Northwest European mills raise offers for HRC, aim for Eur800/mt
Several major Northwest European steelmakers raised offers for hot-rolled coil Jan. 9, aiming to achieve prices of Eur800/mt on ex-works or delivered basis, depending on the location of the customer and the mill, sources told S&P Global Commodity Insights.
This represents a Eur50-60/mt rise from offers of Eur740-750/mt ex-works Northwest Europe as recently as Jan. 8.
Market participants said that ArcelorMittal, Thyssenkrupp and SSAB were among the mills aiming to achieve these new prices, adding that other steelmakers were expected to follow. The mills were offering coil for delivery in April-May, sources said.
New offers for cold-rolled coil and hot-dipped galvanized coil were even heard at Eur920/mt on ex-works or delivered Northwest Europe basis Jan. 9, depending on the location of the customer and the mill.
The bullish sentiment was supported by full order books of European mills, seasonal restocking and reduced interest in imported coil.
“There is a scarcity of material with coil, with shorter lead times,” a German service center said. “And interest in imports is low due to unpredictable freight rates and logistical issues with the Suez Canal. So the mills have good chances to achieve some price rise.”
Platts assessed domestic prices for hot-rolled coil in Northwest Europe at Eur725/mt ex-works Ruhr Jan. 8, showed S&P Global data.
Author Maria Tanatar, Rituparna Nath
Germany’s Wuppermann, Turkey’s Galva Metal end steel partnership
One of Turkey’s largest steel service centers, Galva Metal, and Germany’s large steel processing company Wuppermann Gmbh have ended their partnership, which has been ongoing for more than 10 years, as of Jan. 8, Galva Metal President Tolga Kisacikoglu said.
“Our partnership with the German steel producer Wuppermann Gmbh has come to an end with the purchase back of our partner’s 35% shares,” Kisacikoglu said, adding that the main reason for the separation is their different views on the company’s future.
“While Galva Metal wants to invest and grow; they want to walk a more cautious path. As a result, we have decided to leave our ways by consensus,” he said.
Galva Metal, however, will continue its commercial activities with Wuppermann, the chairman added.
Fluctuations in raw material and energy costs as well as demand conditions pressured Turkish mills’ and stockists’ output, sales and pricing throughout 2023.
According to the latest Turkish Steel Producers’ Association data Turkey’s steel output declined 6.1% on the year to 30.5 million mt in January-November 2023.
The steel export/import coverage ratio of Turkey’s steel industry fell to 55:100 in the first eleven months of 2023 from 92:100 a year prior as import volumes increased in the period by 18% on the year to 16 million mt.
Turkey’s steel export volumes however, declined by 34% on year to 9.4 million mt in January-November 2023, while the revenue generated from these exports fell significantly by 43.4% to $7.5 billion, on low demand and stiff competition in global markets.
Platts, part of S&P Global Commodity Insights, last assessed the Turkish HRC steel price at $715/mt ex-works Jan. 5, up $5/mt on the week, amid strengthened imported scrap costs.
Author Cenk Can
Spanish crude steel output up 22% on year to 1.06 mil mt in Nov – Unesid
Spain’s crude steel production increased 22% year on year in November 2023 to 1.06 million mt taking underlying production to an eight-month high, data from steel group Unesid showed Jan. 10.
Production over the 12 months to November was 11.3 million mt, the most since March 2023, although still not much above the post-pandemic low of 10.8 million mt reached in July 2023.
Spanish scrap recycling volume also firmed in November, rising 16% year on year to 878,000 mt, Unesid said.
The figure was an eight-month high, as was trailing 12-month volume, which reached 9.15 million mt.
Spain is Europe’s fourth largest steel producer, behind Germany, Italy, France with a capacity of nearly 23 million mt/year.
Layoffs extended
With the slow recovery, integrated steel producer ArcelorMittal said Dec. 28 it extended a temporary lay-off scheme announced in October, which it blamed on high level of imports and low demand.
The lay-off scheme was due to end Jan. 1 but has been extended for 12 months, it said, with all agreed conditions remaining in place.
