EU HRC prices likely to soften in near term, sources say
Buyers focused on need-based procurement, prompting some mills to consider lowering offers.
Supplies increased after several idled blast furnaces came back online, while real demand remained muted.
“The buyers are not accepting current prices for coil,” a German service center source said. “It can only work for small tonnages for back-to-back trading. We will see a Eur25/mt decrease next week. I heard that the mills are considering price correction.”
Tradable values for domestic HRC were estimated at Eur710-770/mt ex-works Ruhr, with the majority of tradable values heard around Eur750/mt ex-works Ruhr. Offers were reported at Eur740-760/mt ex-works Ruhr.
Platts assessed the price of domestic hot-rolled coil in Northwest Europe down Eur5/mt on day at Eur745/mt ex-works Ruhr Feb. 7.
In South Europe, tradable values were estimated at Eur740-750/mt ex-works Italy.
Platts assessed the price of domestic HRC in South Europe down Eur5/mt at Eur745/mt ex-works Italy Feb. 7.
Interest in imports remained dull due to uncertainties about safeguard quotas for Q2 and Q3, which also made smaller buyers prefer domestic material.
Geopolitical conditions also pushed up freight rates, which impacted buyers’ sentiments.
“It is safer to buy material for shorter lead times from service centers as they are looking to destock, and competition is tough now,” another German service center source said.
Deals were reported at $710-$720/mt CIF Spain and at $700-$710/mt CIF Italy from Japanese mills.
Platts assessed the price of imported HRC in South Europe down Eur15/mt on the day at Eur660/mt CIF Italy Feb. 7.
Author Rituparna Nath, rituparna.nath@spglobal.
European CRC market dominated by imports; domestic mills avoid giving offers
CRC
Firm offers of CRC from European mills were rare in the market, sources said.
“EU mills cannot supply the market [with CRC at competitive prices],” a buyer source told Fastmarkets. “[EU mills] limit CRC production and try to produce more hot-dipped galvanized coil instead because they are more competitive in that sector.”
Rare CRC offers in Northern Europe from local mills were heard around €870-880 ($935-946) per tonne, with lead times in April.
Buyers’ estimates of tradeable price ranges were as high as €830-850 per tonne ex-works, with some buyers giving lower estimations of €800-830 per tonne ex-works.
Fastmarkets’ price assessment for steel cold-rolled coil domestic, ex-works Northern Europe was €830-850 per tonne on Wednesday, down by €10 per tonne week on week from €840-860 per tonne.
Firm offers in in Southern Europe were also scarce. Only one supplier was heard to be active in Italy, offering CRC around €850 per tonne delivered (€840 per tonne ex-works), with March delivery still reportedly available. Buyers’ estimates of tradeable values were heard around €820-830 per tonne ex-works.
As a result, Fastmarkets’ price assessment for steel cold-rolled coil domestic, ex-works Southern Europe was €830-840 per tonne on Wednesday, down by €10 per tonne week on week from €840-850 per tonne.
Slow demand from end users, as well as competitive overseas offers, were major factors putting downward pressure on domestic prices, sources said.
Notably, suppliers from Vietnam, Japan, Taiwan and South Korea reportedly offered CRC at €740-760 per tonne CFR to Antwerp and to Italy for April shipment.
Deals were reported at €740-750 per tonne CFR for Japan- and India-origin coil.
A booking of around 5,000 tonnes of South Korea origin was heard in late January at €745-750 per tonne CFR to Southern Europe.
HDG
In the HDG market, competition from imports was less intense because overseas mills were unable to supply the full range of grades and dimensions required by European buyers, Fastmarkets understands.
But trading was slow, and sales were limited, due to sluggish end-user demand.
European mills were offering HDG at €880-920 per tonne ex-works in Northern Europe, mainly for April delivery. Some producers reportedly still could supply March shipment HDG.
But tradeable values were estimated as high as €860-870 per tonne ex-works.
Italy-origin HDG was heard offered to Northern Europe at €870-890 per tonne delivered, with bids for such material coming in at €840-860 per tonne delivered.
Fastmarkets weekly price assessment for steel hot-dipped galvanized coil domestic, ex-works Northern Europe was €860-870 per tonne on Wednesday, stable week on week.
Southern European producers were heard to be aiming for €900-920 per tonne delivered (€885-905 per tonne ex-works) for HDG.
In Italy, one supplier was heard offering HDG at €870-880 per tonne ex-works.
Buyers’ estimations of tradeable values for HDG in the region were around €860-870 per tonne ex-works.
As a result, Fastmarkets’ price assessment for steel hot-dipped galvanized coil domestic, ex-works Southern Europe was €860-870 per tonne on Wednesday, unchanged week on week.
