Northwest European HRC prices rise as market activity slowly recovers
Transactions for the domestic hot-rolled coil have been settled at higher prices in Northwest Europe Jan. 8 as market activity has started to gradually recover from the Christmas holidays lull.
Deals have been reported at Eur720-730/mt ex-works Northwest Europe.
Tradable values have been heard at Eur720/mt ex-works Ruhr.
Offers have been reported at Eur740-750/mt on either delivered Germany or ex-works Ruhr basis depending on a mill and a buyers’ location.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe up by Eur15/mt on day to Eur725/mt ex-works Ruhr on Jan. 8.
The bullish sentiment has been supported by expected seasonal demand recovery combined with good order books of the mills. Northwest European steelmakers have been offering late March-April delivery coil.
“I think we will see higher prices by the end of this week when more buyers return to the market,” a mill source said.
Some market participants, however, expressed concerns that the limited real demand as well as restart of majority of the blast furnaces idled in 2023 in the EU would not allow a sustainable and continuous price rise.
Author Maria Tanatar, maria.tanatar@
Klöckner, Danieli Germany move headquarters to Düsseldorf
Klöckner & Co as well as Danieli have each announced they will move their German headquarters from Duisburg to Airport Garden near Düsseldorf Airport.
Klöckner will relocate its group headquarters when the lease expires for the current location, the Silberpalais office building near Duisburg’s main train station, its home for many years.
With the lease in Duisburg set to expire, the distribution group looked at around 70 locations in Duisburg and neighbouring cities, it says. Its decision for Airport Garden was based on a range of criteria, such as the property location and accessibility, the quality of the premises, carbon footprint and cost-efficiency. Approximately 250 employees are scheduled to relocate at the latest by summer 2025.
Technology supplier Danieli will relocate its German headquarters from Duisburg to Airport Garden in the coming weeks. The move will take advantage of the international airport’s strategic location, with excellent connections by plane, train and road, the company tells Kallanish. It also values the proximity to the Ruhrgebiet area which is home to major mills, it says.
Both companies highlight that Airport Garden has been awarded the gold standard as part of the sustainability certification for real estate LEED (Leadership in Energy and Environmental Design). Both also note that the new premises are closely aligned with “new work” principles, taking into account the changes in working practices since the Covid pandemic.
Christian Koehl Germany
Tata Steel European output ends 2023 without recovery
Production and deliveries at Tata Steel’s UK and Netherlands units ended 2023 without a recovery, Kallanish notes.
In the Netherlands, liquid steel production in April-December 2023 was at 3.3 million tonnes, significantly below the 4.8mt registered during the same period of 2022. Nine-month deliveries meanwhile reached 3.9mt against 4.1mt a year earlier.
The contraction of operational results in the Netherlands was mainly due to the relining of one of the blast furnaces at the IJmuiden site. Production was down 23% on-year in the December quarter to 1.17mt, but was more or less stable on-quarter.
Tata Steel’s UK business posted a better performance as liquid steel production during April-December 2023 reached 2.3mt, stable compared with the same period of 2022. Deliveries were also in line y-o-y, at 2.1mt during the nine months.
Tata Steel UK liquid steel production in the December quarter stood at 0.73mt, marginally lower quarter-on-quarter due to operational issues, the firm says. Deliveries stood at 0.63mt, down on-quarter and on-year due to “subdued demand dynamics”, it adds.
Emanuele Norsa Italy
European HRC market slowly restarts after holidays, bullish sentiment prevails
Producers in Northern Europe kept offering steel HRC in the range of €720-750 ($788-821) per tonne ex-works. But demand was still slow, and no major deals were heard in the market.
“Most buyers just came back to work after a two-week break, we will need a few days to figure out the market situation,” a distributor in the EU said.
Two buyer sources estimated the tradable market level to be between €700 per tonne and €720 per tonne ex-works. A third buyer source expressed the opinion that even a bit lower could be achieved, in the range of €690-700 per tonne ex-works.
But several sources told Fastmarkets that European mills were unlikely to sell coil below €700 per tonne ex-works since supply was still limited due to output cuts.
“The mills will not go down below €700 per tonne in spot sales due to good order books”, a buyer source told Fastmarkets.
Most mills could only offer material for March delivery already, while one integrated steelmaker told Fastmarkets they were already offering early-April delivery.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €705.63 per tonne on Monday January 8, increasing by €10.63 per tonne from €695 per tonne January 5.
The index was up by €10.13 per tonne week on week and up by €20.21 per tonne month on month.
No new import offers or bookings were heard in the market.
Last week, sources told Fastmarkets that a lack of competitive imports could support a domestic price rebound for HRC in Europe during January. The mills were offering higher prices for March-delivery HRC because they expected buyers to be short of options with flat steel output in Europe being reduced domestically due to the depleted safeguard quotas.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €691.25 per tonne on January 8, increasing by €1.67 per tonne from January 5.
The index was up by €2.92 per tonne week on week and up by €25.83 per tonne month on month.
Mills in Italy continued offering steel HRC in the range of €720-740 per tonne delivered for February-March delivery. Some sources, however, said, that February delivery was gradually sold out at integrated mills in the nation. But, similarly to the market situation in Northern Europe, demand for coil remained slow, and no major deals were heard in the market.
Two buyer sources estimated the tradeable values for steel HRC in the range of €680-690 per tonne ex-works. But another two buyer sources found these levels too low and estimated the workable market level at about €700 per tonne ex-works.
“It is unsustainable for the Italian mills to sell HRC below €700 per tonne ex-works due to the high production costs,” a second buyer source told Fastmarkets.
The second buyer source added that the limited availability from imports would also influence prices. The source said that buying the material from abroad would mean waiting for its clearance from customs by July.
The source said that prices in Italy would likely reach €740-750 per tonne delivered in the next few weeks and added that those were generally in line with the levels offered now in Northern Europe.
Published by: Julia Bolotova, Darina Kahramanova
Italian authorities, ArcelorMittal fail to agree Acciaierie d’Italia future
The future of Acciaierie d’Italia (ADI), formerly known as Ilva, remains uncertain as the Italian government and ArcelorMittal failed to reach an agreement on Monday over the future injection of much needed funds into the company.
During a meeting held on Monday, the local government asked ArcelorMittal – the current majority shareholder with 62% – to find an agreement for a €320 million ($351m) capital increase to satisfy the steelmaker’s immediate needs, Kallanish notes.
The proposal by Italian authorities envisages a change regarding the company’s control, raising the shares under public control – held by Invitalia – to 66% and therefore making ArcelorMittal a minority shareholder going forward. The proposal has been rejected by ArcelorMittal and the government states it is now instructing its lawyers to understand how to proceed.
The lease of Taranto’s equipment from the administrator is set to expire on 31 May, which is when the equipment should be purchased, a source explained. The original expiration date in May 2022 was already postponed to this year. Given all the legal issues and bureaucracy, ArcelorMittal is said not to be willing to pay to purchase the equipment at this stage, and the Italian authorities will eventually need to find an alternative solution for the assets.
“The government is realising ArcelorMittal will not invest and that a consensual divorce is the best way to separate. The €320 million is nothing compared to what the steelmaker needs,” a source told Kallanish previously. “On 10 January, Taranto’s latest gas bill will be due but there are also many suppliers and shipping companies in need of payment, as well as vessels at the port that cannot unload material.”
This week, another meeting will be held between the local government and trade unions to discuss further options.
Emanuele Norsa Italy