European steelmakers struggle to raise CRC, HDG prices amid thin demand, competitive imports
In Northern Europe, integrated producers were hoping to achieve rises of €30-50 ($32-54) per tonne for cold-rolled coil and hot-dipped galvanized coil for deliveries in January-February.
Offers of CRC were reported closer to €770-780 per tonne ex-works, and around €800 per tonne ex-works for HDG.
But buyers estimated tradable prices to be lower, at €740-750 per tonne ex-works for CRC and €750-770 per tonne ex-works for HDG.
Bookings for January and February deliveries were quite limited, market sources said.
“Real demand is rather low, and CRC imports are very competitive, so European mills have difficulty achieving higher prices,” a trader in Germany said.
“Prices [for CRC and HDG] are nudging upward but very slowly. However, when hot-rolled coil prices are firmer at higher levels, it’s a matter of time before CRC and HDG follow suit,” a trading sources said.
HRC is the feedstock for CRC production, while CRC is used to produce HDG.
Since the week ended November 10, European mills have been pushing for higher HRC offers, to €680-700 per tonne ex-works. According to mill estimates, the premium for CRC over HRC should be “at least €100 per tonne” and at least €120-130 per tonne for HDG, considering current costs.
Fastmarkets’ weekly price assessment for steel cold-rolled coil, domestic, exw Northern Europe, was €740-750 per tonne on Wednesday, up by €10 per tonne from €730-740 per tonne seven days earlier.
And the corresponding weekly price assessment for steel hot-dipped galvanized coil, domestic, exw Northern Europe, was €750-780 per tonne on Wednesday, up by €10-30 per tonne from €740-750 per tonne in the same comparison.
Meanwhile, competitive offers from overseas suppliers were putting additional pressure on European prices.
“Unlike for HRC, for CRC imports there are no allocation concerns [related to EU import restrictions] and the price gap with European mills is quite workable,” a trading source in Italy said.
Offers of Taiwan-origin CRC for January shipment were reported at €685 per tonne CFR to European ports, while CRC offers from South Korea and Japan were around €700-710 per tonne CFR.
Market sources reported bookings of Taiwanese and South Korean CRC at those prices to Antwerp during the assessment week.
And a Vietnamese supplier was offering $840 per tonne CFR for 0.5mm HDG with Z140 coating, for January shipment.
Published by: Julia Bolotova
Steel HRC buying improves on restocking in Northern Europe, prices edge higher
Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €654.13 ($704.66) per tonne on November 15, up by €1.13 per tonne compared with €653.00 per tonne a day earlier.
The index was up by €9.00 per tonne week on week and by €37.05 per tonne month on month.
On Wednesday, several sources reported a transaction for HRC in Germany at €650-660 per tonne ex-works, for delivery in 6-8 weeks’ time, Fastmarkets heard.
Tradeable values were estimated by buyers at €640-660 per tonne ex-works, with sales at €645 per tonne ex-works for January-delivery HRC reported in the region earlier this week.
Trading activity in Northern Europe has picked up after the Blechexpo trade fair, held in Stuttgart on November 7-10.
“Many buyers have been waiting for the outcome of the Stuttgart fair,” a steel service center in Northern Europe said. “Besides, now is [a good] time for distributors to make orders for first-quarter-delivery coil, because lead times are getting longer, import prices are moving up, and the effect of the [carbon border adjustment mechanism (CBAM)] regulations is not clear but could have consequences for imports in general.”
Official offer prices from integrated mills in the region were still being heard around €680-700 per tonne ex-works, for HRC shipments with lead times of 6-8 weeks.
Market sources suggested that, before holiday stoppages, producers might try to push for another round of price increases for the first quarter of 2024.
“I suggest that mills will push offers above €700 per tonne ex-works starting in December [2023], but it is very uncertain whether customers will accept this,” a trading source in the region said. “[With domestic prices at this level], imports would become attractive again.”
The major concern for both buyers and sellers was the lack of real steel consumption.
“There is no substantial pickup in the market as a consequence of a better economy, so the higher apparent steel demand, driven by restocking now, might be followed by a slowdown in December-January,” another trading source said.
“Mills should keep capacities under control,” a third trader said. “If too many blast furnaces are restarted in the first quarter of 2024, we might see the previous year’s scenario all over again – actively push for higher prices, availability increases, imports become more attractive, European prices collapse.”
Several blast furnaces in Europe have been taken offline in the third and fourth quarters of 2023, with reduced availability one of the factors supporting the recent uptrend in flat steel markets.
But there were now discussions about three or more blast furnaces being brought back online in the fourth quarter of 2023 and the first quarter of 2024, sources told Fastmarkets.
Meanwhile, in Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Italy, at €632.50 per tonne on November 15, up by €2.50 per tonne from €630.00 per tonne on November 14.
The index was up by €11.04 per tonne week on week and by €39.48 per tonne month on month.
In Italy, transactions for coil with six-weeks’ lead times were reported at €640-650 per tonne delivered recently (about €625-635 per tonne ex-works).
