Prices for European CRC, HDG slide on weak demand
For cold-rolled coil, producers were avoiding giving firm offers, because they were unable to compete with much cheaper imports, several sources said.
“Energy costs remain quite high again across Europe, and annealing [the heat treatment procedure for CRC production] is very energy-intensive,” a mill source in Europe said.
“CRC is normally a product coming from Northern EU mills to Italy and [Northern EU mills] are not interested in supplying Southern EU/Italy at competitive prices,” a distributor said.
Buyers estimated tradable prices for CRC in Southern Europe at €800-820 ($860-881) per tonne ex-works.
Offers were reported around €840-850 per tonne delivered (€825-835 per tonne ex-works).
As a result, Fastmarkets’ price assessment for steel cold-rolled coil domestic, ex-works Southern Europe was €810-825 per tonne on Wednesday, down by €15-20 per tonne week on week from €830-840 per tonne.
Sources said that competitive offers from overseas suppliers were also dragging European prices downward. Transaction for South Korea- and Taiwan-origin CRC with April shipment was reported at €740-750 per tonne CFR to Southern Europe in early February.
During the assessment week, the import market was quiet due to Lunar New Year celebrations in Asia.
HDG
Competition from imports was less intense in HDG market because overseas mills were unable to supply the full range of grades and dimensions required by European buyers, Fastmarkets understands.
However, slow real demand was pushing prices down, source said.
Southern European producers were heard to have reduced offer prices to €850-860 per tonne per tonne ex-works for HDG, in comparison with the €880 per tonne ex-works reported in January.
Most suppliers could still offer April-delivery HDG, which indicated weak order books, sources suggested.
Buyer’s estimation of tradeable values for HDG was no higher than €860-870 base delivered (€845-855 per tonne ex-works)
As a result, Fastmarkets’ price assessment for steel hot-dipped galvanized coil domestic, ex-works Southern Europe was €845-855 per tonne on Wednesday, down by €15 per tonne from €860-870 per tonne seven days ago.
Overseas HDG offers to Europe were rare due to Lunar New Year celebrations in Asia.
The most recent offers from Vietnamese suppliers for 0.5mm HDG with Z100 coating were said to be aiming for $880-890 per tonne CFR to Southern
Europe. However, due to a persistent downtrend in global HRC markets, most sources expect Vietnamese suppliers to return with lower offers next week.
European HRC prices under pressure from low demand
Trading in the spot HRC market remained weak in Northern Europe, with transactions mainly heard done for limited volumes.
“There is no restocking; everyone buys only what they absolutely have to,” a mill source in the region said.
“The price tendency is going down. It started [during the week to February 9] and mills are still looking for orders for the second quarter, but [real] demand is still very weak,” a trading source told Fastmarkets.
Offer prices for April-delivery HRC were reported at €740-760 ($795-816) per tonne ex-works from integrated mills in the region.
Buyer estimates of tradeable values were no higher than €730-750 per tonne ex-works.
Two sources reported sales of Germany-origin coil at €720-730 per tonne ex-works on Tuesday, but it was not widely confirmed at the time of publication.
Italy-origin coil of March rolling was said to be offered at €760 per tonne ex-works in Germany.
Fastmarkets calculated its daily steel HRC index, domestic, exw Northern Europe at €746.00 per tonne on Wednesday, down by €1.50 per tonne from €747.50 on Tuesday.
The index was down by €9.38 per tonne week on week, but up by €14.12 per tonne month on month.
Fastmarkets calculated its corresponding daily steel HRC index, domestic, exw Italy at €735.63 per tonne on Wednesday, down by €8.12 per tonne from €743.75 per tonne on Tuesday.
The index was down by €17.12 per tonne week on week, but up by €13.96 per tonne month on month.
Italian mills have reduced HRC prices to fill order books for second-quarter delivery, but sales remained slow.
Offers were reported at around €750-760 per tonne delivered from local suppliers for April-delivery HRC.
“Real demand is still weak and prices [for processed coil] in the secondary market are not increasing,” a buyer in Italy said.
Buyers estimated achievable values for April-delivery HRC at €740-750 per tonne delivered (€725-735 per tonne ex-works) compared with €760-770 per tonne delivered (€745-755 per tonne ex-works) achieved for March delivery.
