Market stable in Northern European rebar market amid public holiday closures; wire rod prices rise
But there was an uptrend in Northern European wire rod prices in the week to Wednesday, with mills targeting higher prices to offset rising feedstock costs, production cuts and increasing resistance to the acceptance of below-cost prices, sources said.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe, was €610-630 ($644-665) per tonne on Wednesday, narrowing by €10 per tonne from €610-640 per tonne.
Prices remained largely stable in the Northern European rebar market after mills targeted increased offer prices in late October. Demand has improved slightly and those price hikes have largely been accepted by the market, given the higher feedstock and logistics costs and production cuts.
And despite overall consumption remaining relatively subdued, buyers with low stocks are returning to the market and buying low volumes, sources said.
Due to public holidays on November 1 across Europe, activity remained a near-zero in the middle of the week.
“There are public holidays on November 1 across Europe, so the market is not moving. As a result, the rebar market is unchanged,” a buyer source said.
And a second buyer source said: “The market is frozen due to low tonnages being booked and public holidays.”
Other sources remained optimistic about higher prices in November, however.
“Mills have managed to raise prices by €30-40 per tonne through October and with low stocks, buyers need to restock even if it’s only low tonnages, so it is likely that prices will remain stable or continue to edge upwards in the coming month,” a trader source said.
Mills have cut production in a bid to rebalance the supply-demand dynamics, sources said.
Fastmarkets’ corresponding weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, was €600-630 per tonne on Wednesday, up by €5-30 per tonne from €595-600 per tonne.
Sources reported increased offer prices amid the production cuts and a small uptick in consumption.
“Mills have no choice but to raise their prices despite slow activity. Mills are losing money every month and cannot reduce selling prices because the volumes are slow anyway – regardless of the price,” a wire rod buyer source said.
“Everyone will have losses this year and so it is no longer an option to push prices down,” the source added.
Published by: India-Inés Levy
Small rise in Southern European long steel prices mostly accepted by the market
Mills were reported to be targeting price rises of €15-20 per tonne in the coming week, they added, but whether the market will accept any increases remains uncertain.
Wire rod prices rose in Southern Europe amid a small uptick in demand and high input costs, sources said.
Fastmarkets price assessment for steel reinforcing bar (rebar) domestic, exw Italy was €590-615 ($623-649) per tonne on Wednesday, narrowing up by €10 per tonne from €580-615 per tonne last week.
Low demand and high feedstock costs resulted in the broadly unchanged prices in the Italian rebar market, sources said, but mills were not accepting bids below €590-600 per tonne exw, sources said.
“Producers have set the price at €600 per tonne and, since last week, have refused to accept any prices lower than this,” a buyer source said.
A second buyer source said the buying price had been edging up since the start of month.
“The selling price is edging upwards and, as of November 1, mills are placing orders at €590-600 per tonne exw as a minimum,” the source told Fastmarkets.
But a third buyer source was less convinced,
“Rebar prices are increasing, but we will see over the next few days if they will be able to sustain this [or if there are] slightly lower prices” a third source said.
“There was a small uptick in demand during the last week of October,” the source added.
Offer prices were reported at about €610-630 per tonne exw, while estimates of the workable price were closer to €590-600 per tonne, sources told Fastmarkets.
The market largely remains in a wait-and-see mode, however, holding out to see whether the prices rises will be accepted.
Fastmarkets’ price assessment for steel reinforcing bar (rebar), domestic, delivered, Spain was €590-615 per tonne stable week-on-week.
Southern European wire rod
Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Southern Europe, was €590-600 per tonne on Wednesday up by €10-20 per tonne from €570-590 per tonne.
Mills have pushed for higher prices in the wire rod market amid increasing feedstock costs and production cuts and the hikes have largely been accepted, Fastmarkets understands.
“Mills remain firm in their offer prices, understanding that dropping prices will not stimulate consumption.But with production cuts, the market dynamics could help to support the acceptance of the price rises,” a wire rod trader source said.
Published by: India-Inés Levy
HRC restocking in Europe continues to push up prices
The sustainability of the uptrend remains to be seen, however, because end-user demand for steel remains poor across Europe.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €631.63 ($666.89) per tonne on November 1, up by €9.13 from €622.50 per tonne on Wednesday.
The index was up by €18.21 per tonne week on week and by €11.63 per tonne month on month.
Integrated steelmakers in the region were aiming to get €680 per tonne ex-works for January rolling coil.
“We have now closed sales for Q4, with lead times [going] into Q1 [2024],” a steel mill source told Fastmarkets.
Some steelmakers were reportedly still offering discounts for HRC, but only for December delivery coil.
And transactions for fourth-quarter delivery HRC were heard reported at €620-640 per tonne ex-works in the region.
“We can offer some very limited volumes [of HRC] for December delivery, but those are vanishing because buyers are starting to come back to the market,” a second steelmaker source said.
But others said the improved demand was largely due to restocking activity rather than any improvement in end-user consumption.
“People are buying to cover their first-quarter needs. It has been almost two months without restocking,” a stockholder said.
In Southern Europe, Fastmarkets’ calculated its daily steel hot-rolled coil index domestic, exw Italy at €615 per tonne on November 2, up by €11.25 per tonne €603.75 on November 1.
The Italian index was up by €15 per tonne week on week, but down by €9.37 per tonne month on month.
Deals for December-delivery coil were reported at €600-620 per tonne ex-works in the region, while for January lead times, offers were closer to €650 per tonne delivered, which nets back to €635 per tonne ex-works.
