astedis’ members in a note. They add that collaboration between Astedis and main European producers will further strengthen and consolidate steel distribution in a time of profound changes in the market.

The five associations are responsible for an annual purchasing volume of approximately 3.5 million tonnes of steel products. Headquartered in Dortmund, Germany, Nordwest Handel AG registered a trading volume of €5.8 billion ($6.1bn) in 2022. “Its core purposes are to combine purchasing volumes and provide central regulation as well as a strong central warehouse and comprehensive services”, Astedis says. Nordwest is active in Austria, Switzerland, France, Poland, and Benelux. Spain’s Coalsider reached a purchasing volume of more than 185,000t in 2022 of several steel products, from corrugated beams and commercial profiles to tubes, sheets and mesh. It boasts 22 shareholders able to ensure distribution throughout Spain thanks to 39 warehouses. Polish European Steel Group consists of 10 shareholders with 35 warehouses, purchasing about 400,000 t/y while Italy’s Sider Center has an annual purchasing volume of 350,000t with 29 distributors and 42 warehouses. France’s Socoda achieves 500,000t of steel purchases annually through a national network of 33 distributors with 3,000 stocked items in steel, stainless and aluminium.

“This network can be seen as a strength element and will start a dialogue on an international level but respecting the differences of each country involved,” a member of the network comments.

Natalia Capra France