The plants impacted are Asturias, Sagunto, Extebarri and Lesaka with 7,000 workers in total, it said. AM produces around 40% of Spain’s annual crude steel volume, besides having downstream production in longs and sheet steel, among others.
Hot-rolled coil CIF Antwerp was assessed by Platts for S&P Global Commodity Insights at a midpoint $721.12/mt Jan. 9, up 4% from one month prior.
Author Gianluca Baratti
Supply-side adjustments, construction rebound boost CMC Poland outlook
Supply-side adjustments and the impact of increasing levels of residential and infrastructure construction should drive sequential improvements in financial results beginning in the spring construction season, CMC says of its European unit outlook.
Conditions in Europe are expected to remain challenging, but adjusted Ebitda excluding energy rebates should improve from the levels of the past two quarters.
In the fiscal quarter through November 2023, Polish construction activity decelerated and industrial production across Central Europe remained muted. The market saw weaker demand and lower product margins. “Encouragingly, selling prices and metal margins on long products began to improve midway through the quarter, and several green shoots have emerged that could bolster the Polish market in the quarters ahead,” CMC says in a note seen by Kallanish.
CMC Poland’s steel product shipments plunged 27% on-year in the November quarter to 343,000 short tons, with rebar down 40% to 122,000st and merchant and other products down 18% to 221,000st.
Average selling price was down 20% to $633/short ton, while cost of ferrous scrap utilised remained flat at $365/st. Steel product metal margin contracted 37% to $268/st.
Net sales fell 42% to $225.2 million and adjusted Ebitda was down 36% to $38.9m.
The results include two energy cost rebates totalling approximately $66m. Of these rebates, $27.7m is related to an annual CO2 credit under a government programme that extends to 2030, and the remaining $38.6m is structured as a reimbursement by the Polish government for elevated energy costs incurred during the European energy crisis, CMC says.
Adam Smith Poland
Liberty Dunaferr restarts rolling mills
Liberty Dunaújváros (Dunaferr)’s rolling mills, including its hot-dip galvanised line, have completed their first January campaign for specific customers, a company spokesperson tells Kallanish.
They are “on course” for their next campaign later this month, the spokesperson adds.
The firm declined to comment on whether the restart has been timed to make the most of the consecutive hikes in European flat steel prices in the past few weeks.
According to Hungarian press reports, the Dunaújváros rolling mills’ restart is the first step in its 100-day programme aimed at increasing capacity utilisation, improving efficiency and preparing for an expected market demand recovery.
The firm plans to launch retraining courses by mid-year to prepare workers for the future transition to electric arc furnace steelmaking, reports add.
According to sources, the remaining working blast furnace at Dunaújváros remains idled, as does blast furnace no.3 at the Czech-based sister Ostrava steelworks, which is awaiting power supply.
Last summer, Liberty and China’s CISDI Engineering Co. signed an agreement with the Hungarian Ministry of Economic Development to develop a decarbonisation pathway shifting Dunaferr from coal-based steelmaking to EAF technology. This will see the installation of a new 150-tonne capacity EAF to be supplied by CISDI.
Adam Smith Poland
EU HRC: Market rises as ArcelorMittal increases offers
European hot-rolled coil (HRC) prices climbed today as Europe’s largest producer ArcelorMittal raised offers, and others said they would follow suit.
ArcelorMittal raised its offers by €50/t to €800/t for HRC and €920/t for hot-dip galvanised and others said they would also increase prices by a similar magnitude for April deliveries.
Reaction to the announcement was mixed, but even buy-side sources agreed that the tradable value was now more than €700/t in the north.
Some said mills were not as full as they had been suggesting, with February deliveries already ready, but others said output remained low and that producers still had backlogs. UK buyers said a vessel meant to arrive in November was only just berthing, with some mills in Germany and France full for the first quarter.
One large north European mill said it had no HRC to sell until February, when it will open April rollings in a restricted volume. Another large mill said it would follow ArcelorMittal in increasing for April, but has not yet decided on a price level. Buyers were particularly concerned about 2m-wide supply, given domestic constraints.