One integrated mill in the region was reportedly targeting even higher prices – at around €680 per tonne ex-works. But market participants said the mill only had limited quantities of available HRC, due to being largely focused on sales of more high-margin products, such as galvanized coil.
In Italy, buyers were also restocking, which, along with lack of import offers, was supporting price increases there.
“Buyers want to secure tonnages for first-quarter delivery [and fear] further price spikes in January amid reduced supplies,” a local trader source told Fastmarkets.
Import offers were scarce in the week starting October 30, with overseas suppliers reportedly mulling higher prices.
Sources also told Fastmarkets that previous offers of HRC at €580 per tonne CFR from Asian mills were no longer available.
Published by: Julia Bolotova
Malaysian government plans to tackle regional overcapacity
The Malaysian government plans to engage with China and Southeast Asian authorities to tackle overcapacity in the steel industry.
“The challenge [for the steel industry] is overcapacity. I hope Malaysian steel industry together with the government will be able to have more dialogue and also more be collaborative for cooperation. We hope we can engage with China in a collaborative manner, and also engage with ASEAN states to look at the overcapacity issue in Southeast Asia,” Ministry of Investment, Trade and Industry (Malaysia) deputy minister Liew Chin Tong told reporters on the sidelines of the Malaysian Iron & Steel Industry Federation (MISIF) trade forum that was attended by Kallanish.
However, he did not give a timeline for the engagement, only saying that the ministry will “work on it.” He also emphasises that he hopes to tackle the issue in a collaborative manner, instead of curbing Chinese investment in Malaysia’s steel industry.
He also notes that China’s experience is something that industry players and authorities could share as the Chinese government has successfully tackled overcapacity by taking out up to 150 million tonnes/year of capacity from the steel industry.
It notes that the Southeast Asia Iron and Steel Institute (SEAISI) continues to see unsustainable overcapacity looming in ASEAN-6 – Vietnam, Thailand, Singapore, Philippines, Malaysia, and Indonesia.
SEAISI secretary general Yeoh Wee Jin says in the forum that he expects that the new integrated mill capacities of 71.9m t/y and new electric arc furnace capacities of 4.7m t/y in ASEAN will lead to overcapacity in the region in the next few years.
“Should all integrated mill capacities come on stream, there will be more than 70mt [per year] of steel coming from all the potential integrated mills in ASEAN,” he says, adding that the potential overcapacity would lead to industry losses.
According to him, ASEAN existing steel capacity stands at 75.3 million tonnes/year. This includes steel capacity of 23.2m t/y in Vietnam, 13.8m t/y in Thailand, 16.1m t/y in Malaysia, 0.8m t/y in Singapore, 18.5m t/y in Indonesia, and 3m t/y in the Philippines.
He foresees steel capacity in ASEAN reaching 151.9m t/y. This will include steel capacity of 28.8m t/y in Vietnam, 13.8m t/y in Thailand, 48.9m t/y in Malaysia, 0.8m t/y in Singapore, 41.5m t/y in Indonesia, and 18.2m t/y in the Philippines.
Siew Mung Tan Malaysia
ArcelorMittal raises European HRC offers, import competition weakens
ArcelorMittal has started announcing to its buyers its intention to raise offer levels for January orders to €680/t ex-works North Europe for HRC, according to market sources.
The new offer levels indicate a jump of some €50/t from the latest transaction levels registered by Kallanish. The mill is convinced the increase is justified by the fact sales for Q4 allocations have been closed.
The European market remains cautious at the moment, but a strengthening of offers was anticipated by market sources. Meanwhile import options are seen less competitive than in September/October.
Traders reported an offer in the market this week at €610/t CIF South Europe from Egypt. These volumes would be shipped in February. One trader noted that the allocations are possibly already fulfilled, while another stressed nevertheless that February shipping would likely mean customs clearance in April due to safeguard quotas, and therefore very late. Vietnam could offer prices slightly below Egypt, but with delivery also likely to be in Q2.
“Turkish suppliers are offering at $690-700/t CIF (€648-658/t) with duties already included,” a trader added. “Asian suppliers are not competitive at the moment due to the long lead time.”
According to the latest data available, HRC imports into Europe during the first eight months of this year jumped 13.8% y-o-y to 6.1mt. Imports of CRC and metallic coated coils on the other hand moved down compared with last year.
Emanuele Norsa Italy
Italian rerollers aim for higher heavy plate prices
Italian mills have been offering plate at Eur700/mt ex-works Italy minimum, but no deals have been reported at higher prices yet. The latest transactions have settled at Eur670/mt ex-works Italy.
Platts assessed domestic prices for heavy plate in Italy stable week on week to Eur675/mt ex-works Italy Nov. 2.
The next round of slab purchases were expected to be settled at higher prices due to a rise in raw material costs. In addition, energy costs have also moved up in Italy. As a result, the mills needed to push up plate prices to cover higher costs.
“Slab prices will go up in the next round of deals, and we already have thin margins,” an Italian reroller said.
Platts assessed prices for imported slab in South Europe up by $10/mt week on week to $580/mt CIF Italy Nov. 3.
Offers of slab suitable for heavy plate rolling have been reported at $580-$600/mt CIF Italy.
Platts assessed domestic prices in Northwest Europe stable week on week at Eur790/mt ex-works Ruhr Nov. 3.
Offers have been reported at Eur800/mt ex-works Ruhr for s355jr grade plate. A mill has also been offering limited volumes of plate at Eur765/mt ex-works Ruhr.
Platts is part of S&P Global Commodity Insights.
Author: Maria Tanatar
