EU import quotas for Chinese HDG, HRC and wire rod ‘other country’ quotas filled swiftly
Steel import quotas into the European Union for Chinese hot-dipped galvanized coil as well as quotas in the other country categories for wire rod and hot-rolled coil have filled up swiftly following the beginning of the new quota period Jan. 1.
According to data from the European Commission last updated Jan. 4, hot-dipped galvanized coil imports from China in the category 4B have exceeded the 126,603 mt balance by 52% with a staggering 1.9 million mt waiting to be allocated.
A 25% duty will apply on imported material once a quota has been filled. Category 4B is material used for the automotive sector. The quota for India in category A (industrial use) remains 78% open but 11,688 mt are awaiting allocation adding to the remaining balance of 34,909 mt. Platts, part of S&P Global Commodity Insights, assessed the weekly Northern European HDG assessment at Eur790/mt EXW Ruhr Jan. 3, up Eur/5 mt on month. Quotas for other countries, Korean or Indian material for both HDG categories have remaining balances of 83-100%.
The “other country” quota of 923,594 mt of imports of European HRC has also been filled swiftly with an already registered excess of 18.37% and 1.09 million mt awaiting allocation. Jan. 4
The country-specific quota for Korean HRC has 67.27% remaining out of a 184,008 mt balance and 60,280 mt awaiting allocation. Turkish and Serbian HRC quota levels remain at over 90% available.
“We also suspect the quota for Q2 might also be exhausted,” said a German distributor.
Market participants reported no interest for imported hot-rolled coil among European buyers with most of them concerned about quotas already getting exhausted.
“The materials are now being left at ports, but the high interest rates and high cost of storage are also concerning,” said another German distributor.
An Italian trader also said that storing material for clearance in the second quarter may be risky, which makes imports less attractive to buyers now.
Platts assessed HRC Northern Europe at Eur690/mt EXW Ruhr Jan. 3, stable on month, while the import assessment stood at Eur650/mt CIF Antwerp Jan. 3, which means there is only a Eur40/mt price difference between domestic and import prices which further leads to muted buying interest.
EU HRC mills target bullish offers due to healthy order books, buyers still on sidelines
European hot-rolled coil mills targeted bullish offers Jan. 4 due to healthy order books even though buyers remained on sidelines and were expected to return the coming week.
“The market is not active yet,” a German distributor said. “Business will get back to normal next week.”
Mills maintained an optimistic outlook after having closed some half-yearly contracts for HRC at target offer levels, while most have healthy order books up to February.
Market participants expected trading activity to pick up in the coming week as buyers return post holidays, although no tradable levels were heard during the day.
Mills offered domestic HRC at Eur745-750/mt ex-works Ruhr for March shipment.
Platts assessed the price of domestic hot-rolled coil stable on the day at Eur690/mt EXW Ruhr Jan. 4.
Interest for imported material remained lackluster as safeguard quotas for HRC in first quarter from other countries were exhausted. Buyers remained hesitant about storing material at the ports for the possibility of clearance in Q2 due to high costs.
According to data from the European Commission, HRC import volumes awaiting allocation from other countries have already exceeded the total quota at around 1.09 million mt, as of Jan. 3. Total EU safeguard quota for HRC imports from other countries stood at 923,594.27 mt for Q1.
“Smaller traders, stockists and service centers aim to buy less of imports this year to reduce risks,” a German distributor source said. “People are currently reluctant to conclude deals for imported material.”
No firm offers were heard for imported HRC during the day.
Platts assessed the price of imported HRC in Northwest Europe stable on the day at Eur650/mt CIF Antwerp Jan. 4.
Author Rituparna Nath
US steel import licenses jump 14% on month in December: Commerce
Total US steel imports are expected to rise on the month and on the year for December amid higher import licenses for oil country tubular goods and hot-rolled coil to close out 2023, according to the US Commerce Department data Jan. 4.
Licenses to import steel in December stood at 2.09 million mt, up 14% from November’s preliminary import count of 1.83 million mt. Compared with a year ago, licenses to import steel rose 9% from just under 2 million mt imported in December 2022.
The estimated finished steel import market share in December was 21% and is 21% for the full year of 2023, according to the American Iron and Steel Institute.
| December US steel import licenses by product (carbon and alloy mt) | |||
| Product | November preliminary | December licenses | Percent change (%) |
| Slab | 303,414 | 326,022 | 7 |
| HDG | 166,426 | 184,244 | 11 |
| Other semis | 164,817 | 182,354 | 11 |
| HRC | 132,001 | 178,554 | 35 |
| OCTG | 69,327 | 151,861 | 119 |
| Coiled plate | 91,790 | 105,653 | 15 |
| CRC | 85,515 | 94,600 | 11 |
| Wire rod | 69,199 | 68,981 | 0 |
| Coated sheet and strip | 93,184 | 54,229 | -42 |
| Rebar | 69,010 | 34,357 | -50 |
| Source: US Commerce Department | |||
Import licenses for OCTG surged 119% on the month to 151,861 mt, with South Korea accounting for the largest share at 46,710 mt.
