Domestic CRC, HDG prices in Europe pressured by slow consumption
European CRC and HDG producers avoided giving firm offers due to the weakness in the market, sticking to a “case-by-case” approach, Fastmarkets heard.
“The outlook is uncertain for October as demand from end users keeps slowing down. Steel service centers have thin order books and [are booking] less [CRC and HDG],” a mill source said.
Some mills in the region were still offering coil for October delivery, an indication of thin order books.
Slowing demand from end-user sectors was pressuring prices down, while producers were reluctant to reduce offers, citing high costs.
Buyers’ estimates of tradable values were between €730-740 ($780-791) per tonne ex-works for CRC and no higher €750-760 per tonne ex-works for HDG in Northern Europe.
One mill estimated the price for CRC at €750 per tonne EXW and around €770-780 per tonne for HDG.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €730-740 per tonne on Wednesday, down by €10 per tonne from €740-750 per tonne on September 13.
And the corresponding weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €750-770 per tonne on Wednesday, down by €10-20 from €770-780 per tonne seven days ago.
Import suppliers of CRC to Europe were trying to push offers a bit higher after a series of booking in the first half of September.
Notably, transactions for Asia-origin CRC for October-November shipment were done at €660-670 per tonne CFR Southern Europe earlier this month.
Unlike for hot-rolled coil, quota availability was not a problem for CRC, so buyers showed interest in bookings.
Current offers from South Korea, Japan and Taiwan were around €680-690 per tonne CFR. And a Vietnamese supplier was offering $830-840 per tonne CFR for 0.5mm HDG with Z100-120 coating for November shipment.
Published by: Julia Bolotova
No rebound in sight for European HRC amid end-user consumption concerns
In Northern Europe, trading was close to nil, with most buyers postponing restocking.
“We expect restocking to begin in October or even November, as demand by end users is slowing down. So why buy when clients need less material and at the same time prices are under pressure?” a distributor in the region said.
Most buyers indicated that tradeable prices for HRC in the region were €620-640 ($663-684) per tonne ex-works, while producer sources were sticking to €640-650 per tonne ex-works.
Sources pointed out that firm offers were rare, with mills offering on a “case-by-case” approach. Lead times were quite short, around five to six weeks, indicating thin order books.
The major concern for market participants remained slowing end-user demand, with no signs of recovery this year.
“[Steel service centers] also have short orderbooks and therefore thin purchasing activity,” another source said.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €634.88 per tonne on Wednesday, down by €0.12 per tonne from €635.00 per tonne the previous day.
The index was down by €7.20 per tonne week on week and by €1.37 per tonne month on month.
Fastmarkets’ calculation of its corresponding daily steel hot-rolled coil index domestic, exw Italy, meanwhile, was €622.08 per tonne on Wednesday, down by €1.25 per tonne from €623.33 per tonne on the previous day.
The Italian index was down by €5.25 per tonne week on week and by €7.92 per tonne month on month.
Domestic mills in Italy continued to avoid giving firm offers in a slow market, also preferring to conduct business on a “case-by-case” basis.
Buyers’ idea of the tradeable price level for HRC in the country was no higher than €620-630 per tonne ex-works.
Actual trading, however, was very meager in the Italian market, similarly to Northern Europe.
“It is a very quiet September, very few transactions. Our sales to end users are lower year-on-year, and we are not sure prices have touched the bottom yet, so nobody’s buying [HRC],” a steel service center source in Italy said.
Imports offers of HRC to Europe were broadly flat on Wednesday compared with a day earlier, but interest in imported coil remained low due to long lead times, the small gap with domestic prices and high safeguard-related risks.
An offer from a Vietnamese mill to Italy was heard at $630 per tonne CFR for January arrival.
Offers from Taiwan for January-delivery HRC were heard at around €590-595 per tonne CFR to Italy.
And Japan-origin HRC was offered by a trader at €600-610 per tonne CFR to Italy for January-arrival.
Published by: Julia Bolotova
Banks eyeing industry green financing, costs will reduce
Banks will increasingly provide green or sustainable financing to industry at lower cost, as competition between them increases and new technologies become tried and tested. However, this financing must be clearly defined to make sure it is in fact supporting environmentally conscious projects. So said participants at this week’s European Steel Congress in Katowice.
The steel industry is more volatile than the wider economy and therefore harder to finance, but banks do it willingly as they understand the risks, Andrzej Bialek, strategic clients department director at Bank Pekao, said during the event’s green financing panel attended by Kallanish. However, the prospect of investing into new, untested technology without some form of sponsor makes obtaining bank financing more difficult, he added.
The cost of green financing/second party opinion should reduce in future and the lending margins charged by banks will narrow, Bialek added.