Despite the price declines, trading remained dull in the local market with buyers keeping to the sidelines and not restocking, citing “very slow sales downstream.”
In the secondary market, 4mm HR sheet was traded no higher than €820-830 per tonne CPT.
Meanwhile, imports were quiet due to the Lunar New Year in Asia.
Offers from India were heard at €670 per tonne CFR on Wednesday.
Offers from Japan and Egypt came in at €640-650 per tonne CFR, sources said, while those from Vietnam were heard at €630 per tonne CFR.
Most overseas suppliers were already offering April-shipment cargoes.
Despite the downtrend in the import coil segment and the increasing gap between European and import HRC, most sources agreed that pressure from imports was minimal so far.
“Importing coil is complicated due to fast-depleting quotas, logistics issues caused by uncertainty in the Red Sea and longer lead times. Big companies who traditionally rely on imports will keep booking [imports] no matter what, while those who need quicker shipment will have no alternatives but the EU mills,” a buyer in Italy said.
Published by: Julia Bolotova
UK could follow EU safeguarding measures on China-made EVs
The UK’s Trade Remedies Authority (TRA), a post-Brexit trade watchdog, says it would be ready to implement an investigation on Chinese electric vehicle imports if the government required it to do so.
Oliver Griffiths, ceo of TRA, told the Guardian neither the government nor carmakers have requested such a move yet, though they are closely watching market developments. “We’ve been in close and regular contact with the industry on this one, and lots of people are looking at the import numbers… All eyes will be on Brussels later on this year when they could potentially bring out an interim measure on this,” he says.
Last year, the European Commission announced it would be probing China-made electric vehicles entering its borders due to heavy subsidies and competition distortion. Then, EC President Ursula von der Leyen said the investigation seeks to defend the EU against “unfair practices,” de-risking, not decoupling from China. The probe reportedly started in October on BYD, Geely and SAIC, but is also set to cover European carmakers with production capacity in China.
The EU remains the UK’s biggest automotive trade partner and vice-versa. According to the latest trade report from the UK automotive association SMMT, China was the second largest supplier of cars to the UK in 2022, with a 9.2% share of its total imports (including both EV and ICE cars). Most of the car imports (71.3%) came from the EU.
According to Sam Lowe, partner and trade expert at Flint Global, if and when the EU introduces new countervailing tariffs on China-originating EVs, “the UK will come under a lot more pressure to do the same.”
“Where the EU moves, the UK usually follows,” he adds in a note seen by Kallanish. “While the UK government and industry are currently publicly reluctant to replicate the EU measures, this will probably change once China-originating cars originally destined for the EU turn up in observable quantities on British driveways.”
The EU is among one of the most open markets for Chinese firms trying to get a footprint abroad, Lowe notes. That’s because, with a 10% tariff, it’s relatively more attractive to Chinese car exporters than the US and Turkey, where import tariffs stand at 27.5% and 50%, respectively.
Sunfire installs 20-MW electrolysis plant in Finland
German electrolyser manufacturer Sunfire says it has installed Finland’s first industrial-scale electrolysis plant in Harjavalta, with green hydrogen production anticipated to start later this year.
The 20-megawatt pressurised alkaline electrolyser is installed at Finnish green hydrogen developer P2X Solution’s hydrogen plant in western Finland. The project started construction a year ago. At full capacity, the plant will produce 400 kilograms/hour of green hydrogen using wind energy. It will be commissioned in the coming months, according to Sunfire.
The project also has a methanisation plant, which will produce “renewable synthetic methane” from carbon dioxide and green hydrogen, Kallanish learns from a statement.
P2X signed an offtake agreement with Danisco Sweeteners, a unit of US-based International Flavors & Fragrances, for green hydrogen produced from the plant last November. The company will use the green hydrogen at its plant in Kotka, Finland, to reduce carbon emissions during the production of xylitol, a synthesised sugar alternative used in the food industry.
P2X is targeting a total capacity of 1 gigawatt for green hydrogen production by 2031.
