Belgium’s NLMK La Louviere restarts production after 10-day halt
Belgian flat rolled steel producer NLMK La Louviere has fully restarted production after having had to halt operations following an accident 10 days ago, a company spokesperson told S&P Global Commodity Insights on April 17.
NLMK began restarting the plant on April 15, with production returning fully to normal on April 16.
The halt followed the detection of smoke in an electrical substation on April 5, which led to a black out and is still under investigation.
Located in Belgium, NLMK La Louviere focuses on the production of hot- and cold-rolled coil for automotive industry, general construction, and pressure vessels manufacturers.
The company has a production capacity of 1.7 million mt/year of hot-rolled steel and 1.3 million mt/year of pickled steel.
The Belgium mill, is part of NLMK Belgium Holdings, a joint venture between Belgian investment fund SOGEPA and Russian mining and steel company NLMK.
Apart from La Louviere, NBH owns strip mill NLMK Strasbourg (France), NLMK Manage Steel Center (Belgium), and plate producers NLMK Clabecq (Belgium), NLMK DanSteel (Denmark) and NLMK Verona (Italy).
NLMK La Louviere last year also underwent a halt in its hot strip mill for few months following an accident.
Overall, the European flat steel market has been weak recently, with some sources predicting that this will lead to production cuts.
Platts, part of S&P Global Commodity Insights, assessed HRC in northern Europe down Eur5/mt on the day at Eur630/mt ($669.564/mt) ex-works Ruhr April 16, marking a decline of 8.7% since the start of 2024.
Bowim foresees challenging sales, margins in 2024
The year ahead will be challenging for sales and margins, says Polish distributor Bowim, after 2023 saw weakening European demand and falling prices that prompted mills to limit production or shipments.
In 2023, high energy prices curbed industrial production and new investments in Europe, and therefore also steel demand, while the construction sector downturn also hit steel requirement. Persistent inflationary pressure and high interest rates exacerbated the situation, Bowim observes.
Bowim’s shipments were flat on-year in 2023 at 501,697 tonnes, with sheet accounting for 201,574t, slightly up on-year. Pipe and profiles were also up slightly to 94,694t, while rebar sales jumped 28% to 82,485t. However, deliveries of merchant bar and prefabricated steel reinforcement dropped, Kallanish notes.
Consolidated revenue in 2023 fell 25% on-year to PLN 2.07 billion ($506.3 million) and net profit plummeted 88% to PLN 13.3m.
Adam Smith Poland
Assofermet sees significantly lower on-year consumption for flats
The attitude of buyers remains cautious in April, but the belief that the price floor has been reached is spreading throughout the Italian service centre sector, says Italian steel trade association Assofermet in its latest market note obtained by Kallanish.
However, despite orders from end-users remaining substantially lower compared to the same period last year, the association is registering growing interest from customers buying according to their programmes for the coming months.
“There are high expectations for the Tube & Wire trade fair … the outcome of which could generate a change in market direction,” the note states. There was a further weakening of coil demand from end-users and service centres in March, with a consequent price decline, it adds. “The general lack of propensity to purchase … has led [Italian] steel mills to review selling prices in an attempt to react to the offers from Asian steel mills,” the association notes.
Assofermet notes that the EU’s “other country” safeguard quota for hot rolled coil has been exhausted in the second quarter again within days. In 2023, imports of this product category increased substantially from Asia. The huge volumes not cleared through EU Customs are now added to the volumes that will be cleared during this quarter and remain stored in the port terminals. This entails “heavy economic repercussions on the importer and on the organisation of port logistics,” the association concludes.
Natalia Capra France
European industry bemoans bureaucracy, no incentives for transition
The EU needs to cut red tape and reward companies that meet emissions reduction targets in order to incentivise costly investments into decarbonisation, participants said at this week’s Industry in Transition conference in Katowice.
Stefan Moritz, secretary general of the European Entrepreneurs “CEA-PME” confederation, bemoaned the European Commission has failed to get rid of administrative hurdles that delay investment. The EU has a Net-Zero Industry Act, but Moritz asked: “Can we have a net zero administration act?” He added: “Can we reward virtuous consumers, those who use less energy?” Guaranteeing tax breaks or financial rewards would incentivise investment, he suggested.