A service centre said it bought some Indian 2m-wide HRC for March arrival at €710/t cfr via a trader. Other offers were reported at about €640-650/t cfr for black HRC from an Indian mill. Some said they were cautious about placing offers, as they expected many buyers could turn to India with the other countries’ quota full, potentially causing issues for the Indian quota in April-June.
Argus’ daily northwest EU HRC index increased by €15.25/t to €707.75/t ex-works today, while the daily Italian HRC index rose by €3.25/t to €692.50/t ex-works. The twice-weekly cif Italy HRC assessment inched up by €2.50/t to €647.50/t, while the weekly cold-rolled coil (CRC) assessment increased by €10/t to €780/t ex-works.
A major Italian producer had not made any offers today, but participants expected that it would seek well above €700/t ex-works, after ArcelorMittal’s increased offers. Another Italian producer, whose production capabilities were unclear, was offering March delivery HRC at €720/t base delivered, although not many were considering buying from the seller.
Last deals closed in Italy stood at about €700/t base delivered, market participants said, from a variety of EU sellers, although expectations are that in today’s market, at least €10-20/t higher would be achievable.
Some import offers started emerging too — Indian HRC was offered at €650/t cif Italy, and pickled and oiled at €680/t cfr. A Turkish HRC offer was heard at $730/t cfr, excluding duty — inclusive of duties, this would be below ArcelorMittal’s current HRC offering, which could open some sales opportunities for Turkey. CRC from Korea was offered at €735-750/t cfr depending on the seller, and from India at €730/t cfr Italy.
Some buyers expect that Indian offers across products will move up soon, but at the same time domestic demand prospects in the country are not very bullish, which could continue keeping prices workable for EU markets. Expectations of safeguard duty on April arrivals under the ‘other countries’ quota is expected to dissuade buyers from purchasing from other Asian suppliers.
A domestic Italian CRC offer was heard today at €790/t ex-works. One producer said it was sold out of CRC until April.
ArcelorMittal increases steel coil offers by €50/t
Europe’s largest steelmaker, ArcelorMittal, has increased its headline offer for hot-rolled coil (HRC) by €50/t on limited import options and low domestic supply.
The company is now offering €800/t for HRC to northwest European buyers, up by €50/t from its previous offer. Hot-dip galvanised coil is now offered at €920/t, also up by €50/t. It was offering HRC at €740/t to southern EU and €750/t to the north before the rise.
The move comes as contract talks with automakers and the wider supply chain continue, with most mills trying to achieve rollovers or slight increases. Large buyers are still eyeing reductions and there is competition among mills for large original equipment manufacturer business — one large producer said it had to reduce its price for a six-month contract after being undercut by another mill.
Supply remains limited from domestic mills. UK buyers suggest that some EU mills are around two months late on deliveries, with one vessel meant for November arrival only docking in recent days. ArcelorMittal itself has had production problems, and some of its plants have been affected by strike action over the past month.
Import options are also constrained — 1.23mn t was awaiting clearance into the other countries’ HRC quota as of 8 January, compared with a quota of 923,594t, meaning that importers would have to pay a sizeable duty of around 8.3pc.
Some buyers said the new price was too rich compared with the latest deals, which largely remained below €700/t for February and March deliveries.
A price of €800/t would open the door to other exporters that have not been competitive in recent months, especially Turkey. Assuming an export price of $700/t fob and the lowest import duty for Turkish mills, they could sell slightly below €700/t cfr EU.
Argus’ benchmark northwest EU HRC index has risen since mid-October, on curtailed domestic supply and a period of restocking after months of service centres reducing inventories. It stood at €692.50/t on 8 January, up by €92.25/t from €600.25/t on 17 October. The daily Italian HRC index rose by €101.75/t from €587.50/t to €689.25/t over the same period.
European HRC prices push up on limited supplies
The European flat steel market has now properly restarted after the year-end holidays, with some mills aiming for ambitious price rises for April delivery HRC, citing good order books.
Notably, the leading European steelmaker ArcelorMittal again increased its offer prices for HRC – this time raising the price for April deliveries by €50 ($55) per tonne, to €800 per tonne ex-works in Northern Europe.
