EU steelmakers want more import measures
European steelmakers want more effective tools to challenge low-cost and high-carbon intensity imports, which are gaining an increasing share of overall market supply.
Imports represented over 23pc of total European hot-rolled coil supply in July, according to Argus calculations, and this is set to increase in the coming months as over 1mn t cleared into the EU’s other countries’ quota in October. Utilisation rates at domestic European mills are at around 50-60pc owing to weak demand for domestic product.
In the cold-rolled coil segment, imports make up 35-39pc of total European market supply, steelmaking executives told Argus.
Domestic mills cannot compete with overseas producers’ because they face higher energy costs and have to pay carbon costs that producers in other locations do not incur. European producers are paying around €32/t ($34/t) for carbon, assuming a European carbon price of €80/t and the fact that mills have a deficit of allowances of around 20pc they need to purchase. The marginal cost is €160/t, with average carbon emissions at 2t for each tonne of steel produced.
The EU’s carbon border adjustment mechanism does not require overseas producers to pay for carbon emitted during steel production until 2026, leading European mills to feel unprotected from imports of steel produced in places where there are no carbon costs — despite import quotas and dumping duties on a number of countries. Mills do not expect the current safeguards to be extended, as EU trade commissioner Valdis Dombrovskis has hinted that they will lapse.
“The nonchalance of this flagrant and destructive lack of level playing, and the naivety of politicians and the commission is incredible,” one senior steelmaking executive told Argus.
Director general of European steel association Eurofer Axel Eggert told Argus that he wants the EU and US to deliver on negotiations for a global arrangement on sustainable steel and aluminium (GSSA), which have been under way since early 2021. Only 10 days remain for the sides to agree on a GSSA, if a reimposition of tariffs issued under former president Donald Trump is to be avoided.
“It’s not only China that’s massively pushing outside investment in steel production capacity. Countries like Indonesia also have to be tackled when doing an assessment,” Eggert said. “Traditional trade defence instruments aren’t able to do this. You target one product and one country. But state-driven overcapacity is about everything — all related steel products,” he added, pointing to excess capacity reaching almost 600mn t.
A further 150mn t of carbon-intensive capacity additions are planned between now and 2026, which will emit more carbon than the entire European steel industry, Eggert said. This capacity would wipe out all EU steel industry emission reduction efforts up to 2050 in just three years, Eurofer said.
Eurofer has not been approached about anti-subsidy measures on Chinese steel, which the US has reportedly requested in the GSSA negotiations.
“We don’t know what will be presented. We are simply saying there need to be additional tools,” Eggert said. Anti-subsidy measures are already in place on some Chinese steel products, including hot-rolled coil.
Supply shortages push up European stainless steel prices despite sluggish demand
Fastmarkets’ monthly price assessment for stainless steel cold-rolled sheet 2mm grade 304 transaction domestic, delivered North Europe, was €2,550-2,650 ($2,700-2,805) per tonne on Friday, up from €2,500-2,600 per tonne on September 1.
A shortage in the stainless steel flat products market is the reason prices are moving up, despite the disappointing demand, a producer source told Fastmarkets.
“[The shortage] is due to many [market participants] deciding to stop importing from Thailand and instead opting to buy from Europe. Big mills are offering material for shipment in November-December, which means material won’t be available to the end-user market before January 2024,” the producer source said.
October’s price increase is the first increase since February and the first price change since July.
There was no reason for the upward trend to stop in the coming months and distributors will be faced with a “pursuit to survive,” the producer source said.
And a distributor source said: “We’ve never been so uncertain as we are now, because of the macro-economic situation – because of Germany and because there is no demand. Everyone is in waiting mode.”
The distributor raised concerns about the closed nature of the market – in which suppliers can set prices and decide production levels.
“This situation is causing fear among distributors. We are waiting because [suppliers] are now increasing the prices, but the market is not [willing to] pay [those prices],” he said.
A second distributor hinted at potential “price dumping” and said: “If import materials decrease, we believe that a lot of the distributors will try to sell at any price.”