Overseas HDG offers to Europe were rare, with few suppliers active in the market, Fastmarkets heard.
Notably, Vietnamese suppliers of 0.5mm HDG with Z100 coating were said to be aiming for $880-890 per tonne CFR to Southern Europe.
Published by: Julia Bolotova
Voestalpine expects higher steel shipments in January-March despite gloomy economic outlook
Restocking in January supported some price upticks in the European flat steel market, Fastmarkets reported.
The price of hot-rolled coil in Northern Europe moved up steadily; Fastmarkets’ daily HRC index domestic, ex-works Northern Europe averaged €731.73 ($786.27) per tonne in January, the highest monthly average since May 2023.
But Voestalpine expects sluggish demand from main industry sectors and predicts a gloomy economic outlook in Europe for January-March.
“The expected economic downturn is noticeable in some areas,” the company said in its report, referring to interest rate sensitive sectors such as construction, mechanical engineering and consumer goods industries. “And, from today’s perspective, [they] will not show any signs of recovery for the remainder of the business year 2023/24.”
Voestalpine’s current business year goes from April 2023 to March 2024.
Voestalpine had a similar outlook for investments in industrial production facilities, but the company said it expects the automotive industry sector to remain stable in January-March.
In terms of different regions where the company operates, the outlook for Europe is the gloomiest.
“Europe is expected to see the weakest economic trend worldwide for the remainder of the 2023/24 business year. The Eurozone has been teetering on the brink of recession in the last two quarters and no positive impetus is expected for [January-March],” the company said.
Voestalpine’s key indicators
Revenue from Voestalpine’s steel division was €1.37 billion ($1.51 billion) in October-December — the third quarter of its business year 2023/24 — down by 7.4% from the previous quarter.
The drop in revenue happened because “product prices for shorter-term contracts fell slightly,” the company said; its steel division sells products exclusively via contracts.
The decline in steel prices first became apparent in the spot market then moved to the contract business, Voestalpine said.
Indeed, Fastmarkets’ daily steel HRC index, domestic, ex-works Northern Europe averaged €847.77 per tonne in April — its highest monthly value in 2023 — and decreased gradually during the next few months.
The index was at its lowest in October, at €616.63 per tonne. Since then, average monthly prices have been increasing again.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) from the steel division were €156.9 million in October-December, down by 13.4% compared with the previous quarter.
Voestalpine said that delivery volumes fell slightly quarter on quarter, without mentioning specific figures, adding that the decline in sales volumes was the main driver for the earnings drop in the steel division.
Meanwhile, Voestalpine Group’s total revenue was €3.87 billion in the third quarter of the business year 2023/2024, down from €4.07 billion in the previous quarter.
And the group’s EBITDA was €368.3 million in the third quarter of 2023/24, down from €410.1 million in the previous quarter.
Voestalpine’s decarbonization targets
Currently, 52% of Voestalpine’s revenue is generated by operations with “no material carbon footprint,” the financial report said. The company plans to grow this share to 65% by 2030.
Voestalpine intends to replace coal-fueled blast furnaces with climate-friendlier electric-arc furnaces (EAFs) powered by green electricity at its Austrian sites in Linz and Donawitz by 2027; construction is already “in full swing,” the company said.
In early January, Voestalpine awarded Primetals Technologies the contract to supply the new EAF for its Linz site; and in September, the company announced that Danieli would supply the EAF for its Donawitz site.
Voestalpine has its own green steel brand, called “greentec steel.”
By 2035, 80% of its revenue will be generated by operations with no material carbon footprint, the company said; its steel division will then consist of two EAFs and only one blast furnace. Meanwhile, its Metal Engineering division will have a twin EAF, Voestalpine said.
Published by: Julia Bolotova, Darina Kahramanova
Electric smelting could reach DRI-EAF cost parity: WoodMac
The direct reduced iron-electric smelting furnace-basic oxygen furnace (DRI-ESF-BOF) route could reach near cost parity with traditional DRI-EAF over the long term. In some cases, it could even be cheaper, depending on regional dynamics and whether the fuel feedstock used is natural gas or hydrogen, says Wood Mackenzie.
The ESF-BOF process could bridge the gap between existing EAF and BF-BOF technologies. The initial ESF process utilises electricity, instead of coal/coke, as fuel like an EAF, but unlike the EAF process it can accept DRI produced with low and medium-grade iron ores as a feedstock. ESF-produced liquid hot metal can then be processed into steel in a traditional basic oxygen furnace, the consultancy notes.
ESF-BOF can potentially be rolled out at BF-BOF facilities using existing BOF footprints, helping to reduce blast furnace use and cut emissions while reducing capital expenditure, operational complexity, and project execution time, it adds.
