EU quota cap could impact Indian HRC imports
India may see a rise in hot rolled coil steel imports as an unintended consequence of Europe’s residual tariff-rate quota (TRQ) capping, Kallanish learns from Indian sources. This could lead to a re-direction of HRC imports from Southeast Asian and Asian countries into India.
Last week, the European Commission proposed to extend the EU safeguard measure on steel by a further two years to 30 June 2026. It also plans to introduce a 15% cap per origin over the “other country” TRQ for HRC (see Kallanish passim).
A market participant notes that a rise in HRC imports could occur from countries such as Vietnam, Japan, Korea and others, being redirected into India. Another trader notes: “[India’s] HRC imports could grow if Asian mills drop prices further.”
Indian producers have been outspoken about their concern over rising imports from Asian and Southeast Asian countries. In May, Indian steel representatives warned of the potential impact of imports into India following the US tariff hike on China-origin steel.
Indian Steel Association (ISA) secretary-general Alok Sahay said: “Imports from China and Japan have already gone up last year. Given this kind of situation, India is already under grave threat of import because all major steel consuming economies are shutting their doors on these steel producing countries.”
Given India has not implemented any trade remedial action on steel in the last couple of years, this makes it vulnerable to “predatory” imports that will hamper its ambitious steel capacity expansion plans, he added.
In May, Vietnamese steelmaker Formosa Ha Tinh Steel was also granted a licence renewal from the Bureau of Indian Standards (BIS), adding to the number of foreign players in the Indian import market.
India remained a net importer of finished steel in April, according to Joint Plant Committee data. Finished steel imports rose by 27.1% year-on-year to 0.585 million tonnes, while exports contracted by 41% to 0.505mt (see Kallanish passim).
India was a net finished steel importer in the fiscal year ending March 2024. Annual finished steel imports rose by 38.2% on-year to 8.32mt. Exports grew 11.5% to 7.487mt.
In January, ISA called for the Indian government to implement safeguard measures, such as a 8-12% import duty applicable to all steel shipments, particularly those arriving from countries such as China. But the steel ministry said it is not likely to impose a duty, citing higher-than-expected domestic demand.
Suhita Poddar India
Voestalpine expects relatively stable markets
Market trends have not changed significantly for voestalpine following the start of its 2024/25 business year in April, the Austrian group said when presenting its annual results on Wednesday.
In fiscal 2023/24 – ending March 2024 – voestalpine achieved satisfactory results, with overseas markets performing better than Europe. Looking at its customer segments, it expects good demand from railway infrastructure, aerospace, and warehouse technology to continue. The automotive industry and the energy sector, as its main segments, should largely continue their stable development to date, the group noted.
At the annual press conference attended by Kallanish, chief executive Herbert Eibensteiner conceded that the energy sector will not repeat last year’s boom, as exploration and pipeline projects have slowed down. Last year’s “problem children” – the construction, mechanical engineering, and consumer goods segments – are likely to remain at least at their current level. “It seems that the bottom has been reached here – at least, we do not see a further deterioration,” he observed.
The group’s revenue in 2023/24 was its second-highest in history, at €16.7 billion ($18.2 billion), after achieving record revenue of €18.2 billion in the previous year. Key figures have now “returned to normal” in the latest reporting year, voestalpine noted. Ebitda reached €1.7 billion, down from €2.5 billion. Ebit came to €570 million. While the economic slowdown was partly responsible for the earnings drop from the previous year, non-recurring effects also played a role, the company said.
Voestalpine’s management will continue to expand the group’s processing activities globally in the 2024/25 business year (see separate story).
Christian Koehl Germany
Italian rebar producers seek increases
Italian rebar transaction and producer quote prices are rising, mills and distribution sources tell Kallanish.
Steelmakers are now asking for a significant, €30/tonne ($32) on-month hike to €370-390/tonne base ex-works. Domestic deal values, however, have increased so far by only €10/t versus last month and are pegged at €330-340/t base ex-works. Including extras, this week’s transactions have reached €590-600/t base ex-works. The level of €610/t ex-works has also been achieved but for very low tonnages.
Domestic mesh is increasing in line with rebar, hovering at €430-440/t base ex-works. Buyers must add transport costs and around €300/t in size extras to obtain effective prices, sources suggest.
According to a buyer, the increases will not stick due to the weak market, and prices will fall back again to about €320/t base ex-works on average. Some local mills have pushed up values due to the current low margins and high cost of raw material. Another source reports limited consumption and sluggish activity in May.
Natalia Capra France
ArcelorMittal increases longs prices in Europe
Market sources say ArcelorMittal is announcing higher prices for long products across Europe. The move is driven by the high cost of production and the need to recover margins, Kallanish notes.
The steelmaker is reported to be offering €30/tonne ($32) above its May quotes for all commodity grade longs. “Capacities have been reduced because of the lower consumption across Europe, but prices are now being strongly impacted by the high cost of energy and raw materials, such as scrap which remains expensive,” a source comments. He adds that demand is not as high as it was in recent years, but is still “acceptable”.