Market sources said that the mill’s new price target was likely to be around €670-680 per tonne delivered (equivalent to €655-665 per tonne ex-works), with €700 per tonne the next target for the first quarter.
In general, sentiment in the market was cautiously positive, with restocking and limited supply supporting the uptrend.
Also, in the secondary market, prices for HR sheet have started to pick up recently, to about €720-740 per tonne CPT. But trading remained quite slow, market sources said.
Similarly to Northern Europe, Italian buyers were cautious because of the still-weak demand from end-users.
Import offers were also trending higher recently.
Vietnam-origin coil offers for January shipment were heard at €610 per tonne CFR, while HRC from Egypt, also for January shipment, was offered at €620 per tonne CFR to European ports.
One source reported an offer of January-shipment HRC from Japan at €650 per tonne CFR to Antwerp, but this was not confirmed by other market participants.
And Turkish mills could offer December-shipment coil at €640-650 per tonne CFR, but that did not take into account any anti-dumping duties.
Published by: Julia Bolotova
Italian service centres struggle to increase prices
Stagnating demand and depressed prices are persisting in Italy for coil derivatives, such as sheet and welded tube. European steelmakers are nevertheless increasing coil prices significantly due to limited supply, following several production stoppages and import quota exhaustion, Kallanish notes.
Service centres are seeing continued weak demand. They are pushing up sheet prices to €750/tonne ($814) ex-works for hot rolled sheet and €780/t for pickled material, but this is barely enough to cover their costs. They are now receiving hot rolled coil bought weeks ago at €650/t base ex-works, while their sheet selling prices hovered at €680-690/t ex-works or lower in October and at the beginning of November.
While some prefer to lose orders rather than sell at below cost, many have been chasing volumes and discounting material. Their customers are now ready to purchase for first-quarter and first-half delivery in 2024, and have been able to secure fixed prices for the entire H1 2024 at October’s low levels.
Companies downstream have not been united in pushing forward increases, giving end-users the upper hand. Selling sheet at €700/t delivered will eat significantly into companies’ earnings and Q1 is not seen improving. Some service centres report they are increasing selling prices to €720/t for hot rolled sheet and believe that, gradually, values will hike.
Meanwhile, European steelmakers are giving buyers lower allocations for Q1 due to shortages. After slow sales last week, several sources now report domestic HRC values beginning to increase in contracts to €630-640/t delivered. HRC prices are seen increasing further to €670/t delivered, sources suggest.
Natalia Capra France
Italian longs demand continues to drag
Although reduced, in line with all long products, Italian demand for sections has remained reliable in October and November so far. Prices have been dragged down on-month, however, by cheaper imports and the general negative sentiment pervading the distribution sector.
Distributors and agents say they managed to achieve acceptable results in October and this month, thanks to beam sales, with purchases continuing for small but frequent volumes. The product continues to enjoy a balance between supply and demand thanks to the numerous production slowdowns over recent months. Sales are seen slowing towards the second half of November, in view of the slower seasonal period in December.
Distribution activity is stagnating. One company reports reaching its targets thanks to beams and other higher value-added products sales last month, but order intake for December-delivery is now slowing. An agent agrees on the good order intake for beams in October. The fist category of beams is hovering at €785/tonne ($852) delivered on average, Kallanish notes.
Meanwhile, prices seem to have reached rock bottom for merchant bar. Values remain stable on-week at €690-710/t ex-works including extras, Italian sources suggest.
Natalia Capra France
EU proposes Russia pig iron sanctions: reports
The draft of the EU’s 12th package of Russia sanctions proposes import restrictions on Russian pig iron alongside other commodities, according to reports from Bloomberg, Politico as well as Russian media.
European Commission spokesperson Daniel Ferrie confirmed to Kallanish the Joint Proposals from the Commission and the High Representative as part of the proposed 12th sanctions package have been adopted by the Commission. However, the Commission did not comment on the inclusion of pig iron in the new sanctions package.
Commission President von der Leyen recently stated that the upcoming package will introduce new import and export bans, efforts to strengthen the oil price cap, and stringent measures targeting third-country companies that attempt to bypass the sanctions. Furthermore, the package intends to diminish the remaining revenue that Russia earns from exporting diamonds to Europe and associated partners.
It is now for Member States to adopt the package, including proposals from the High Representative, by unanimity, Ferrie added.
According to reports, the proposals also include restrictions on copper wire, aluminium wire, foil, tube, pipe, and liquefied propane.
The Commission has also introduced a proposal to prohibit the export of machine tools and machinery parts to Russia, intended for the production of weapons targeting Ukraine. Additionally, the EU aims to extend its list of restricted goods related to Russia’s military efforts against Ukraine, encompassing chemicals, lithium batteries, thermostats, motors, and servomotors used in drone technology, according to reports.
The proposed measures, if approved, would also expand the list of restricted entities to include over 30 companies. This list would comprise firms from various regions, including Kazakhstan, Uzbekistan, Singapore, and several Russian machine-building companies.
Elina Virchenko UAE