The comments came despite European commissioner for the internal market Thierry Breton opening the conference with a video message assuring the Commission is reducing bureaucracy, which should benefit green steel projects.
As for the impact of the transition on industry, Moritz asked: “Is it a cost or a benefit? We only see the costs now, but we want to make it a benefit. In the long run, we want to make sure renewables and nuclear are cheaper than energy today. But this has massive infrastructure costs and raw materials supply challenges. These very high investment costs must be diluted for the next 26 years in order to prevent an economic shock now, to get step by step to where we need to go.”
ArcelorMittal Poland chief executive Wojciech Koszuta stressed the “steel industry wants to stay in Europe … But we need to have tailwinds, or at least no headwinds. If we have lots of regulations, we need to adapt to them, yes. But this regulation should not stop businesses from functioning. The technology is there – a portion of Polish steel is already produced in electric arc furnaces. But this technology costs money and we will need to spend lots of money.”
Koszuta cautioned against the EU giving up its steel market share to imports. In 2012, imports accounted for 12% of the bloc’s steel consumption. In 2023, this had risen to 26%. “Is this a direction we want to go in? I think not,” the ceo said at the event attended by Kallanish. Europe needs to have captive steel supply to produce the infrastructure required for its renewable energy rollout, he added.
“Steel in Europe is currently too expensive. That makes our wind mills more expensive, our cars and building houses more costly,” Moritz pointed out. “We are now starting to buy wind turbines from China. We already buy batteries from China, already buy solar from China. What else do we want to buy from there?”
He also said the Carbon Border Adjustment Mechanism must cover not only steel imports but also imports of the final steel-using product, such as wind turbines from China.
Adam Smith Poland
UK Steel proposes 2026 CBAM start
UK Steel has proposed the UK government bring forward the implementation of its prospective Carbon Border Agreement Mechanism (CBAM) by one year to 2026, to align with the EU’s schedule. This would minimise the risk of trade barriers and trade diversion, the UK trade association says.
The recommendation is one of 12 made by UK Steel in a new report on key design principles for CBAM.
“Over 90% of global steel production faces no carbon cost, so it is crucial that a new UK carbon border creates a level playing field on carbon pricing. This will ensure that imported steel faces similar levels of carbon costs as domestic steel producers,” UK Steel director general Gareth Stace says in a note sent to Kallanish.
“The UK CBAM must be designed to be robust and impenetrable. Otherwise, there is a substantial risk of significant damage to the UK steel industry at the time of once-in-a-lifetime investment in state-of-the-art, modern Net Zero steel production,” he adds.
An estimated 22.5 million tonnes of high-emission steel currently imported by the EU would be at higher risk of being diverted to other open markets once EU CBAM is implemented in 2026. If just 10% of this were to be diverted to the UK, that would result in a 45% increase in UK imports, corresponding to around 80% of the UK market, UK Steel says.
In 2026, EU free allowances will be reduced by 2.5%, and the UK government plans to implement its reforms to free allocation. This will result in importers of UK-made steel having to buy EU CBAM certificates, as the legal and cost compliance obligations are on importers, the trade association notes.
“Where the actual cost falls directly or indirectly will be a matter for commercial discussions and agreements with any EU-based customers and will be bespoke to each commercial agreement. However, an additional cost is placed on UK-made steel if imported to the EU market, which will constitute as a disadvantage to the UK steel industry’s biggest export market,” UK Steel says in the report.
UK Steel also recommends delaying the inclusion of scope 2 emissions, until there is a complete decarbonisation of the electricity grid. It says all UK Emissions Trading System (ETS) sectors should be covered to minimise the risk of material substitution, as should products where CBAM materials make up a substantial part, to avoid value chain circumvention. CBAM should also be linked to UK ETS and be based on weekly average ETS prices.
Moreover, UK CBAM should obtain mutual recognition with EU CBAM to enable frictionless trade with the UK’s largest trading partner. Non-EU exports should meanwhile be exempted from UK ETS costs to avoid disadvantaging trade to non-EU markets, and CBAM revenue should be earmarked for industrial decarbonisation.
Adam Smith Poland