HRC prices tick up in Europe, but still below target offers
European steelmakers kept their target offers prices for HRC at €800 ($871) per tonne ex-works for second-quarter delivery coil, but those levels have yet to be sealed in deals, Fastmarkets understands.
A mill source did report a transaction in the Benelux region at €760 per tonne ex-works, meanwhile, and buyers in Germany estimated the tradable value at €720-750 per tonne ex-works, with deals for small tonnages reported at €740 per tonne ex-works on Wednesday.
Despite slow end-user demand, which is considered by buyers to be a major obstacle to price hikes, European mills remained bullish because of their strong order books.
Buyers were cautious about bookings, however, buying mainly small volumes of coil to cover urgent needs.
“There is no booming activity in the market, but buyers do not have many options to choose from. Of course, €800 per tonne is elevated, but the move [to increase offer prices] is helping the mills achieve their previous goals,” a buyer in the Benelux area said.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €735.63 ($801.37) per tonne on January 17, up by €5.00 per tonne compared with €730.63 per tonne on Tuesday.
The index was up by €6.88 per tonne week on week and by €44.75 per tonne month on month.
In Southern Europe, Fastmarkets calculated its corresponding daily steel hot-rolled coil index domestic, exw Italy at €730.00 per tonne on January 17, up by €8.33 per tonne from €721.67 per tonne on Tuesday January 16.
The index was up by €15.00 per tonne week on week and by €50.83 per tonne month on month.
One integrated mill in Italy was heard offering March delivery HRC at €760-770 per tonne delivered (€745-755 per tonne ex-works).
Transactions for limited tonnages of HRC were reported at €750 per tonne delivered (€735 per tonne ex-works) on Wednesday.
Buyers estimated the tradable level at €740-750 per tonne delivered (€725-735 per tonne ex-works), with the lower end of the range viable for larger volumes.
Sources, however, pointed out, that buyers were booking only “minimal tonnages – not a single tonne above their needs.”
“It is a question, how long a supply-driven increase will last. The demand is still not there, so buyers are not stockpiling,” a second buyer said. “On the contrary, everyone is focused on pushing down their stock levels.”
In the secondary market, 4 mm hot-rolled sheet was traded at around €820-830 per tonne CPT at its highest level, compared with €800 per tonne CPT last week.
Import offers to Italy were largely flat day on day, meanwhile, with HRC for late-March shipment from Taiwan, Japan and South Korea on offer at €655-670 per tonne CFR to Italy.
The lowest offers were from Taiwan, source said, but this origin was falling under the “other” safeguard quota category, which is deemed as facing “the highest risk of paying the anti-dumping duty,” sources said.
Several sources reported that Turkey-origin coil with March shipment was on offer to Italy at €730 per tonne CFR, including the anti-dumping duty, although a buyer told Fastmarkets this was “too close to the domestic price to be workable.”
Published by: Julia Bolotova
European CRC, HDG prices move up, but remain below target offers
Slow demand from the key end-user sectors — automotive and construction — was a major concern for the market, sources said.
“We expect steel consumption by automotive in 2024 to be 20-30% lower year on year,” a steel service center source in Germany said.
But limited supply due to reduced production and rising input costs were prompting European mills to increase offer prices substantially in early January.
In Northern Europe, offers from integrated mills were heard at €900-920 ($980-1,002) per tonne ex-works for CRC and HDG. Lead times for both products were April-May at the earliest, sources said.
“New offers are out of touch, end-user demand is totally unsupportive of such a massive rise,” a buyer source said.
Buyers’ estimations of achievable prices were at €820-830 per tonne ex-works for CRC and €830-840 per tonne ex-works for HDG.
“After declaring higher offers, mills managed to slowly consolidate previous target levels [for both CRC and HDG],” a second buyer said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Northern Europe was €820-835 per tonne on Wednesday, up by €15-20 per tonne from €800-820 per tonne a week earlier.
And Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil domestic, exw Northern Europe was €830-840 per tonne on Wednesday, up by €10-30 per tonne from €800-830 per tonne a week earlier.
Meanwhile, the market situation in Southern Europe was quite similar, with trading being described as “dead” in the region.
Southern European producers were aiming for €870-880 per tonne delivered (€855-865 per tonne ex-works) for CRC and €900-920 per tonne delivered (€885-905 per tonne ex-works) for HDG.