Licenses to import sheet products rose from November across all major categories, with HRC seeing the biggest jump at 178,554 mt, up 35% from the prior month’s preliminary total. Platts, part of S&P Global Commodity Insights, last assessed US HRC imports at $850/st DDP Houston Jan. 3.
Import licenses for hot-dipped galvanized steel and cold-rolled coil each rose 11% on the month to 184,244 mt and 94,600 mt, respectively.
Among major product categories, rebar imports are expected to see the steepest drop in December, with licenses down 50% on the month at 34,357 mt amid a lack of licenses from Algeria and Egypt. Platts last assessed the weekly US rebar import price at $770/st on a DDP Houston basis Dec. 29.
Despite a 7% drop on the month, Canada is expected to remain the largest exporter of steel to the US in December, with 452,569 mt of steel from the country licensed for import in the final month of 2023.
| December US steel import licenses by country (carbon and alloy mt) | |||
| Country | November preliminary | December licenses | Percent change (%) |
| Canada | 484,510 | 452,569 | -7 |
| Brazil | 344,769 | 405,859 | 18 |
| Mexico | 224,636 | 259,710 | 16 |
| South Korea | 127,717 | 273,213 | 114 |
| Germany | 47,402 | 89,938 | 90 |
| Source: US Commerce Department | |||
European HRC market largely inactive in continuing seasonal slowdown; mills to aim for higher prices later in month
Both buyers and sellers continued holding back from trading on Thursday due to the continuing holiday break.
Most buyer sources estimated the HRC price at €680-700 per tonne ex-works, while others said that spot prices could climb “just slightly above” €700 per tonne ex-works if supplies remain tight.
In northern Europe, offers from integrated mills for February and March delivery were reported at €720-750 per tonne ex-works before the holiday break.
One producer source told Fastmarkets that it was offering March delivery coil at €730 per tonne exw, stressing that this was “the minimum possible level due to high production costs.”
A distributor source said everyone was still on holiday.
“Trading is zero this week. Mills are keeping their offers high, citing strong order portfolio, but we [will soon] see if these offers are accepted in deals,” the source said.
Fastmarkets calculated its daily steel HRC index domestic, exw Northern Europe at €695.00 ($759.89) per tonne on Thursday, edging down by just €0.42 per tonne from €695.42 per tonne on January 3.
The index was down by €0.50 per tonne week on week, but up by €18.33 per tonne month on month.
In Southern Europe, Fastmarkets calculated its daily steel HRC index domestic, exw Italy at €689.58 per tonne on Thursday, stable day on day.
The index was up by €1.25 per tonne week on week and by €19.58 per tonne month on month.
The Italian market was also still in “holiday mode,” sources said, with trading activity not expected to resume until the second week of January.
Target offers from Italian steelmakers for February-March-delivery HRC stood at €720-730 per tonne delivered, while one European steelmaker was offering coil to the nation at €740 per tonne delivered.
Buyer sources estimated the market at €680-690 per tonne ex-works.
Published by: Julia Bolotova
Tosyali buys Spanish tubemaker STS
Turkish conglomerate Tosyali Holding says it has acquired Spain’s Baika Steel Tubular System (STS). The company manufactures helical welded steel (SAW) tube with different coatings and structural pipes, used mainly in the oil & gas sector, water transportation and for civil engineering applications.
“We have added a new milestone to our global growth,” Tosyali says in a note seen by Kallanish. “With this acquisition, the company has increased its global pipe production capacity to more than 3 million tonnes/year, reinforcing our position as the largest steel pipe producer in Europe.”
Although it does not reveal any details of the agreement, STS confirms that Tosyali will modernise its two plants in Alegría-Dulantzi, in the Basque Country. This will increase their annual production capacity from the current 150,000 tonnes/year to almost 240,000 t/y.
Todor Kirkov Bulgaria
French buyers intend to rebuff longs increases
Some French buyers say they will try to refuse the recent wave of steel price increases implemented by European producers before the end of last year, despite contract values for rebar rising in recent weeks.
The industry is still on holiday, with activity, like in most European countries, expected to resume on 8 January. Despite the hikes on all long products, demand remained uncertain in France until the end of the year. A purchasing group says its members intend to keep stocks low given the current economic climate and downturn in the French construction sector, which saw output decline greatly in 2023.
Distributors’ purchasing volumes were weak through year-end. Last month did not bring any significant restocking. However, some restocking is seen happening in January. Purchasing groups are resorting to buying abroad for more competitive deals.
“These increases will not last. Stocks are low and we are going to buy as little as possible. Prices for all longs will inevitably go backwards. There was ‘technical’ demand at the end of the year because stocks were low throughout the country, but if the construction sector does not resume ordering volumes, the high prices will not stick,” a source comments.
French rebar values are flat on month at €650/tonne ($561) delivered on average, Kallanish learns from market sources.
The construction industry in the country is showing no signs of recovery. The sector’s crisis is deepening, particularly in the private residential segment, and is now expanding to non-residential construction. In the third quarter, the fall in new building sites exceeded 20%, while permits for new construction collapsed by almost 30%. The outlook remains negative (see Kallanish passim).