Lukasz Smigasiewicz, financial director at Polish coal exporter and steel processor Weglokoks, said the benefit of procuring green financing today is just reputational, rather than cost saving. Banks are providing lending on the basis of the company’s operations rather than “some green idea”, he pointed out, “so why would you lower lending margins?”
Marcin Terebelski, industrial development programme director at Polish development bank BGK, added that green financing must be clearly defined because banks are obliged to report the funds, which are then verified.
There may be no cost benefit yet for green financing off-takers but the reputational benefit is important as “your supply chain is looking at your image”, Terebelski observed. Banks have green financing written into their strategies and will be increasingly looking to provide it, he added. However, the sector must be aware of the risk of big corporations overstating their ESG credentials in the reports they publish.
Adam Smith Poland
Cogne Acciai Speciali completes SMP acquisition
Italian stainless long steel producer Cogne Acciai Speciali, a subsidiary of Taiwanese stainless steelmaker Walsin Lihwa, has completed the acquisition of Sheffield-headquartered Special Melted Products (SMP) from Germany’s Mutares SE & Co. KgaA, Kallanish learns from Cogne.
Cogne’s shareholders implemented a €200 million ($214m) capital increase earlier this month in view of the merger. “With this acquisition, we take a significant step forwards in our growth path, which thanks to Special Melted Products is enriched by a top-notch equipment and product mix, complementary to ours,” says Cogne Acciai Speciali chief executive Massimiliano Burelli.
Last month, Taiwan’s Fair Trade Commission gave the go ahead for Walsin Lihwa’s acquisition of SMP. The commission said the two companies produce stainless steel billet and bar, but SMP has no record of sales to Taiwan and no future plans for the market. Therefore, the deal was approved because it would not restrict competition for the product in the Taiwan market.
Walsin is investing over €110m in Cogne’s Aosta plant between 2022-2024. The growth strategy involves gaining market share in Europe and Asia, and developing the group’s presence in the US.
Natalia Capra France
Salzgitter orders hydrogen plant from Andritz
Salzgitter has selected technology group Andritz to supply one of Europe’s largest green hydrogen plants.
The plant is part of the SALCOS (Salzgitter Low CO2 Steel) programme, which aims to achieve virtually CO2-free steel production. Andritz will build a 100MW electrolysis plant at the site of the steelmaker’s strip unit in Salzgitter. It will involve partner company HydrogenPro, “whose pressurised electrolyser stacks are very well suited for large-scale industrial applications”, says Andritz executive Domenico Iacovelli.
Starting in 2026, the plant will produce around 9,000 tonnes/year of green hydrogen, which will be used to produce green steel. This will mark the start of the industrial utilisation of hydrogen under the SALCOS programme, Salzgitter emphasises.
At MBI Infosource’s Stahltag event this week, Salzgitter Mannesmann Handel chief executive Sebastian Bross gave details on the challenges of the SALCOS project. In spring, Salzgitter was the first EU steel mill to get European Commission approval for funding by the national government, to the tune of €1 billion ($1.1 billion).
An additional €1.3 billion will have to be paid by the company, against many odds, Kallanish heard from Bross at the conference. “We will have to earn that money, defying rising energy costs and international competition,” he said.
In the final phase of its transition, at the end of 2033, Salzgitter plans to have shut down its blast furnaces in favour of direct reduced iron and EAF facilities. “It remains to be seen if it will transpire like that,” Bross noted. “It might well be that we have to hit the ‘recalculate route’ button along the way.”
Christian Koehl Germany
Industry foots decarbonisation bill, CCUS investment required: conference
The steel industry is likely to pick up a substantial portion of the massive bill needed for decarbonisation, while carbon capture utilisation and storage (CCUS) must be used to bridge the energy gap for the time being. So said participants at this week’s European Steel Congress in Katowice.
European industry is competing with firms in other regions that have different capital sources and financing conditions, as well as adhere to different regulations, EY CESA power & utilities leader Jarosław Wajer pointed out at the event attended by Kallanish. “If we look at what happens during crises, governments always side with the final consumer, meaning investors get hit,” he observed.
The costs of decarbonisation will need to be borne either way. Poland is “the China of Europe” as it exports many components to other European countries, and consumers will increasingly demand that their supply chains are green, Wajer added.
Artur Beck from the Togetair climate summit asserted that in order to be competitive, Poland “needs to fight for EU funds, we need to fight for green hydrogen, do everything we can to invest in technology.” Competition with China is one thing, but the playing field within the EU itself is also uneven, when one considers that France has such a large share of nuclear in its energy mix, he added.
Swietokrzyska Grupa Przemyslowa Industria SMR director Slawomir Malara meanwhile said his company’s small modular reactor should be online by 2034. SMRs will play a big role in Poland’s energy mix in future, but “I don’t see any SMR projects starting before 2030”, he added.