The northern and southern European longs markets have been hit by lower consumption and high production costs. According to a mill source, southern European countries are performing better than those in the north and west, where sales are weak and margins low. Last month, all longs producers in Germany, France, Italy and Spain pushed up values with mixed results. This month, Italian rebar makers are again attempting a price increase (see separate article).
Natalia Capra France
Trader Cargill exits China domestic steel trading
According to China metals trading lead, Oliver Handasyde Dick, Cargill is adjusting its structure according to market fundamentals and had ceased steel trading after a recent examination of its business model.
“However, this does not change Cargill’s position in China; we will continue to provide risk management solutions for our clients in China. For example, we continue to maintain a strong position in iron ore and will continue to provide Chinese steelmakers with pricing and supply chain solutions,” Dick said in a note the clients.
He also promised no changes to Cargill’s current contract obligations in China.
“The Chinese market is very tough to compete in,” an industry source in Southeast Asia told Fastmarkets.
Multiple trading companies have suspended their physical trading in the past couple of years, according to market participants.
“It’s been a big struggle for the ferrous industry chain, from steelmakers to downstream users, to make money in the recent two years. With traders in the middle of the chain, we are facing greater challenges in maintaining margins,” a Shanghai-based trader, who handles spot steel trading in China, told Fastmarkets.
China’s ferrous metal smelting and rolling processing industry recorded a total loss of 22.22 billion yuan ($3.07 billion) in the first four months of 2024, according to data from National Bureau of Statistics (NBS).
Meanwhile, Cargill’s exit from Chinese domestic steel trading is not expected to have any effect on the overall market in terms of prices, supply or demand, a second steel trader in Shanghai said.
With demand seasonally slowing and cost supports softening in anticipation of peaking hot metal production, Chinese steel prices have moved lower in the past two weeks.
Fastmarkets’ price assessment for steel hot-rolled coil domestic, ex-whs Eastern China (Shanghai) was 3,780-3,800 yuan ($522-525) per tonne on Tuesday. This is its lowest level in about eight weeks.
On the same day, Fastmarkets’ daily price assessment for steel reinforcing bar (rebar) domestic, ex-whs Eastern China was 3,500-3,520 yuan ($483-487) per tonne, marking the lowest level in three weeks.
Jessica Zong in Shanghai contributed to this article.
Published by: Zihuan Pan, Paul Lim
Norway’s steel demand expected to strengthen in H2 2024 as economic fundamentals improve
Norway’s steel demand is expected to strengthen in the second half of 2024 and 2025 helped by a recovery in economic fundamentals mainly in the construction sector, Arne Reinertsen, CEO of E.A. Smith, the only steel service center in the country, told S&P Global Commodity Insights on the sidelines of the EUROMETAL conference in Oslo on June 4.
The construction sector was the largest consumer of steel in Norway in the first half of 2024, followed by the oil and gas sector.
“Construction went down 30% to 40% [in H1 2024] from its peak as both residential and commercial real estate were affected by high interest rates, with housing starts hitting 20-year lows, despite population growth,” Reinertsen said. “The offshore sector has been solid throughout, driven by high energy prices and COVID-era tax incentives for capital expenditure.”
Norway’s total steel consumption including all grades and qualities, and shapes and sizes, was around 1.3 million-1.4 million mt in the 12 months ended April that is “pretty flat relative to the preceding 12 months,” Reinertsen said. “Around 90% of this is imported, while the rest is made by rebar producer Celsa [Armeringsstal] in Mo i Rana,” he said, citing Norway statistics data.
“While imports of long steel for construction are down around 40% year on year and traditional flat steel imports down approximately 20% on the year, pipe and steel for the offshore industry have held up total volumes reasonably well,” he said.
Nils Kristian Knudsen, analyst at consumer banking company Handelsbanken expects H2 2024 to be brighter for the Norwegian economy, with houses prices rising 6%-7% each year going forward, sustaining the construction sector and the steel industry.
Norway produced 689.884 mt of steel products in 2023, down 2% year on year, according to wordsteel data. Celsa Armeringsstal is Norway’s only steelmaker. It is part of Celsa Nordic, which serves the broader region, and makes liquid steel via electric arc furnace and finished rebar products.
Celsa Nordic’s low carbon strategy
Celsa Armeringsstal expects its total steel products output for 2024 to be slightly below 2023, Halvard , Celsa Nordic commercial manager and chairman of Norwegian Steel Association told Commodity Insights on the sidelines of the event.
Celsa Armeringsstal uses 55% of all steel scrap in Norway as raw material, and hydropower in its melting processes, making it a low CO2 emitter in the country with 304 kg CO2e/mt each year. Celsa Nordic aims to cut its CO2 emissions by 50% by 2030 and reach zero CO2 emissions by 2050, said.
Celsa Nordic is part of Celsa Group. Celsa Group has said that it expects to sell some of its plants in Poland, Norway and the UK to strengthen its financial position.
Platts, part of Commodity Insights, assessed the price of Northwest European rebar at Eur600/mt ex-works on May 29, up Eur15 on the week.