“ESF technology offers steelmakers greater flexibility. They can either use their own DRI or trade all ranges of DRI products based on their value-in-use (VIU) analysis; in contrast DRI-EAF producers are technically limited to high-grade iron ore products,” Daniel Carvalho, Wood Mackenzie global research director, metals and mining processing, says in a note seen by Kallanish.
DRI stands out as a preferred route to low-emission steelmaking. “Using green hydrogen instead of natural gas or coal to produce DRI as the metallic feedstock eliminates the sources of carbon from the steelmaking process and is the route closest to carbon neutrality. As a result, DRI’s share in the metallic mix is projected to more than double by 2050,” Carvalho continues.
The consultancy foresees seven potential hubs for DRI-based steel production by 2050. Each will have a distinct technological mix and development timeline.
The Middle East, China, Australia and Europe are likely to lead DRI capacity additions. The US and Brazil will see some traction, but high scrap use may dampen DRI demand. India is expected to shift from coal to gas-based DRI only gradually, limiting its potential contribution to green steel production.
Adam Smith Poland
Metinvest increases exports to Poland, border bottlenecks remain
Metinvest Group increased the export of steel products to Poland in 2023 by 16% year-on-year, says the head of the logistics department of Metinvest Polska, Yulia Mezentseva.
“The increase in cargo flow is facilitated by the unblocking of routes. However, transshipment at ports and border crossings remain bottlenecks,” she tells Poland-based Puls Biznesu, published on the company’s web site. “2023 was a little better for us than the previous one. There were no longer so many traffic jams and queues on the Polish railway network, which contributed to increased transport efficiency.”
A total of 1.9 million tonnes of Metinvest products were transported through Polish railways and ports.
“Of these, about 1.3mt are metal products, 378,000 tonnes of iron ore and 237,000t of coking coal,” Mezentseva specifies. “Of the total volume of products delivered from Ukraine to Poland, 939,000t were exported to other countries through Polish ports, in particular Germany, Italy and Slovakia. At the same time, transshipment at Polish ports is four times slower than at Black Sea terminals.”
Despite the improvement in the situation with the export and transit of Ukrainian goods through Poland compared with 2022, problems with transportation still exist and relate directly to mining and metals industry products, Kallanish notes.
Metinvest Polska hopes that the suspension of the protests at the Polish-Ukrainian border will facilitate smooth transport by road and rail. The company is interested in building long-term business relationships in the Polish market.
“We talk about challenges, but at the same time we are ready to develop solutions together with the Polish side. We want to simplify procedures and transportation,” Mezentseva states.
In 2024, Metinvest Polska expects to at least maintain, and perhaps even slightly increase, the volume of supplies of certain goods to the Polish market.
“At the same time, local producers fear that Ukrainian steel may flood the Polish market, although for comparison: In 2021, 1.2mt of the company’s steel went directly to the Polish market, a year later 700,000t and in 2023, 0.8mt, so this looks like temporary ‘political’ speculation against Ukrainian exports,” she concludes.
Svetoslav Abrossimov Bulgaria
British Steel submits Scunthorpe EAF planning application
British Steel has submitted a planning application to North Lincolnshire Council for its proposed electric arc furnace in Scunthorpe.
This follows its application in December to Redcar and Cleveland Brough Council to build an EAF at Teesside Beam Mill.
The submissions are part of the steelmaker’s £1.25 billion ($1.58 billion) proposal to transform to electric arc furnace steelmaking. The proposal, still subject to approval by the UK government, would see one EAF each installed at the firm’s Scunthorpe headquarters and manufacturing site in Teesside, with commissioning potentially by end-2025 (see Kallanish passim).
The firm said in November it had agreed for its proposal to be reviewed by an external specialist on behalf of trade unions.
This comes after Tata Steel confirmed last month it was closing both blast furnaces at its Port Talbot works by year-end and commissioning a 3 million tonnes/year EAF by 2027. This was despite receiving an alternative proposal from unions and consultancy Syndex that advocated for blast furnace no.4 to remain operational alongside a smaller EAF until 2032.
While Tata Steel UK has secured $500 million in UK government funding for its EAF transformation, British Steel is yet to agree on its sum of funding.
“EAF technology is the only solution to significantly reducing our carbon emissions in a relatively short period of time. It is prudent to evaluate different operational scenarios to help us achieve our goals and we are continuing to assess our options. However, we firmly believe electrification will provide a rapid and sustainable solution to our decarbonisation challenge,” the Scunthorpe-based steelmaker says.
Adam Smith Poland
Europe longs: Slow demand weighs on sentiment
European producers of long products grappled with slow demand during the winter season, trying to attract local customers with discounts.
