Italian mills cut rebar prices again
Italian longs producers cut prices this week, amid the weak construction season and tepid global market recovery.
Argus‘ weekly Italian rebar assessments declined by €15/t to €575/t ex-works, while the drawing-quality wire rod index softened by €10/t, to €650/t delivered.
Italian producers dropped rebar prices to €580/t ex-works, including extras for sizes, with levels of €560-570/t ex-works available for larger orders, probably in attempts to spur buying interest ahead of the Easter holiday. Demand remains low as customers still doubt prices have reached the bottom, market participants said.
Indications for Italian drawing quality wire rod stood in a wide range of €640-670/t delivered locally and to nearby markets depending on tonnages, but producers were yet to start offering April material. In Spain offers were €10/t below these levels last week, but given high pressure from imports it was possible to obtain lower prices for sizable tonnages in Italy and Spain. Workable levels for high-carbon wire rod remained at €750-780/t delivered in Italy late last week.
Offers to nearby markets were scarce as some mills closed their March order books and were about to start their April campaign next week. But indications for rebar were pegged at €585-590/t ex-works, although given lower local prices discounts were deemed available. Despite a slow recovery seen in the construction sector across Europe, Italian mills were mainly focused on the central region while they faced high competition with Turkish suppliers in the southern countries.
Although inflation rates fell below 3pc, it was unclear if interest rates might decrease, but any cut would only be slight, a German market participant said. Construction activity is not expected to improve substantially, with fabricators maintaining cut and rebar prices in the range of €650-690/t delivered in Germany. Rebar prices from Germany mills were indicated at €640-650/t delivered for smaller tonnages and at least €630-640/t delivered lower for larger lots, with €620/t delivered available in some cases. Some German buyers were still receiving tonnages booked late last year for the first quarter as they had to postpone these deliveries after slower than expected construction demand.
In Poland rebar prices fell to €650/t delivered and below locally, with €630/t delivered available to nearby markets last week.
Offers of Bulgarian rebar lowered to 1,215-1,230 lev/t (€621-629/t) delivered last week under pressure from cheaper imports.
Some European buyers have resumed purchases of rebar and wire rod from overseas suppliers in recent weeks, suggesting prices may be close to reaching a floor. Sales were reported mainly from Turkey to Balkan markets at $580-595/t for small lots of rebar, with latest bookings heard to Serbia and Albania last week. “In Serbia no-one wants to buy a kilogram, as they are scared of further price drops,” a buyer said. Drawing quality wire rod was also heard booked from Turkey mainly to Spain at €590/t cfr or slightly below for late March-early April shipment in the past two weeks, with this quarter’s quota filled and it is estimated that Turkish allocation for the next quota period will be exhausted promptly in the first few days of next month.
Egyptian mills were offering rebar at $580-590/t fob and were said to be focusing on other markets, such as the Americas. There was talk that GCC rebar might have been imported to Europe recently, probably because of a prolonged downturn in Asia and other markets, but no details have emerged.
Argus Media
Tata Steel UK to close coke ovens on March 20, shut down one BF in summer
“The performance of the coke ovens has been deteriorating over many months, despite herculean efforts by the teams there. The condition of the ovens has now worsened to a level that makes continued operation untenable,” chief executive officer Rajesh Nair said on March 18.
“We will now begin the process of safely closing and purging the coke ovens, and ceasing operations at the adjoining By-Products plant,” he added.
In January this year, the company announced plans to shut down the hot-end at Port Talbot before the end of 2024.
One of two operating blast-furnaces (BFs) at Port Talbot will be shut down in summer this year, according to a press release.
Port Talbot is equipped with two BFs with combined capacity for 5 million tonnes per year, and two basic-oxygen furnaces (BOFs) with capacity for 4.8 million tpy. The site at Port Talbot produces hot-rolled and cold-rolled coil, as well as tubes.
Tata Steel plans to replace the existing BF-BOF production route at Port Talbot with more eco-friendly electric-arc furnace (EAF) operations, with new EAFs expected to come online in 2027.
Tata Steel intends to keep its hot-strip mills operating, and the company’s downstream and steel processing centers will also keep working.
Market sources suggested that the company would use both imported slab and slab produced by its own asset in the Netherlands to feed its hot-strip mill.
Unions may consider strike over BF closure
Trade unions described the decision to close the coke ovens as a “massive blow” but admitted that they had expected the decision because of the condition of the equipment.