“Green hydrogen will play a crucial role in the transformation of the chemical sector,” says Sunfire ceo, Nils Aldag. “We feel privileged to be part of this pioneering project with P2X Solutions, where our pressurised alkaline electrolyser will be operated on an industrial scale. I am especially pleased that our ‘Made in Europe’ electrolysis technology will contribute to Finnish energy history.”
The project has an estimated total investment of €70 million ($75.4m). Of this, €36m was provided by the Finnish government’s Ministry of Economic Affairs and Employment and the Finnish Climate Fund.
Based in Dresden, Germany, Sunfire develops and manufactures electrolysers based on solid oxide electrolyser cell (SOEC) and alkaline technologies. Last September, German energy developer RWE produced the first green hydrogen at its gas-fired power plant in Emsland, Germany, using a 250-kilowatt (kW) SOEC supplied by Sunfire.
Early last year, the company also began the series production of alkaline electrolysers at its Solingen site in Germany.
Reliance agrees to acquire American Alloy Steel
Reliance Steel and Aluminum has agreed to acquire Houston, Texas-based plate and bar distributor American Alloy Steel, Kallanish understands.
The acquisition will increase Reliance’s value-added processing capabilities in burning, cutting, rolling and beveling, the Scottsdale, Arizona-based company states.
“We look forward to continuing to grow the American Alloy business, especially in value-added processing, as well as leveraging our collaboration efforts to expand the product and service offerings of both American Alloy and our existing Reliance companies as they find opportunities to work together and grow,” says Reliance ceo Karla Lewis.
The sale price was not disclosed. Reliance says the transaction includes all related real estate assets and outstanding equity interests of American Alloy Steel, which had 2023 net sales of approximately $310 million.
The transaction is expected to be completed within 60 days, pending customary closing procedures and regulatory review. American Alloy’s team, including management, is expected to remain in place through the transition.
American Alloy Steel is a leading distributor of specialty carbon and alloy steel plates and round bars, including pressure vessel quality material. The company operates five service centres in the US, a US-based plate fabrication business, and a joint venture in Canada. In addition to its customers across North America, American Alloy serves international markets for military, infrastructure, power generation, utility, refining, petrochemical, mining, shipbuilding and marine application industries.
Kristen DiLandro USA
Europe’s automotive segment fails to strengthen: thyssenkrupp
The steel divisions of Germany’s thyssenkrupp AG (tk) may reduce output slightly in the face of potentially weaker orders but the company does not expect to idle capacity.
In reporting fiscal first quarter earnings, cfo Klaus Keysberg notes that the company does not expect increasing dynamics from the automotive industry in the months ahead, at least not in Europe. A “gap compared to pre-crisis levels” will prevail, Kallanish hears him say in the earnings conference call.
For the current prospects of capacity utilisation of tk’s mills, Keysberg notes that the mills’ steel output can be reduced only within limits, but that the company will not stop any blast furnace.
In the quarter ended 31 December, thyssenkrupp conceded sinking revenues and orders and diverging impact from automotive customers.
At the group’s steelmaking unit, tk Steel Europe, the figure of €2.4 billion ($2.6 billion) for both order intake and revenues was below the prior-year quarter’s of €3 billion, also for both indicators. This was due especially to strong price declines. Whereas shipment volumes were stable compared with the prior year, at some 1.9 million tonnes, order volumes decreased slightly to 2.1mt mainly driven by lower demand from automotive customers.
Against that, at the group’s distribution division, tk Materials Services, the business with automotive customers through its service centres provided some stability. The division overall still reported declining results, at €2.9 billion for both order intake and sales, down 17% and 21% year-on-year, respectively. The division saw lower prices especially for finished steel and stainless steel, and lower demand in Europe.
However, significantly positive earnings contributions were delivered by the service centres, Aerospace and the direct-to-customer business.
Keysberg notes that the positive service centre operations were mainly achieved in the North American units. Shipment of materials and raw materials at tk Materials Services versus the prior-year-quarter went down from 2.1mt to 1.8mt.
Christian Koehl Germany
Acciaierie d’Italia reports 2.5mt of orders
Acciaierie d’Italia (ADI), the joint venture between ArcelorMittal and state company Invitalia, has sold 2.5 million tonnes of steel, and has 1 million tonnes of steel in stock, including raw materials and finished products. In 2023, ADI produced about 3 million tonnes of crude steel, Acciaierie d’Italia’s ceo Lucia Morselli said in a televised speech at the Senate seen by Kallanish.