Natalia Capra France
Italian rebar buyer uncertainty to impact January sales
Italian rebar buyers expect the current period of quiet to last until mid-January. Many of them are adopting a wait-and-see attitude and tell Kallanish they can hold out without purchasing for another couple of weeks.
The Italian rebar market remains inactive this week as activity will restart following winter holidays on 8 January. Contract values increased in December in line with higher asking prices.
Before shutting down for the Christmas break, local steelmakers were asking for between €380-400/tonne ($416-438) base ex-works. Relatively small rebar volumes were sold at €360-380/t base ex-works. Including extras, domestic rebar was fetching €620-640/t base ex-works.
Confidence in present and future activity increased in December in the Italian construction sector, according to a report by national statistics institute Istat.
General consumer confidence regarding the current and future economic landscape also increased last month. An improved sentiment has been registered in all sectors of the industry, except for manufacturing where the association points to a continued negative outlook and expectations of deteriorating production levels in 2024.
Istat says November prices in the construction sector remained flat for both residential and non-residential buildings.
Natalia Capra France
ArcelorMittal pairs up with India to develop hyperloop transportation
ArcelorMittal has partnered with Indian Institute of Technology Madras (IIT Madras) to develop cost-effective hyperloop technology for the high-speed transport of passengers and cargo.
Hyperloops are a proposed transport system made of steel tubes large enough — up to 3.5 meters in diameter — to carry passenger and freight pods at up to 1,200 km/hour speeds while using very little energy, hailed by some — including Elon Musk — as a potential sustainable high-speed mobility system for the future. So far, testing speeds have been limited to 200-500 km/hour.
ArcelorMittal said in a Jan. 3 statement that together with its integrated flat steel manufacturer ArcelorMittal Nippon Steel India it is providing steel, as well as engineering, design and project management expertise to support the creation of India’s and Asia’s first hyperloop test track at IIT Madras’ 163-acre Discovery Campus on the outskirts of Chennai, in the state of Tamil Nadu.
ArcelorMittal Nippon Steel India is supplying 400 mt of steel for the fabrication of a 400-meter vacuum tube, in which autonomous, levitating pods will be tested at speeds of up to 200 km/hour. The test facility is expected to be operational by the end of Q1 2024.
Following the completion of the proof-of-concept phase, next would come the development of an operational demonstration route to validate the techno-commercial prospects of the technology.
Hyperloop’s proponents believe it will use 10-times less energy than road transportation or aviation, yet the infrastructure it needs is very metal intensive: 1 km of this transportation system requires from 2,000 mt (at maximum achieved steel weight reduction without the loss of properties) to 5,000 mt of steel — a lot more than the 1,600 mt of steel than it takes to build a railtrack of the same length, and this means higher embedded emissions too.
Current world average direct and indirect emissions during the production of 1 mt of 600 mm or wider flat-rolled steel coil is estimated by the European Commission at 2.28-2.39 mt of CO2, which means that steel in 1 km of the hyperloop would carry anything between 5,000 mt and 11,000 mt of CO2, S&P Global Commodity Insights estimates.
Steel companies have been optimizing steel properties for the ultra-high-speed conditions of hyperloop systems since the late 2010s, aiming to develop strong, yet lightweight steels and pipe designs that could withstand internal low pressure with sufficient rigidity while ensuring high safety and energy efficiency at low construction and scalability costs.
For this purpose, ArcelorMittal has been in partnership with European hyperloop developer Zeleros since 2017.
Tata Steel and Posco unveiled a collaboration to develop steel grades and tube technologies for hyperloops in November 2020; by that time Posco had been conducting hyperloop-related research for more than 10 years already. Later Tata Steel said its low carbon steel product Zeremis Carbon Lite would be tested in the European Hyperloop Center in Groningen, the Netherlands.
Later, in October 2021, Russian steel company Severstal secured a contract with Los Angeles-based Hyperloop Transportation Technologies to supply steel for one of the first commercial hyperloop prototypes, but Russia’s invasion of Ukraine led to the removal of the company from the project.
Author: Katya Bouckley
EU HRC importers to pay first-quarter safeguard taxes
Importers of hot rolled coil into Europe are set to be requested to pay part of the 25% safeguard duties, as volumes currently being cleared at customs have exceeded the allocated first-quarter quota.
Similarly to what happened in Q4 2023, there are almost 1.1 million tonnes of HRC waiting to be cleared under the “other countries” sub-group. This figure exceeds the tariff-free available quota by some 170,000t, meaning that importers could be requested to pay an almost 5% duty on these imports, according to Kallanish calculations.
The “other countries” quotas include all import origins, excluding Serbia, Turkey, India, South Korea and the UK.
Importers of metallic coated coil from China are also set to face a similar problem. For Q1, the allocated quota amounts to slightly over 126,000t but, at the moment, over 190,000t of this product is awaiting to be cleared by EU Customs.
Emanuele Norsa Italy