European steel HRC buyers still holding back, despite lower offers
Trading in the European spot market for HRC has been extremely quiet in recent weeks, with buyers abstaining from bookings, even though HRC prices have decreased since January.
“Lead times from mills are quite short, so we are not in a hurry. It looks like there is still room for some [price] drops,” a stockholder in Germany said.
“Stocks are not really full at buyers, but they are happy to live ‘hand-to-mouth’, and low end-user demand allows that,” a mill source said.
Integrated mills in Northern Europe were offering HRC with April delivery at €730-760 ($792-825) per tonne ex-works, compared with targets of €780-800 per tonne given in January for second-quarter delivery material.
Buyers’ estimates of tradeable values were in the range of €700-730 per tonne ex-works.
A Germany-based steelmaker was reported to have made a booking “close to €700 per tonne ex-works” recently, but market sources were not certain about the details of the deal at the time of publication.
“When a booking is done for special grades or dimensions, extras can [cost] as much as €300 per tonne or even more. In such cases, the base price doesn’t really matter [because] the mill is making money on the extras,” a buyer in Germany said.
Most industry sources agreed that €700 per tonne ex-works “was not there yet” in Northern Europe, but buyers have been actively pushing mills to this price point.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index, domestic, exw Northern Europe, at €716.04 per tonne on Wednesday, down by €2.92 per tonne from €718.96 per tonne the previous day.
The index was also down by €7.09 per tonne week on week and by €35.21 per tonne month on month.
In Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index, domestic, exw Italy, was calculated at €711.88 per tonne on Wednesday, down by €3.12 per tonne from €715.00 per tonne on February 27.
The index was down by €10.06 per tonne week on week and by €33.12 per tonne month on month.
One local supplier was offering April-delivery HRC at €720-730 per tonne ex-works.
But market sources reported sales done at a lower price of €720 per tonne delivered (€710 per tonne ex-works).
Some bids were reported as low as €700 per tonne delivered (around €690 per tonne ex-works), but most industry sources believed that this price had not been accepted by suppliers yet.
Another local integrated flat steelmaker, which was put into extraordinary administration earlier this month, was not offering HRC at the moment.
“The absence of ADI doesn’t really affect the price [for HRC in Italy],” a source in the Italian market said. “But the additional volume that will not come from it will have to be replaced, either by imports or by European material.”
In the secondary market, 4mm HR sheet was traded at prices no higher than €780-790 per tonne CPT, sources said, compared with €820-830 per tonne CPT in early February.
Imports were still unattractive for European buyers despite the lower offer prices from some suppliers.
Collateral risks – such as long lead times in a very volatile market and uncertainties regarding the extension of EU safeguard measures – were the major factors limiting the buying interest for imports.
Offers of late-April-May shipment, July-delivery HRC from Vietnam were heard at €620 per tonne CFR on Wednesday. Bids were heard at €600 per tonne CFR.
Offers from Japan and Egypt, meanwhile, came in at €640-650 per tonne CFR, also for April-shipment HRC.
Published by: Julia Bolotova
Klöckner supplies GEA with CO2-reduced stainless steel
Coils will be delivered to the GEA production site in Bönen, North Rhine Westphalia (NRW) state via Klöckner’s service centre unit Becker, which is also located in Bönen. GEA is one of the world’s largest systems suppliers for the food, beverage and pharmaceutical sectors. Its portfolio includes machinery and plants, as well as advanced process technology, components and comprehensive services.
Klöckner’s Nexigen brand coil for CO2-reduced products and services has a carbon footprint that is around 90% lower than that of conventional stainless steel, according to the company.
At GEA, the material is being used as part of a pilot project for more sustainable milking technology production. Klöckner is the first company selected by GEA to supply carbon-reduced stainless steel. “Our suppliers play a crucial role in achieving our climate goals,” says Johannes Giloth, chief operating officer at GEA. “Sustainable procurement is indispensable here. That is why we are working closely with our partners to jointly develop and offer resource-saving solutions.”
Christian Koehl Germany
German steel industry completes final wage bargaining
The southwestern chapter of union IG Metall completed at the beginning of the week the annual wage bargaining talks with employers in the region, which include Saarstahl, Dillinger, Badische Stahlwerke and Buderus.
The talks in the southwest normally take place three months after those of the northwestern and eastern chapters. The northwestern chapter is by far the biggest, including thyssenkrupp, Salzgitter, and most operations of ArcelorMittal, and the results of its negotiations normally are adopted by the smaller chapters.
In December, the northwestern employers and the union agreed on a wage increase of 5.5%, as Kallanish reported then. Employees will also receive an inflation compensation bonus of €1,500 ($1,635). A further €1,500 is to be paid in instalments until the end of 2024. In addition, both sides arrived on a formula to satisfy both the demand for shorter working hours and the simultaneously growing demands of the energy transition.
All these conditions were adopted by the negotiation partners in the southwest and will take effect with three months delay from the other two chapters.
Christian Koehl Germany
EAF plate supports EU steel decarbonisation: Industeel’s Gingell
ArcelorMittal subsidiary Industeel says it produces heavy plate under the XCarb recycled and renewably produced brand using slab from the electric arc furnace route.