At the same time, the trade unions expressed their disappointment over Tata’s decision to proceed with this summer’s proposed closure of BF4, and warned of possible industrial action.
“Regretfully, the coke ovens were always going to close during the transition period,” Alun Davies, National Officer for Steel at steelworkers’ trade union Community, said on March 18. “Once national consultations conclude, we will ballot for industrial action, should Tata confirm its intention to close BF No4.”
Muted demand, cheaper raw materials weigh on European HRC prices
But, on a firm bid, producers were reportedly ready to accept lower prices, namely €680-690 per tonne ex-works.
Buyers’ estimates of achievable prices were heard at €660-690 per tonne ex-works.
A booking of HRC from Central Europe to Germany was reported at €690 per tonne delivered, with freight estimated around €50 per tonne.
Nevertheless, overall trading remained extremely slow in the region, with sources mainly reporting hand-to-mouth booking for limited tonnages.
“There is no trading. Everyone is on a wait-and-see mode because mills have shown resistance on lowering prices despite falling raw materials costs,” a steel-service center source in the Benelux area said.
“Mills will need to cut production to find a [supply-demand] balance, but there are no [official announcements] yet. [European steelmakers] will need time,” the source added.
Declining prices for iron ore and coking coal have been putting additional pressure on finished steel prices, sources said.
The downtrend in raw materials “is one of the key reasons why steel prices are under pressure,” a buyer source in Germany said. “Mills still have room to decrease [HRC] prices, and there is a perception that rock bottom is yet to be touched, so buyers keep a low profile.”
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €683.96 ($744.44) per tonne on Tuesday, down by €5.04 per tonne day on day from €689.00 per tonne.
The index was down by €15.12 per tonne week on week and by €41.04 per tonne month on month.
Short-term expectations were quite pessimistic, buyer sources said, adding that they expect HRC prices to keep sliding down.
“Demand is showing no signs of improving and bookings are very slow [from sectors such as] automotive, construction, mechanical engineering — everything is very quiet,” a mill source said.
“There is some demand [for steel] from the renewable energy sector, but it’s not enough to compensate for the lack of demand from other industries,” the mill source added.
In Southern Europe, Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €668.75 per tonne on Tuesday, down by €1.25 per tonne day on day from €670.00 per tonne.
The index was down by €6.25 per tonne week on week and by €54.58 per tonne month on month.
HRC offers from an integrated supplier in Italy for April-May delivery were heard at €680-690 per tonne delivered, which nets back to about €670-680 per tonne ex-works.
But buyers’ ideas of workable prices were lower, with bids reported at €660-670 per tonne delivered (equivalent to €650-660 per tonne ex-works).
Sources reportedly limited activity in the market, with buyers preferring to book only small tonnages of HRC and expecting prices to drop further.
Import HRC offers from Indonesia, Japan and India to Italy were reported at €600 per tonne CFR.
Offers from Vietnam were heard at €580 per tonne CFR, while two sources pointed out that prices in the range of €560-570 per tonne were “achievable” for Vietnamese material.
Late-May shipment was heard available from most overseas suppliers.
Strikes could stretch EU stainless coil lead times
European prices for stainless cold rolled coil are increasing in transactions on-month. Italian values are lower than the rest of EU countries due to continued uncertainty in the market and low activity downstream, sources tell Kallanish.
Sheet prices however are increasing on-month in all of Europe and also in Italy, where stocks are said to be medium-low. At present Outokumpu and Acerinox are idling their plants due to strikes. Since less coils will be available on the market, mills are expected to delay orders. Longer lead-times are seen supporting steelmakers’ price increases for May delivery.
The strike happening in Finland is aimed against the Finnish government and is not related to Outokumpu’s labour relations. The majority of Outokumpu’s stainless steel and ferrochrome operations as well as Tornio port in Finland will be shut down for two weeks between 11-25 March. The strike is also expected to indirectly impact Outokumpu’s operations in other countries through internal material flows. Meanwhile, Acerinox employees have been on an indefinite strike since 5 February over the new collective agreement. The industrial action involves almost 1,800 people. The strike is understood to be continuing during the negotiation process. The company is losing almost 1,200 tonnes/day of production since its workers at Cadiz declared the indefinite strike. Financial losses are estimated to have exceeded €3.5 million ($3.80m) over the last four weeks (see Kallanish passim).