Argus’ weekly Italian rebar assessment softened by €5/t to €610/t ex-works, but the drawing-quality wire rod index was flat at €665/t delivered.
Sale levels for Italian rebar plummeted to €600-610/t ex-works this week, including extras for sizes (€340-350/t base), down by €10/t from the last completed sales and down by €20-30/t from offers. Demand has been low in recent weeks and producers are unable to reverse the trend, an Italian participant said. Also, scrap sentiment slightly softened in the international market, with some participants expecting costs to decline in Europe in the near term. But others expect prices to rebound as soon as mills improve their order books.
Offers for Italian rebar and rebar in coils to other European regions remained at €600/t fca and €620/t fca, respectively, but some mills were heard willing to discount for sizeable volumes. Fob offers were at €610-630/t fob, mainly coming to Greek customers. In Bulgaria, Italian rebar was available at €665/t delivered, but received no feedback as local and other origins were quoted lower.
The Italian wire rod market was stronger and mills continued targeting €680-700/t delivered for drawing-quality grade locally and to central European countries. But a level of €660-670/t delivered was considered workable depending on volume.
Despite increases in local rebar offers indicated by most European producers a few weeks ago, sales levels in central Europe remained low as colder temperatures delayed a recovery in the construction sector. It will take at least a couple of months to see any improvements after EU funds were allocated to Poland, a participant said. But demand for some steel products in Poland has also been driven by the conflict in nearby Ukraine, with the need to produce more finished products to supply there, another participant added.
Rebar was heard being still available at about 2,780-2,860 zlotys/t ($689.24-709.08/t) delivered in Poland last week, the equivalent to €640-660/t delivered. Tradable values for wire rod in Poland were indicated at about 2,900-3,000 zlotys/t delivered, which translates to about €670-690/t delivered.
But some central and eastern European buyers restocked from Moldova last week, with prices for wire rod indicated at €630-640/t delivered and up to €20/t lower for rebar.
In the Balkans, Bulgarian rebar was available at €640-650/t delivered locally and €650-670/t delivered to Romania late last week. Romanian rebar of 12mm and above was still quoted at $620-630/t delivered.
But in Romania, traders were offering import rebar and wire rod from €630/t to €660/t delivered. Egyptian and Algerian rebar was available at $600-615/t fob to European buyers, with Turkish rebar and wire rod quoted at $610-620/t fob and $630-640/t fob, respectively. Buyers restocked mainly with small volumes of Egyptian rebar and Turkish wire rod a few weeks ago, while a 30,000t lot of Turkish wire rod was heard booked to the Netherlands slightly below the offer level last week. Since then, buyers have largely adopted a wait-and-see stance, awaiting clarity on price direction. Some European buyers were reported showing interest in wire rod from Vietnam and other origins, given that the “other” country quota was exhausted and Turkey filled more than 50pc of its allowance. Spanish buyers were heard bidding €610/t cfr for drawing-quality grade.
Mikael Nyquist passed away
We are deeply saddened to learn and announce the passing of Mikael Nyquist.
Mikael Nyquist was a member of the EUROMETAL presidency in charge of Steel Distribution in the Nordic countries.
For several years, as manager of Tibnor, he was actively involved in EUROMETAL’s mission since its start, to inform, boost and promote the distribution and trade of steel, with a particular focus on the Nordic countries.
EUROMETAL shares its deepest condolences to the entire family.
Rest in peace, Mikael
Kaltenbach.Solutions receives “Top 100“ award as top innovator
Smart factory specialist Kaltenbach.Solutions from Freiburg has been recognized as a top innovator by an independent jury. The prestigious “Top 100” seal is awarded annually to particularly forward-looking medium-sized German companies. Kaltenbach.Solutions impressed the expert jury in all the categories tested and received the award for the first time.
The organizer compamedia has been conducting the “Top 100” innovation competition since 1993; innovation researcher Dr. Nikolaus Franke is the scientific director. Together with his team from the University of Vienna, he examines the innovative strength of the participating companies using extensive criteria from the categories of innovation-promoting top management, innovation climate, innovative processes and organizations as well as external orientation and innovation success. Kaltenbach.Solutions was particularly successful in the areas of innovation success, external orientation and top management, making it one of the top innovators in the size category of up to fifty employees for the first time. The official award ceremony will take place on June 28 as part of the German SME Summit in Weimar.
Kaltenbach.Solutions is delighted to receive this award, which it sees as confirmation of its continuous innovation work, and would like to thank all its customers and partners, without whom this success would not have been possible.
Kaltenbach.Solutions GmbH is a smart factory specialist with decades of experience in the steel industry. They develop innovative web- and AI-based industry solutions to increase performance in the area of operations.
