HRC prices flat in Europe; no rebound in sight amid insufficient demand
Quiet trading conditions prevailed in the European HRC market on Wednesday. Despite the common realization among buyers and sellers that the price has reached a bottom, bullish momentum has failed to reignite.
“Prices [for HRC] have been stable for the last three to four weeks, mills’ attempts to get higher values have failed because demand is not there and the market is oversupplied,” a buyer in Germany said.
“Mills, however, do not want to drop prices ahead of long-term contract negotiations with automotive [customers] for the second half of 2024,” he added.
Buyers’ estimates of tradable values for HRC in Northern Europe ranged between €630 ($684) per tonne and €650 per tonne ex-works, with deals reported at €630-640 per tonne ex-works in the week started May 20.
This was in contrast with offers heard at €640-670 per tonne ex-works for HRC with delivery in June-July.
Sources expected the next round of restocking to be in mid-June but suggested that booked volumes will likely remain limited.
As a result, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €637.00 ($691.64) per tonne on Wednesday, marginally down by €1.75 per tonne from €638.75 per tonne on the previous day.
The index was down by €3.63 per tonne week on week but up by €11.58 per tonne month on month.
Fastmarkets’ corresponding daily steel hot-rolled coil index domestic, exw Italy was calculated at €632.50 per tonne on Wednesday, down by €1.25 per tonne from €633.75 per tonne on the day before.
The index was down by €4.88 per tonne week on week but up by €13.33 per tonne month on month.
Prices for HRC in the Italian market were also fairly stable on Wednesday.
Transactions were reported at €630-640 per tonne ex-works for Italy-origin HRC with July delivery.
Offers for such material were made earlier this month at €670 per tonne delivered (€660 per tonne ex-works), but this level was deemed “unworkable” by buyers.
“Trend reversal has failed; yes, [HRC] prices have stopped falling and tended to stabilize in the past few weeks, but no major rebound has happened,” a buyer in Italy said.
Distributors and steel-service centers struggled to increase prices downstream amid poor end-user demand.
“There was an attempt to increase prices for HR sheets to €740-750 per tonne delivered, but bookings are still done at no higher than €720-730 per tonne delivered,” a steel service center source in Italy said.
Import offers were largely flat day on day.
Notably, July-shipment HRC from Vietnam was available at €580-590 per tonne CFR. But it was not widely confirmed by all sources that lower end was actually available.
HRC from India was on offer in Europe at €590-600 per tonne CFR, depending on a supplier.
And offers from Taiwan, Japan and South Korea were heard at €600-620 per tonne CFR for July-August shipment.
Buyers’ price ideas for imported coil was around €550-560 per tonne CFR – a price which is currently outside the acceptable range for overseas suppliers.
Published by: Julia Bolotova
USS, Cliffs publicly clash on Nippon deal feasibility
After the US Steel (USS) board of directors issued a letter claiming Cleveland-Cliffs is spreading inaccuracies regarding the legitimacy of its sale to Japan’s Nippon Steel, Cleveland-Cliffs has fired back with a press release calling the proposed transaction “an un-closeable deal,” Kallanish reports.
“Unfortunately, we have found ourselves in the midst of a long-running misinformation campaign targeting our company, our investors, our employees and our business partners. For that reason, we must correct the record,” the US Steel board states in an update to investors, employees, stakeholders and interested parties on 21 May.
USS accuses its Ohio-based rival of “sowing misinformation to our stakeholders in a relentless and unbridled effort to derail the transaction. While Cleveland-Cliffs is pushing false rumours to influence the market into believing we are working to unwind the transaction, nothing could be further from the truth,” the letter adds.
USS claims that it vetted Cleveland-Cliffs as a legitimate prospective buyer before finally deciding, “in the end, the Nippon Steel Company’s transaction was superior and offered the most value. The board found that the significant antitrust approval risk and associated valuation implications from a deal with Cleveland-Cliffs, among other risks, made their cash and stock proposal inferior to the higher, all-cash offer presented by NSC.”
In response, Cliffs sent out a statement under the title “Cleveland-Cliffs Reminds US Steel: You Have No Path to Close.”
“It is unfortunate that the US Steel board of directors is just now realising that it announced an un-closeable deal and is trying to blame Cliffs for its terrible decision-making. There has been nothing we have publicised or said publicly that could be described as ‘misinformation’,” says the Cliffs statement.
Lourenco Goncalves, Cleveland-Cliffs’ chief executive officer, contends that US Steel’s labour agreements with the United Steelworkers, who favored Cliffs as a would-be acquirer, are too high of a hurdle for Nippon to clear.
“With a USW-represented facility, you are not entitled to sell to whomever you please. We knew this, and you apparently did not,” his statement says. “We tried to explain to you, but you did not listen to us. The board of directors of US Steel failed its stockholders in this ‘strategic review process’ and is attempting to blame Cliffs for its own self-inflicted disaster.”
In August 2023, US Steel rejected a takeover offer from Cleveland-Cliffs (see Kallanish 14 August). In late 2023, USS accepted a bid from Nippon Steel, setting the stage for the combined entity to become the second-largest steel producer in the world (see Kallanish 18 December).
Market participants have expressed fears that a USS acquisition by Cleveland-Cliffs could weaken competition in the market, potentially leading to higher flat-steel prices (see Kallanish passim). US President Joe Biden announced that he too believes “US Steel must remain domestically owned” (see Kallanish passim).
Kristen DiLandro USA
Innofreight builds ore unloading device at Třinecké Železárny
Třinecké Železárny has started operating a stationary unloading machine for railway wagons, built by railway logistics services company Innofreight.
The machine facilitates safe unloading of various types of fine ore and iron ore concentrates. Its capacity is up to 5 million tonnes/year of iron ore, with approximately 840t being unloaded in one hour, Kallanish hears from Innofreight. The wagons are shifted by a cable-shunting device called “Turtle”. The machine is controlled from an air-conditioned cabin, so that the operator is protected from noise, the Austrian supplier notes.
In addition to building the unloading machine, Innofreight has delivered wagons and special “MonTainer” containers, which it says enable more efficient utilisation of the freight trains to Třinec.
Earlier this year, Innofreight presented a new transporting system for wire coils named WireStanchions, commissioned by Austrian steelmaker voestalpine. Compared to transporting bundles in one layer with accordingly long trains, fewer wagons are now required as each wagon can carry up to 40-50% more payload, Innofreight claims. An InnoWaggon equipped with the WireStanchions can transport up to 38 wire coil bundles with a payload of 141t.
The system has been in use for voestalpine‘s inter-plant transportation since late last year, in a project with a transport capacity of around 2,000 truck transports per year. These are now transported by rail from the wire rod mill in St. Peter-Freienstein, Austria, to the wire drawing plant in Finsterwalde, Germany, some 770km away. This shift from road to rail saves around 1,500t of CO2 emissions, according to Innofreight.
Christian Koehl Germany
Bekaert acquires Bexco
Belgian wire solution specialist Bekaert has acquired 100% shares of Hamme-headquartered Bexco for €40 million ($43m). Bexco is active in the lifting and mooring market for offshore energy and marine applications, Kallanish notes.
The merger responds to the company’s strategy to strengthen its presence in the sector as it is expected to create a global offshore rope solutions provider generating significant synergies as well as profit.
“The move towards deeper waters requires rope solutions to permanently moor turbines to the seabed. Bekaert already has significant experience in this field via its Bridon-Bekaert Ropes Group business unit and now further strengthens its offering through the acquisition of Bexco,” Bekaert notes.
Bexco posted revenue of €40m last year.
Natalia Capra France