EU market debates safeguard revision mechanics, awaits confirmation
The EU’s proposed safeguard duty revision could encourage mills to go for a synchronised price hike. This comes after weeks of hot rolled coil moving down close to the €600/tonne ($650) mark and repeated mill hike attempts proving to be unsustainable, Kallanish notes.
The revision means the “other countries of origin”, which previously had a collective quarterly HRC quota of around 1 million tonnes, will now face an additional restriction per individual country. Individual countries may not sell more than 15% of the total, meaning 150,000t. Some of the more active exporters “easily sold twice that,” a German observer says.
The measure was proposed by the European Commission’s EG Trade at the end of May, and will have to be approved by each EU member state this coming week. In addition, it needs to be approved by the WTO, which many see as a given. But there is uncertainty over whether the rule will take effect as of 1 July or 1 October. “That may remain unclear until the end of June,” a Dutch manager says. “Mills are well-advised to try for hikes now for orders throughout June, because it might turn out that the market gets another break until October,” he adds.
The German observer does not think that the different dates will matter. “Even if it takes until October, people are now already deterred from ordering from Taiwan, Japan or Vietnam because the ships won’t come before October, with the risk of a 25% duty,” he notes.
He expects the market leader mill to make the first move, with most integrated mills following. This might not include the one group that re-rolls Russian slab, which has been heard undercutting market prices to retain orders.
Some German buyers expressed doubt that a big hike can be asserted. “The new rules will not change the import business all that much, and you cannot just create the demand to make increases sustainable,” one says.
Christian Koehl Germany
Tata sells Corby land to invest in tubemaking
Tata Steel will invest £12 million ($13m) into its Corby tube-making works using proceeds from the sale of a 99-acre site within the west side of the works, which has become redundant, Kallanish notes.
The end use of the plot will be a fully-serviced campus-style logistics hub.
Tata Corby works manager Gary Blackman says: “We are already well progressed with a £30 million investment programme in Corby – one of the largest in the site’s history. The sale of the old West Works land will now fund the regeneration and development of one of our warehouses on the East Works into a world-class complex of offices, stores and engineering workshops, and upgrade one of our tubes finishing lines.”
The new building will be clad with over 18,000m2 of Tata Steel’s own Trisomet insulated wall and roof panels, which will enable faster installation and gives optimum performance for water drainage and strength, the firm says.
Warmflame Developments, which facilitated the plot sale, says it has managed a phased enabling of the site whilst transitioning some of Tata Steel’s existing operations from the West Works to its retained land in the east.
In 2022, Tata Steel announced it was replacing one of the two cold-formed sections mills at its Corby site. Last year, it said it plans to install two new induction furnaces to reduce carbon dioxide emissions from one of its tube mills by at least 2,000 tonnes/year.
Adam Smith Poland
Tata, government conduct ‘detailed’ negotiations over IJmuiden decarbonisation
Tata Steel says it is taking part in “a detailed framework of diligence, analysis, discussions and negotiations” with the Dutch government over potential decarbonisation funding. However, it is too early to confirm any details of a potential deal with authorities.
The steelmaker was responding to reports that the government is prepared to cough up billions of euros to decarbonise the IJmuiden operations.
In March, the Dutch Parliament formally gave a mandate to the government to negotiate the terms of potential support towards a proposal for Tata Steel Nederland’s decarbonisation.
The “detailed framework” will run over several months before potentially culminating in an agreed set of terms, Tata says. These terms will then require approval from the Parliament as well as Tata Steel’s board. “It may be premature to draw any final conclusions at this time and hence the Company is not in a position to comment any further,” the steelmaker adds in a stock exchange filing seen by Kallanish.
Unlike its less profitable UK plant, at its Ijmuiden plant in the Netherlands, Tata plans, thanks to gas availability in that country, to build a gas-based DRI-EAF operation, later migrating to hydrogen when it becomes available. Ijmuiden already has a pellet plant which facilitates the DRI route.
Last week, Tata awarded contracts to Danieli and Tenova for the basic engineering of a direct reduction plant, an EAF and other facilities at IJmuiden (see Kallanish passim).
Tata Steel’s Netherlands operations reduced shipments 3% on-year in the March quarter to 1.43 million tonnes. However, this was up 10% on-quarter as blast furnace no.6 ramped up following its reline completed in early February. Liquid steel output was also down 3% on-year but surged 24% versus the December quarter to 1.48mt.
Adam Smith Poland
Market questions pre-summer EU coil price hike possibility
European market sources have expressed differing views on the future trajectory of coil prices following the EU’s safeguard measure extension and residual quota revision proposal.
Some Dutch and German sources say the integrated mill groups have left the market, and will come back this coming week with potentially increased offer prices. “There is a bit of a stir among buyers because of that,” a Dutch manager tells Kallanish.
Meanwhile, one mill source is actually more prudent, saying his company is still making offers, and is reluctant to make hike announcements too soon. “We will have to wait for the [EU member] vote [on the safeguard extension] this week before we make a decision,” he says. He also expressed some doubt if a big hike would make sense before the summer break.
Come September, however, his company will prepare for a “major increase”, which many buyers expect to come sooner or later. Although a big trigger for demand is not in sight, he says the reduction of interest rates in Europe would help to revive the construction industry, for example.
The increase is yet to be given a solid figure, but the Dutch manager says he has heard of “at least” €50/tonne ($54). Over the past three months, prices have moved only slightly back and forth, between €610 and €640 ex-works for hot rolled coil. The lowest figure of €605/t was heard from the Netherlands, while most German sources cited €620-640.
Despite reports of particularly weak prices for cold rolled coil, Dutch and German sources say the price premium over HRC has been in the normal €80/t range, with galv fetching €100-120/t on top of HRC.