Fastmarket’s monthly stainless steel cold-rolled sheet 2mm grade 304 alloy surcharge domestic, Europe, was €2,193-2,212 per tonne on Friday, up from €2,179-2,209 per tonne one month earlier.
Surcharges for October will typically be based on alloy component costs between August 20 and September 21, when the average three-month daily official nickel price on the London Metal Exchange was $20,337 per tonne, a $740-per-tonne decline from $21,077 per tonne one month earlier.
Published by: Zdravko Cherkezov
Celsa takeover moves ahead, industrial partner sought
The Spanish government will need to approve the move, but the investment funds have agreed to the main request made by authorities: find an industrial partner to acquire a 20% stake in the group, Kallanish understands.
According to Spanish sources, if all goes smoothly, control of Celsa could pass to the new owners by mid-2024. Media reports suggest industrial partner candidates include Sidenor, Megasa, as well as Hierros Anon – the owner of Siderurgica Balboa.
Emanuele Norsa Italy
CBAM risks creating two-tier market: Assofermet meeting
Speaking at last week’s meeting organised by Italian steel trade association Assofermet in Rome, Gianclaudio Torlizzi said the right conditions do not exist to impose European green steel standards uniformly across all countries of the world.
Volatility is a key aspect of the post-pandemic market. “Today, companies find themselves operating in a completely different market than the one we were used to until a few years ago … We are witnessing new difficulties in business, and creating long-term strategies becomes particularly complex,” Torlizzi observed.
The event focused on sustainability and new challenges. “The theme of the conference underlines how much the green wave is changing the way of life and the way of doing business,” Assofermet says in a note obtained by Kallanish.
“For those who deal with steel, decarbonisation is an economic-financial and technological commitment strongly influenced by the political context,” notes merchant bar maker Beltrame’s chief commercial officer, Enrico Fornelli.
The CBAM mechanism could lead to an increase in steel import prices of around 15%. It currently applies only to some steel products, which impacts end-users and downstream companies, exposing them to unfair competition with importers of competing finished products who would face no restrictions or taxation, Assofermet stated last month.
If not radically revised, it risks undermining the competitiveness of an important part of the EU manufacturing sector.
The transitional CBAM period will expire on 31 December 2025. Until that time, buyers will have to fulfil only a part of the mechanism’s regulations. Assofermet hopes that before the start of the definitive period, on 1 January 2026, the EU will be able to modify the measure to reconcile the environmental transition with the economic consequences that arise from the implementation of the EU Green Deal and Fit For 55.
Natalia Capra France
Strategic partnership between Kaltenbach.Solutions and Fraunhofer IPA
Kaltenbach.Solutions GmbH has agreed on a strategic partnership in the field of sawing technology with the Fraunhofer Institute for Production Engineering and Automation (IPA) in Stuttgart. The aim of this joint project is to measurably and sustainably increase the efficiency of sawing machines used in steel and wood processing through the use of digital solutions.
Due to the great demand from the steel and wood processing industries, a solution for the simple digitization of sawing processes is being developed in the Sawing Technology business unit of the Fraunhofer IPA. With 1200 employees, the Institute for Manufacturing Engineering and Automation is one of the largest institutions in the Fraunhofer-Gesellschaft. Its research activities focus on the economic production of sustainable and personalized products. In the field of sawing technology, machines and production lines are tested under the direction of Tim Mayer, in addition to components, devices and processes. As a specialist in digital transformation in steel processing, Kaltenbach.Solutions is contributing its proven industry expertise to the agreed collaboration.
Sawing machines in industry are designed for maximum material capacity, which leads to high demands on the processing quality and the cost efficiency of the workflows. In the first step of the project, automatic data evaluation is planned for circular and band saws in trial operation on Fraunhofer IPA machines. Findings obtained here will subsequently be transferred to series operation. As part of the strategic partnership with Kaltenbach.Solutions, the aim is to achieve a sustainable increase in efficiency in the use of sawing machines through the use of digital monitoring.
Source: kaltenbach-solutions.com