Buyers expect European HRC offers to rise following proposed changes to safeguard measures
European buyers expected an increase in hot-rolled coil offers on June 4 following the changes proposed by the European Commission to safeguard measures.
The European Commission announced May 30 that it is considering a 15% cap for a single country over the Tariff Rate Quota volume for HRC initially available in each quarter. European authorities are scheduled to announce definitive measures by June 30.
The proposed changes are expected to limit volumes coming from Japan, Taiwan and Vietnam, sources said.
“Demand for import is low due to the new safeguard clause,” an Italian service center said. “This for sure will have an impact on HRC imports from Japan, Vietnam, Taiwan.”
Buyers are expected to turn to an alternative import, either material from the Middle East or buying more coil from European mills.
In addition, market sources expect an increase in offers from European mills and non-EU suppliers that are not impacted by the safeguard changes.
“The amended measures make imports more complicated, it is unclear how the new measures would be implemented,” another service center said. “And European mills will use this situation to finally push prices up.”
Import offers from Turkey have been heard at Eur590-610/mt CIF Italy and from Asia, at Eur610/mt CIF Italy.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe at Eur630/mt ex-works Ruhr on June 4, unchanged on the day.
Tradable values have been reported at Eur630-635/mt ex-works Ruhr with majority of data reported at Eur630/mt ex-works Ruhr.
Offers have been heard at Eur640-660/mt delivered Northwest Europe.
Platts assessed domestic prices for hot-rolled coil in South Europe stable on the day at Eur625/mt ex-works Italy on June 4.
Market sources estimated tradable values at Eur620-630/mt ex-works Italy and offers at Eur650/mt delivered Italy.
Maria Tanatar
Higher EU demand supports Turkey’s steel output, exports: trade body
Turkey’s crude steel output rose 22.1% year on year to 12.3 million mt in the first four months of the year, while exports jumped 49.4% to 4.2 million mt, according to the latest TCUD data.
The rise in export volumes was mostly due to a 84.4% rise in flat steel shipments, Yayan said, adding however that steel import volumes into Turkey declined 5.9% to 5.5 million mt.
Steel export/import coverage ratio of the Turkish steel industry increased to 72:100 in January-April 2024 from 50:100 a year prior, TCUD data showed.
“The rise in Turkey’s crude steel output, however, began to slow down as of April amid lower demand in the EU and global markets,” Yayan said, citing the 12.5% month-on-month drop in April’s output.
Dumped and subsidized steel imports from some South Asian countries jumped 37% on the year to 2.8 million mt in January-April 2024, despite the decline in overall import volumes. Yayan said that to maintain the rise seen in Turkish steel output and export volumes, efficient precautions against these imports, similar to the US and EU, should be imposed.
The rise seen in steel imports from Asian countries, particularly from China, was despite the anti-dumping investigation opened by the Turkish Ministry of Trade on Oct. 31 against imports of hot-rolled coil from China, India, Japan and Russia.
The result of the anti-dumping investigation is expected to be announced in the coming months of 2024.
Low priced imports, slow demand and fluctuations in input costs have been pressuring Turkish mills’ steel pricing in recent weeks.
Platts, part of S&P Global Commodity Insights, last assessed the Turkish HRC steel price at $600/mt EXW May 31, stable on the week in a quiet market. The assessment, however, was $70 lower than the March 1 assessment.
European HRC prices remain stable in slow market
European buyers have continued to book limited volumes to fill gaps in portfolios avoiding restocking of bigger tonnages.
“The market is slow, mills need to fill order books but they are also not ready to drop the prices as that would not help with the demand issues,” a distributor said.
Platts assessed domestic prices for hot-rolled coil in Northwest Europe stable on the day at Eur630/mt ex-works Ruhr on June 3.
Tradable values have been reported at Eur620-640/mt ex-works Ruhr.
Platts assessed domestic prices for hot-rolled coil in South Europe at Eur625/mt ex-works Italy on June 3, also stable on the day.
Market participants estimated tradable values at Eur620-630/mt ex-works Italy.
Some sources believe that recently proposed changes to the safeguard measures might make buyers more interested in the domestic coil instead of import from Asia and to trigger the domestic offer rise in the EU.
The European Commission announced May 30 that it is considering a 15% cap for a single country over the Tariff Rate Quota volume initially available in each quarter. Sources said that this would create problems for the buyers, who would either keep booked materials at the port or find other buyers in Africa or Middle east and might also pick up material from European mills if needed.