One German distributor’s manager says she has observed the premium for galv becoming narrower downstream, when the product is cut and slit. According to her, this is a sign that service centres are trying to snatch business by selling at intake prices.
One German trader is even more explicit about this behaviour at distributor level, and that it covers all strip products. “It’s mainly the distributors that need to step on the brake to turn the trend, really. Sales prices here sometimes were lower than the intake price [for HRC] of €630/620,” he notes. Without giving names, he says he observed this among big distribution players.
Christian Koehl Germany
Assofermet: EU safeguard revision means significant HRC shortage
The EU’s residual safeguard quota revision will trigger an annual shortage of 1.63 million tonnes of steel in the bloc, warns Italian steel trade association Assofermet.
The European Commission announced in May its intention to extend safeguards by a further two years to 30 June 2026. It will also introduce a 15% cap per origin over the “other country” tariff-rate quota (TRQ) for hot rolled coil, to ensure market stability and avoid crowding out traditional suppliers.
The future shortage would have “catastrophic repercussions” on several steel-consuming sectors, including automotive, construction, mechanical engineering and the entire manufacturing industry, which will see companies lose competitiveness, Assofermet warns. In 2023, Vietnam, Japan, Taiwan and Egypt, the origins in the “other country” TRQ, sold 3.9mt of HRC to Europe. The annual flow from the four countries to Europe would decrease to 2.26mt, “effectively wiping out 1.63 million tonnes of steel”, Assofermet says.
“These are steel grades that are not available in sufficient quantities in the European Union. For this reason, imports are necessary in order to guarantee the sector the supply it needs … Maintaining the safeguard for another 24 months implies an overlap with the Carbon Border Adjustment Mechanism (CBAM), which will generate de facto double taxation,” comments Assofermet president Acciai Paolo Sangoi.
The association notes that the safeguard revision is based on the comparison with figures gathered over the three-year period of 2015-2016-2017. Such a comparison is no longer up to date, as several countries that were listed as EU suppliers are now under embargoes or sanctions, or are shipping material to other geographical areas. The consequences of the amendment could be uncontrolled increases in raw material costs due to duties, long waits for customs clearance at the beginning of the each quarter, financial strains for all importers and port terminal congestion.
According to EUROMETAL data elaborated by Assofermet, in 2023 Vietnam exported to Europe 1,113,000t of HRC. The association’s projection for Vietnam’s annual shipments following the amendment is 567,399t, with an annual shortage of 545,601t. Last year, Japan exported to the EU 1,058,000t, but it will be allowed to export half of this next year, about 567,399t, with an annual shortage of 490,601t.
In 2023, Taiwan supplied 1,016,000t. After the safeguard renewal, it will be allowed to sell no more that 567,399t, representing a future annual shortage of 448,601t. Last year, Egypt sold 720,000t to Europe, which will decrease in 2024 to 567,399t, with an annual shortage of 152,601t, Assofermet concludes.
Natalia Capra France
Steel as a material of choice in seismic prone areas
Promoting steel as a material of choice in seismic prone areas: meeting with the Ministry of Environment, Urbanisation & Climate change, Türkiye
Structural damage is the primary cause of injury and loss of life during earthquakes. Architects, engineers, and developers must ensure buildings are constructed with appropriate materials and design standards. Horizontal movements during earthquakes are particularly dangerous, as tall buildings are more resistant to vertical loads than horizontal ones.
Building structures to withstand seismic forces requires using materials with the right properties, and steel is the most widely used material for earthquake-resistant buildings. Ductile buildings, which can dissipate seismic energy, are safer. Steel is the most common material for ductile parts that can undergo plastic deformations without structural failure during an earthquake. Additionally, steel’s flexibility and low weight are advantages in seismic areas, as stiffer and heavier structures attract larger forces during earthquakes.
On 30 April 2024, constructsteel convened in Istanbul to promote the benefits of steel solutions for disaster prevention and restoration, focusing on steel’s role in seismic areas. This meeting built upon discussions from the constructsteel annual conference in Seoul on 26 September 2023.
The event gathered Turkish government officials from the Ministry of Environment, Urbanisation, and Climate Change, including Deputy Minister Hasan Suver and General Director Banu Aslan, along with members of The Turkish Structural Steel Association (TUCSA) and Turkish Steel Producers Association (TÇÜD). Discussions highlighted steel’s significant role in rebuilding efforts following Türkiye’s recent earthquake, featuring presentations on post-disaster construction and preventive measures using steel solutions.
Deputy Minister Hasan Suver welcomed constructsteel members and attendees, acknowledged the lives lost in the 6 February 2023 earthquake, and detailed the state’s rebuilding efforts, including constructing steel structures. TUCSA President Mr. Gür’eş presented on earthquake perspectives and needs in Türkiye, leading to further discussions on post-disaster construction using steel solutions and preventive measures for future disasters. Participants engaged in technical and practical exchanges to address Türkiye’s earthquake-related needs and potential actions by constructsteel.
Banu Aslan summarized the earthquake losses, noting the construction of approximately 230,000 buildings, including 23,300 light steel village houses and around 400 mid-rise steel buildings (Source: TUCSA), highlighting the ongoing and increased use of steel structures. Constructsteel members expressed readiness to support Türkiye through knowledge exchange and bilateral meetings.
The meeting concluded with mutual satisfaction and plans for continued discussions to assist Türkiye in implementing steel solutions. Constructsteel announced the addition of its first members from the Republic of Türkiye: Çolakoğlu Metalurji A.Ş., marking a significant step in advancing steel’s role in the construction sector.
Steel remains the material of choice in seismic-prone areas.