Mills in Europe are now asking €2,580-2,600/tonne ($2,809-2,831) delivered for stainless cold rolled coils for end-May delivery. Italian contracts are ticking up to €2,400-2,450/t on average, while European CRC is pegged at €2,500-2,550/t delivered, sources suggest. Stainless HRC prices in Italy remain weak due to imports from Asian countries. Domestic values stand at €2,300/t delivered, on average. European sheet prices are also increasing by some €100/t on-month. In Italy sheets are pegged at €2,700/t ex-works, sources suggest.
Natalia Capra France
European north-south plate price gap widening
The gap between Italian plate prices and levels in northwestern Europe is widening again, Kallanish hears from market participants.
A convergence of prices for flat products north and south of the Alps had been observed since the middle of last year. Some observers even forecast that this could be the standard in future. However, Italian plate prices have fallen back since mid-February, after failed attempts by Italian mills to attain the level of northern mills, with €850/t ($922) delivered as the basis for S355.
On both sides of the Alps, plate prices returned to a softening trend in February, with Italian mills quicker to make concessions than northern mills.
“It seems they are afraid they might not get their order books full before the holiday closure in August,” says a German distribution manager with strong connections to the Italy market.
One reason for falling Italian prices is the “relatively low demand in Germany. After all we are an important destination for them,” he tells Kallanish. Up until February, Italian prices rose more substantially, while northern prices moved sideways, he says.
A Dutch source concurs, as he saw northwestern plate prices stable at or above €850 since November, but currently observes a lower end around €820. A Scandinavian manager says he paid altogether higher prices for material from integrated works, with lower offers from the local re-roller group.
He, too, sees prices softening, albeit arriving with a delay up north. “There is a small indication of slipping prices,” that source comments.
Christian Koehl Germany
ArcelorMittal to implement DRI premium for wire rod
ArcelorMittal is in the process of communicating to European customers its intention to implement a premium for all new orders of high grade wire rod that require the use of DRI in the production process, Kallanish understands.
The company currently is the sole European steelmaker with integrated DRI-EAF production in Hamburg, with a DRI plant built by Midrex..
High quality wire rod that requires the use of DRI will carry a premium going forward. The premium is set to be discussed case by case with the clients, depending on the amount of DRI needed to produce the ordered specifications.
“Clients will have the possibility to discuss the premium with their commercial agents. This will give them the opportunity to evaluate the specifications required and the actual need of DRI for the production of the order in the process,” a source with knowledge of the situation comments.
In the Hamburg mill ArcelorMittal can produce up to 700,000 t/y of DRI and 1m t/y of crude steel.
Emanuele Norsa Italy
Swiss Steel reports 2023 loss on weak markets
The performance of Swiss Steel in 2023 was impacted by very weak market demand. Revenues fell by 20% year-on-year to €3.24 billion ($3.52 billion).
Revenues decreased across all major geographical markets, Kallanish hears from the maker of special bar. The revenue generated in its main market, Germany, which accounts for around one third, decreased by 22% to €1.10 billion. In addition, customers destocked their inventories, and increased imports further exacerbated demand weakness, the group notes. Required minimum plant utilisation was not sustained at all major production sites
This led to a decline in sales volume of 17% to 1.375 million tonnes, while the fall in the average sales price of SBQ steels was relatively mild, at -3%, to €2,363/t. The group notes that input prices for scrap sort 2/8, which is particularly important for its production, were down 18% from 2022.
The Engineering Steel Division, Swiss Steel’s largest division in terms of sales volume (75%), was particularly affected by the weak demand from automotive production and the contractions in the mechanical and plant engineering sectors. The sales volume here was down 17.5 % y-o-y at 1.03m tonnes. Stainless steels made 17%, or 239,000t, of the company’s sales, and tool steels 8%, or 104,000t.
In addition, the performance was impacted by multiple one-time effects. This included significantly decreasing spot prices for electricity and gas in combination with declining raw material prices resulting in significant inventory valuation losses. Extraordinary costs were also caused by layoffs, with the headcount reduced by 11% to 8,812 staff, including 251 employees from the divestment of Eastern European sales and distribution entities.
The adjusted Ebitda fell from €217m to a loss of €41m tonnes, the net loss came to €295m, following a net profit of €9m in 2022.
Christian Koehl Germany