In collaboration with the ArcelorMittal plate mill in Gijon, it is now possible to make structural steel plate with a certified CO2 footprint of 914 kg CO2e per tonne of steel. This is based on a life cycle analysis (LCA) approach and certified by an Environmental Product Declaration (EPD), Industeel business development director Andrew Gingell said at this week’s Gulf Steel show in Dubai attended by Kallanish.
To compare, heavy plate produced via the blast furnace-basic oxygen furnace route emits around 2.6 tonnes CO2 per tonne of steel.
Gingell did not disclose the specific premium for low-emission plate paid by customers. However, he emphasised the pricing reflects the added value as perceived by the customer, depending on the end-use market and its approach to sustainability.
Scrap-using EAF technology is only one part of the solution for the steel industry, according to Gingell. Since scrap availability is insufficient, the world will still rely on primary iron beyond 2050. Therefore, ArcelorMittal’s decarbonisation strategy emphasises achieving net-zero emissions in primary steel production through the direct reduced iron-based route.
By transitioning from BF-BOF to DRI using natural gas, in conjunction with EAF utilisation, CO2 emissions could be significantly reduced. Further steps involve transitioning to green hydrogen in DRI production, and implementation of carbon capture, usage, and storage (CCUS) technology, leading to a net elimination of CO2 emissions.
The energy transition is driving increased demand for steel in sectors like solar and wind, among others. Industeel’s low-emission plate can therefore find application in various industries supporting decarbonisation efforts, such as biofuels, CCUS, solar photovoltaic (PV) systems, energy storage (including cryobatteries), liquid hydrogen storage, and other energy transition-related sectors.
In response to rising demand for steel from sectors supporting decarbonisation efforts, ArcelorMittal has reorganised its assets. It has created a dedicated division called Sustainable Solutions, which focuses on markets that are both “structurally attractive and experiencing high growth”, with Industeel part of that division.
This division comprises specialised, low-capital ventures playing important roles in addressing climate change. Currently, the construction, engineering project solutions, renewables, metallics, including cleaner scrap, distribution, and service centre sectors collectively contribute around 4% of the company’s $7.6 billion Ebitda. This figure is expected to double over the next five years.
Elina Virchenko UAE
Spain’s automotive industry foresees promising 2024
The Spanish automotive sector increased both production and exports in January, Kallanish notes.
“Car output has started the year at a good pace, confirming the sector’s recovery and approaching pre-Covid-19 figures, at only 3.9% below 2019,” comments national automotive association Asociación Nacional de Fabricantes de Automóviles y Camiones (Anfac) president José López-Tafall. “Our goal is to return to the 2.8 million vehicles produced before the pandemic and to make Spain an electromobility hub in Europe. The automotive industry must be a priority for the government’s industrial policy to generate a favourable scenario for investment.”
Production in January reached 230,956 units, an on-year growth of 18.7%.
Meanwhile, Spanish vehicle exports reached 201,454 units in the month. This volume was up 14.7% on-year, supported by higher supplies to Europe.
Shipments in Europe represented 91% of the country’s total exports in January, up 1.3 percentage points, with France, Germany, the UK, Italy and Turkey being the top destinations, Anfac data show.
Todor Kirkov Bulgaria
Italian HRC prices drop fast, imports considered again
Italian coil prices continue to decline amid market stagnation and low sales. The coil derivative market is also experiencing weak consumption and lower prices, with activity considered to be “stuck”, local sources tell Kallanish.
“We have no apparent demand and our clients are only ordering back-to-back because of the very low visibility. Sheet prices should be at least €70-80/tonne ($75-86) more expensive for us to have a slight margin but prices are falling and our competitors are chasing volumes. Today, nobody is buying hot rolled coil and we can resist using our stocks for some time,” a service centre comments. Another says it is losing money at current prices for the first quarter, following the low sales seen in the second half of 2023.
Some coil buyers have resumed importing from Asia despite the long lead times. Prices from countries such as India, Taiwan and Japan are at €620-640/t cfr Italy for end-March and April boarding, meaning material availability in July. Some contracts from an Asian country were agreed at roughly €650-660/t cfr in the first half of February. After vessels arrive at the port, buyers will not be able to clear out material through customs until quotas are renewed in July, Kallanish is told.
Italian domestic HRC is now at €710-720/t base ex-works for March-April shipment. This represents about a €50/t decline compared to the beginning of February. Sources in the market predict further price declines in the coming weeks and domestic values to fall below €700/t base ex-works in March.
Natalia Capra France
Revista InfoAcero – Febrero 2024
En el siguiente enlace pueden acceder a la edición de Febrero de nuestra revista INFOACERO
Destacamos a continuación algunos de sus contenidos:
- Opinión – D. José Francisco Sánchez- Junta Directiva UAHE
- Evolución del Índice de Precios de Productos Siderúrgicos – UAHE
- Información Asociativa: Webinar Ciberseguridad (8 Febrero) // Próximos Cursos UAHE
- Siderurgia: Evolución Sectores Consumidores, Consumo Real y Consumo Aparente- Informe Eurofer- 1er trimestre 2024
- Colaboración ASCEM: “Perspectivas del acero optimistas para 2024”- D. José Mª Lagos- Gerente ASCEM
- Steel Net Forum Iberia 2024: 11 y 12 de Abril en Santiago