Metinvest eyes $9 billion green steel production investments
The decarbonisation of Metinvest’s Ukrainian assets will require $9 billion in the next ten years, says the company’s operations director, Oleksandr Myronenko.
“We understand the company will not be able to implement such a project alone and we will need to attract resources from Western banks,” he noted at the Forbes Ukraine forum last week. “Unfortunately, this option is currently not possible. While the war is going on, it is very difficult to persuade banks to provide any financing for projects in Ukraine, so we plan to start modernisation after the end of hostilities.”
The company is now focused on supporting the Ukrainian assets’ current operations, he added.
According to Mironenko, capital investment this year is projected at $320 million, with operating expenses at about $350m. “These are standard repairs of blast furnaces, sintering machines, maintenance of GZK equipment and development of mine management in Pokrovsk,” he noted.
“We are currently at 65% of base capacity, but we clearly understand that when the hostilities are over and the infrastructure is fully restored, production will need to increase,” Mironenko said. “For this, people and working equipment will be needed, and that is why we are focusing on these two key goals.”
The group plans to build a green steel plant in Italy to compensate for the loss of Mariupol steel production and increase the capacity of Ukrainian mining and processing plants (see Kallanish passim). Metinvest is also eyeing increasing exports to the Middle East and North Africa.
In the first quarter, the group decreased production of crude steel by 5% quarter-on-quarter to 469,000 tonnes (see Kallanish passim). Hot metal output fell 5% to 403,000t. Compared to Q1 2023, Metinvest reduced crude steel output by 4% and pig iron by 10%.
However, the firm observed a surge in Q1 iron ore concentrate production, reaching 4.86 million tonnes, up 36% q-o-q and doubling on-year, after the opening of the Black Sea corridor for exports. Production of merchant iron ore products climbed 41% q-o-q and 100% on-year to 4.4mt. The increases were 31% on-year for pellet and 53% for concentrate as volumes were directed towards external sales.
Svetoslav Abrossimov Bulgaria
Plate remains weak in northwest Europe
Prices of heavy plate from northwest European mills have not gained strength, with some sources saying they have in fact noticed further softening in recent weeks.
“The market keeps getting softer, mills are, so-to-speak, flexible, and willing to reconsider prices in negotiations,” a northern German buyer tells Kallanish. Sales nevertheless remain weak and buyers reserved, he adds. “The eight has fallen,” he notes, meaning S355 grade plate prices have dropped below the €800/tonne ($868) delivered threshold.
This would point at another dip of some €20/t, given that €800 was the lower limit for ex-works quotes. On the import front, he tells of offers at €710/t delivered northern Germany.
It is possible that domestic mills are being more flexible with those buyers who employ mixed, import/domestic sourcing, and more rigid with their loyal customers. A manager of one distribution group who buys only from local mills finds that prices have not moved much in two months, and are still circling at around the €800 mark. “It can be €790 sometimes and €810 at other times,” he says.
An observer from a re-roller mill agrees with the manager. His impression, too, is that the integrated northwestern mills have not given in much, while prices in Italy are softening lately. “Mills there [in Italy] are still anxious to fill their books by summer,” he notes.
All sources agree, however, that they see little cause for a major recovery in the foreseeable future.
Christian Koehl Germany
Celsa merges Spanish and French units
Celsa will operate its Spanish and French assets as one business unit. The decision follows the company’s plan to optimise resources and improve efficiency.
Celsa France was already integrated with Celsa España at a corporate level, the steelmaker confirms to Kallanish. “The current executive director of Celsa in France, Josep Vilaseca, will be the head of the new business unit. For his part, Carlos Día, general director of the company for Spain, has been named the new commercial director of the Group,” Celsa explains.
The company meanwhile remains tight-lipped about finding a new local partner, which was a requirement set by the Spanish government when the main creditors took control from the Rubiralta family last year. Since Celsa is considered a strategic business, the new owners had to find a local investor by June to take a 20% stake in the group, according to the commitment.
The Spanish press has reported that Sidenor, Megasa, Christian Lay and Gonvarri showed interest and have already contacted Celsa, but the group has indicated it is in no rush to close a deal.
The priority for Celsa continues to be the possible sale of foreign units and the strengthening of its financial position. Potential buyers can bid separately for operations in France, Norway, Poland and the UK.
Market analysts estimate that the value of these units has fallen significantly amid the current uncertainty in the steel sector. Celsa is waiting for conditions to improve in order to complete asset divestments, since 50% of the group’s Ebitda is generated by its operations abroad.
Todor Kirkov Bulgaria