Buyers estimated tradeable values at no higher than €840-850 per tonne delivered for CRC and €850-860 per tonne delivered for HDG.
“Most buyers have sufficient stock and in fact are trying to lower their inventories,” a trading source in Europe said. “My impression is that due to low activity in the construction market and threatening downturn in the automotive sector, nothing spectacular will happen. Besides, high interest rates don’t stimulate investments.
“Until very recently, import offers for CRC from Asia were very competitive, and quite a lot of bookings were made, so that is another obstacle for a domestic price rise,” a buyer in Italy said.
Fastmarkets’ weekly price assessment for steel cold-rolled coil domestic, exw Southern Europe was €825-835 per tonne on Wednesday, up by €15-25 per tonne from €800-820 per tonne the week before.
And Fastmarkets’ weekly price assessment for steel hod-dipped galvanized coil domestic, exw Southern Europe was €830-840 per tonne on Wednesday, up by €10-30 per tonne from €800-830 per tonne the week before.
Import offers for CRC and HDG were also trending higher during the assessment week.
Current CRC import offers were at €735-760 per tonne CFR for CRC, up from €725-740 per tonne CFR earlier in January.
Asian suppliers were offering material for shipment in mid-March to early April, which would mean arrival would be in May-June.
One mill from South Korea was offering CRC to Southern Europe at €760 per tonne CFR.
Another South Korean supplier was offering CRC to Italy at €735 per tonne CFR.
A Japanese mill was offering CRC to Italy at €735-745 per tonne CFR.
And finally, Vietnamese suppliers were said to be aiming for $900-930 per tonne CFR for 0.5mm HDG with Z100-120 coating.
Published by: Julia Bolotova
Metso builds DRI smelting furnace pilot facility
Metso says it is investing €8 million ($8.7m) to build a “state-of-the-art” direct reduced iron smelting furnace pilot facility, in Pori, Finland. This will allow customer-specific pilot-scale testing to demonstrate the applicability and results of industrial-scale DRI smelting with Metso’s Outotec DRI Smelting Furnace technology.
“There has been a lot of interest towards the recently launched Metso’s ‘Outotec’ DRI Smelting Furnace. It substitutes traditional blast furnaces used in iron and steel making, and enables a significant reduction of emissions, when combined with a direct reduction plant,” Metso vice president, smelting Jyrki Makkonen says in a note sent to Kallanish.
“The investment into the DRI Smelting Furnace pilot facility supports the rapidly increasing customer demand for reliable testing when planning a transition to emissions-free smelting. With the pilot facility, we can reliably test various types of customer materials for industrial scale-up,” notes Metso director, smelting research & development Mari Lindgren.
Construction of the facility has started, with first tests and campaigns scheduled in the latter part of 2024.
The new high-capacity Outotec DRI Smelting Furnace, launched in 2022, is one of Metso’s breakthrough technologies. Combined with a direct reduction plant, it substitutes traditional blast furnaces in the production of hot metal, reducing CO2 emissions with minimal changes to the rest of the steel plant. The furnace can be integrated with Metso’s hydrogen-based “Circored” process or other direct reduction processes.
Adam Smith Poland
Bremen, EWE go for more hydrogen cooperation
ArcelorMittal Bremen and northern German energy service provider EWE want to jointly implement further hydrogen projects, they say in a statement sent to Kallanish.
In April 2023, ArcelorMittal Bremen, EWE and its subsidiary utility SWB (Stadtwerke Bremen) laid the foundation stone for the construction of a 10-megawatt hydrogen production plant in Bremen. The electrolysis plant will form the basis for green steel production in northwest Germany. It is due to go into operation this year.
The two companies have now signed a letter of intent to supply green hydrogen in large quantities to significantly reduce CO2 emissions from steel production. Green hydrogen from a 320-megawatt production plant in Emden is expected to be supplied to Bremen from 2028, EWE says.
EWE plans to build up to 400 megawatts of electrolysis capacity at locations near the German North Sea coast. Up to 40,000 tonnes/year of green hydrogen are projected to be produced, depending on the sales market, EWE says. There is also the possibility of expanding production capacity to gigawatt scale in line with demand, it notes.
The hydrogen from the EWE plants is to be transported via hydrogen pipelines, which are being built as part of the large-scale “Clean Hydrogen Coastline” project, as well as the planned “HyPerLink” project.