Polish state assets deputy minister Marek Wesoly said Polish policy has moved away from using natural gas as a transition fuel, since the break in cooperation with Russia has shown the difficulties of sourcing this from outside Europe.
The state still plans to move away from fossil fuels to hydrogen but not to the detriment of energy security. “Whether we like it or not … today coal is the basis of energy security in Poland. This will be the case until we have a reliable, stable source of renewable energy,” Wesoly commented.
Dominik Kolorz of trade union ZR NSZZ “Solidarnosc” said CCUS is not talked about enough. While three years ago it was considered uneconomic, CO2 emission allowances touched €100/tonne ($107) this year, making it the right time for industry to invest in CCUS. This can be financed by EU as well as Polish state funds. “I support green energy but let’s bear in mind that over the next two decades this will be the most expensive energy source,” he added.
Adam Smith Poland
French rebar market remains uneventful
The French rebar market continues to be weak this month, no different to other European markets. Mills and distributors are reporting low order books and low visibility, Kallanish hears from market participants.
Prices remain stable compared to the beginning of the month, with one distributor reporting a slight decline, while large buyers are on the fence despite stocks being low throughout the country. “All clients are afraid to stock material and they continue to buy one truckload each week. August was a very slow month and our results for September are still unclear. We put together out turnover each day with no visibility,” a distributor comments.
Some orders continue to come from infrastructure projects but no general improvement is seen in the coming weeks. The market is forecast to remain slow and uneventful, with sporadic better days and a general frustrating quiet. Rebar prices are mostly stable at €580-600/tonne ($620-642) delivered, sources suggest.
Natalia Capra France
Small scrap yards will survive consolidation: Stahltag
The relatively nascent trend of scrap yards being taken over by companies that are not recyclers will not mean the end of smaller players, says Sebastian Will, director at German recyclers organisation BVSE.
At MBI Infosource’s Stahltag conference in Frankfurt this week, speakers addressed the challenge of scrap being increasingly sought after as feedstock for both EAFs and oxygen converters, to improve steelmaking CO2 footprint.
Moreover, “Germany exports more than it imports, but it should be the other way round; we need to keep scrap in Europe,” ArcelorMittal Germany spokesman Arne Langner said at the event attended by Kallanish. “For this reason, ArcelorMittal has chosen to buy scrap yards in various countries.” He noted that ArcelorMittal’s takeover of Zlomex in Poland, announced last December, has not yet been finalised.
Apart from direct takeovers, some mills have chosen to forge closer cooperations with recyclers, as is the case with Salzgitter, said Will. He displayed some cynicism about ArcelorMittal’s “clever move” last year to acquire three yards from Alba. For the big recycling group, it was a welcome opportunity to get rid of yards that were performing poorly and in poor condition, he opined.
He noted that big recycler groups like TSR tend to have enormous costs and low margins to keep their networks running. “They may have big flagship suppliers like VW, but they also pay big for their new scrap, and end up with margins of 1.5%,” Will stated. “There is a learning process going on, and such processes result in small players finding new ways, as they can be faster, while big ones wait until the container is full,” he commented.
He identified one other trend, of companies with no physical operations acquiring scrap yards, to become exporters and to benefit from rising international prices. “This is of course absolutely against the interest of domestic mills, and that is why they are being pressured to act,” he stated.
Christian Koehl Germany
European stainless coil prices seen increasing
European stainless coil prices are seen increasing as mills are implementing hikes for November delivery. Buyers, however, do not believe that values will increase as downstream demand for stainless flats and tubes remains poor, with visibility limited.
Stainless cold rolled coil in northern Europe for October delivery is at about €2,350-2,400/tonne ($2,514-2,568) delivered, while hot rolled coil is at €2,250/t base delivered on average, Kallanish hears. European mills are quoting November delivery at €2,450-2,550/t for CRC and €150/t less for HRC.
“For the moment, clients are not willing to accept increases but they will have to. Prices need to increase more throughout the value chain,” a service centre comments. The firm’s customers have some work on hand, he adds. Demand is “okay” but significantly lower than last year. Strong increases are seen happening for scrap, particularly 316 grade, due to firm molybdenum prices. These, coupled with material shortages, could lift 316 grade by as much as €200/t in the coming weeks.
Multiple sources say European mills are focusing on lobbying to tighten protectionism and investigate possible circumvention of anti-dumping measures on stainless coils.
In August, the European Commission initiated an investigation to examine the potential circumvention of anti-dumping measures placed on imports of stainless steel cold-rolled (SSCR) flat products from Indonesia. This would be done through imports of the same products from Taiwan, Turkey, and Vietnam.
A new regulation mandates that imports of SSCR flat products consigned from Taiwan, Turkey, and Vietnam, whether declared as originating from these countries or not, be subjected to registration during the next nine months (see Kallanish passim).