The most recent offer for March-delivery HRC from the producer was heard at €750 per tonne ex-works in late December.
Other integrated mills in Northern Europe are currently offering March delivery HRC at €740-750 per tonne ex-works, Fastmarkets understands.
“Prices [for HRC] are moving up quickly now… But it’s not a demand-driven increase because underlying real demand remains low. The increase is entirely driven by supply concerns,” a source in Northern Europe said.
Buyers in Europe have just returned from the holiday break and are digesting the new offers, with some sources putting the tradable range at between €700 per tonne and €730 per tonne ex-works.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €723.33 per tonne on January 9, up by €17.70 per tonne compared with €705.63 per tonne on Monday.
The index was up by €28.33 per tonne week on week and up by €37.91 per tonne month on month.
Restocking was expected to support HRC price rises in the domestic market, especially given the lack of competitive imports.
“Quotas [for HRC have already been] exceeded for the ‘other countries’ category, which means we are going to [have to] pay a dury of around 8.4% on HRC imported under that category. It’s quite penalizing,” a buyer source said.
On Tuesday, a buyer reported an offer for pickled and oiled HRC from South Korea at around €700 per tonne CFR to Europe, for mid-March shipment. No firm offers were heard for untreated, black coil, but sources estimated potential offers from Asia to be “no lower than €660-670 per tonne CFR” to Europe.
In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €705.00 per tonne on January 9, increasing by €13.75 per tonne from €691.25 per tonne on January 8.
The index was up by €16.67 per tonne week on week and up by €39.58 per tonne month on month.
The Italian market was slowly restarting after the holiday, with a “real market price” likely to become clearer toward the end of the current week, sources said.
In general, they added, prices in Italy are likely to reach €740-750 per tonne delivered in the next few weeks, which is in line with offers in Northern Europe.
On Tuesday, buyer sources estimated the market level at €700-720 per tonne ex-works.
But some market participants were concerned about whether the Italian mills would be willing to accept €700 per tonne ex-works, given the tight supplies.
“[An integrated mill in the south of Italy] has financial problems and is quite unreliable,” a second buyer source told Fastmarkets, “so, basically there are two [reliable HRC] suppliers active in Italy.
“[And] imports are getting increasingly tricky because of the depleted [EU] quotas, rising prices and the Red Sea shipping crisis in the Red Sea,” the source3 added.
ArcelorMittal ‘unwilling’ to invest further in ADI
Luxembourg-based steelmaker ArcelorMittal has rejected plans to increase the Italian government’s shareholdings in Acciaierie d’Italia (ADI), which operates the former Ilva assets, and to commit to further investment in the troubled company.
ADI sought capital to ensure production continues at its plants, with market talk over the past months suggesting that raw materials supply is under threat, while steel deliveries to customers were routinely being delayed.
ArcelorMittal owns 62pc of ADI’s shares, with the remaining 38pc owned by the Italian state through the national agency for investment and business, Invitalia. Both owners have equal voting and governance rights for ADI.
At negotiations yesterday, ArcelorMittal refused calls to invest further in ADI, a source close to the company said, adding that the likelihood of production stopping was now higher. Other market participants expect that the management team of ADI will soon be changed and the company might be placed in extraordinary administration.
During the negotiations, the Italian government proposed an investment of €320mn ($349mn) to increase Invitalia’s shareholdings to 66pc, which ArcelorMittal rejected, a government statement said. The government “has appointed Invitalia to take the consequent decisions, through its legal team”. ArcelorMittal did not return a request for comment.
Italian metalworkers’ union Fiom-Cgil called on the Italian government to take complete control of ADI. “We expect the government to come up with a solution that will ensure the safety of all workers, including those in related industries, and guarantee public control, employment protection, health and safety, environmental remediation and industrial revival,” said Fiom-Cgil general secretary Roberto Benaglia.
At full production, the Taranto plant, ADI’s flagship asset, can produce 9.6mn t/yr of hot metal, but has been operating below this level for many years. A company source stated ADI is currently operating two blast furnaces, having brought its second furnace back on line after one week of maintenance in December.
By George Barsted