Morselli did not specify the period in which the 2.5mt of sales was secured or the period in which the sales are to be delivered, but did say that this number was “as orders.”
The true debt of Acciaierie d’Italia is about €700 million ($749m), Morselli states. In total ADI has €3.1 billion debt. “This debt is mostly intercompany, towards the holding company, of about €1 billion. Then there is about €1 billion that we should pay in case we decide to buy the equipment,” Morselli adds. The equipment of the Taranto steelworks belongs to the Ilva special administration. In May this year, the lease ADI is paying to use the equipment will expire, Kallanish notes. Morselli adds that roughly half of the €700m is outstanding debt.
The company is not in a dramatic situation and continues to produce and pay salaries, he says. But the absence of credit lines and liquidity, the Covid economic crisis, and the increase in energy costs have had a strong impact on productivity. Gas costs rose from €250m to €1.4 billion last year, which meant the shareholders had to help pay the energy bills, Morselli notes. This month a tribunal in Milan rejected ArcelorMittal’s appeal to block its state-owned joint venture partner in ADI, Ivitalia, from requesting the commencement of a special administration for the steelmaker. ArcelorMittal submitted an appeal which revealed that ADI had accumulated debt of €3.1 billion as of 30 November 2023. Trade unions have warned several times that the hot-end area is being idled and have lamented the lack of safety at the Taranto steelworks. ADI is rumoured to be idling blast furnace No. 2 at Taranto and is producing using only BF No. 4 (see Kallanish passim).
Natalia Capra France
Liberty restarts Galati steelmaking
Liberty Steel is confirming the restart of crude steelmaking at its plant in Galati, Romania, following the relaunch of operations at the blast furnace number 5, Kallanish learns from the company.
The output at the furnace will be ramped up during the next weeks. The furnace was temporary idled in autumn last year and brought steelmaking to a halt at Liberty’s European unit after other blast furnaces stoppages in Czech Republic and Hungary implemented in 2023.
Following the restart in Galati, Liberty is planning to resume rolling operations at its lines in Romania, Czech Republic and Hungary. The company explains that there is good demand at the moment for heavy plates and hot rolled coils.
“Despite the difficult European market conditions, Liberty Galati has managed to overcome a range of challenges over the last few months and has restarted its primary production – which will benefit its business as well as the rest of the Liberty’s other major European sites,” says Theuns Victor, ceo of Liberty’s European upstream businesses. “We do expect the improved market conditions this year to give Europe a much-needed boost and to provide some momentum to our operations.”
Emanuele Norsa Italy
Indian steel mills face greatest CBAM risk: Goldman Sachs
Investment bank Goldman Sachs Group says in a report that Indian steel producers are the most at risk from Europe’s carbon plan, the Carbon Border Adjustment Mechanism (CBAM), Kallanish notes.
This is due to two main factors: steel producers from India registering high sales to the European market, and Indian steel mills having an elevated emissions intensity. This puts them at more risk for carbon tax-related import charges.
In January, India was the largest HRC exporter to Italy, with shipments reaching 192,152 tonnes, according to data from Cybex.
According to the Goldman report by analysts led by Emma Jones, Indian steel mills could face an additional $102-190/tonne of carbon import tax charges on flows of Indian steel to the bloc over the next decade. This additional charge would account for 15-28% of current hot rolled coil prices, and assumes a carbon price of $70/t.
The CBAM carbon plan aims to levy charges on imported goods entering the European Union (EU), for certain energy-intensive sectors such as steel, to encourage cleaner pollution standards at its trading partners. The carbon tax will come into effect on 1 January 2026. The move has been met with strong criticism from overseas producers, including Russia and China.
The analysts say: “Indian steel producers operate at a carbon intensity level well above the EU and global level, potentially exposing them to elevated charges,” as they rely mainly on coal-based processes.
The report notes that, among the producers, Tata Steel and JSW Steel have the most direct exposure to the EU.
Indian mills have also been outspoken about the potential impact of this tax, likening it to a trade barrier. The Indian government is currently in discussions with the EU, in order to reach an agreement for concessions.
Suhita Poddar India