Christian Koehl Germany
Feralpi considers investing in hydrogen for German plant
Italian steelmaker Feralpi is assessing replacing gas with green hydrogen to decarbonise the steelmaking process at its Feralpi Stahl facility in Riesa, Germany, a source close to the company tells Kallanish.
In an interview with Italian media outlet Industria Italiana, Feralpi managing director Giovanni Pasini said the project may become operational in 2027. Renewable energy plants need to be built to feed the electrolysers, as does the infrastructure required to operate a green hydrogen production plant.
While the company is boosting its renewable capacities in Italy, it is focusing on accelerating hydrogen use in Germany where the uptake of the green gas is expected to occur much faster. “Germany is investing much more than Italy in hydrogen but it also has some traits that make hydrogen more attractive … The north of Germany has several wind farms. It intends to build several offshore wind power capacities and this will allow Germany to have several hours [of wind energy generation], many more than today, resulting in negative prices of energy. Using renewable energy at a negative price can be a challenge that allows hydrogen to be extremely competitive,” Pasini says.
Feralpi Group is further expanding investments to decarbonise steel production at its sites in Italy and Germany. The company aims to cut a further 275,000 tonnes/year of CO2 emissions from its Scope 1 and Scope 2 emissions by 2027.
During the 2023-2027 period, Feralpi is investing €131 million ($142m) in industrial processes in Italy, €233m in Germany and an additional €200m across both countries aimed at developing renewable energy production. Feralpi Stahl and eastern Germany’s largest municipal utility, SachsenEnergie, want to jointly build a 150-megawatt solar park in the Zeithainer district of Jacobsthal. This will provide renewable energy for steelmaking. Energy supplier Stadtwerke Riesa will also support the project (see Kallanish passim).
Feralpi in Germany is located in the industrial area of Meissen, a cluster that uses large quantities of energy.
Natalia Capra France
ADI prepares for life after ArcelorMittal
The Italian government has issued a decree clearing the way for the implementation in future of an “extraordinary administration” to prepare for the departure of its private partner in Acciaierie d’Italia (ADI), ArcelorMittal.
According to sources close to the matter, this follows a meeting between Italian Prime Minister Giorgia Meloni and the ministers involved in saving the troubled steelmaker.
The decree also guarantees production continuity and employment at Acciaierie d’Italia, a joint venture between state company Invitalia and ArcelorMittal, formerly known as Ilva.
“The Council of Ministers has approved a law decree which strengthens some measures already present in the legal system, to protect the production and employment continuity of companies in crisis, including the former Ilva, and provides guarantees of extraordinary layoffs during any extraordinary administration,” states the decree document obtained by Kallanish.
The government is looking for a partner to replace ArcelorMittal in the ADI JV, after the steelmaking group refused to inject any more cash into the troubled steelmaker. Authorities have solicited Italian steel companies.
Natalia Capra France
CRC, HDG strengthen in northwest Europe
Northwest European mills have held prices for cold rolled and hot-dip galvanized coil steady, although the target value of €900/tonne ($976) plus seems way out of sight.
Mills are maintaining pricing discipline, helped by recent outages at blast furnaces, but the weak demand on the market will not allow for clear increases. In fact, now that ArcelorMittal Belgium, Tata Ijmuiden and Salzgitter are restarting their furnaces, increased supply might stop the gentle upward movement.
Buyers in the Benelux and Germany see prices at between €830 and €870, with CRC slightly lower than HDG. One Dutch manager, however, tells of offers for HDG below that of CRC, but could not explain this effect. His observation has not been confirmed by others, although players offered several theories for such a scenario.
“It could well happen if, for example, carmakers do not call off HDG volumes reserved for them, which makes that oversupply available,” a buyer of a German processor says. Along the same lines, “there may have been too much production at some galvanizing lines, meaning mills were forced to sell off,” another German source says.
According to a manager at an automotive supplier, “cold-rolling capacities were reduced notably when mills cut back on production. That could cause such an effect temporarily,” he tells Kallanish.
Another Dutch source does not consider the observation very representative. “Especially for CRC, import offers are attractive, so that mills here won’t be able to push their prices too far up,” he says. According to Swiss and German sources, imported CRC starts at €750/t cif Antwerp, for delivery in May-June.
However, import prices are likely to rise as vessels increasingly avoid the Suez Canal/Red Sea route. This means longer freight duration at higher costs around the Cape of Good Hope, and, as one manager points out, higher insurance rates.
Christian Koehl Germany